Document:

Exhibit 10.2

 

SECOND AMENDMENT TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT AND AMENDMENT TO OTHER LOAN DOCUMENTS

 

THIS SECOND AMENDMENT TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT AND AMENDMENT TO OTHER LOAN DOCUMENTS (this “Amendment”), dated as of August 1, 2018, is made by and among STRATEGIC EDUCATION, INC., a Maryland corporation, formerly known as Strayer Education, Inc., a Maryland corporation (the “Borrower”), the several banks and other financial institutions and lenders party hereto (the “Lenders”), and SUNTRUST BANK, in its capacity as administrative agent for the Lenders (the “Administrative Agent”) and as issuing bank (the “Issuing Bank”) and as swingline lender (the “Swingline Lender”), STRAYER UNIVERSITY, LLC, a Maryland limited liability company, formerly known as The Strayer University Corporation, a Maryland corporation, formerly known as Strayer University, Inc., a Maryland corporation (“SU”), NEW YORK CODE AND DESIGN ACADEMY, INC., a Delaware corporation (“NYCDA”), THE NEW YORK CODE AND DESIGN ACADEMY PENNSYLVANIA, INC., a Delaware corporation (“NYCDA PA”), NYCDA REALTY, LLC, a New York limited liability company (“NYCDA Realty”), CAPELLA EDUCATION COMPANY, a Minnesota corporation (“Capella”), CAPELLA UNIVERSITY, INC., a Minnesota corporation (“CU”), CAPELLA LEARNING SOLUTIONS, LLC, a Delaware limited liability company (“CLS”), SOPHIA LEARNING, LLC, a Delaware limited liability company (“Sophia”), HACKBRIGHT ACADEMY, INC., a Delaware corporation (“Hackbright”), and DEVMOUNTAIN, LLC, a Utah limited liability company (“DevMountain,” and together with SU, NYCDA, NYCDA PA, NYCDA Realty, Capella, CU, CLS, Sophia and Hackbright, collectively, the “Subsidiary Loan Parties,” and each, a “Subsidiary Loan Party,” and the Subsidiary Loan Parties together with the Borrower, collectively, the “Loan Parties,” and individually, a “Loan Party”).

 

RECITALS

 

WHEREAS, the Borrower, the Lenders and the Administrative Agent are parties to the Second Amended and Restated Revolving Credit and Term Loan Agreement, dated as of November 8, 2012, as amended by the First Amendment to Second Amended and Restated Revolving Credit and Term Loan Agreement, dated as of July 2, 2015, by and among the Borrower, the other Loan Parties party thereto, the Lenders party thereto and the Administrative Agent, as amended by the Supplement and Joinder Agreement, dated as of July 2, 2015, by and among the Borrower, the other Loan Parties party thereto, the Lenders party thereto and the Administrative Agent, as amended by the Waiver to Second Amended and Restated Revolving Credit and Term Loan Agreement, dated as of January 12, 2016, by and among the Borrower, the other Loan Parties party thereto, the Lenders party thereto and the Administrative Agent, as amended by the Supplement and Joinder Agreement, of even date herewith (the “Supplement and Joinder”), by and among the Borrower, the other Loan Parties, the Lenders party thereto and the Administrative Agent (as further amended, supplemented, amended and restated or otherwise modified through the date hereof, the “Credit Agreement”).  Capitalized terms defined in the Credit Agreement and undefined herein shall have the same defined meanings when such terms are used in this Amendment;

 

 

WHEREAS, the Borrower has entered into that certain Agreement and Plan of Merger, dated as of October 29, 2017 (the “Capella Acquisition Agreement”), among the Borrower, Sarg Sub Inc., a Minnesota corporation (the “Merger Sub”),  and Capella, pursuant to which Borrower acquired all of the Capital Stock of Capella on the date hereof simultaneously or substantially concurrent with the effectiveness of this Amendment (the “Capella Acquisition”);

 

WHEREAS, the Borrower has requested that the Administrative Agent and the Lenders amend certain provisions of the Credit Agreement to, among other things, permit the Capella Acquisition and amend the Security Agreement as set forth herein;

 

WHEREAS, the Merger Sub is a Domestic Subsidiary of the Borrower, and the Borrower failed to notify the Administrative Agent of the incorporation of the Merger Sub and cause the Merger Sub to become a Subsidiary Loan Party in accordance with the requirements set forth in Section 5.11 of the Credit Agreement (collectively, the “Additional Subsidiary Joinder Failure”);

 

WHEREAS, the Borrower and the other Loan Parties have requested that the Administrative Agent and the Lenders waive any Default or Event of Default that may be deemed to have been caused by the Additional Subsidiary Joinder Failure; and

 

WHEREAS, the Administrative Agent and the Lenders have agreed to do so, subject to the terms and conditions of this Amendment;

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged), the parties hereto hereby agree as follows:

 

AGREEMENT

 

1.                                      Incorporation of Recitals.  The Recitals hereto are incorporated herein by reference to the same extent and with the same force and effect as if fully set forth herein.

 

2.                                      Amendments to Credit Agreement and other Loan Documents.  The Credit Agreement and the other Loan Documents are hereby amended as follows:

 

(a)                                 The Credit Agreement (other than the Schedules and Exhibits attached thereto) is hereby amended to reflect all of the terms and conditions set forth in the updated version of the Credit Agreement that is attached hereto as Exhibit A.

 

(b)                                 Schedule I to the Credit Agreement is amended to read in its entirety as set forth in Appendix A attached hereto and made a part hereof.

 

(c)                                  Schedule II to the Credit Agreement is amended to read in its entirety as set forth in Appendix B attached hereto and made a part hereof.

 

(d)                                 The Credit Agreement is amended by adding a new Schedule 1.1 thereto in the appropriate order therein as set forth in Appendix C attached hereto and made a part hereof.

 

2

 

(e)                                  Exhibit 5.1(d)(1) to the Credit Agreement is amended to read in its entirety as set forth in Appendix D attached hereto and made a part hereof.

 

(f)                                   Exhibit 5.1(d)(2) to the Credit Agreement is amended to read in its entirety as set forth in Appendix E attached hereto and made a part hereof.

 

(g)                                  The definition of “Excluded Collateral” set forth in the Security Agreement is amended to read in its entirety as does the definition of “Excluded Collateral” set forth in Section 1.1 of the Credit Agreement as amended hereby.

 

(h)                                 Except as specifically modified by this Amendment, the terms and provisions of the Credit Agreement and the Security Agreement are ratified and confirmed by the parties hereto and remain unchanged and in full force and effect.

 

(i)                                     Each of the Borrower, the other Loan Parties, the Administrative Agent and each Lender agrees that, as of and after the Amendment Effective Date (as hereinafter defined), each reference in the Loan Documents to the Credit Agreement or the Security Agreement shall be deemed to be a reference to the Credit Agreement or the Security Agreement, as applicable, as amended hereby.

 

3.                                      Consent; Waiver.

 

(a)                                 Notwithstanding any provision to the contrary contained in the Loan Documents, the Administrative Agent and the Lenders consent to the consummation of the Capella Acquisition pursuant to the Capella Acquisition Agreement and the other transactions contemplated thereby (collectively, the “Contemplated Transactions”).  The parties hereto further agree that the consummation of the Contemplated Transactions, in and of themselves, shall not otherwise cause any representation, warranty, covenant, Default or Event of Default under any Loan Document to be in breach.

 

(b)                                 Subject to the terms and conditions herein, each of the Lenders and the Administrative Agent hereby waives any Default or Event of Default that may deemed to have been caused by the Additional Subsidiary Joinder Failure (collectively, the “Waived Defaults”).

 

4.                                      Effectiveness of Amendment.  This Amendment and the amendments contained herein shall become effective on the date (the “Amendment Effective Date”) when each of the conditions set forth below shall have been fulfilled to the satisfaction of the Administrative Agent:

 

(a)                                 The Administrative Agent shall have received counterparts of this Amendment, duly executed and delivered on behalf of the Borrower, the other Loan Parties, the Administrative Agent and the Lenders party hereto, the Supplement and Joinder, duly executed and delivered on behalf of the Borrower, the other Loan Parties, the Administrative Agent and the Lenders party thereto, as well as allonges to the Revolving Credit Notes or amended and restated Revolving Credit Notes and/or new Revolving Credit Notes, in the principal amount of each Revolving Loan Lender’s Revolving Commitment (after giving effect to this Amendment and the Supplement and Joinder), duly executed by the parties thereto, and all other Loan

 

3

 

Documents or other documents, instruments and certificates required hereby or thereby (collectively, the “Modification Documents”).

 

(b)                                 After giving effect to this Amendment and the other Modification Documents, no event shall have occurred and be continuing that constitutes a Default or an Event of Default.

 

(c)                                  All representations and warranties of the Borrower contained in the Credit Agreement, and all representations and warranties of each other Loan Party in each Loan Document to which it is a party, shall be true and correct in all material respects (or, if qualified by materiality, in all respects) at the Amendment Effective Date as if made on and as of such Amendment Effective Date (except to the extent stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects (or, if qualified by materiality, in all respects) as of such earlier date).

 

(d)                                 The Borrower shall have delivered to the Administrative Agent a certificate of the Secretary or Assistant Secretary of each Loan Party in form and substance reasonably acceptable to the Administrative Agent, attaching and certifying copies of its bylaws and of the resolutions of its boards of directors, or comparable organizational documents and authorizations, authorizing the execution, delivery and performance of the Modification Documents to which it is a party and certifying the name, title and true signature of each officer of such Loan Party executing the Modification Documents to which it is a party.

 

(e)                                  The Administrative Agent (or its counsel) shall have received a favorable written opinion of Hogan Lovells US LLP, counsel to the Loan Parties, and Gray, Plant, Mooty, Mooty & Bennett, P.A., local Minnesota counsel to the Loan Parties, in each case, addressed to the Administrative Agent and each of the Lenders, and covering such matters relating to the Loan Parties, this Amendment, the other Modification Documents and the transactions contemplated herein and therein as the Administrative Agent or the Required Lenders shall reasonably request.

 

(f)                                   The Administrative Agent (or its counsel) shall have received the results of a search of the Uniform Commercial Code filings (or equivalent filings) made with respect to the Loan Parties in the states (or other jurisdictions) of formation of such Persons, and to the extent requested by the Administrative Agent, in which the chief executive office of each such Person is located and in the other jurisdictions in which such Persons maintain property or do business, together with copies of the financing statements (or similar documents) disclosed by such search, and accompanied by evidence satisfactory to the Administrative Agent that the Liens indicated in any such financing statement (or similar document) would be permitted by Section 7.2 of the Credit Agreement or have been or will be contemporaneously released or terminated.

 

(g)                                  Intentionally deleted.

 

(h)                                 The Borrower shall have delivered to the Administrative Agent a duly completed and executed Compliance Certificate of the Borrower, including pro forma calculations of the financial covenants set forth in Article 6 (other than Section 6.3) hereof as of March 31, 2018, giving effect to the repayment in full of any Indebtedness of Capella and its Subsidiaries required by the Capella Acquisition Agreement to be repaid upon the consummation of the Capella Acquisition and the disbursement of any Revolving Loans as of the Amendment Effective Date.

 

4

 

(i)                                     The Borrower shall have paid to the Administrative Agent and STRH and the other Lead Arrangers (as defined in the Fee Letter) the amounts due pursuant to the Fee Letter, and the fees and expenses required pursuant to Section 11 of this Amendment, in each case, as of the Amendment Effective Date.

 

(j)                                    All documents delivered pursuant to this Amendment and the other Modification Documents must be of form and substance reasonably satisfactory to the Administrative Agent.

 

(k)                                 Satisfaction of the conditions precedent to effectiveness of the Supplement and Joinder, in accordance with the terms and conditions set forth therein.

 

5.                                      Amendment Only; No Novation; Modification of Loan Documents.  Each of the Borrower and each other Loan Party acknowledges and agrees that this Amendment and the other Modification Documents only amend the terms of the Credit Agreement and the other Loan Documents and does not constitute a novation, and each of the Borrower and each other Loan Party ratifies and confirms the terms and provisions of, and its obligations under, the Credit Agreement and the other Loan Documents in all respects.  Each of the Borrower and each other Loan Party acknowledges and agrees that each reference in the Loan Documents to any particular Loan Document shall be deemed to be a reference to such Loan Document as amended by this Amendment and the other Modification Documents.  To the extent of a conflict between the terms of any Loan Document and the terms of this Amendment, the terms of this Amendment shall control.

 

6.                                      Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of the Borrower, the other Loan Parties, the Lenders and the Administrative Agent and their respective successors and assigns.

 

7.                                      No Further Amendments.  Nothing in this Amendment, the other Modification Documents or any prior amendment to the Loan Documents shall require the Administrative Agent or any Lender to grant any further amendments to the terms of the Loan Documents.  Each of the Borrower and each other Loan Party acknowledges and agrees that there are no defenses, counterclaims or setoffs against any of their respective obligations under the Loan Documents.

