Document:

exv10w7

 

Exhibit 10.7

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (“Agreement”) is entered into as of this 31st day of October, 2003,
by and between American Public University System, Inc., a West Virginia corporation (the
“Company”), American Public Education, Inc., a Delaware corporation (“the Parent”) and James
Herhusky (the “Executive”).

     WHEREAS, the Company is a wholly owned subsidiary of the Parent; and

     WHEREAS, the Company desires to employ the Executive, and the Executive desires to be employed
by the Company, on the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and
other good and valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereto agree as follows:

     1. Employment. On the terms and conditions set forth in this Agreement, the Company
agrees to employ the Executive, and the Executive agrees to be employed by the Company, for the
term set forth in Section 2 hereof and in the position and with the duties set forth in Section 3
hereof.

     2. Term. The employment of the Executive by the Company as provided in Section 1
hereof shall commence on the date of execution of this Agreement and, unless sooner terminated as
hereinafter set forth, shall end three (3) years thereafter;
provided, however, that this Agreement
may be renewed at the Company’s option (with the consent of the Executive) for additional one (1)
year periods (each a “Renewal Term”) on the third anniversary of the Effective Date and on each
additional anniversary thereafter by Company’s delivery to Executive of written notice at least
thirty (30) days prior to the expiration of the Term or any Renewal Term. If this Agreement is
renewed for one or more Renewal Terms, such Renewal Term shall be on the basis stated herein,
except for the base salary of Executive for any Renewal Term which shall be negotiated in good
faith and agreed upon by the Parties prior to the Commencement of each Renewal Term.

     3. Position and Duties. The Executive shall serve as the Executive Vice President for
Institutional Advancement of the Company, or in another position of equal or greater title,
authority and responsibility, as assigned by the

 

 

board of directors of the Company, with duties and responsibilities as the board of directors of
the Company may from time to time determine and assign to the Executive. The Executive shall
devote the Executive’s best efforts and full business time to the performance of the Executive’s
duties and the advancement of the business and affairs of the Company.

     4. Place of Performance. In connection with the Executive’s employment by the
Company, the Executive shall be based at the principal executive offices of the Company in Charles
Town, WV, which the Company retains the right to change in its discretion, or such other place as
the Company and the Executive mutually agree.

     5. Compensation.

          5(a). Base Salary. The Company shall pay to the Executive an annual base salary (the
“Base Salary”) at the rate of $200,000 per year. The Base Salary shall be reviewed no less
frequently than annually and may be increased at the discretion of the Compensation Committee (the
“Compensation Committee”) of the board of directors of the Parent (the “Board”). If the
Executive’s Base Salary is increased, the increased amount shall be the Base Salary for the
remainder of the employment term hereunder, except that the Company may reduce the Executive’s Base
Salary at any time as part of a general salary reduction applied to all employees of the Company
with annual salaries in excess of $100,000 (the “Senior Executive Group”) in which case the
Executive’s reduced Base Salary shall be the Base Salary for the remainder of the employment term
hereunder. Any such reduction in the Executive’s Base Salary shall be no more than the lesser of
the median percentage salary reduction applied to the Senior Executive Group or 20%. The Base
Salary shall be payable biweekly or in such other installments as shall be consistent with the
Company’s payroll procedures.

          5(b). Annual Bonus. The Executive shall be eligible to receive a bonus of up to 50% of
the Executive’s Base Salary for each year as determined by the Compensation Committee in its sole
discretion, based upon the achievement of certain performance goals established by the Compensation
Committee for each year. The Executive shall be entitled to a pro-rata portion of the Annual Bonus
and additional bonus for any period less than a full calendar year (or fiscal year, if other than a
calendar year) for which he is entitled to his salary except in the case of a termination for Cause
pursuant to Section 11(c).

          5(c). Other Benefits. The Executive shall be entitled to receive such other benefits
approved by the Compensation Committee and made available to senior executives of the Company. The
Executive also shall be entitled to participate in such plans and to receive such bonuses,
incentive compensation and fringe benefits as may be granted or established by the Company from
time to time.

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Nothing contained in this Agreement shall prevent the Company from changing carriers or from
effecting modifications in insurance coverage for the Executive.

          5(d). Vacation; Holidays. The Executive shall be entitled to all public holidays
observed by the Company and vacation days in accordance with the applicable vacation policies for
senior executives of the Company, which shall be taken at a reasonable time or times.

          5(e) Withholding Taxes and Other Deductions. To the extent required by law, the
Company shall withhold from any payments due Executive under this Agreement any applicable federal,
state or local taxes and such other deductions as are prescribed by law or Company policy.

     6. Expenses. The Company shall reimburse the Executive for all reasonable expenses
incurred by the Executive (in accordance with the policies and procedures in effect for senior
executives of the Company) in connection with the Executive’s services under this Agreement. The
Executive shall account to the Company for expenses in accordance with policies and procedures
established by the Company.

     7. Relocation Expenses. The Company will pay or reimburse the Executive for the
customary and reasonable moving expenses incurred by the Executive in connection with Executive’s
initial employment and/or in connection with any subsequent relocation of Executive’s place of
performance pursuant to Section 4 of this Agreement. If the Internal Revenue Service or any state
or local taxing authority takes the position that the relocation expenses paid or reimbursed
subject to this Section 7 results in the receipt of taxable income to Executive, such expenses
shall include an amount equal to the aggregate Federal, state and local income and employment taxes
imposed on Executive as a direct result of such payment or reimbursement.

     8. Confidential Information.

          8(a). The Executive covenants and agrees that the Executive will not ever, without the prior
written consent of the Board or a person authorized by the Board or except as may be ordered by a
court of competent jurisdiction, publish or disclose to any unaffiliated third party or use for the
Executive’s personal benefit or advantage any confidential information with respect to the
Company’s past, present, or planned business, including but not limited to all information and
materials related to any Company business, business plan, product, service, procedure, strategy,
method, technique, technology, research, strategy, plan, customer or supplier information, customer
or supplier list, financial data, technical data, computer files, and computer software, including
any of the foregoing that is in any stage of research, development, or planning, and any other
information

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which the Executive obtained while employed by, or otherwise serving or acting on behalf of, the
Company or which the Executive may possess or have under his control, that is not generally known
(except for unauthorized disclosures) to the public or within the industry in which the Company
does business.

          8(b). The Executive acknowledges that the restrictions contained in Section 8(a) hereof are
reasonable and necessary, in view of the nature of the Company’s business, in order to protect the
legitimate interests of the Company, and that any violation thereof would result in irreparable
injury to the Company. Therefore, the Executive agrees that in the event of a breach or threatened
breach by the Executive of the provisions of Section 8(a) hereof, the Company shall be entitled to
obtain from any court of competent jurisdiction, preliminary or permanent injunctive relief
restraining the Executive from disclosing or using any confidential information. Nothing herein
shall be construed as prohibiting the Company from pursuing any other remedies available to it for
breach or threatened breach, including, without limitation, recovery of damages from the Executive.