 

8.                                      Representations and Warranties.  Each of the Borrower and each other Loan Party represents and warrants that (i) each of this Amendment and the other Modification Documents is within its respective company powers, have been duly authorized, executed and delivered by it in accordance with resolutions adopted by its board of directors or comparable managing body and is the legal, valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its terms, provided that the enforceability hereof and thereof is subject to general principles of equity and to bankruptcy, insolvency and similar laws affecting the enforcement of creditors’ rights generally, (ii) the execution, delivery and performance by each Loan Party of this Amendment and each of the other Modification Documents to which it is a party (A) require no consent or approval of or action by or in respect of, or registration or filing with, any Governmental Authority, except such as have been obtained or made and are in full force and effect, (B) do not contravene, or constitute a default under, any provision of applicable law, regulation or order of any Governmental Authority or such Loan Party’s organizational documents or of any judgment, injunction, order or decree binding upon such Loan Party, and

 

5

 

(C) will not violate or result in a default under any indenture, loan agreement or other material agreement or instrument binding upon such Loan Party or its assets and (iii) all other representations and warranties made by the Borrower and each other Loan Party in the Loan Documents to which it is a party, are true and correct in all material respects (or, if qualified by materiality, in all respects) on the Amendment Effective Date (except to the extent stated to relate to a specific earlier date, in which case such representations and warranties are true and correct in all material respects (or, if qualified by materiality, in all respects) as of such earlier date).  Each of the Borrower and each other Loan Party represents and warrants to the Administrative Agent, the Lenders and the Issuing Bank that, no Default or Event of Default (other than the Waived Defaults) has occurred and is continuing or will occur and continue after giving effect to the terms of this Amendment and the other Modification Documents.

 

9.                                      No Implied Waivers.  Except as expressly set forth herein, each of the Borrower and each other Loan Party acknowledges and agrees that the amendments contained herein and the other Modification Documents shall not constitute a waiver, express or implied, of any Default, Event of Default, covenant, term or provision of the Credit Agreement or any of the other Loan Documents, nor shall they create any obligation, express or implied, on the part of the Administrative Agent or any other Lender to waive, or to consent to any amendment of, any existing or future Default, Event of Default or violation of any covenant, term or provision of the Credit Agreement or any of the other Loan Documents.  The Administrative Agent and the Lenders shall be entitled to require strict compliance by the Borrower and the other Loan Parties with the Credit Agreement and each of the other Loan Documents, and nothing herein shall be deemed to establish a course of action or a course of dealing with respect to requests by the Borrower or any other Loan Party for waivers or amendments of any Default, Event of Default, covenant, term or provision of the Credit Agreement or any of the other Loan Documents.

 

10.                               Confirmation of Lien.  Each of the Borrower and each other Loan Party hereby acknowledges and agrees that the Collateral is and shall remain in all respects subject to the lien, charge and encumbrance of the Credit Agreement and the other Loan Documents and nothing herein contained, and nothing done pursuant hereto, shall adversely affect or be construed to adversely affect the lien, charge or encumbrance of, or conveyance effected by the Loans or the priority thereof over other liens, charges, encumbrances or conveyances.

 

11.                               Expenses.  The Borrower agrees to pay the reasonable and documented out-of-pocket costs and expenses of the Administrative Agent and its Affiliates, including the fees, charges and disbursements of counsel for the Administrative Agent and its Affiliates, in connection with the preparation, due diligence and administration of this Amendment and the other Modification Documents.

 

12.                               Severability.  Any provision of this Amendment held to be illegal, invalid or unenforceable in any jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of such illegality, invalidity or unenforceability without affecting the legality, validity or enforceability of the remaining provisions hereof; and the illegality, invalidity or unenforceability of a particular provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

6

 

13.                               Governing Law.  This Amendment shall be construed in accordance with and be governed by the law (without giving effect to the conflict of law principles thereof) of the Commonwealth of Virginia.  THIS AMENDMENT WILL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE COMMONWEALTH OF VIRGINIA.

 

14.                               Counterparts.  This Amendment may be executed by one or more of the parties to this Amendment on any number of separate counterparts (including by telecopy or other electronic transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.  It shall not be necessary that the signature of, or on behalf of, each party, or that the signatures of the persons required to bind any party, appear on more than one counterpart.

 

15.                               Titled Agents.  PNC Bank, National Association, shall have the title “Syndication Agent,” subject to the provisions of Section 9.10 of the Credit Agreement.  Each of Bank of America, N.A., and Bank of Montreal shall have the title “Documentation Agent,” subject to the provisions of Section 9.10 of the Credit Agreement.   Each of SunTrust Robinson Humphrey, Inc., PNC Capital Markets LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and BMO Capital Markets Corp., shall have the titles “Joint Lead Arranger” and “Joint Book Manager,” subject to the provisions of Section 9.10 of the Credit Agreement.

 

[SIGNATURES ON FOLLOWING PAGES]

 

7

 

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

 

	
 
    	
BORROWER:
    
	
 
    	
 
    
	
 
    	
STRATEGIC EDUCATION, INC.,   a Maryland corporation, formerly known as Strayer Education, Inc., a   Maryland corporation
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Daniel Jackson
    
	
 
    	
Name:
    	
Daniel Jackson
    
	
 
    	
Title:
    	
Executive Vice   President, Chief Financial Officer and 
    
	
 
    	
Treasurer
    
	
 
    	
 
    
	
 
    	
SUBSIDIARY LOAN PARTIES:
    
	
 
    	
 
    
	
 
    	
STRAYER UNIVERSITY, LLC,   a Maryland limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Daniel Jackson
    
	
 
    	
Name:
    	
Daniel Jackson
    
	
 
    	
Title:
    	
Executive Vice   President and Treasurer
    
	
 
    	
 
    
	
 
    	
NEW YORK CODE AND DESIGN   ACADEMY, INC., a Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Daniel Jackson
    
	
 
    	
Name:
    	
Daniel Jackson
    
	
 
    	
Title:
    	
Secretary and Treasurer
    
	
 
    	
 
    
	
 
    	
THE NEW YORK CODE AND DESIGN   ACADEMY PENNSYLVANIA, INC., a Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Daniel Jackson
    
	
 
    	
Name:
    	
Daniel Jackson
    
	
 
    	
Title:
    	
Vice President
    

 

[SIGNATURES CONTINUE ON FOLLOWING PAGES]

 

 

	
 
    	
NYCDA REALTY, LLC,   a New York limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Daniel Jackson
    
	
 
    	
Name:
    	
Daniel Jackson
    
	
 
    	
Title:
    	
Secretary and Treasurer
    
	
 
    	
 
    
	
 
    	
CAPELLA EDUCATION COMPANY,   a Minnesota corporation
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Daniel Jackson
    
	
 
    	
Name:
    	
Daniel Jackson
    
	
 
    	
Title:
    	
Vice President and   Treasurer
    
	
 
    	
 
    
	
 
    	
CAPELLA UNIVERSITY, INC.,   a Minnesota corporation
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Richard Senese
    
	
 
    	
Name:
    	
Dr. Richard Senese
    
	
 
    	
Title:
    	
President
    
	
 
    	
 
    
	
 
    	
CAPELLA LEARNING SOLUTIONS, LLC,   a Delaware limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Daniel Jackson
    
	
 
    	
Name:
    	
Daniel Jackson
    
	
 
    	
Title:
    	
Treasurer
    
	
 
    	
 
    
	
 
    	
SOPHIA LEARNING, LLC,   a Delaware limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Daniel Jackson
    
	
 
    	
Name:
    	
Daniel Jackson
    
	
 
    	
Title:
    	
Treasurer
    
	
 
    	
 
    
	
 
    	
HACKBRIGHT ACADEMY, INC.,   a Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Daniel Jackson
    
	
 
    	
Name:
    	
Daniel Jackson
    
	
 
    	
Title:
    	
President and Chief   Financial Officer
    

 

 

	
 
    	
DEVMOUNTAIN, LLC,   a Utah limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Daniel Jackson
    
	
 
    	
Name:
    	
Daniel Jackson
    
	
 
    	
Title:
    	
President and Chief   Financial Officer
    

 

[SIGNATURES CONTINUE ON FOLLOWING PAGES]

 

 

	
 
    	
ADMINISTRATIVE AGENT:
    
	
 
    	
 
    
	
 
    	
SUNTRUST BANK
    
	
 
    	
as Administrative Agent, as Issuing Bank and as Swingline Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mary K. Lundin
    
	
 
    	
Name:
    	
Mary K. Lundin
    
	
 
    	
Title:
    	
Director
    

 

 

	
 
    	
LENDERS:
    
	
 
    	
 
    
	
 
    	
SUNTRUST BANK
    
	
 
    	
as a Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mary K. Lundin
    
	
 
    	
Name:
    	
Mary K. Lundin
    
	
 
    	
Title:
    	
Director
    

 

 

	
 
    	
PNC BANK, NATIONAL ASSOCIATION
    
	
 
    	
as a Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Carolyn L. West
    
	
 
    	
Name:
    	
Carolyn L. West
    
	
 
    	
Title:
    	
Senior Vice President
    

 

 

	
 
    	
BANK OF AMERICA, N.A.
    
	
 
    	
as a Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Michael D. Brannan
    
	
 
    	
Name:
    	
Michael D. Brannan
    
	
 
    	
Title:
    	
Sr. Vice President
    

 

 

	
 
    	
BANK OF MONTREAL
    
	
 
    	
as a Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Christina Boyle
    
	
 
    	
Name:
    	
Christina Boyle
    
	
 
    	
Title:
    	
Managing Director
    

 

 

	
 
    	
ASSOCIATED BANK
    
	
 
    	
as a Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Lisa Hufford
    
	
 
    	
Name:
    	
Lisa Hufford
    
	
 
    	
Title:
    	
VP
    

 

 

	
 
    	
BANK OF THE WEST
    
	
 
    	
as a Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Juae Son
    
	
 
    	
Name:
    	
Juae Son
    
	
 
    	
Title:
    	
Assistant Vice   President
    

 

 

	
 
    	
TD BANK, N.A.
    
	
 
    	
as a Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert L. Defutt
    
	
 
    	
Name:
    	
Robert L. Defutt
    
	
 
    	
Title:
    	
Vice President
    

 

 

	
 
    	
UNION BANK & TRUST
    
	
 
    	
as a Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Charles B. Vaughters_
    
	
 
    	
Name:
    	
Charles B. Vaughters
    
	
 
    	
Title:
    	
Director – Corporate   Banking
    

 

 

APPENDIX A

 

Schedule I

 

APPLICABLE MARGIN FOR THE LOANS AND

APPLICABLE PERCENTAGE

 

	
Pricing
   Level
    	
 
    	
Leverage Ratio
    	
 
    	
Applicable Margin
   for Eurodollar Loans
   and Index Rate
   Loans
    	
 
    	
Applicable
   Margin for Base
   Rate Loans
    	
 
    	
Applicable
   Percentage for
   Commitment Fee
    
	
I
    	
 
    	
Less than or equal to 1.00:1
    	
 
    	
1.500% per annum
    	
 
    	
1.500% per annum
    	
 
    	
0.200% per annum
    
	
II
    	
 
    	
Greater than 1.00:1.00 but less than or equal to   1.50:1.00
    	
 
    	
1.750% per annum
    	
 
    	
1.750% per annum
    	
 
    	
0.250% per annum
    
	
III
    	
 
    	
Greater than 1.50:1.00
    	
 
    	
2.000% per annum
    	
 
    	
2.000% per annum
    	
 
    	
0.300% per annum
    

 

 

APPENDIX B

 

Schedule II

 

COMMITMENT AMOUNTS

 

	
Lender
    	
 
    	
Revolving Commitment Amount
    
	
SunTrust Bank
    	
 
    	
$
    	
55,000,000
    
	
PNC Bank, National   Association
    	
 
    	
$
    	
55,000,000
    
	
Bank of America,   N.A.
    	
 
    	
$
    	
35,000,000
    
	
Bank of Montreal
    	
 
    	
$
    	
35,000,000
    
	
Associated Bank
    	
 
    	
$
    	
20,000,000
    
	
Bank of the West
    	
 
    	
$
    	
20,000,000
    
	
TD Bank, N.A.
    	
 
    	
$
    	
20,000,000
    
	
Union   Bank & Trust
    	
 
    	
$
    	
10,000,000
    
	
Total
    	
 
    	
$
    	
250,000,000
    

 

 

APPENDIX C

 

Schedule 1.1

 

EXISTING EXCLUDED JVS

 

As provided to the Administrative Agent.

 

 

APPENDIX D

 

Schedule 5.1(d)(1)

 

COMPLIANCE CERTIFICATE

 

 

Compliance Certificate

 

Dated            , 20  

 

In connection with the terms of the Second Amended and Restated Revolving Credit and Term Loan Agreement, dated as of November 8, 2012 (as amended, modified or supplemented from time to time, the “Credit Agreement”), among Strategic Education, a Maryland corporation, formerly known as Strayer Education, Inc., a Maryland corporation (the “Borrower”), SunTrust Bank, a Georgia banking corporation (the “Administrative Agent”), and each Lender that is, or may become, a party thereto, the undersigned certify that the following information is true and correct, in all material respects, as of the date of this Compliance Certificate:

 

16.                               No Default or Event of Default has occurred and is continuing.

 

17.                               The Leverage Ratio for the period of four consecutive Fiscal Quarters ended on               was        to 1, calculated as set forth on Schedule 1, and does not exceed the level required by Section 6.1 of the Credit Agreement.

 

18.                               For purposes of calculating the Applicable Margin and the Applicable Percentage, the Leverage Ratio for the period of four consecutive Fiscal Quarters ended on           was     to 1, calculated as set forth on Schedule 1.

 

19.                               The Coverage Ratio for the period of four consecutive Fiscal Quarters ended on           was      to 1, calculated as set forth on Schedule 2, and exceeds the level required by Section 6.2 of the Credit Agreement.

 

[SIGNATURE ON FOLLOWING PAGE]

 

 

Capitalized terms used in this Compliance Certificate shall have the same meanings as those assigned to them in the Credit Agreement.

 

	
 
    	
STRATEGIC   EDUCATION, INC.,
    
	
 
    	
a Maryland   corporation, formerly known as Strayer
    
	
 
    	
Education, Inc.,   a Maryland corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Compliance Certificate Signature Page

 

 

Schedule 1

 

Leverage Ratio

 

	
1.
    	
 
    	
Consolidated Total Debt as of                  
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(a)                                 borrowed money
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b)                                 obligations evidenced   by bonds, debentures, notes or other similar instruments
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(c)                                  deferred purchase   price obligations (other than (x) trade payables incurred in the   ordinary course of business and (y) any earn-out, purchase price   adjustment or similar obligation until such obligation is required by GAAP to   be included in the liabilities section of the balance sheet of such Person)
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(d)                                 obligations under   any conditional sale or other title retention agreement
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(e)                                  Capital Lease Obligations
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(f)                                   obligations for   letters of credit, acceptances or similar extensions of credit
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(g)                                  Guaranties of   Indebtedness of the types in the foregoing (a) through (f)
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(h)                                 Indebtedness of a   third party secured by any Lien
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(i)                                     preferred or   common stock or similar equity interests subject to mandatory sinking fund   payments, redemption or acceleration on equity on or prior to the Revolving   Commitment Termination Date (other than voluntary repurchases of shares and   the exercise of options permitted by Sections 7.4(f) and   7.5(iii) of the Credit Agreement and repurchase obligations of such   Capital Stock upon the occurrence of a change of control so long as the terms   of such Capital Stock provide that the issuer thereof will not redeem or   repurchase any such Capital Stock pursuant to such provisions prior to the   Payment in Full of all Obligations)
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(j)                                    Off-Balance Sheet   Liabilities
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(k)                                 partnership or joint   venture debt
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
TOTAL (a+b+c+d+e+f+g+h+i+j+k)(1)
    	
 
    	
$
    

 

(1)  Such amount shall be the sum of clauses (a) through (k) without duplication.  The calculation shall include the Indebtedness of any partnership or joint venture in which such the Borrower or any of its Subsidiaries is a general partner or a joint venturer, except to the extent that the terms of such Indebtedness provide that such Borrower or Subsidiary is not liable therefor.

 

 

	
2.
    	
 
    	
Consolidated EBITDA for the period of four   consecutive Fiscal Quarters ended on             (2)
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(a)                                 Consolidated Net   Income(3)(4)
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b)                                 Consolidated   Interest Expense(5)
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(c)                                  income tax expense
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(d)                                 depreciation
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(e)                                  amortization
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(f)                                   Charges   associated with the grant of any share based payment awards to employees,   officers, directors or consultants
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(g)                                  all other non-cash   Charges (other than any increase in the allowance for doubtful accounts)
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(h)                                 unusual or   non-recurring Charges (as determined in good faith by the Borrower, but to   the extent not excluded in the
    	
 
    	
$
    

 

(2)  All determined on a consolidated basis in accordance with GAAP for such period.

 

(3)  For the Borrower and its Subsidiaries for any period, the net income (or loss) of the Borrower and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, but excluding therefrom (to the extent otherwise included therein) (i) any extraordinary gains or losses, (ii) any gains attributable to write-ups of assets, (iii) any equity interest of the Borrower or any Subsidiary of the Borrower in the unremitted earnings of any Person that is not a Subsidiary, (iv) the cumulative effect of a change in accounting principles and changes as a result of the adoption or modification of accounting policies, (v) accruals and reserves that are established or adjusted within 24 months after the closing of any acquisition that are so required to be established or adjusted as a result of such acquisition in accordance with GAAP or changes as a result of adoption or modification of accounting policies in accordance with GAAP and (vi) any net after-tax effect of gains or losses (less all fees, expenses and charges relating thereto) attributable to abandoned, closed or discontinued operations, or to asset dispositions or the sale or other disposition of any equity interests of any person, in each case other than in the ordinary course of business, as determined in good faith by the Borrower.

 

(4)  For the avoidance of doubt, Consolidated Net Income for the Initial Period and each applicable period thereafter shall include the results of Capella and its Subsidiaries prior to the Second Amendment Effective Date and be determined on a pro forma basis as if the Capella Acquisition had been completed on the first day of the Initial Period.

 

(5)  Consolidated Interest Expense shall (x) exclude amortization of debt issuance costs and other deferred financing fees incurred on or prior to the Second Amendment Effective Date relating to the Revolving Credit Agreement dated as of January 3, 2011, among the Borrower, the Administrative Agent, and the other parties thereto, the Existing Credit Agreement or the Credit Agreement and the other Loan Documents, and (y) for the Initial Period and each applicable period thereafter include the results of Capella and its Subsidiaries prior to the Second Amendment Effective Date and be determined on a pro forma basis as if the Capella Acquisition had been completed on the first day of the Initial Period.

 

 

	
 
    	
 
    	
determination of Consolidated Net Income)
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(i)                                     pro forma “run   rate” cost savings, operating expense reductions, operational improvements   and synergies (net of the amount of actual amounts realized) reasonably identifiable   and factually supportable (in the good faith determination of the Borrower)   related to (1) the Capella Acquisition, (2) asset sales,   acquisitions, investments, dispositions, operating improvements,   restructurings, cost saving initiatives and certain other similar initiatives   (including the renegotiation of contracts and other arrangements) and   specified transactions consummated prior to the Second Amendment Effective   Date and (3) asset sales, acquisitions, investments, dispositions, operating   improvements, restructurings, cost saving initiatives and certain other   similar initiatives (including the renegotiation of contracts and other   arrangements) and specified transactions consummated after the Second   Amendment Effective Date and permitted by the Credit Agreement, in each case   of the foregoing clauses (1), (2) and (3), projected by the Borrower in   good faith to result from actions that have been taken or with respect to   which substantial steps have been taken or are expected to be taken (in the good   faith determination of the Borrower) within 24 months (for the avoidance of   doubt including in connection with any of the foregoing, or actions taken,   prior to the Second Amendment Effective Date)
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(j)                                    any Charge   attributable to the undertaking and/or implementation of business   optimization activities, cost savings initiatives, cost rationalization   programs, operating expense reductions and/or synergies and/or similar   initiatives and/or programs, including the following: any business optimization   Charge, any restructuring Charge (including any Charge relating to any tax   restructuring), any Charge relating to the closure or consolidation of any   facility (including but not limited to rent termination costs, moving costs   and legal costs), any systems implementation Charge, any retention or   completion bonus, any expansion and/or relocation Charge and any severance   Charge
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(k)                                 all Charges incurred   in connection with any acquisition, investment, equity issuance, debt   issuance, refinancing, amendment, disposition or other transaction (in each   case, whether or not consummated) permitted by the Credit Agreement,   including, without limitation, in connection with the Second Amendment and   the Capella Acquisition,
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
TOTAL (a+b+c+d+e+f+g+h+i+j+k)(6)
    	
 
    	
$
    

 

(6)   For the avoidance of doubt, Consolidated EBITDA for the period of four consecutive Fiscal Quarters ending on September 30, 2018 (the “Initial Period”) and each applicable period thereafter shall include the results of Capella and its Subsidiaries prior to the Second Amendment Effective Date and be determined on a pro forma basis as if the Capella Acquisition had been completed on the first day of the Initial Period.

 

 

	
3.
    	
 
    	
Leverage Ratio(7)

 
    	
 
    	
 
    
	
 
    	
 
    	
Consolidated Total Debt   ($      )

Consolidated EBITDA   (            )
    	
 
    	
=         to   1
    

 

(7)   In the event the Borrower shall complete, directly or through a Subsidiary, an acquisition of any Person or business unit during any period, the Leverage Ratio as of the end of and for such period and each applicable period thereafter shall thereafter be determined on a pro forma basis as if such acquisition had been completed on the first day of such initial period.

 

 

Schedule 2

 

Coverage Ratio

 

	
1.                                      Consolidated EBITDAR for the period of four consecutive Fiscal Quarters ended on           (8)
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(a)                                 Consolidated   EBITDA for such period, calculated as set forth in item 2 of Schedule 1
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
(b)                                 Consolidated   Rent Expense for such period(9)(10)
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
TOTAL (a+b)
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
2.                                      Consolidated   Interest Expense for such period(11)(12)
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
(a)                                 total   interest expense, including without limitation the interest component of any   payments in respect of Capital Lease Obligations capitalized or expensed   during such period (whether or not actually paid during such period)
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
(b)                                 the   net amount payable (or minus the net   amount receivable) under Hedging Transactions during such period (whether or   not actually paid or received during such period)
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
3.                                      Consolidated   Rent Expense for such period(4)(13)
    	
 
    	
$
    

 

(8)  All calculated for the Borrower and its Subsidiaries in accordance with GAAP on a consolidated basis.

 

(9)  To the extent deducted from revenues in determining Consolidated Net Income, all payments under Operating Leases for such period (net of any lessor lease incentive amounts attributable to such period).

 

(10)  For clarity, Consolidated Rent Expense (x) shall be calculated net of any lessor lease incentive amounts attributable to such period and (y) shall include the results of Capella and its Subsidiaries prior to the Second Amendment Effective Date and be determined on a pro forma basis as if the Capella Acquisition had been completed on the first day of the Initial Period.

 

(11)  Measured for the period of four consecutive Fiscal Quarters ending on or immediately prior to such date.

 

(12)  Consolidated Interest Expense shall (x) exclude amortization of debt issuance costs and other deferred financing fees incurred on or prior to the Second Amendment Effective Date relating to the Revolving Credit Agreement dated as of January 3, 2011, among the Borrower, the Administrative Agent, and the other parties thereto, the Existing Credit Agreement or this Agreement and the other Loan Documents, and (y) for the Initial Period and each applicable period thereafter include the results of Capella and its Subsidiaries prior to the Second Amendment Effective Date and be determined on a pro forma basis as if the Capella Acquisition had been completed on the first day of the Initial Period.

 

(13)  For clarity, Consolidated Rent Expense (x) shall be calculated net of any lessor lease incentive amounts attributable to such period and (y) shall include the results of Capella and its Subsidiaries prior to the Second Amendment Effective Date and be determined on a pro forma basis as if the Capella Acquisition had been completed on the first day of the Initial Period.

 

 

	
4.                                      Coverage   Ratio(14)
    	
 
    	
 
    
	
 

Coverage (1)

(2+3)
    	
=
    	
      to 1
    

 

(14)  In the event the Borrower shall complete, directly or through a Subsidiary, an acquisition of any Person or business unit during any period, Consolidated EBITDAR, Consolidated Interest Expense and Consolidated Rent Expense for such period and each applicable period thereafter shall, in each case for purposes of determining the Coverage Ratio, thereafter be determined on a pro forma basis as if such acquisition had been completed on the first day of such initial period.

 

 

APPENDIX E

 

Schedule 5.1(d)(2)

 

DOE COMPLIANCE CERTIFICATE

 

 

DOE Compliance Certificate

 

Dated            , 20

 

In connection with the terms of the Second Amended and Restated Revolving Credit and Term Loan Agreement, dated as of November 8, 2012 (as amended, modified or supplemented from time to time, the “Credit Agreement”), among Strategic Education, Inc., a Maryland corporation, formerly known as Strayer Education, Inc., a Maryland corporation (the “Borrower”), SunTrust Bank, a Georgia banking corporation (the “Administrative Agent”), and each Lender that is, or may become, a party thereto, the undersigned certify that the following information is true and correct, in all material respects, as of the date of this DOE Compliance Certificate:

 

1.                                      The Consolidated DOE Financial Responsibility Composite Score of the Borrower as of the end of the Fiscal Year ended on December 31, 20   was      , calculated pursuant to the definition thereof contained in the Credit Agreement and the regulations therein cited, as more particularly set forth on Exhibit A attached hereto and made a part hereof, and exceeds the level required by Section 6.3 of the Credit Agreement.

 

[SIGNATURE ON FOLLOWING PAGE]

 

 

Capitalized terms used in this DOE Compliance Certificate shall have the same meanings as those assigned to them in the Credit Agreement.