          8(c). The Executive shall deliver promptly to the Company on termination of employment, or at
any other time the Company may so request, all confidential materials, memoranda, notes, records,
reports and other documents and materials (and all copies thereof), in whatever form or medium,
that contain any of the foregoing, including but not limited to computer data, files, software, and
hardware, relating to the Company’s or its affiliates’ respective businesses which the Executive
obtained while employed by, or otherwise serving or acting on behalf of, the Company or which the
Executive may then possess or have under his control.

     9. Non-Competition.

          9(a). Non-Competition. The Executive covenants and agrees that the Executive will
not, during the Executive’s employment hereunder and for a period of one (1) year thereafter (to
the extent permitted by law), at any time and in the United States or any other jurisdiction in
which the Company is engaged or has reasonably firm plans to engage in business, (i) compete with
the Company on behalf of the Executive or any third party; (ii) participate as a director, agent,
representative, stockholder or partner or have any direct or indirect financial interest in any
enterprise which engages in any business in which the Company is engaged; or (iii) participate as
an employee or officer in any enterprise in which the Executive’s responsibility relates to any
business in which the Company is engaged. The ownership by the Executive of less than five percent
(5%) of the outstanding stock of any corporation listed on a national securities exchange shall not
be deemed a violation of this Section 9(a).

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          9(b). Injunctive Relief. In the event the restrictions against engaging in a
competitive activity contained in Section 9(a) hereof shall be determined by any court of competent
jurisdiction to be unenforceable by reason of their extending for too great a period of time or
over too great a geographical area or by reason of their being too extensive in any other respect,
Section 9(a) hereof shall be interpreted to extend only over the maximum period of time for which
it may be enforceable and over the maximum geographical area as to which it may be enforceable and
to the maximum extent in all other respects as to which it may be enforceable, all as determined by
the court in the action.

          9(c). Non-Solicitation. The Executive covenants and agrees that the Executive will
not, during the Executive’s employment hereunder and for a period of one (1) year thereafter
solicit, induce, entice, or encourage or attempt to solicit, induce, entice, or encourage any
employee of the Company or any of the Company’s affiliates to render services for any other person,
firm, entity, or corporation or to terminate his or her employment with the Company.

     10. Termination of Employment.

          10(a). Death. The Executive’s employment hereunder shall terminate upon the
Executive’s death.

          10(b). By the Company. The Company or Parent may terminate the Executive’s
employment hereunder under the following circumstances:

               (i) The Company or Parent may terminate the Executive’s employment hereunder for
“Disability.” For purposes of this Agreement, “Disability” shall mean the Executive shall have
been unable to perform all of the Executive’s duties hereunder by reason of illness, physical or
mental disability or other similar incapacity, which inability shall continue for more than three
(3) consecutive months.

               (ii) The Company or Parent may terminate the Executive’s employment hereunder for “Cause.”
For purposes of this Agreement, “Cause” shall mean (A) refusal by the Executive to follow a
written order of the Chief Executive Officer, Chairman of the Board or the Board of Directors, (B)
the Executive’s engagement in conduct materially injurious to the Company or its reputation, (C)
dishonesty of a material nature that relates to the performance of the Executive’s duties under
this Agreement, (D) the Executive’s conviction for any crime involving moral turpitude or any
felony, and (E) the Executive’s continued failure to perform his duties under this Agreement
(except due to the Executive’s incapacity as a result of physical or mental illness) to the
satisfaction of the Board of Directors of the Company for a period of at least thirty (30)
consecutive days after

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written notice is delivered to the Executive specifically identifying the manner in which the
Executive has failed to perform his duties.

               (iii) The Company, in the sole discretion of its board of directors, or the Parent, in the
sole discretion of the Board, may terminate the Executive’s employment hereunder at any time other
than for Disability or Cause, for any reason or for no reason at all.

     10(c). By the Executive. The Executive may terminate the Executive’s employment
hereunder for “Good Reason.” For purposes of this Agreement, “Good Reason” shall mean:

               (i) the assignment to the Executive of any duties inconsistent in any material respect with
the Executive’s position as contemplated by Section 3 of this Agreement, excluding for this purpose
an isolated, insubstantial and inadvertent action which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;

               (ii) any failure by the Company to comply with any of the provisions of this Agreement, other
than an isolated, insubstantial and inadvertent failure which is remedied by the Company or Parent
promptly after receipt of notice thereof given by the Executive;

               (iii) there is a merger, acquisition or other similar affiliation with another entity and the
Executive does not continue as the Executive Vice President for Institutional Advancement, or any
other office he holds at the time of the transaction, of the most senior resulting entity
succeeding to the business of the Company;

               (iv) any failure by the Company or Parent to comply with and satisfy Section 16(c) of this
Agreement.

          10(d). Notice of Termination. Any termination of the Executive’s employment by the
Company, the Parent or the Executive (other than pursuant to Section 10(a) hereof) shall be
communicated by written “Notice of Termination” to the other party hereto in accordance with
Section 13 hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a notice
which shall indicate the specific termination provision in this Agreement relied upon, if any, and
shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated.

          10(e). Date of Termination. For purposes of this Agreement, the “Date of
Termination” shall mean (i) if the Executive’s employment is terminated by

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the Executive’s death, the date of the Executive’s death; (ii) if the Executive’s employment is
terminated pursuant to Section 10(b)(i) hereof, thirty (30) days after Notice of Termination,
provided that the Executive shall not have returned to the performance of the Executive’s duties on
a full-time basis during this 30-day period; (iii) if the Executive’s employment is terminated
pursuant to Section 10(b)(ii), 10(b)(iii) or 10(c) hereof, the date specified in the Notice of
Termination; and (iv) if the Executive’s employment is terminated for any other reason, the date on
which Notice of Termination is given.

     11. Compensation Upon Termination.

          11(a). If the Executive’s employment is terminated by the Executive’s death, the Company
shall pay to the Executive’s estate, or as may be directed by the legal representatives of the
estate, the Executive’s full Base Salary through the Date of Termination and all other unpaid
amounts, if any, to which the Executive is entitled as of the Date of Termination in connection
with any fringe benefits or under any incentive compensation plan or program of the Company
pursuant to Sections 5(b) and (c) hereof, at the time these payments are due and the Company shall
have no further obligations to the Executive under this Agreement.

          11(b). If the Company terminates the Executive’s employment for Disability as provided in
Section 10(b)(i) hereof, the Company shall pay the Executive his full Base Salary through the Date
of Termination and all other unpaid amounts, if any, to which the Executive is entitled as of the
Date of Termination in connection with any fringe benefits or under any incentive compensation plan
or program of the Company pursuant to Sections 5(b) and (c) hereof, at the time these payments are
due, and the Company shall have no further obligations to the Executive under this Agreement;
provided, that payments made to the Executive during the Disability Period shall be reduced
by the sum of the amounts, if any, payable to the Executive at or prior to the time of any payment
under disability benefit plans of the Company and which amounts were not previously applied to
reduce any payment.

          11(c). If the Company terminates the Executive’s employment for Cause as provided in Section
10(b)(ii) hereof, the Company shall pay the Executive the Executive’s full Base Salary through the
Date of Termination and all other unpaid amounts, if any, to which Executive is entitled as of the
Date of Termination in connection with any fringe benefits or under any incentive compensation plan
or program of the Company pursuant to Section 5(c) hereof, and the Company shall have no further
obligations to the Executive under this Agreement.