 

	
 
    	
STRATEGIC   EDUCATION, INC.,
    
	
 
    	
a Maryland   corporation, formerly known as Strayer
    
	
 
    	
Education, Inc.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

Exhibit A

 

Consolidated DOE Financial Responsibility Composite Score

 

	
Composite score   calculation for Strategic
   Education, Inc.
   for FY ending December 31, 20[  ]
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Primary reserve ratio
    	
 
    	
 
    
	
Total equity
    	
 
    	
 
    
	
less:   Intangibles
    	
 
    	
 
    
	
less: Net   PP&E
    	
 
    	
 
    
	
plus: LT Debt
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Adjusted equity
    	
 
    	
 
    
	
Total expenses   (includes interest)
    	
 
    	
 
    
	
Prime reserve   ratio
    	
 
    	
 
    
	
Prime reserve   ratio (multiple x20)
    	
 
    	
 
    
	
Adjusted prime   reserve ratio
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Equity ratio
    	
 
    	
 
    
	
Total equity
    	
 
    	
 
    
	
Less intangibles
    	
 
    	
 
    
	
Modified equity
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Total assets
    	
 
    	
 
    
	
Less intangibles
    	
 
    	
 
    
	
Modified assets
    	
 
    	
 
    
	
Equity ratio
    	
 
    	
 
    
	
Equity ratio   (multiple x6)
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Adjusted equity   ratio
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Net income ratio
    	
 
    	
 
    
	
Income before   taxes
    	
 
    	
 
    
	
Total revenue   (includes Investment income)
    	
 
    	
 
    
	
Income ratio
    	
 
    	
 
    
	
Income ratio   (multiple 1 + x33.3)
    	
 
    	
 
    
	
Adjusted income   ratio
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Financial   Composite Score
    	
 
    	
 
    

 

 

EXHIBIT A

 

[See attached conformed Credit Agreement]

 

 

CONFORMED COPY - THROUGH SECOND AMENDMENT

 

SECOND AMENDED AND RESTATED

 

REVOLVING CREDIT AND TERM LOAN AGREEMENT

 

dated as of November 8, 2012(1)

 

among

 

STRATEGIC EDUCATION, INC.,

formerly known as Strayer Education, Inc.,

as Borrower

 

THE LENDERS FROM TIME TO TIME PARTY HERETO

 

and

 

SUNTRUST BANK

as Administrative Agent

 

and

 

PNC BANK, NATIONAL ASSOCIATION,

as Syndication Agent

 

and

 

BANK OF AMERICA, N.A., and

BANK OF MONTREAL

as Documentation Agents

	
 
    

 

SUNTRUST ROBINSON HUMPHREY, INC.,

PNC CAPITAL MARKETS LLC,

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

and

BMO CAPITAL MARKETS CORP.

 

as Joint Lead Arrangers and Joint Book Managers

 

(1)  Conformed through the Second Amendment

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE 1   DEFINITIONS; CONSTRUCTION 
    	
1
    
	
 
    	
 
    	
 
    
	
Section 1.1.
    	
Definitions
    	
1
    
	
Section 1.2.
    	
Classifications of Loans and   Borrowings
    	
33
    
	
Section 1.3.
    	
Accounting Terms and   Determination
    	
34
    
	
Section 1.4.
    	
Terms Generally
    	
34
    
	
Section 1.5.
    	
Letter of Credit Amounts
    	
35
    
	
Section 1.6.
    	
Regulatory Changes in the Consolidated DOE   Financial Responsibility Composite Score
    	
35
    
	
Section 1.7.
    	
Limited Condition Acquisitions
    	
35
    
	
 
    	
 
    
	
ARTICLE 2   AMOUNT AND TERMS OF THE COMMITMENTS
    	
36
    
	
 
    	
 
    	
 
    
	
Section 2.1.
    	
General Description of   Facilities
    	
36
    
	
Section 2.2.
    	
Revolving Loans
    	
36
    
	
Section 2.3.
    	
Procedure for Revolving   Borrowings
    	
36
    
	
Section 2.4.
    	
Swingline Commitment
    	
37
    
	
Section 2.5.
    	
Reserved
    	
39
    
	
Section 2.6.
    	
Term Loans
    	
39
    
	
Section 2.7.
    	
Funding of Borrowings
    	
39
    
	
Section 2.8.
    	
Interest Elections
    	
40
    
	
Section 2.9.
    	
Optional Reduction and   Termination of Commitments
    	
41
    
	
Section 2.10.
    	
Repayment of Loans
    	
42
    
	
Section 2.11.
    	
Evidence of Indebtedness
    	
42
    
	
Section 2.12.
    	
Optional Prepayments
    	
43
    
	
Section 2.13.
    	
Mandatory Prepayments
    	
43
    
	
Section 2.14.
    	
Interest on Loans
    	
44
    
	
Section 2.15.
    	
Fees
    	
45
    
	
Section 2.16.
    	
Computation of Interest and   Fees
    	
46
    
	
Section 2.17.
    	
Inability to Determine Interest   Rates
    	
46
    
	
Section 2.18.
    	
Illegality
    	
47
    
	
Section 2.19.
    	
Increased Costs
    	
48
    
	
Section 2.20.
    	
Funding Indemnity
    	
50
    
	
Section 2.21.
    	
Taxes
    	
50
    
	
Section 2.22.
    	
Payments Generally; Pro Rata   Treatment; Sharing of Set-offs
    	
53
    
	
Section 2.23.
    	
Letters of Credit
    	
55
    
	
Section 2.24.
    	
Increase of Commitments;   Additional Lenders
    	
60
    
	
Section 2.25.
    	
Mitigation of Obligations
    	
63
    
	
Section 2.26.
    	
Replacement of Lenders
    	
63
    
	
Section 2.27.
    	
Defaulting Lender
    	
64
    
	
Section 2.28.
    	
Certain Permitted Amendments
    	
65
    

 

 

	
ARTICLE 3   CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT
    	
66
    
	
 
    	
 
    	
 
    
	
Section 3.1.
    	
Conditions To Effectiveness
    	
66
    
	
Section 3.2.
    	
Each Credit Event
    	
70
    
	
Section 3.3.
    	
Delivery of Documents
    	
71
    
	
 
    	
 
    
	
ARTICLE 4   REPRESENTATIONS AND WARRANTIES
    	
71
    
	
 
    	
 
    	
 
    
	
Section 4.1.
    	
Existence; Power
    	
71
    
	
Section 4.2.
    	
Organizational Power; Authorization
    	
71
    
	
Section 4.3.
    	
Governmental Approvals; No   Conflicts
    	
71
    
	
Section 4.4.
    	
Financial Statements
    	
72
    
	
Section 4.5.
    	
Litigation and Environmental   Matters
    	
72
    
	
Section 4.6.
    	
Compliance with Laws and   Agreements
    	
72
    
	
Section 4.7.
    	
Investment Company Act, Etc.
    	
72
    
	
Section 4.8.
    	
Taxes
    	
72
    
	
Section 4.9.
    	
Margin Regulations
    	
73
    
	
Section 4.10.
    	
ERISA
    	
73
    
	
Section 4.11.
    	
Ownership of Property
    	
73
    
	
Section 4.12.
    	
Disclosure
    	
74
    
	
Section 4.13.
    	
Labor Relations
    	
74
    
	
Section 4.14.
    	
Subsidiaries
    	
74
    
	
Section 4.15.
    	
Insolvency
    	
74
    
	
Section 4.16.
    	
Anti-Corruption Laws; Sanctions
    	
75
    
	
Section 4.17.
    	
OFAC
    	
75
    
	
Section 4.18.
    	
Patriot Act
    	
75
    
	
Section 4.19.
    	
Security Documents
    	
75
    
	
 
    	
 
    
	
ARTICLE 5   AFFIRMATIVE COVENANTS
    	
76
    
	
 
    	
 
    	
 
    
	
Section 5.1.
    	
Financial Statements and Other   Information
    	
76
    
	
Section 5.2.
    	
Notices of Material Events
    	
78
    
	
Section 5.3.
    	
Existence; Conduct of Business
    	
79
    
	
Section 5.4.
    	
Compliance with Laws, Etc;   Maintenance of Licenses and Accreditations
    	
79
    
	
Section 5.5.
    	
Payment of Obligations
    	
79
    
	
Section 5.6.
    	
Books and Records
    	
79
    
	
Section 5.7.
    	
Visitation, Inspection,   Etc.
    	
79
    
	
Section 5.8.
    	
Maintenance of Properties;   Insurance
    	
80
    
	
Section 5.9.
    	
Use of Proceeds and Letters of   Credit
    	
80
    
	
Section 5.10.
    	
Intentionally Deleted
    	
80
    
	
Section 5.11.
    	
Additional Subsidiaries
    	
80
    
	
Section 5.12.
    	
Further Assurances
    	
81
    
	
Section 5.13.
    	
Anti-Corruption Laws; Sanctions
    	
81
    

 

ii

 

	
ARTICLE 6   FINANCIAL COVENANTS
    	
82
    
	
 
    	
 
    	
 
    
	
Section 6.1.
    	
Leverage Ratio
    	
82
    
	
Section 6.2.
    	
Coverage Ratio
    	
82
    
	
Section 6.3.
    	
Consolidated DOE Financial   Responsibility Composite Score
    	
82
    
	
 
    	
 
    
	
ARTICLE 7   NEGATIVE COVENANTS
    	
82
    
	
 
    	
 
    	
 
    
	
Section 7.1.
    	
Indebtedness and Preferred   Stock
    	
82
    
	
Section 7.2.
    	
Negative Pledge
    	
83
    
	
Section 7.3.
    	
Fundamental Changes
    	
84
    
	
Section 7.4.
    	
Investments, Loans, Etc.
    	
85
    
	
Section 7.5.
    	
Restricted Payments
    	
86
    
	
Section 7.6.
    	
Sale of Assets
    	
87
    
	
Section 7.7.
    	
Transactions with Affiliates
    	
87
    
	
Section 7.8.
    	
Restrictive Agreements
    	
88
    
	
Section 7.9.
    	
Sale and Leaseback Transactions
    	
88
    
	
Section 7.10.
    	
Hedging Transactions
    	
89
    
	
Section 7.11.
    	
Amendment to Material Documents
    	
89
    
	
Section 7.12.
    	
Intentionally Deleted
    	
89
    
	
Section 7.13.
    	
Accounting Changes
    	
89
    
	
Section 7.14.
    	
Sanctions and Anti-Corruption   Laws
    	
89
    
	
 
    	
 
    
	
ARTICLE 8   EVENTS OF DEFAULT
    	
89
    
	
 
    	
 
    	
 
    
	
Section 8.1.
    	
Events of Default
    	
89
    
	
Section 8.2.
    	
Application of Proceeds from   Collateral
    	
92
    
	
 
    	
 
    
	
ARTICLE 9   THE ADMINISTRATIVE AGENT
    	
93
    
	
 
    	
 
    	
 
    
	
Section 9.1.
    	
Appointment of Administrative   Agent
    	
93
    
	
Section 9.2.
    	
Nature of Duties of   Administrative Agent
    	
94
    
	
Section 9.3.
    	
Lack of Reliance on the   Administrative Agent
    	
94
    
	
Section 9.4.
    	
Certain Rights of the   Administrative Agent
    	
95
    
	
Section 9.5.
    	
Reliance by Administrative   Agent
    	
95
    
	
Section 9.6.
    	
The Administrative Agent in its   Individual Capacity
    	
95
    
	
Section 9.7.
    	
Successor Administrative Agent
    	
95
    
	
Section 9.8.
    	
Authorization to Execute other   Loan Documents
    	
96
    
	
Section 9.9.
    	
Benefits of Article 9
    	
97
    
	
Section 9.10.
    	
Titled Agents
    	
98
    
	
 
    	
 
    
	
ARTICLE 10   MISCELLANEOUS
    	
98
    
	
 
    	
 
    	
 
    
	
Section 10.1.
    	
Notices
    	
98
    
	
Section 10.2.
    	
Waiver; Amendments
    	
100
    
	
Section 10.3.
    	
Expenses; Indemnification
    	
102
    
	
Section 10.4.
    	
Successors and Assigns
    	
104
    
	
Section 10.5.
    	
Governing Law; Jurisdiction;   Consent to Service of Process
    	
107
    

 

iii

 

	
Section 10.6.
    	
WAIVER OF JURY TRIAL
    	
108
    
	
Section 10.7.
    	
Right of Setoff
    	
108
    
	
Section 10.8.
    	
Counterparts; Integration
    	
109
    
	
Section 10.9.
    	
Survival
    	
110
    
	
Section 10.10.
    	
Severability
    	
110
    
	
Section 10.11.
    	
Confidentiality
    	
110
    
	
Section 10.12.
    	
Interest Rate Limitation
    	
111
    
	
Section 10.13.
    	
Waiver of Effect of Corporate   Seal
    	
111
    
	
Section 10.14.
    	
Patriot Act
    	
111
    
	
Section 10.15.
    	
Publicity
    	
111
    
	
Section 10.16.
    	
Acknowledgement and Consent to   Bail-In of EEA Financial Institutions
    	
111
    

 

iv

 

Schedules

 

	
Schedule I
    	
 
    	
-
    	
 
    	
Applicable Margin and Applicable Percentage
    
	
Schedule II
    	
 
    	
-
    	
 
    	
Commitment Amounts
    
	
Schedule 2.23
    	
 
    	
-
    	
 
    	
Existing Letters of Credit
    
	
Schedule 4.5
    	
 
    	
-
    	
 
    	
Environmental Matters
    
	
Schedule 4.14
    	
 
    	
-
    	
 
    	
Subsidiaries
    
	
Schedule 4.19
    	
 
    	
-
    	
 
    	
Real Property
    
	
Schedule 7.1
    	
 
    	
-
    	
 
    	
Outstanding Indebtedness
    
	
Schedule 7.2
    	
 
    	
-
    	
 
    	
Existing Liens
    
	
Schedule 7.4
    	
 
    	
-
    	
 
    	
Existing Investments
    

 

Exhibits

 

	
Exhibit A
    	
 
    	
-
    	
 
    	
Form of Revolving Credit Note
    
	
Exhibit B
    	
 
    	
-
    	
 
    	
Form of Term Note
    
	
Exhibit C
    	
 
    	
-
    	
 
    	
Reserved
    
	
Exhibit D
    	
 
    	
-
    	
 
    	
Form of Swingline Note
    
	
Exhibit E
    	
 
    	
-
    	
 
    	
Form of Assignment and Assumption
    
	
Exhibit F
    	
 
    	
-
    	
 
    	
Form of Second Amended and Restated Subsidiary   Guaranty Agreement
    
	
Exhibit G
    	
 
    	
-
    	
 
    	
Form of Amended and Restated Security Agreement
    
	
Exhibit H
    	
 
    	
-
    	
 
    	
Form of Amended and Restated Pledge Agreement
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Exhibit 2.3
    	
 
    	
-
    	
 
    	
Form of Notice of Revolving Borrowing
    
	
Exhibit 2.4
    	
 
    	
-
    	
 
    	
Form of Notice of Swingline Borrowing
    
	
Exhibit 2.8
    	
 
    	
-
    	
 
    	
Form of Notice of Conversion/Continuation
    
	
Exhibit 5.1(d)(1)
    	
 
    	
-
    	
 
    	
Form of Compliance Certificate
    
	
Exhibit 5.1(d)(2)
    	
 
    	
-
    	
 
    	
Form of DOE Compliance Certificate
    

 

v

 

SECOND AMENDED AND RESTATED

REVOLVING CREDIT AND TERM LOAN AGREEMENT

 

THIS SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT (as amended, modified or supplemented from time to time, this “Agreement”) is made and entered into as of November 8, 2012(2), by and among STRATEGIC EDUCATION, INC., a Maryland corporation, formerly known as Strayer Education, Inc., a Maryland corporation (the “Borrower”), the several banks and other financial institutions and lenders from time to time party hereto (the “Lenders”), and SUNTRUST BANK, in its capacity as administrative agent for the Lenders (the “Administrative Agent”), as issuing bank (the “Issuing Bank”) and as swingline lender (the “Swingline Lender”).

 

W I T N E S S E T H:

 

WHEREAS, the Administrative Agent, certain of the Lenders and the Borrower are parties to an Amended and Restated Revolving Credit and Term Loan Agreement, dated as of April 4, 2011 (as amended, modified or supplemented to the date hereof, the “Existing Credit Agreement”), pursuant to which such Lenders extend credit to the Borrower;

 

WHEREAS, the Borrower has requested that (a) the Revolving Loan Lenders establish a $100,000,000 revolving credit facility in favor of, and (b) the Term Loan Lenders make term loans in an aggregate principal amount equal to $125,000,000 to, the Borrower;

 

WHEREAS, subject to the terms and conditions of this Agreement, which amends and restates the Existing Credit Agreement in its entirety, the Revolving Loan Lenders, the Term Loan Lenders, the Issuing Bank and the Swingline Lender to the extent of their respective Commitments as defined herein, are willing severally to establish the requested revolving credit facility, letter of credit subfacility and the swingline subfacility in favor of, and severally to make the term loans to, the Borrower.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Borrower, the Lenders, the Administrative Agent, the Issuing Bank and the Swingline Lender agree as follows:

 

ARTICLE 1

 

DEFINITIONS; CONSTRUCTION

 

Section 1.1.                                 Definitions.  In addition to the other terms defined herein, the following terms used herein shall have the meanings herein specified (to be equally applicable to both the singular and plural forms of the terms defined):

 

“Accepting Lender” shall have the meaning provided in Section 2.28(a).

 

(2)  Conformed through the Second Amendment

 

 

“Accreditor” shall mean any entity or organization, whether governmental or government-chartered, private or quasi-private, which engages in the granting or withholding of accreditation of post-secondary education institutions or of educational programs provided by such institutions in accordance with prescribed standards and procedures.

 

“Additional Commitment Amount” shall have the meaning ascribed to such term in Section 2.24.

 

“Additional Lender” shall have the meaning ascribed to such term in Section 2.24.

 

“Adjusted LIBO Rate” shall mean, subject to the implementation of a Replacement Rate in accordance with either Section 2.17(b) or 2.18, with respect to each Interest Period for a Eurodollar Borrowing, the rate per annum obtained by dividing (i) LIBOR for such Interest Period by (ii) a percentage equal to 1.00 minus the Eurodollar Reserve Percentage.  Notwithstanding the foregoing, unless otherwise specified in any amendment to this Agreement entered into in accordance with Section 2.17(b) or 2.18, in the event that a Replacement Rate with respect to the Adjusted LIBO Rate is implemented, then all references herein to the Adjusted LIBO Rate shall be deemed references to such Replacement Rate.

 

“Administrative Questionnaire” shall mean, with respect to each Lender, an administrative questionnaire in the form prepared by the Administrative Agent and submitted to the Administrative Agent duly completed by such Lender.

 

“Affiliate” shall mean, as to any Person, any other Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such Person.  For the purposes of this definition, “Control” shall mean the power, directly or indirectly, either to (i) vote 5% or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of a Person or (ii) direct or cause the direction of the management and policies of a Person, whether through the ability to exercise voting power, by control or otherwise.  The terms “Controlling”, “Controlled by”, and “under common Control with” have the meanings correlative thereto.

 

“Aggregate Revolving Commitment Amount” shall mean the aggregate principal amount of the Aggregate Revolving Commitments from time to time.  On the Closing Date, the Aggregate Revolving Commitment Amount equals $100,000,000.  On the First Amendment Effective Date, the Aggregate Revolving Commitment Amount equals $150,000,000.  On the Second Amendment Effective Date, the Aggregate Revolving Commitment Amount equals $250,000,000.

 

“Aggregate Revolving Commitments” shall mean, collectively, all Revolving Commitments of all Lenders at any time outstanding.

 

“Anti-Corruption Laws” shall have the meaning given to such term in Section 4.16.

 

“Applicable Lending Office” shall mean, for each Lender and for each Type of Loan, the “Lending Office” of such Lender (or an Affiliate of such Lender) designated for such Type of Loan in the Administrative Questionnaire submitted by such Lender or such other office of such Lender (or an Affiliate of such Lender) as such Lender may from time to time specify to the

 

2

 

Administrative Agent and the Borrower as the office by which its Loans of such Type are to be made and maintained.

 

“Applicable Margin” shall mean, as of any date, with respect to interest on all Revolving Loans and Term Loans outstanding on any date, or the letter of credit fee, as the case may be, a percentage per annum determined by reference to the applicable Leverage Ratio from time to time in effect as set forth on Schedule I; provided, that a change in the Applicable Margin resulting from a change in the Leverage Ratio shall be effective on the second Business Day after which the Borrower delivers the financial statements required by Section 5.1(a) or (b) and the Compliance Certificate required by Section 5.1(d); provided, further, that if at any time the Borrower shall have failed to deliver such financial statements and such Compliance Certificate when so required, the Applicable Margin shall be at Level III as set forth on Schedule I until such time as such financial statements and Compliance Certificate are delivered, at which time the Applicable Margin shall be determined as provided above; and provided, further, that in the event that any financial statement delivered pursuant to Section 5.1(a) or (b) or any Compliance Certificate delivered pursuant to Section 5.1(d) is shown to be inaccurate (regardless of whether this Agreement or the Commitments are in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for any period (an “Applicable Margin Period”) than the Applicable Margin applied for such Applicable Margin Period, and only in such case, then the Borrower shall immediately (i) deliver to the Administrative Agent a corrected Compliance Certificate for such Applicable Margin Period, (ii) determine the Applicable Margin for such Applicable Margin Period based upon the corrected Compliance Certificate, and (iii) immediately pay to the Administrative Agent the accrued additional interest owing as a result of such increased Applicable Margin for such Applicable Margin Period, which payment shall be promptly applied by the Administrative Agent in accordance with Section 2.22.  The provisions of this definition are in addition to rights of the Administrative Agent and Lenders with respect to Section 2.14(c) and Article 8 and other of their respective rights under this Agreement.  Notwithstanding the foregoing, the Applicable Margin from the Closing Date until the financial statements and Compliance Certificate for the Fiscal Quarter ending December 31, 2012, are required to be delivered shall be at Level II as set forth on Schedule I.  Notwithstanding the foregoing, the Applicable Margin from the First Amendment Effective Date until the financial statements and Compliance Certificate for the Fiscal Quarter ending June 30, 2015, are required to be delivered shall be at Level I as set forth on Schedule I.  Notwithstanding the foregoing, the Applicable Margin from the Second Amendment Effective Date until the financial statements and Compliance Certificate for the Fiscal Quarter ending June 30, 2018, are required to be delivered shall be at Level I as set forth on Schedule I.

 

“Applicable Percentage” shall mean, as of any date, with respect to the commitment fee as of any date, the percentage per annum determined by reference to the applicable Leverage Ratio in effect on such date as set forth on Schedule I; provided, that a change in the Applicable Percentage resulting from a change in the Leverage Ratio shall be effective on the second Business Day after which the Borrower delivers the financial statements required by Section 5.1(a) or (b) and the Compliance Certificate required by Section 5.1(d); provided further, that if at any time the Borrower shall have failed to deliver such financial statements and such Compliance Certificate, the Applicable Percentage shall be at Level III as set forth on Schedule I until such time as such financial statements and Compliance Certificate are delivered, at which

 

3

 

time the Applicable Percentage shall be determined as provided above; and provided, further, that in the event that any financial statement delivered pursuant to Section 5.1(a) or (b) or any Compliance Certificate delivered pursuant to Section 5.1(d) is shown to be inaccurate (regardless of whether this Agreement or the Commitments are in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Percentage for any period (an “Applicable Percentage Period”) than the Applicable Percentage applied for such Applicable Percentage Period, and only in such case, then the Borrower shall immediately (i) deliver to the Administrative Agent a corrected Compliance Certificate for such Applicable Percentage Period, (ii) determine the Applicable Percentage for such Applicable Percentage Period based upon the corrected Compliance Certificate, and (iii) immediately pay to the Administrative Agent the accrued additional commitment fees owing as a result of such increased Applicable Percentage for such Applicable Percentage Period, which payment shall be promptly applied by the Administrative Agent in accordance with Section 2.22.  For purposes of calculating the Applicable Percentage only, the Loans shall be deemed used to the extent of the then outstanding Revolving Loans plus the sum of (x) the aggregate undrawn amount of all outstanding Letters of Credit plus (y) the aggregate amount of all unreimbursed LC Disbursements.  The provisions of this definition are in addition to rights of the Administrative Agent and Lenders with respect to Section 2.14(c) and Article 8 and other of their respective rights under this Agreement.  Notwithstanding the foregoing, the Applicable Percentage for the commitment fee from the Closing Date until the financial statements and Compliance Certificate for the Fiscal Quarter ending December 31, 2012, are required to be delivered shall be at Level II as set forth on Schedule I.  Notwithstanding the foregoing, the Applicable Percentage for the commitment fee from the First Amendment Effective Date until the financial statements and Compliance Certificate for the Fiscal Quarter ending June 30, 2015, are required to be delivered shall be at Level I as set forth on Schedule I.  Notwithstanding the foregoing, the Applicable Percentage for the commitment fee from the Second Amendment Effective Date until the financial statements and Compliance Certificate for the Fiscal Quarter ending June 30, 2018, are required to be delivered shall be at Level I as set forth on Schedule I.

 

“Approved Fund” shall mean any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an entity that administers or manages a Lender.

 

“Assignment and Assumption” shall mean an Assignment and Assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 10.4(b)) and accepted by the Administrative Agent, in the form of Exhibit E attached hereto or any other form approved by the Administrative Agent.

 

“Availability Period” shall mean the period from the Closing Date to the Revolving Commitment Termination Date.

 

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

 

4

 

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

 

“Base Rate” shall mean the highest of (i) the per annum rate which the Administrative Agent publicly announces from time to time to be its prime lending rate, as in effect from time to time, (ii) the Federal Funds Rate, as in effect from time to time, plus one-half of one percent (0.50%) or (iii) the one-month Index Rate.  The Administrative Agent’s prime lending rate is a reference rate and does not necessarily represent the lowest or best rate charged to customers.  The Administrative Agent may make commercial loans or other loans at rates of interest at, above or below the Administrative Agent’s prime lending rate.  Each change in the Administrative Agent’s prime lending rate shall be effective from and including the date such change is publicly announced as being effective.

 

“Borrowing” shall mean a borrowing consisting of (i) Loans of the same Class and Type, made, converted or continued on the same date and in the case of Eurodollar Loans, as to which a single Interest Period is in effect, or (ii) a Swingline Loan.