          11(d). If the Executive terminates the Executive’s employment other than for Good Reason, the
Company shall pay the Executive the Executive’s

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full Base Salary through the Date of Termination and all other unpaid amounts, if any, to which
Executive is entitled as of the Date of Termination in connection with any fringe benefits or under
any incentive compensation plan or program of the Company pursuant to Sections 5(b) and (c) hereof,
and the Company shall have no further obligations to the Executive under this agreement.

          11(e). If the Company terminates the Executive’s employment other than for Cause or
Disability or the Executive terminates the Executive’s employment for Good Reason as provided in
Section 10(c) hereof, the Company shall pay the Executive the following amounts and shall have no
further obligations to the Executive:

               (i) the sum of (1) the Executive’s Base Salary through the Date of Termination to the extent
not theretofore paid, (2) the product of (x) the Annual Bonus (to the extent Company and Executive
performance were satisfying the performance targets, adjusted for the short period through the Date
of Termination, for an Annual Bonus) and (y) a fraction, the numerator of which is the number of
days in the current fiscal year through the effective date of termination of the Executive’s
employment (the “Date of Termination”), and the denominator of which is 365, and (3) any
compensation previously deferred by the Executive (together with any accrued interest or earnings
thereon) and any accrued vacation pay, in each case, to the extent not theretofore paid, (the sum
of the amounts described in clauses (1), (2), and (3) shall be hereinafter referred to as the
“Accrued Obligations”) in a lump sum in cash within 30 days of the Date of Termination;

               (ii) an amount equal to the sum of (x) the Executive’s Base Salary and (y) the Annual Bonus
(to the extent Company and Executive performance were satisfying the performance targets, adjusted
for the short period, after the Date of Termination to the end of the calendar year for an Annual
Bonus and as to the remainder of the one year period following the Date of Termination, only if net
income has increased from the same period in the prior year and the performance targets established
for the successor Executive Vice President for Institutional Advancement were being satisfied for
that period), in substantially equal proportionate installments in accordance with the Company’s
normal payroll practices, commencing with the first payroll period in the month following the month
in which the Date of Termination occurs, for a period of twelve (12) months; and

               (iii) for twelve (12) months after the Date of Termination, or any longer period as may be
provided by the terms of the appropriate plan, program, practice or policy, the Company shall
continue benefits to the Executive and/or the Executive’s family at least equal to those which
would have been provided to them in accordance with the welfare benefit plans, practices, policies
and programs provided by the Company and its affiliated companies (including, without limitation,
medical, prescription, dental, disability, employee life,

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group life, accidental death and travel accident insurance plans and programs) to the extent
applicable generally to other peer employees of the Company and its affiliated companies, as if the
Executive’s employment had not been terminated; provided, however, that if the
Executive becomes reemployed with another employer and is eligible to receive medical or other
welfare benefits under another employer provided plan, the medical and other welfare benefits
described herein shall be secondary to those provided under the other plan during the applicable
period of eligibility.

               (iv) to the extent that less than thirty three and one-third percent (33 1/3%) of all stock
options granted to the Executive under the American Public Education, Inc. 2002 Stock Incentive
Plan or any other employee stock option plan maintained for Company employees which are outstanding
at the time of such event shall be vested on the Date of Termination, such additional number of
options, if any, shall immediately accelerate and vest and become exercisable in accordance with
their terms. This Agreement is intended to amend all stock option grants previously awarded to the
Executive to modify vesting as described above to the extent more than sixty six and two-thirds
percent (66 2/3%) of the options held by the Executive shall not be vested under the terms of such
stock option grants on the Date of Termination.

               (v) to the extent not theretofore paid or provided, for twelve (12) months after the Date of
Termination, the Company shall timely pay or provide to the Executive any other amounts or benefits
required to be paid or provided or which the Executive is eligible to receive under any plan,
program, policy or practice or contract or agreement of the Company and its affiliated companies
(these other amounts and benefits shall be hereinafter referred to as the “Other Benefits”).

          11(f). No Duty to Mitigate. The Executive shall not be required to mitigate
amounts payable pursuant to Section 11 hereof by seeking other employment.

          11(g). No Additional Payments. Notwithstanding anything to the contrary in this
Agreement, the Executive acknowledges and agrees that in the event of the termination of his
employment, even if in breach of this Agreement, he will be entitled only to those payments
specified herein for the circumstances of his termination, and not to any other payments by way of
damages or claims of any nature, whether under this Agreement or under any other agreements between
the Executive and the Company.

     12. Acceleration of Options Upon Change of Control. Immediately prior to a Change of
Control (as hereinafter defined), all stock options granted to the Executive on or prior to the
date hereof or as contemplated by Section 5(e) hereof which are outstanding immediately prior to
such event shall be vested and fully

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exercisable. This Agreement is intended to amend all stock option grants previously awarded to the
Executive to modify vesting as described above to the extent vesting would not otherwise accelerate
in full under the terms of such stock option grants. For purposes of this Agreement, “Change of
Control” means (i) the dissolution or liquidation of the Parent or a merger, consolidation, or
reorganization of the Parent with one or more other entities in which the Parent is not the
surviving entity, (ii) a sale of substantially all of the assets of the Parent to another person or
entity, or (iii) any transaction (including without limitation a merger or reorganization in which
the Parent is the surviving entity) which results in any person or entity (other than persons who
are shareholders or affiliates immediately prior to the transaction) owning 50% or more of the
combined voting power of all classes of stock of the Parent.

     13. Notices. All notices, demands, requests or other communications required or
permitted to be given or made hereunder shall be in writing and shall be delivered, telecopied or
mailed by first class registered or certified mail, postage prepaid, addressed as follows:

          (a) If to the Company:

               American Public University System, Inc.

               10648 Wakeman Court

               Manassas, Virginia 20110

               Telecopy: (703) 330-5109

               Attention: Secretary

          (b) If to the Parent:

               American Public Education, Inc.

               10648 Wakeman Court

               Manassas, Virginia 20110

               Telecopy: (703) 330-5109

               Attention: Secretary

          (c) If to the Executive:

or to such other address as may be designated by either party in a notice to the other. Each
notice, demand, request or other communication that shall be given or made in the manner described
above shall be deemed sufficiently given or made for all purposes three (3) days after it is
deposited in the U.S. mail, postage prepaid, or at such time as it is delivered to the addressee
(with the return receipt, the delivery receipt, the answer back or the affidavit of messenger being
deemed conclusive

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evidence of delivery) or at such time as delivery is refused by the addressee upon presentation.

     14. Severability. The invalidity or unenforceability of any one or more provisions of
this Agreement shall not affect the validity or enforceability of the other provisions of this
Agreement, which shall remain in full force and effect.

     15. Survival. It is the express intention and agreement of the parties hereto that
the provisions of Sections 8 and 9 hereof shall survive the termination of employment of the
Executive. In addition, all obligations of the Company to make payments hereunder shall survive
any termination of this Agreement on the terms and conditions set forth herein.