 

“Business Day” shall mean (i) any day other than a Saturday, Sunday or other day on which commercial banks in Richmond, Virginia are authorized or required by law to close and (ii) if such day relates to a Borrowing of, a payment or prepayment of principal or interest on, a conversion of or into, or an Interest Period for, an Index Rate Loan or Eurodollar Loan or a notice with respect to any of the foregoing, any day on which dealings in Dollars are carried on in the London interbank market.

 

“Capella” means Capella Education Company, a Minnesota corporation.

 

“Capella Acquisition” shall have the meaning ascribed to such term in the Second Amendment.

 

“Capital Expenditures” shall mean for any period, without duplication, (i) the additions to property, plant and equipment and other capital expenditures of the Borrower and its Subsidiaries that are (or would be) set forth on a consolidated statement of cash flows of the Borrower for such period prepared in accordance with GAAP and (ii) Capital Lease Obligations incurred by the Borrower and its Subsidiaries during such period.

 

“Capital Lease Obligations” of any Person shall mean all obligations of such Person to pay rent or other amounts under any lease (or other arrangement conveying the right to use) of 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.

 

“Capital Stock” shall mean any capital stock (or in the case of a partnership or limited liability company, the partners’ or members’ equivalent equity interest) of the Borrower or any of its Subsidiaries (to the extent issued to a Person other than the Borrower), whether common or preferred.

 

5

 

“Cash Management Swingline Loans” shall have the meaning assigned to such term in Section 2.4(b).

 

“CEC RDN” means CEC RDN, Inc., a Florida corporation.

 

“Change in Control” shall mean the occurrence of one or more of the following events after the Second Amendment Effective Date: (i) any sale, lease, exchange or other transfer (in a single transaction or a series of related transactions) of all or substantially all of the assets of the Borrower to any Person or “group” (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder in effect on the date hereof), (ii) 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) of 30% or more of the outstanding shares of the voting stock of the Borrower or (iii) during any period of twenty-four (24) consecutive months ending on each anniversary of the Second Amendment Effective Date, individuals who, at the beginning of any such 24-month period, constituted the board of directors of the Borrower (together with any new directors whose election by such board, or whose nomination for election by the shareholders of the Borrower was approved by a vote of a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved), cease for any reason to constitute a majority of the board of directors of the Borrower then in office.

 

“Change in Law” shall mean (i) the adoption of any applicable law, rule or regulation after the date of this Agreement, (ii) any change in any applicable law, rule or regulation, or any change in the interpretation or application thereof, by any Governmental Authority after the date of this Agreement, or (iii) compliance by any Lender (or its Applicable Lending Office) or the Issuing Bank (or for purposes of Section 2.19(b), by such Lender’s or the Issuing Bank’s Parent Company, if applicable) 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 (and for purposes of this Agreement, the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines and directives in connection therewith and all requests, rules, guidelines or directives concerning capital adequacy promulgated by the Bank for International Settlements, the Basel Committee on Banking Regulations and Supervisory Practices (or any successor or similar authority) or the United States or foreign financial regulatory authorities, are deemed to have been adopted and gone into effect after the date hereof, regardless of the date adopted, issued, promulgated or implemented).

 

“Charge” means any charge, expense, cost, accrual, reserve or losses of any kind.

 

“Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans, Swingline Loans or Term Loans and when used in reference to any Commitment, refers to whether such Commitment is a Revolving Commitment, a Swingline Commitment or a Term Loan Commitment.

 

“Closing Date” shall mean the date on which the conditions precedent set forth in Section 3.1 and, if a Loan or Letter of Credit is requested, Section 3.2(a), (b) and (f), have been satisfied or waived in accordance with Section 10.2.

 

6

 

“Code” shall mean the Internal Revenue Code of 1986, as amended and in effect from time to time.

 

“Collateral” shall mean all property and assets of the Loan Parties, now owned or hereafter acquired, upon which a Lien is purported to be created by any Security Document, other than Excluded Collateral.

 

“Commitment” shall mean a Revolving Commitment, a Swingline Commitment or a Term Loan Commitment or any combination thereof (as the context shall permit or require).

 

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

 

“Competitor” means, at any time of determination, any Person that is directly and primarily engaged in substantially the same line of business as the Borrower and its Subsidiaries in owning and operating colleges and universities or in a line of business reasonably related or incidental to the line of business of the Borrower and its Subsidiaries.

 

“Compliance Certificate” shall mean a certificate from the principal executive officer or the principal financial officer of the Borrower in the form of, and containing the certifications set forth in, the certificate attached hereto as Exhibit 5.1(d)(1).

 

“Consolidated DOE Financial Responsibility Composite Score”  means the composite score, as determined pursuant to 34 C.F.R. Section 668.172 and Appendix A to Subpart L of 34 C.F.R. Section 668, as of the end of any Fiscal Year.

 

“Consolidated EBITDA” shall mean, for the Borrower and its Subsidiaries for any period, an amount equal to the sum of (i) Consolidated Net Income for such period plus (ii) to the extent deducted in determining Consolidated Net Income for such period:

 

(A) Consolidated Interest Expense,

 

(B) income tax expense determined on a consolidated basis in accordance with GAAP,

 

(C) depreciation and amortization determined on a consolidated basis in accordance with GAAP,

 

(D) the amount of any Charges associated with the grant of any share based payment awards to employees, officers, directors or consultants,

 

(E) all other non-cash Charges (other than any increase in the allowance for doubtful accounts),

 

(F) unusual or non-recurring Charges (as determined in good faith by the Borrower, but to the extent not excluded in the determination of Consolidated Net Income),

 

(G) pro forma “run rate” cost savings, operating expense reductions, operational improvements and synergies (net of the amount of actual amounts realized) reasonably

 

7

 

identifiable and factually supportable (in the good faith determination of the Borrower) related to (1) the Capella Acquisition, (2) asset sales, acquisitions, investments, dispositions, operating improvements, restructurings, cost saving initiatives and certain other similar initiatives (including the renegotiation of contracts and other arrangements) and specified transactions consummated prior to the Second Amendment Effective Date and (3) asset sales, acquisitions, investments, dispositions, operating improvements, restructurings, cost saving initiatives and certain other similar initiatives (including the renegotiation of contracts and other arrangements) and specified transactions consummated after the Second Amendment Effective Date and permitted by this Agreement, in each case of the foregoing clauses (1), (2) and (3), projected by the Borrower in good faith to result from actions that have been taken or with respect to which substantial steps have been taken or are expected to be taken (in the good faith determination of the Borrower) within 24 months (for the avoidance of doubt including in connection with any of the foregoing, or actions taken, prior to the Second Amendment Effective Date),

 

(H) any Charge attributable to the undertaking and/or implementation of business optimization activities, cost savings initiatives, cost rationalization programs, operating expense reductions and/or synergies and/or similar initiatives and/or programs, including the following:  any business optimization Charge, any restructuring Charge (including any Charge relating to any tax restructuring), any Charge relating to the closure or consolidation of any facility (including but not limited to rent termination costs, moving costs and legal costs), any systems implementation Charge, any retention or completion bonus, any expansion and/or relocation Charge and any severance Charge, and

 

(I) all Charges incurred in connection with any acquisition, investment, equity issuance, debt issuance, refinancing, amendment, disposition or other transaction (in each case, whether or not consummated) permitted by this Agreement, including, without limitation, in connection with the Second Amendment and the Capella Acquisition,

 

as all of the foregoing are determined on a consolidated basis in accordance with GAAP, in each case for such period.  For the avoidance of doubt, Consolidated EBITDA for the period of four consecutive Fiscal Quarters ending on September 30, 2018 (the “Initial Period”) and each applicable period thereafter shall include the results of Capella and its Subsidiaries prior to the Second Amendment Effective Date and be determined on a pro forma basis as if the Capella Acquisition had been completed on the first day of the Initial Period.

 

“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” shall mean, for the Borrower and its Subsidiaries for any period determined on a consolidated basis in accordance with GAAP, the sum of (i) total interest expense, including without limitation the interest component of any payments in respect of Capital Lease Obligations capitalized or expensed during such period (whether or not actually paid during such period) plus (ii) the net amount payable (or minus the net amount receivable) under Hedging Transactions during such period (whether or not actually paid or received during such period); provided, however, that Consolidated Interest Expense shall (x) exclude

 

8

 

amortization of debt issuance costs and other deferred financing fees incurred on or prior to the Second Amendment Effective Date relating to the Revolving Credit Agreement dated as of January 3, 2011, among the Borrower, the Administrative Agent, and the other parties thereto, the Existing Credit Agreement or this Agreement and the other Loan Documents, and (y) for the Initial Period and each applicable period thereafter include the results of Capella and its Subsidiaries prior to the Second Amendment Effective Date and be determined on a pro forma basis as if the Capella Acquisition had been completed on the first day of the Initial Period.

 

“Consolidated Net Income” shall mean, for the Borrower and its Subsidiaries for any period, the net income (or loss) of the Borrower and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, but excluding therefrom (to the extent otherwise included therein) (i) any extraordinary gains or losses, (ii) any gains attributable to write-ups of assets, (iii) any equity interest of the Borrower or any Subsidiary of the Borrower in the unremitted earnings of any Person that is not a Subsidiary, (iv) the cumulative effect of a change in accounting principles and changes as a result of the adoption or modification of accounting policies, (v) accruals and reserves that are established or adjusted within 24 months after the closing of any acquisition that are so required to be established or adjusted as a result of such acquisition in accordance with GAAP or changes as a result of adoption or modification of accounting policies in accordance with GAAP and (vi) any net after-tax effect of gains or losses (less all fees, expenses and charges relating thereto) attributable to abandoned, closed or discontinued operations, or to asset dispositions or the sale or other disposition of any equity interests of any person, in each case other than in the ordinary course of business, as determined in good faith by the Borrower.  For the avoidance of doubt, Consolidated Net Income for the Initial Period and each applicable period thereafter shall include the results of Capella and its Subsidiaries prior to the Second Amendment Effective Date and be determined on a pro forma basis as if the Capella Acquisition had been completed on the first day of the Initial 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.  For clarity, Consolidated Rent Expense (x) shall be calculated net of any lessor lease incentive amounts attributable to such period and (y) shall include the results of Capella and its Subsidiaries prior to the Second Amendment Effective Date and be determined on a pro forma basis as if the Capella Acquisition had been completed on the first day of the Initial Period.

 

“Consolidated Total Debt” shall mean, as of any date, all Indebtedness of the Borrower and its Subsidiaries measured on a consolidated basis as of such date, but excluding Indebtedness of the type described in subsection (xi) thereof.

 

“Contractual Obligation” of any Person shall mean any provision of any security issued by such Person or of any agreement, instrument or undertaking under which such Person is obligated or by which it or any of the property in which it has an interest is bound.

 

“Coverage Ratio” shall mean, as of any date, the ratio of (a) Consolidated EBITDAR for the period of four consecutive Fiscal Quarters ending on or immediately prior to such date to (b) the sum of (i) Consolidated Interest Expense and (ii) Consolidated Rent Expense, in each case measured for the period of four consecutive Fiscal Quarters ending on or immediately prior

 

9

 

to such date. In the event the Borrower shall complete, directly or through a Subsidiary, an acquisition of any Person or business unit during any period, Consolidated EBITDAR, Consolidated Interest Expense and Consolidated Rent Expense for such period and each applicable period thereafter shall, in each case for purposes of determining the Coverage Ratio, thereafter be determined on a pro forma basis as if such acquisition had been completed on the first day of such initial period.

 

“CU” shall mean Capella University, Inc., a Minnesota corporation.

 

“Default” shall mean any condition or event that, with the giving of notice or the lapse of time or both, would constitute an Event of Default.

 

“Defaulting Lender” shall mean, at any time, a Lender (which the Administrative Agent shall promptly notify the Borrower thereof) that (i) such Lender has failed for three or more Business Days to comply with its obligations under this Agreement to make a Loan, make a payment to the Issuing Bank in respect of a Letter of Credit and/or make a payment to the Swingline Lender in respect of a Swingline Loan (each, a “funding obligation”), (ii) such Lender has notified the Administrative Agent or the Borrower in writing, or has stated publicly, that it will not comply with any such funding obligation hereunder, or has defaulted on its funding obligations under any other loan agreement or credit agreement or other similar/other financing agreement, (iii) such Lender has, for three or more Business Days, failed to confirm in writing to the Administrative Agent, in response to a written request of the Administrative Agent, that it will comply with its funding obligations hereunder, (iv) a Lender Insolvency Event has occurred and is continuing with respect to such Lender or (v) becomes the subject of a Bail-In Action.  Any determination that a Lender is a Defaulting Lender under clauses (i) through (v) above will be made by the Administrative Agent in its reasonable discretion acting in good faith, but a failure of the Administrative Agent to make such a determination shall not be determinative of the status of such Lender as not being a Defaulting Lender for purposes of this Agreement.  The Administrative Agent will promptly send to all parties hereto a copy of any notice to the Borrower provided for in this definition.

 

“Default Interest” shall have the meaning set forth in Section 2.14(c).

 

“Disposition” shall have the meaning set forth in Section 7.6.

 

“DOE” means the United States Department of Education.

 

“DOE Compliance Certificate” shall mean a certificate from the principal executive officer or the principal financial officer of the Borrower in the form of, and containing the certifications set forth in, the certificate attached hereto as Exhibit 5.1(d)(2).

 

“Dollar(s)” and the sign “$” shall mean lawful money of the United States of America.

 

“Domestic Subsidiary” shall mean a direct or indirect Subsidiary of the Borrower organized under the laws of the United States, one of the fifty states or commonwealths of the United States or the District of Columbia.

 

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“Educational Licenses” shall mean all federal, state, and Accreditor licenses, permits, authorizations, certifications, agreements, or similar approvals necessary under applicable law and accreditation standards and procedures for any of the Borrower and its Subsidiaries to operate as a post-secondary educational institution as it currently operates or may operate from time to time during the term of this Agreement.

 

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

 

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

 

“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

 

“Environmental Laws” shall mean all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by or with 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 or to health and safety matters.

 

“Environmental Liability” shall mean any liability, contingent or otherwise (including any liability for damages, costs of environmental investigation and remediation, costs of administrative oversight, fines, natural resource damages, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (i) any actual or alleged violation of any Environmental Law, (ii) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (iii) any actual or alleged exposure to any Hazardous Materials, (iv) the Release or threatened Release of any Hazardous Materials or (v) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute.

 

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated), which, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for the 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” shall mean (i) 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); (ii) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of

 

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ERISA), whether or not waived; (iii) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (iv) 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; (v) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator appointed by the PBGC of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (vi) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (vii) 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 of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

 

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.

 

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

 

“Eurodollar Reserve Percentage” shall mean the aggregate of the maximum reserve percentages (including, without limitation, any emergency, supplemental, special or other marginal reserves) expressed as a decimal (rounded upwards to the next 1/100th of 1%) in effect on any day to which any Lender is subject with respect to the Adjusted LIBO Rate pursuant to regulations issued by the Board of Governors of the Federal Reserve System (or any Governmental Authority succeeding to any of its principal functions) with respect to eurocurrency funding (currently referred to as “eurocurrency liabilities” under Regulation D).  Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under Regulation D.  The Eurodollar Reserve Percentage shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

 

“Event of Default” shall have the meaning provided in Article 8.

 

“Excluded Collateral” shall mean:

 

(a)                                 any lease, license, contract, property rights or agreement to which any Loan Party is a party (including any Educational Licenses) or any of its respective rights or interests therein if and for so long as the grant of a security interest therein shall constitute or result in (i) the abandonment, invalidation or unenforceability of any right, right, title or interest of any Loan Party therein or (ii) a breach or termination pursuant to the terms of, or a default under, any such lease, license, contract, property rights or agreement or under applicable law (other than to the extent that any such term would be rendered ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law); provided, however, that a security interest shall attach immediately (and such lease, license, contract, property rights or agreement shall immediately cease to be

 

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Excluded Collateral) at such time as the condition causing such abandonment, invalidation or unenforceability shall be remedied, and, to the extent severable, shall attach immediately to any portion of such lease, license, contract, property rights or agreement (and such portion of such lease, license, contract, property rights or agreement shall immediately cease to be Excluded Collateral) that does not result in any of the consequences specified in the foregoing clauses (i) or (ii);

 

(b)                                 (i) funds that any of the Borrower and its Subsidiaries receives from federal student financial aid programs under Title IV, and holds in a bank or investment account for federal funds pursuant to 34 C.F.R. 668.163 (or any successor regulation) or otherwise in trust pursuant to 34 C.F.R. 668.161(b) and (ii) any similar federal or state student financial aid funds;

 

(c)                                  any treasury stock of the Borrower that has not yet been retired;

 

(d)                                 leasehold interests in real property;

 

(e)                                  any intent-to-use trademark application prior to the filing of a “Statement of Use” or “Amendment to Allege Use” with respect thereto, to the extent, if any, that, and solely during the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark application under applicable federal law;

 

(f)                                   vehicles and other goods subject to certificates of title and foreign intellectual property (other than to the extent perfection can be achieved with the filing of UCC-1 financing statements);

 

(g)                                  any Capital Stock in any Excluded JV and CEC RDN;

 

(h)                                 voting Capital Stock in any Foreign Subsidiary or FSHCO in excess of 65% of all voting Capital Stock in such Foreign Subsidiary or FSHCO;

 

(i)                                     assets subject to a Lien permitted by either of Sections 7.2(d) and (e) only to the extent and for so long as the terms of the agreement in which such Lien is granted either (A) validly prohibit the creation of a security interest in such asset or (B) require the consent of any Person as a condition to the creation of a security interest in such asset, in each case other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law; and

 

(j)                                    other assets for which the cost of obtaining or perfecting a security interest exceeds the value to the Lenders, in the reasonable discretion of the Administrative Agent, of obtaining or perfecting such security interest.

 

“Excluded JV” means those certain limited partnership interests listed on Schedule 1.1 attached hereto, and each other joint venture in which the Borrower or any Subsidiary owns Capital Stock and the pledge of such Capital Stock of such joint venture and/or the Guarantee of the Obligations by such joint venture is prohibited by such Person’s organizational or joint venture documents or any contractual obligation of such Person (to the extent such contractual obligation is permitted under the Loan Documents).  A Person shall cease to qualify as an Excluded JV to the

 

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extent the pledge of such Capital Stock of such joint venture and the Guarantee of the Obligations by such joint venture are no longer prohibited by such Person’s organizational or joint venture documents and any contractual obligation of such Person, and such Excluded JV (to the extent constituting a Domestic Subsidiary (other than a FSHCO)) shall be required to comply with the provisions of Section 5.11.

 

“Excluded Swap Obligation” means, with respect to a Loan Party, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Loan Party, or the grant by such Loan Party of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Loan Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the Obligations of such Loan Party are incurred or the Guarantee of such Loan Party or the grant of such security interest becomes effective with respect to such Swap Obligation.  If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Obligations, Guarantee or security interest is or becomes illegal.

 

“Excluded Taxes” shall mean 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 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 any Lender is located, (c) in the case of a Lender, any withholding tax that (i) is imposed on amounts payable to such Lender at the time such Lender becomes a party to this Agreement, (ii) is imposed on amounts payable to such Lender at any time that such Lender designates a new lending office, other than taxes that have accrued prior to the designation of such lending office that are otherwise not Excluded Taxes, and (iii) is attributable to such Lender’s failure to comply with Section 2.21(e), and (d) any U.S. federal withholding taxes imposed under FATCA.

 

“Exempt Student Financial Aid Funds” shall mean (i) funds that (A) any of the Borrower and its Subsidiaries receives from federal student financial aid programs under Title IV, and (B) students do not earn pursuant to 34 C.F.R. 668.22(e) (or any successor regulation) and (ii) any similar federal or state student financial aid funds.

 

“Existing Credit Agreement” has the meaning set forth in the recitals to this Agreement.

 

“Existing Letters of Credit” means the letters of credit issued and outstanding under the Existing Credit Agreement as set forth on Schedule 2.23.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, and any agreements entered into pursuant Section 1471(b)(1) of the Code.

 

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“Federal Funds Rate” shall mean, for any day, the rate per annum (rounded upwards, if necessary, to the next 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with member banks of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the next succeeding Business Day or if such rate is not so published for any Business Day, the Federal Funds Rate for such day shall be the average rounded upwards, if necessary, to the next 1/100th of 1% of the quotations for such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by the Administrative Agent.  If at any time the Federal Funds Rate is less than zero, the Federal Funds Rate shall be deemed to be zero for purposes of this Agreement.

 

“Fee Letter” shall mean, collectively, that certain fee letter, dated as of October 1, 2012, executed by STRH and SunTrust Bank and accepted by the Borrower on October 2, 2012, that certain fee letter, dated as of May 20, 2015, executed by STRH and SunTrust Bank and accepted by the Borrower on May 20, 2015, that certain fee letter, dated as of July 25, 2018, executed by STRH and SunTrust Bank and accepted by the Borrower on July 25, 2018, and those certain fee letters, relating to the Second Amendment executed by each other Joint Lead Arranger and/or the Lender that is the Affiliate of each such Joint Lead Arranger and accepted by the Borrower.

 

“First Amendment” shall mean the First Amendment to Second Amended and Restated Revolving Credit and Term Loan Agreement, dated as of July 2, 2015, by and among the Borrower, the other Loan Parties, the Lenders party thereto and the Administrative Agent.

 

“First Amendment Effective Date” shall mean the Amendment Effective Date (as such term is defined in the First Amendment).

 

“Fiscal Quarter” shall mean any fiscal quarter of the Borrower.

 

“Fiscal Year” shall mean any fiscal year of the Borrower.

 

“Foreign Lender” shall mean any Lender that is not a United States person under Section 7701(a)(30) of the Code.

 

“Foreign Subsidiary” shall mean any Subsidiary that is organized under the laws of a jurisdiction other than the United States, one of the fifty states or commonwealths of the United States or the District of Columbia.

 

“FSHCO” shall mean any Subsidiary (i) organized under the laws of the United States, any state thereof or the District of Columbia and (ii) substantially all of the assets of which constitute Capital Stock of Foreign Subsidiaries.

 

“GAAP” shall mean generally accepted accounting principles in the United States applied on a consistent basis and subject to the terms of Section 1.3.

 

“Governmental Authority” shall mean 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

 

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executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

“Guarantee” of or by any Person (the “guarantor”) shall mean 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, direct or indirect, of the guarantor (i) 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, (ii) 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, (iii) 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 (iv) as an account party in respect of any letter of credit or letter of guaranty issued in support of such Indebtedness or obligation; provided, that the term “Guarantee” shall not include endorsements for collection or deposits in the ordinary course of business.  The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which Guarantee is made or, if not so stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.  The term “Guarantee” used as a verb has a corresponding meaning.

 

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

 

“Hedging Obligations” of any Person shall mean any and all obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired under (i) any and all Hedging Transactions, (ii) any and all cancellations, buy backs, reversals, terminations or assignments of any Hedging Transactions and (iii) any and all renewals, extensions and modifications of any Hedging Transactions and any and all substitutions for any Hedging Transactions.

 

“Hedging Transaction” of any Person shall mean (a) any transaction (including an agreement with respect to any such transaction) now existing or hereafter entered into by such Person that is a rate swap transaction, swap option, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap or option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option, spot transaction, credit protection transaction, credit swap, credit default swap, credit default option, total return swap, credit spread transaction, repurchase transaction, reverse repurchase transaction, buy/sell-back transaction, securities lending transaction,  or any other similar transaction (including any option with respect to any of these transactions) or any combination thereof, whether or not any such transaction is governed by or subject to any master agreement and (b) any and all transactions of any kind, and the related confirmations, which are subject to

 

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the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

 

“Higher Education Act” shall mean the Higher Education Act of 1965, as amended, 20 U.S.C. Ch. 28, and any amendments or successor statutes thereto.

 

“Indebtedness” of any Person shall mean, without duplication (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person in respect of the deferred purchase price of property or services (other than (x) trade payables incurred in the ordinary course of business; provided, that for purposes of Section 8.1(g), trade payables overdue by more than 120 days shall be included in this definition except to the extent that any of such trade payables are being disputed in good faith and by appropriate measures and (y) any earn-out, purchase price adjustment or similar obligation until such obligation is required by GAAP to be included in the liabilities section of the balance sheet of such Person), (iv) all obligations of such Person under any conditional sale or other title retention agreement(s) relating to property acquired by such Person, (v) all Capital Lease Obligations of such Person, (vi) all obligations, contingent or otherwise, of such Person in respect of letters of credit, acceptances or similar extensions of credit, (vii) all Guarantees of such Person of the type of Indebtedness described in clauses (i) through (vi) above, (viii) all Indebtedness of a third party secured by any Lien on property owned by such Person, whether or not such Indebtedness has been assumed by such Person, (ix) all obligations of such Person, contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any preferred or common stock of such Person on or prior to the Revolving Commitment Termination Date (other than voluntary repurchases of shares of Capital Stock, the exercise of options to purchase shares of Capital Stock of the Borrower permitted by Sections 7.4(f) and 7.5(iii) and repurchase obligations of such Capital Stock upon the occurrence of a change of control so long as the terms of such Capital Stock provide that the issuer thereof will not redeem or repurchase any such Capital Stock pursuant to such provisions prior to the Payment in Full of all Obligations), (x) Off-Balance Sheet Liabilities and (xi) all Hedging Obligations.  The Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture in which such Person is a general partner or a joint venturer, except to the extent that the terms of such Indebtedness provide that such Person is not liable therefor.

 

“Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

 

“Index Rate” means, subject to the implementation of a Replacement Rate in accordance with either Section 2.17(b) or 2.18, that rate per annum effective on any Index Rate Determination Date which is equal to the quotient of:

 

(i) the rate per annum equal to the offered rate for deposits in U.S. dollars for a one (1) month period, which rate appears on that page of Reuters reporting service, or such similar service as determined by the Administrative Agent, that displays ICE Benchmark Administration (“ICE”) (or any successor thereto if ICE is no longer making a London Interbank Offered Rate available) interest settlement rates for deposits in U.S. Dollars, as of 11:00 A.M.