     16. Successors and Assigns. (a) This Agreement is personal to the Executive and
without the prior written consent of the Company and the Parent shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This Agreement shall
inure to the benefit of and be enforceable by the Executive’s legal representatives.

     (b) This Agreement shall inure to the benefit of and be binding upon the Company and the
Parent and their successors and assigns.

     (c) The Company and the Parent will require any successor or any party that acquires control
of the Company and the Parent (whether direct or indirect, by purchase, merger, consolidation or
otherwise) or all or substantially all of the business and/or assets of the Company or the Parent
to assume expressly and agree to perform this Agreement in the same manner and to the same extent
that the Company and the Parent would be required to perform it if no succession had taken place.
As used in this Agreement, “Company” and “Parent” shall mean the Company or Parent, respectively,
as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes
and agrees to perform this Agreement by operation of law, or otherwise.

     17. Binding Effect. Subject to any provisions hereof restricting assignment, this
Agreement shall be binding upon the parties hereto and shall inure to the benefit of the parties
and their respective heirs, devisees, executors, administrators, legal representatives, successors
and assigns.

     18. Amendment; Waiver. This Agreement shall not be amended, altered or modified
except by an instrument in writing duly executed by the parties hereto. Neither the waiver by
either of the parties hereto of a breach of or a default under any of the provisions of this
Agreement, nor the failure of either of the parties, on one or more occasions, to enforce any of
the provisions of this Agreement or to exercise any right or privilege hereunder, shall thereafter
be construed as a waiver

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of any subsequent breach or default of a similar nature, or as a waiver of any provisions, rights
or privileges hereunder.

     19. Headings. Section and subsection headings contained in this Agreement are
inserted for convenience of reference only, shall not be deemed to be a part of this Agreement for
any purpose, and shall not in any way define or affect the meaning, construction or scope of any of
the provisions hereof.

     20. Governing Law. This Agreement, the rights and obligations of the parties hereto,
and any claims or disputes relating thereto, shall be governed by and construed in accordance with
the laws of the State of West Virginia (but not including the choice of law rules thereof).

     21. Entire Agreement. This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof, and it supersedes all prior oral or
written agreements, commitments or understandings with respect to the matters provided for herein.

     22. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be an original and all of which shall be deemed to constitute one and the same
instrument.

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     IN WITNESS WHEREOF, the undersigned have duly executed this Agreement, or have caused this
Agreement to be duly executed on their behalf, as of the day and year first hereinabove written.

	 	 	 	 	 
	 	 	AMERICAN PUBLIC UNIVERSITY SYSTEM, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Wallace E. Boston, Jr.
	 

	 	 	 	 
	 	 	Name: Wallace E. Boston, Jr.
	 	 	Title: EVP & CFO
	 
	 	 	 	 
	 	 	AMERICAN PUBLIC EDUCATION, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Wallace E. Boston, Jr.
	 

	 	 	 	 
	 	 	Name: Wallace E. Boston, Jr.
	 	 	Title: EVP & CFO
	 
	 	 	 	 
	 	 	THE EXECUTIVE:
	 
	 	 	 	 
	 	 	/s/ James Herhusky
	 	 	 
	 	 	James Herhusky

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Exhibit 10.9

EXECUTION COPY

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

AMONG

AMERICAN PUBLIC EDUCATION, INC.,

ABS CAPITAL PARTNERS IV, L.P.,

ABS CAPITAL PARTNERS IV-A, L.P.,

ABS CAPITAL PARTNERS IV OFFSHORE, L.P.,

ABS CAPITAL PARTNERS IV SPECIAL OFFSHORE, L.P.,

CAMDEN PARTNERS STRATEGIC FUND III, L.P.,

AND

CAMDEN PARTNERS STRATEGIC FUND III-A, L.P.

AUGUST 2, 2005

 

 

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

     THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement” or the “Registration
Rights Agreement”) is entered into as of August 2, 2005 by and among each of the following parties:
(i) American Public Education, Inc., a Delaware corporation (the “Company”) and (ii) ABS Capital
Partners IV, L.P., a Delaware limited partnership, ABS Capital Partners IV-A, L.P., a Delaware
limited partnership, ABS Capital Partners IV Offshore, L.P., a Cayman Islands exempt limited
partnership, ABS Capital Partners IV Special Offshore, L.P., a Cayman Islands exempt limited
partnership, Camden Partners Strategic Fund III, L.P., a Delaware limited partnership, and Camden
Partners Strategic Fund III-A, L.P., a Delaware limited partnership (collectively, the
“Investors”).

     WHEREAS, on the date hereof, the Investors have acquired an aggregate of 806,448 shares of
Class A Common Stock (the “Class A Common Stock”) from the Company pursuant to a Stock Purchase
Agreement dated August 2, 2005 and in exchange for previously outstanding shares of the Company’s
Series A Convertible Preferred Stock;

     WHEREAS, the Company and the Investors desire to enter into this Agreement in order to provide
the Investors with certain rights with respect to the registration of the Common Stock of the
Company issued or issuable upon conversion of the Class A Common Stock;

     WHEREAS, this Agreement shall supersede the prior Registration Rights Agreement by and among
the Company and ABS, dated as of August 30, 2002 (the “Prior Registration Rights Agreement”); and

     WHEREAS capitalized terms used in this Agreement shall have the meanings ascribed to them in
Article 2 hereof.

     NOW, THEREFORE, for and in consideration of the foregoing and of the mutual covenants and
agreements hereinafter set forth, the parties hereto agree as follows:

1. REGISTRATION RIGHTS

 1.1. Demand Registration Rights

     1.1.1. Request

     At any time after six months following an IPO, holders of at least 30% of the then outstanding
Registrable Securities may request registration for sale under

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the Act of all or part of the Registrable Securities then held by them, and upon such request the
Company will promptly take the actions specified in Section 1.1.2.

     1.1.2. Demand Procedures

     Within ten (10) Business Days after receipt by the Company of a written registration request
under Section 1.1.1 (which request shall specify the number of shares proposed to be registered and
sold and the manner in which such sale is proposed to be effected), the Company shall promptly give
written notice to all other Holders of the proposed demand registration, and such other Holders
shall have the right to join in the proposed registration and sale, upon written request to the
Company (which request shall specify the number of shares proposed to be registered and sold)
within five (5) Business Days after receipt of such notice from the Company. The Company shall
thereafter, as expeditiously as practicable, use commercially reasonable efforts to (i) file with
the SEC under the Act a registration statement on the appropriate form concerning all Registrable
Securities specified in the demand request and all Registrable Securities with respect to which the
Company has received the written request from the other Holders and (ii) cause the registration
statement to be declared effective. At the request of participating Holders holding a majority of
the Registrable Securities being registered, the Company shall cause each offering pursuant to
Section 1.1.1 to be managed, on a firm commitment basis, by a recognized regional or national
underwriter selected by such participating Holders and approved by the Company, such approval not
to be unreasonably withheld, conditioned or delayed. All Holders proposing to distribute their
securities through such underwriting shall enter into an underwriting agreement in customary form.
The Company shall not be obligated to effect more than two registrations requested by the Holders
under Section 1.1.1, provided, however, that any such request shall be deemed satisfied only when a
registration statement covering more than 75% of the Registrable Securities specified in notices
received as aforesaid, for sale in accordance with the method of disposition specified by the
Holders, has become effective.

     1.1.3. Delay by Company

     The Company shall not be required to effect a demand registration under the Act pursuant to
Section 1.1.1 above if (i) the Company receives a request for registration under Section 1.1.1 less
than 90 days preceding the anticipated effective date of a proposed underwritten public offering of
securities of the Company approved by the Company’s Board of Directors prior to the Company’s
receipt of the request and in such event the Company shall not be required to effect any such
requested registration until 120 days after the effective date of such proposed underwritten public
offering; (ii) within 120 days prior to any such request for registration, a registration of
securities of the Company has been effected in which the Holders had the right to participate
pursuant to this Section 1.1 or Section 1.3 hereof; or (iii) the Board of Directors of the Company
reasonably

- 2 -

 

determines in good faith that effecting such a demand registration at such time would have a
material adverse effect upon a proposed sale of all (or substantially all) of the assets of the
Company, or a merger, reorganization, recapitalization, or similar transaction materially affecting
the capital structure or equity ownership of the Company, or would otherwise be seriously
detrimental to the Company because the Company was then in the process of raising capital in the
public or private markets; provided, however, that the Company may only delay a demand registration
pursuant to this Section 1.1.3 for a period not exceeding 120 days (or until such earlier time as
such transaction is consummated or no longer proposed) and may only defer any such filing pursuant
to this Section 1.1.3 once per calendar year. The Company shall promptly notify in writing the
Holders requesting registration of any decision not to effect any such request for registration
pursuant to this Section 1.1.3, which notice shall set forth in reasonable detail the reason for
such decision and shall include an undertaking by the Company promptly to notify such Holders as
soon as a demand registration may be effected.

     1.1.4. Reduction

     If a demand registration is an underwritten registration and the managing underwriters advise
the Company and the Holders participating in the demand registration in writing that in their
opinion the number of shares of Common Stock requested to be included in such registration exceeds
the number which can be sold in such offering, then the amount of such shares that may be included
in such registration shall first be allocated pro rata among all of the Holders exercising demand
rights under Section 1.1 in proportion to the number of shares of Registrable Securities owned by
them and then to the Company or any other party seeking to participate in the offering.

     1.1.5. Withdrawal

     Holders participating in any demand registration pursuant to this Section 1.1 may withdraw at
any time before a registration statement is declared effective, and the Company may withdraw such
registration statement if no Registrable Securities are then proposed to be included (and if
withdrawn by the Company the Holders shall not be deemed to have requested a demand registration
for purposes of Section 1.1.1 hereof). If the Company withdraws a registration statement under
this Section 1.1.5 in respect of a registration for which the Company would otherwise be required
to pay expenses under Section 1.6.2 hereof, the Holders that shall have withdrawn shall reimburse
the Company for all expenses of such registration in proportion to the number of shares each such
withdrawing Holder shall have requested to be registered unless the Holders withdrew from the
requested registration pursuant to the discovery of material information adverse to the Company.

- 3 -

 

 1.2. Piggyback Registration Rights

     1.2.1. Request

     If at any time or times after the date of this Agreement the Company proposes to file a
registration statement covering any of its securities under the Act (whether to be sold by it or by
one or more selling stockholders), other than pursuant to an offering pursuant to a demand
registration under Section 1.1.1 or Section 1.3 hereof or an offering registered on Form S-8 or
Form S-4, or successor forms relating to employee stock plans and business combinations, the
Company shall, not less than 30 days prior to the proposed filing date of the registration form,
give written notice of the proposed registration to all Holders specifying in reasonable detail the
proposed transaction to be covered by the registration statement, and at the written request of any
Holder delivered to the Company within 30 days after giving such notice, shall include in such
registration and offering, and in any underwriting of such offering, all Registrable Securities as
may have been designated in the Holder’s request. The Company shall have no obligation to include
shares of Common Stock owned by any Holder in a registration statement pursuant to this Section
1.2, unless and until such Holder (a) in connection with any underwritten offering, agrees to enter
into an underwriting agreement, a custody agreement and power of attorney and any other customary
documents required in an underwritten offering all in customary form and containing customary
provisions and (b) shall have furnished the Company with all information and statements about or
pertaining to such Holder in such reasonable detail and on such timely basis as is reasonably
deemed by the Company to be legally required with respect to the preparation of the registration
statement.

     1.2.2. Reduction

     If a registration in which any Holder has the right or is otherwise permitted to participate
pursuant to this Section 1.2 is an underwritten registration, and the managing underwriters advise
the Company in writing that in their opinion the number of securities requested to be included in
such registration exceeds the number which can be sold in such offering, the Company shall include
in such registration (i) first, the shares proposed to be sold by the Company, (ii) second, the
shares proposed to be sold by Holders exercising rights under Section 1.2.1, allocated pro rata
among such Holders in proportion to the number of Registrable Securities owned by them, and (iii)
third, by any other stockholders proposing to sell shares of Common Stock pursuant to such
registration.

 1.3. Registration on Form S-3

     Subject to the limitations set forth in Section 1.1.3, if at any time the Company is eligible
to use Form S-3 (or any successor form) for secondary sales any Holder may request (by written
notice to the Company stating the number of

- 4 -

 

Registrable Securities proposed to be sold and the intended method of disposition) that the Company
file a registration statement on Form S-3 (or any successor form) for a public sale of all or any
portion of the Registrable Securities beneficially owned by it, provided that the reasonably
anticipated aggregate price to the public of such Registrable Securities shall be at least $1
million. At the written request of the Holder requesting such registration, such registration
shall be for a delayed or continuous offering under Rule 415 under the Act. Upon receiving such
request, the Company shall use commercially reasonable efforts to promptly file a registration
statement on Form S-3 (or any successor form) to register under the Act for public sale in
accordance with the method of disposition specified in such request, the number of shares of
Registrable Securities specified in such request and shall otherwise carry out the actions
specified in Section 1.1.2 and 1.4. There shall be no limitation on the number of registrations on
Form S-3 that may be requested and obtained under this Section 1.3 except that the Company shall
not be obligated to effect more than two registrations on Form S-3 under this Section 1.3 annually.

 1.4. Registration Procedures

     Whenever any Holder has requested that any shares of Common Stock be registered pursuant to
Sections 1.1, 1.2 or 1.3 hereof, the Company shall, as expeditiously as reasonably possible:

     (1) prepare and file with the SEC a registration statement with respect to such shares and use
commercially reasonable efforts to cause such registration statement to become effective as soon as
reasonably practicable thereafter (provided that before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company shall furnish counsel for such
Holder with copies of all such documents proposed to be filed);

     (2) prepare and file with the SEC such amendments and supplements to such registration
statement and prospectus used in connection therewith as may be necessary to keep such registration
statement effective for a period of not less than 90 days (two (2) years in the case of a
registration pursuant to Section 1.3 hereof), or until such earlier time as Holder has completed
the distribution described in such registration statement, whichever occurs first;

     (3) furnish to such Holder such number of copies of such registration statement, each
amendment and supplement thereto, the prospectus included in such registration statement (including
each preliminary prospectus), and such other documents as such Holder may reasonably request;

     (4) use commercially reasonable efforts to register or qualify such shares under such other
securities or blue sky laws of such jurisdictions as such Holder requests (and to maintain such
registrations and qualifications effective for

- 5 -

 

the applicable period of time set forth in Section 1.4(2) hereof, and to do any and all other acts
and things which may be necessary or advisable to enable such Holder to consummate the disposition
in such jurisdictions of such shares (provided that the Company will not be required to (i) qualify
generally to do business in any jurisdiction where it would not be required but for this subsection
(4), (ii) subject itself to taxation in any such jurisdiction, or (iii) file any general consent to
service of process in any such jurisdiction); provided that, notwithstanding anything to the
contrary in this Agreement with respect to the bearing of expenses, if any such jurisdiction shall
require that expenses incurred in connection with the qualification of such shares in that
jurisdiction be borne in part or full by such Holder, then such Holder shall pay such expenses to
the extent required by such jurisdiction;

     (5) notify such Holder, at any time when a prospectus relating thereto is required to be
delivered under the Act within the period that the Company is required to keep the registration
statement effective, of the happening of any event as a result of which the prospectus included in
any such registration statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading, and promptly prepare, file and furnish to
the Holder a supplement or amendment to such prospectus so that, as thereafter delivered to the
purchasers of such shares, such prospectus will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or, in light of the circumstances
then existing, necessary to make the statements therein not misleading;

     (6) cause all such shares to be listed on securities exchanges, if any, on which similar
securities issued by the Company are then listed (or if not then listed, on such exchanges as are
requested by participating Holders holding a majority of the Registrable Securities being
registered);

     (7) provide a transfer agent and registrar for all such shares not later than the effective
date of such registration statement;

     (8) enter into such customary agreements and take all such other customary actions as such
Holder reasonably requests (and subject to its reasonable approval) in order to expedite or
facilitate the disposition of such shares;

     (9) make available for inspection by such Holder, by any underwriter participating in any
distribution pursuant to such registration statement, and by any attorney, accountant or other
agent retained by such Holder or by any such underwriter, all financial and other records,
pertinent corporate documents, and properties (other than confidential intellectual property) of
the Company; and

- 6 -

 

     (10) in connection with an underwritten offering pursuant to a registration statement filed
pursuant to Section 1.1 hereof, enter into an underwriting agreement in customary form and
containing reasonable customary provisions, including provisions for indemnification of
underwriters and contribution, if so requested by any underwriter.

 1.5. Holdback Agreement

     (a) Notwithstanding anything in this Agreement to the contrary, if after any registration
statement to which the rights hereunder apply becomes effective (and prior to completion of any
sales thereunder), the Board of Directors determines in good faith that the failure of the Company
to (i) suspend sales of stock under the registration statement or (ii) amend or supplement the
registration statement, would have a material adverse effect on the Company, the Company shall so
notify each Holder participating in such registration and each Holder shall suspend any further
sales under such registration statement until the Company advises the Holder that the registration
statement has been amended or that conditions no longer exist which would require such suspension,
provided that the Company may impose any such suspension for no more than 30 days and no more than
two (2) times during any twelve month period.

     (b) In the event that the Company effects a registration of any securities under the Act in
its IPO, each Holder agrees not to effect any sale, transfer, disposition or distribution,
including any sale pursuant to Rule 144 under the Act, of any Equity Securities (except as part of
such offering) during the 180-day period commencing with the effective date of the registration
statement for the IPO, provided that all holders of 5% or more of the Company’s outstanding Equity
Securities, and officers and directors of the Company, to the extent that they hold Equity
Securities and have been requested by the managing underwriter to do so, enter into similar
agreements providing for similar restrictions on sales.

 1.6. Registration Expenses

     1.6.1. Holder Expenses

     If, pursuant to Sections 1.1, 1.2 or 1.3 hereof, Registrable Securities are included in a
registration statement, then the Holder thereof shall pay all transfer taxes, if any, relating to
the sale of its shares, and any underwriting discounts or commissions or the equivalent thereof
applicable to the sale of its shares.

     1.6.2. Company Expenses

     Except for the fees and expenses specified in Section 1.6.1 hereof and except as provided
below in this Section 1.6.2, the Company shall pay all expenses

- 7 -

 

incident to the registration of
shares by the Company and any Holders pursuant to Sections 1.1, 1.2 or 1.3 hereof, and to the
Company’s performance of or compliance with this Agreement, including, without limitation, all
registration and filing fees, fees and expenses of compliance with securities or blue sky laws,
underwriting discounts, fees and expenses (other than any Holder’s portion of any underwriting
discounts or commissions or the equivalent thereof), printing expenses, messenger and delivery
expenses, and reasonable fees and expenses of counsel for the Company and a single counsel for all
Holders selling shares and all independent certified public accountants and other persons retained
by the Company.

     1.6.3. Indemnity and Contribution

     (a) In the event that any shares owned by a Holder are proposed to be offered by means of a
registration statement pursuant to Section 1.1, 1.2 or 1.3 hereof, to the extent permitted by law,
the Company agrees to indemnify and hold harmless such Holder, any underwriter participating in
such offering, each officer, partner, manager and director of such person, each person, if any, who
controls or may control such Holder or underwriter within the meaning of the Act and each
representative of any Holder serving on the Board of Directors of the Company (such Holder or
underwriter, its officers, partners, managers directors and representatives, and any such other
persons being hereinafter referred to individually as an “Indemnified Person” and collectively as
“Indemnified Persons”) from and against all demands, claims, actions or causes of action,
assessments, losses, damages, liabilities, costs, and expenses, including, without limitation,
interest, penalties, and attorneys’ fees and disbursements, asserted against, resulting to, imposed
upon or incurred by such Indemnified Person, directly or indirectly (hereinafter referred to in
this Section 1.6.3 in the singular as a “claim” and in the plural as “claims”), based upon, arising
out of or resulting from any breach of representation or warranty made by the Company in any
underwriting agreement or any untrue statement of a material fact contained in the registration
statement or any omission to state therein a material fact necessary to make the statements made
therein, in the light of the circumstances under which they were made, not misleading, except
insofar as such claim is based upon, arises out of or results from information furnished to the
Company in writing by such Indemnified Person for use in connection with the registration
statement.

     (b) The indemnification provisions set forth herein shall be in addition to any liability the
Company may otherwise have to the Indemnified Persons. Promptly after receiving notice of any
claim in respect of which an Indemnified Person may seek indemnification under this Section 1.6.3,
such Indemnified Person shall submit written notice thereof to either the Company or
the Holders, as the case may be (sometimes being hereinafter referred to as an “Indemnifying
Person”). The omission of the Indemnified Person so to notify the Indemnifying Person of any such
claim shall not relieve the Indemnifying Person from any liability it may have hereunder except to
the extent that (a) such liability

- 8 -

 

was caused or increased by such omission, or (b) the ability of
the Indemnifying Person to reduce such liability was materially adversely affected by such
omission. In addition, the omission of the Indemnified Person so to notify the Indemnifying Person
of any such claim shall not relieve the Indemnifying Person from any liability it may have
otherwise than hereunder. The Indemnifying Person shall have the right to undertake, by counsel or
representatives of its own choosing, the defense, compromise or settlement (without admitting
liability of the Indemnified Person) of any such claim asserted, such defense, compromise or
settlement to be undertaken at the expense of the Indemnifying Person, and the Indemnified Person
shall have the right to engage separate counsel, at its own expense, whom counsel for the
Indemnifying Person shall keep informed and consult with in a reasonable manner. In the event the
Indemnifying Person shall elect not to undertake such defense by its own representatives, the
Indemnifying Person shall give prompt written notice of such election to the Indemnified Person,
and the Indemnified Person shall undertake the defense, compromise or settlement (without admitting
liability of the Indemnified Person) thereof on behalf of and for the account of the Indemnifying
Person by counsel or other representatives designated by the Indemnified Person. Notwithstanding
the foregoing, no Indemnifying Person shall be obligated hereunder with respect to amounts paid in
settlement of any claim if such settlement is effected without the consent of such Indemnifying
Person (such consent not to be unreasonably withheld).

     (d) If the indemnification provided for in this Section 1.6 is held by a court of competent
jurisdiction to be unavailable to an Indemnified Person, then the Indemnifying Person, in lieu of
indemnifying such Indemnified Person hereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of any losses or claims in such proportion as is appropriate to
reflect the relative fault of the Indemnified Person on the one hand and the Indemnifying Person on
the other in connection with the statements or omissions that resulted in such losses or claims as
well as any other relevant equitable considerations. The relative fault of the Indemnified Person
and the Indemnifying Person shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Indemnifying Person or by the Indemnified Person and the
parties’ relative intent, knowledge and access to information and opportunity to correct or prevent
such statement or omission. In no event will the liability of any Holder for contribution exceed
the net proceeds received by such Holder in any sale of securities to which such liability relates.

 1.7. Grant and Transfer of Registration Rights

     Except for registration rights which have been granted by the Company as of the date hereof
and registration rights granted by the Company after the date hereof which are subordinate to the
rights of the Holders hereunder,

- 9 -

 

the Company shall not grant any registration rights to any other
person or entity without the prior written consent of Holders of a majority of the Registrable
Securities held by all Holders. Notwithstanding the foregoing sentence, Legg Mason Wood Walker,
Incorporated (“LMWW”) received a warrant exercisable for up to 14,165 shares of Class A Common
Stock on August 2, 2005. Upon exercise of the Warrant, LMMW shall have the right to join this
Agreement as a Holder. Additionally, the shares of Common Stock into which the Class A Common Stock
obtained by LMMW upon exercise of the Warrant are then convertible shall be deemed Registrable
Securities hereunder. Holders shall have the right to transfer or assign the rights contained in
this Agreement (i) to any limited partner or affiliate of a Holder in connection with the transfer
of any Registrable Securities or (ii) to any third party transferee acquiring at least 20% of the
Registrable Securities issued to the Holder as of the date hereof or the shares of Common Stock
issued upon conversion of such Registrable Securities; provided: (a) the Company is, within a
reasonable time after such transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such registration rights are being
assigned; (b) such transferee or assignee agrees in writing to be bound by and subject to the terms
and conditions of this Agreement; and (c) such assignment shall be effective only if immediately
following such transfer the further disposition of such securities by the transferee or assignee is
restricted under the Act.

 1.8. Information from Holder

     It shall be a condition precedent to the obligations of the Company to take any action
pursuant to this Section 1 with respect to the Registrable Securities of any selling Holder that
such Holder shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities as shall be
required to effect the registration of such Holder’s Registrable Securities.

2. DEFINITIONS

     The capitalized terms contained in this Agreement shall have the following meanings unless
otherwise specifically defined:

     “ABS” shall mean ABS Capital Partners IV, L.P., a Delaware limited partnership, ABS Capital
Partners IV-A, L.P., a Delaware limited partnership, ABS Capital Partners IV Offshore, L.P., a
Cayman Islands exempt limited partnership,
and ABS Capital Partners IV Special Offshore, L.P., a Cayman Islands exempt limited partnership.

     “Act” shall mean the Securities Act of 1933, as amended.

     “Agreement” shall mean this Registration Rights Agreement.

- 10 -

 

     “Business Day” shall mean Monday through Friday and shall exclude any federal or bank holidays
observed in New York City.

     “Camden” shall mean Camden Partners Strategic Fund III, L.P., a Delaware limited partnership,
and Camden Partners Strategic Fund III-A, L.P., a Delaware limited partnership.

     “Company” shall mean American Public Education, Inc., a Delaware corporation, or any successor
thereto.

     “Common Stock” shall mean the common stock of the Company, $.01 par value per share.

     “Equity Securities” shall mean the Common Stock, the Class A Common Stock and any warrants or
other rights to subscribe for or to purchase, or any options for the purchase of, Common Stock, any
stock or security convertible into or exchangeable for Common Stock or any other stock, security or
interest in the Company whether or not convertible into or exchangeable for Common Stock.

     “Holders” shall mean the Investors and any other person or entity that is a valid transferee
of the rights granted hereunder pursuant to Section 1.7 hereof.

     “Indemnified Person” shall have the meaning ascribed to that term in Section 1.6.3.

     “Indemnifying Person” shall have the meaning ascribed to that term in Section 1.6.3.

     “IPO” shall mean the initial public offering of the Company’s Equity Securities registered
under the Act.

     “Registrable Securities” shall mean (i) shares of Common Stock, issued or issuable upon
conversion of the Class A Common Stock, (ii) any other shares of Common Stock held by the Investors
as of the date hereof or hereafter acquired by such Holders, and (iii) any equity securities issued
as a distribution with respect to or in exchange for or in replacement for any of the shares
referred to in clauses (i)
and (ii); provided, however, that Registrable Securities shall not include any securities that have
been previously sold pursuant to a registration statement filed under the Act or under Rule 144
promulgated under the Act, or which have otherwise been transferred in a transaction in which the
transferor’s rights under this Agreement are not assigned, or, as to any Holder, all of such
Holder’s Equity Securities if all of such Equity Securities are then eligible for sale in a single
transaction under Rule 144(k), promulgated under the Act.

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3. MISCELLANEOUS

 3.1. Entire Agreement; Amendment

     This Agreement constitutes the entire agreement among the parties hereto with respect to the
matters provided for herein, and it supersedes all prior oral or written agreements, commitments or
understandings with respect to the matters provided for herein, including the Prior Registration
Rights Agreement. This Agreement may not be amended without the written consent of the Company and
the Holders of a majority of the Registrable Securities held by all Holders. In addition to the
foregoing, for so long as Camden owns any Registrable Securities, any amendment to this Agreement
that would materially and adversely modify Camden’s rights or obligations hereunder differently
than it modifies the rights or obligations of ABS hereunder shall also require the consent of
Camden.

 3.2. Waiver

     No delay or failure on the part of any party hereto in exercising any right, power or
privilege under this Agreement or under any other instruments given in connection with or pursuant
to this Agreement shall impair any such right, power or privilege or be construed as a waiver of
any default or any acquiescence therein. No single or partial exercise of any such right, power or
privilege shall preclude the further exercise of such right, power or privilege, or the exercise of
any other right, power or privilege. No waiver shall be valid against any party hereto unless made
in writing and signed by the party against whom enforcement of such waiver is sought and then only
to the extent expressly specified therein.

 3.3. Termination

     This Agreement shall forthwith become wholly void and of no effect upon the earlier to occur
of the following: (i) as to any Holder, at such time as all of such Holder’s Equity Securities are
then eligible for sale in a single transaction under Rule 144(k), promulgated under the Act, or
(ii) seven years from the closing date of the Company’s IPO.

 3.4. No Third Party Beneficiaries

     Except to the extent that the rights hereunder are assigned in accordance with Section 1.7, it
is the explicit intention of the parties hereto that no person or entity other than the parties
hereto is or shall be entitled to bring any action to enforce any provision of this Agreement
against any of the parties hereto, and the covenants, undertakings and agreements set forth in this
Agreement shall be solely for the benefit of, and shall be enforceable only by, the parties hereto
or

- 12 -

 

their respective successors, heirs, executors, administrators, legal representatives and
permitted assigns.

 3.5. Binding Effect

     This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors, heirs, executors, administrators, legal representatives and permitted
assigns.

 3.6. Governing Law

     This Agreement, the rights and obligations of the parties hereto, and any claims or disputes
relating thereto, shall be governed by and construed in accordance with the laws of the State of
Delaware (excluding the choice of law rules thereof).

 3.7. Notices

     All notices, demands, requests, or other communications which may be or are required to be
given, served, or sent by any party to any other party pursuant to this Agreement shall be in
writing and shall be hand-delivered, sent by overnight courier service or mailed by first-class,
registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

     (i) If to the Company:

111 W. Congress Street

Charles Town, West Virginia 25414

Attention: Chief Executive Officer

with a copy (which shall not constitute notice) to:

Hogan & Hartson, L.L.P.

111 South Calvert Street

Baltimore, Maryland 21202

Attention: Thene M. Martin

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     (ii) If to ABS:

ABS Capital Partners IV, L.P.

400 East Pratt Street

Suite 910

Baltimore, Maryland 21202

Attention: Phillip A. Clough

with a copy (which shall not constitute notice) to:

DLA Piper Rudnick Gray Cary

6225 Smith Avenue

Baltimore, Maryland 21209

Attention: Richard C. Tilghman, Jr.

     (iii)If to Camden:

Camden Partners Holdings, LLC

One South Street, Suite 2150

Baltimore, Maryland 21202

Attention: David L. Warnock

with a copy (which shall not constitute notice) to:

Wilmer Cutler Pickering Hale and Dorr LLP

1600 Tysons Boulevard

Suite 1000

McLean, Virginia 22102

Attention: Gregory J. Ewald

     (iv) If to any other Holder, such Holder’s address as appearing on
the records of the Company.

Each party may designate by notice in writing a new address to which any notice, demand, request or
communication may thereafter be so given, served or sent. Each notice, demand, request, or
communication which shall be hand-delivered or mailed in the manner described above, shall be
deemed sufficiently given, served, sent, received or delivered for all purposes at such time as it
is delivered to the addressee (with the return receipt or the delivery receipt being deemed
conclusive, but not exclusive, evidence of such delivery) or at such time as delivery is refused by
the addressee upon presentation.

 3.8. Execution in Counterparts

     To facilitate execution, this Agreement may be executed in as many counterparts as may be
required; and it shall not be necessary that the signatures of, or on behalf of, each party, or
that the signatures of all persons required to bind

- 14 -

 

any party, appear on each counterpart; but it
shall be sufficient that the signature of, or on behalf of, each party, or that the signatures of
the persons required to bind any party, appear on one or more of the counterparts. All
counterparts shall collectively constitute a single agreement. It shall not be necessary in making
proof of this Agreement to produce or account for more than a number of counterparts containing the
respective signatures of, or on behalf of, all of the parties hereto.

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     IN WITNESS WHEREOF, the undersigned have duly executed this Registration Rights Agreement, or
have caused this Registration Rights Agreement to be duly executed on their behalf, as of the day
and year first set forth above.

	 	 	 
	 

	 	AMERICAN PUBLIC EDUCATION, INC.
	 
	 	 
	 

	 	By: /s/ Wallace E. Boston, Jr.
	 

	 	 

	 

	 	     Wallace E. Boston, Jr., Chief Executive Officer
	 
	 	 
	 

	 	ABS CAPITAL PARTNERS IV, L.P.
	 

	 	By: ABS Partners IV, L.L.C.
	 

	 	Its General Partner
	 
	 	 
	 

	 	By: /s/ Phillip A. Clough
	 

	 	 

	 

	 	Name: Phillip A. Clough
	 

	 	Title: Managing Member
	 
	 	 
	 

	 	ABS CAPITAL PARTNERS IV-A, L.P.
	 

	 	By: ABS Partners IV, L.L.C.
	 

	 	Its General Partner
	 
	 	 
	 

	 	By: /s/ Phillip A. Clough
	 

	 	 

	 

	 	Name: Phillip A. Clough
	 

	 	Title: Managing Member
	 
	 	 
	 

	 	ABS CAPITAL PARTNERS IV OFFSHORE L.P.
	 

	 	By: ABS Partners IV, L.L.C.
	 

	 	Its General Partner
	 
	 

	 	By: /s/ Phillip A. Clough
	 

	 	 

	 

	 	Name: Phillip A. Clough
	 

	 	Title: Managing Member
	 
	 	 
	 

	 	ABS CAPITAL PARTNERS IV SPECIAL
OFFSHORE L.P.
	 

	 	By: ABS Partners IV, L.L.C.
	 

	 	Its General Partner
	 
	 	 
	 

	 	By: /s/ Phillip A. Clough
	 

	 	 

	 

	 	Name: Phillip A. Clough

Title: Managing Member

- 16 -

 

	 	 	 
	 

	 	CAMDEN PARTNERS STRATEGIC FUND III, L.P.
	 

	 	By: Camden Partners Strategic III, LLC
	 

	 	Its General Partner
	 
	 

	 	By: Camden Partners Strategic Manager, LLC
	 

	 	Its Managing Member
	 
	 	 
	 

	 	By: /s/ David A Warnock
	 

	 	 

	 

	 	Name: David A. Warnock
	 

	 	Title: Managing Member
	 
	 	 
	 

	 	CAMDEN PARTNERS STRATEGIC FUND III-A, L.P.
	 

	 	By: Camden Partners Strategic III, LLC
	 

	 	Its General Partner
	 
	 	 
	 

	 	By: Camden Partners Strategic Manager, LLC

Its Managing Member
	 
	 	 
	 

	 	By: /s/ David A Warnock
	 

	 	 

	 

	 	Name: David A. Warnock
	 

	 	Title: Managing Member

- 17 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}]]