 

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(London, England time) two (2) Business Days prior to the Index Rate Determination Date; provided, that if no such offered rate appears on such page, the rate used for such period will be the per annum rate of interest determined by the Administrative Agent to be the rate at which U.S. dollar deposits for such period, are offered to the Administrative Agent in the London Inter-Bank Market as of 11:00 A.M. (London, England time), on the day that is two (2) Business Days prior to the Index Rate Determination Date, divided by

 

(ii) a percentage equal to 1.00 minus the maximum reserve percentages (including any emergency, supplemental, special or other marginal reserves) expressed as a decimal (rounded upward to the next 1/100th of 1%) in effect on any day to which the Administrative Agent is subject with respect to any Index Rate Loan pursuant to regulations issued by the Board of Governors of the Federal Reserve System with respect to eurocurrency funding (currently referred to as “eurocurrency liabilities” under Regulation D).  This percentage will be adjusted automatically on and as of the effective date of any change in any reserve percentage.  If at any time the Index Rate is less than zero, the Index Rate shall be deemed to be zero for purposes of this Agreement.

 

Notwithstanding the foregoing, unless otherwise specified in any amendment to this Agreement entered into in accordance with Section 2.17(b) or 2.18, in the event that a Replacement Rate with respect to the Index Rate is implemented, then all references herein to the Index Rate shall be deemed references to such Replacement Rate.

 

“Index Rate Borrowing” and “Index Rate Loan” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, bears interest at a rate determined by reference to the Index Rate, provided, that “Index Rate Borrowing” and “Index Rate Loan” shall not be deemed to refer to any Base Rate Loan or Base Rate Borrowing bearing interest at a rate determined by reference to the Index Rate.

 

“Index Rate Determination Date” means the Closing Date and the first Business Day of each calendar month thereafter.

 

“Interest Period” shall mean, with respect to any Eurodollar Borrowing, a period of one, two, three or six months; provided, that:

 

(i)                                     the initial Interest Period for such Borrowing shall commence on the date of such Borrowing (including the date of any conversion from a Borrowing of another Type), and each Interest Period occurring thereafter in respect of such Borrowing shall commence on the day on which the next preceding Interest Period expires;

 

(ii)                                  if any Interest Period would otherwise end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day, unless such Business Day falls in another calendar month, in which case such Interest Period would end on the next preceding Business Day;

 

(iii)                               any Interest Period which begins on the last Business Day of a calendar month or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period shall end on the last Business Day of such calendar month;

 

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(iv)                              each principal installment of the Term Loans shall have an Interest Period ending on each installment payment date and the remaining principal balance (if any) of the Term Loans shall have an Interest Period determined as set forth above; and

 

(v)                                 no Interest Period may extend beyond the Revolving Commitment Termination Date (or, if any Term Loans are outstanding, the Maturity Date).

 

“Issuing Bank” shall mean SunTrust Bank or any other Lender that may agree to issue Letters of Credit, each in its capacity as an issuer of Letters of Credit pursuant to Section 2.23.

 

“LC Commitment” shall mean that portion of the Aggregate Revolving Commitment Amount that may be used by the Borrower for the issuance of Letters of Credit in an aggregate face amount not to exceed $150,000,000.

 

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

 

“LC Documents” shall mean all applications, agreements and instruments relating to the Letters of Credit (but excluding the Letters of Credit).

 

“LC Exposure” shall mean, at any time, the sum of (i) the aggregate undrawn amount of all outstanding Letters of Credit at such time, plus (ii) the aggregate amount of all LC Disbursements that have not been reimbursed by or on behalf of the Borrower at such time.  The LC Exposure of any Lender shall be its Pro Rata Share of the total LC Exposure at such time.

 

“Lender Insolvency Event” shall mean that (i) a Lender or its Parent Company is insolvent, or is generally unable to pay its debts as they become due, or makes a general assignment for the benefit of its creditors, or (ii) such Lender or its Parent Company is the subject of a bankruptcy, insolvency, reorganization, liquidation or similar proceeding, or a receiver, trustee, conservator, intervenor or sequestrator or the like has been appointed for such Lender or its Parent Company, or such Lender or its Parent Company has taken any action in furtherance of or indicating its consent to or acquiescence in any such proceeding or appointment.

 

“Lenders” shall have the meaning assigned to such term in the opening paragraph of this Agreement and shall include, where appropriate, the Swingline Lender and each Additional Lender that joins this Agreement pursuant to Section 2.24.

 

“Letter of Credit” shall mean any stand-by letter of credit issued pursuant to Section 2.23 by the Issuing Bank for the account of the Borrower pursuant to the LC Commitment and the Existing Letters of Credit.  For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.5.  For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

 

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“Leverage Ratio” shall mean, as of any date, the ratio of (i) Consolidated Total Debt as of such date to (ii) Consolidated EBITDA for the period of four consecutive Fiscal Quarters ending on or immediately prior to such date.  In the event the Borrower shall complete, directly or through a Subsidiary, an acquisition of any Person or business unit during any period, the Leverage Ratio as of the end of and for such period and each applicable period thereafter shall thereafter be determined on a pro forma basis as if such acquisition had been completed on the first day of such initial period.

 

“LIBOR” shall mean, for any Interest Period with respect to a Eurodollar Loan, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on that page of Reuters reporting service, or such similar service as determined by the Administrative Agent, that displays ICE (or any successor thereto if ICE is no longer making a London Interbank Offered Rate available) interest settlement rates for deposits in U.S. Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period. If for any reason such rate is not available, LIBOR shall be, for any Interest Period, the rate per annum reasonably determined by the Administrative Agent as the rate of interest at which Dollar deposits in the approximate amount of the Eurodollar Loan comprising part of such borrowing would be offered by the Administrative Agent to major banks in the London interbank Eurodollar market at their request at or about 10:00 a.m. (Richmond, Virginia time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period.  If at any time LIBOR is less than zero, LIBOR shall be deemed to be zero for purposes of this Agreement.

 

“Lien” shall mean any mortgage, pledge, security interest, lien (statutory or otherwise), charge, encumbrance, hypothecation, assignment, cash collateral arrangement, or other arrangement having the practical effect of the foregoing or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having the same economic effect as any of the foregoing).

 

“Limited Condition Acquisition” shall mean any Permitted Acquisition or other Investment by the Borrower or any of its Subsidiaries permitted pursuant to the Loan Documents in respect of which consummation is not conditioned on the availability of, or on obtaining, third party financing.

 

“Limited Condition Acquisition Agreement” shall mean, with respect to any Limited Condition Acquisition, the executed acquisition agreement for such Limited Condition Acquisition.

 

“Limited Condition Acquisition Test Date” shall mean, with respect to any Limited Condition Acquisition, the date that the Limited Condition Acquisition Agreement for such Limited Condition Acquisition is executed and delivered by the parties thereto.

 

“Loan Documents” shall mean, collectively, this Agreement, the Notes (if any), the LC Documents (other than the Letters of Credit themselves), the Subsidiary Guaranty Agreement, the Security Documents, all Notices of Borrowing, all Notices of Conversion/Continuation, all Compliance Certificates, all DOE Compliance Certificates, each Assignment and Assumption,

 

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any Loan Modification Agreement and any and all other instruments, agreements, documents and writings executed in connection with any of the foregoing (other than any agreement delivered in connection with Hedging Obligations or Treasury Management Obligations).(3)

 

“Loan Modification Agreement” shall mean a Loan Modification Agreement in form and substance reasonably satisfactory to the Administrative Agent and the Borrower, among the Borrower, the other Loan Parties, one or more Accepting Lenders and the Administrative Agent.

 

“Loan Modification Offer” shall have the meaning provided in Section 2.28(a).

 

“Loan Parties” shall mean the Borrower and the Subsidiary Loan Parties.

 

“Loans” shall mean all Revolving Loans, Swingline Loans and Term Loans in the aggregate or any of them, as the context shall require.

 

“Material Adverse Effect” shall mean, with respect to any event, act, condition or occurrence of whatever nature (including any adverse determination in any litigation, arbitration, or governmental investigation or proceeding), whether singularly or in conjunction with any other event or events, act or acts, condition or conditions, occurrence or occurrences whether or not related, a material adverse change in, or a material adverse effect on, (i) the business, results of operations, financial condition, assets or liabilities of the Borrower and its Subsidiaries taken as a whole (it being understood that fluctuations in the stock price of the Borrower, alone, shall not be the determinant of the existence of a Material Adverse Effect under this clause (i)), (ii) the ability of the Loan Parties, taken as a whole, to perform any of their material obligations under the Loan Documents, (iii) the rights and remedies of the Administrative Agent, the Issuing Bank, Swingline Lender, and the Lenders under any of the Loan Documents, or (iv) the legality, validity or enforceability of any material provision of the Loan Documents.

 

“Material Indebtedness” shall mean Indebtedness (other than the Loans and Letters of Credit) and Hedging Obligations of the Borrower or any of its Subsidiaries, individually or in an aggregate principal amount exceeding $20,000,000.  For purposes of determining the amount of attributed Indebtedness from Hedging Obligations, the “principal amount” of any Hedging Obligations at any time shall be the Net Mark-to-Market Exposure of such Hedging Obligations.

 

(3)  Section 3 of the First Amendment amends the Loan Documents and reads as follows: “The parties agree that, notwithstanding any provision to the contrary contained in the Loan Documents, the Obligations, as defined in the Credit Agreement, the Guaranteed Obligations, as defined in the Subsidiary Guaranty Agreement, and the Secured Obligations, as defined in the Security Agreement and the Pledge Agreement, shall not include Excluded Swap Obligations.  Each Qualified ECP Loan Party hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Loan Party to honor all of its obligations under the Loan Documents in respect of Swap Obligations (provided, however, that each Qualified ECP Loan Party shall only be liable under this Section 3 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 3 or otherwise under the Loan Documents, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount).  The obligations of each Qualified ECP Loan Party under this Section shall remain in full force and effect until the Obligations are Paid in Full.  Each Qualified ECP Loan Party intends that this Section 3 constitute, and this Section 3 shall be deemed to constitute, a “keepwell, support or other agreement” for the benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.”

 

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“Maturity Date” shall mean, with respect to the Term Loans, the earlier of (i) December 31, 2016, or (ii) the date on which the principal amount of all outstanding Term Loans have been declared or automatically have become due and payable (whether by acceleration or otherwise).

 

“Moody’s” shall mean Moody’s Investors Service, Inc., and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency designated by the Borrower with the consent of the Administrative Agent.

 

“Multiemployer Plan” shall have the meaning set forth in Section 4001(a)(3) of ERISA.

 

“Net Mark-to-Market Exposure” of any Person shall mean, as of any date of determination with respect to any Hedging Obligation, the excess (if any) of all unrealized losses over all unrealized profits of such Person arising from such Hedging Obligation.  “Unrealized losses” shall mean the fair market value of the cost to such Person of replacing the Hedging Transaction giving rise to such Hedging Obligation as of the date of determination (assuming the Hedging Transaction were to be terminated as of that date), and “unrealized profits” means the fair market value of the gain to such Person of replacing such Hedging Transaction as of the date of determination (assuming such Hedging Transaction were to be terminated as of that date).

 

“Non-Defaulting Lender” shall mean, at any time, a Lender that is not a Defaulting Lender or a Potential Defaulting Lender.

 

“Notes” shall mean, collectively, the Revolving Credit Notes, the Swingline Note and the Term Notes.

 

“Notice of Conversion/Continuation” shall mean the notice given by the Borrower to the Administrative Agent in respect of the conversion or continuation of an outstanding Borrowing as provided in Section 2.8(b).

 

“Notice of Revolving Borrowing” shall have the meaning as set forth in Section 2.3.

 

“Notice of Swingline Borrowing” shall have the meaning as set forth in Section 2.4.

 

“Notices of Borrowing” shall mean, collectively, the Notices of Revolving Borrowing and the Notices of Swingline Borrowing.

 

“Obligations” shall mean (a) all amounts owing by the Borrower to the Administrative Agent, the Issuing Bank or any Lender (including the Swingline Lender) pursuant to or in connection with this Agreement or any other Loan Document or otherwise with respect to any Loan or Letter of Credit, including without limitation, all principal, interest (including any interest accruing after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization or like proceeding relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), all reimbursement obligations, fees, expenses, indemnification and reimbursement payments, costs and expenses (including all fees and expenses of counsel to the Administrative Agent, the Issuing Bank and any Lender (including the Swingline Lender) incurred, or required to be reimbursed, pursuant to this Agreement or any other Loan Document), whether direct or indirect, absolute or contingent,

 

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liquidated or unliquidated, now existing or hereafter arising hereunder or thereunder, (b) all Hedging Obligations owed by any Loan Party to any Specified Hedge Provider and (c) all Treasury Management Obligations owed by any Loan Party to any Specified Treasury Management Provider, together with all renewals, extensions, modifications or refinancings of any of the foregoing; excluding, in each case, any Excluded Swap Obligations.

 

“Off-Balance Sheet Liabilities” of any Person shall mean (i) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, (ii) any liability of such Person under any sale and leaseback transactions that do not create a liability on the balance sheet of such Person, (iii) any Synthetic Lease Obligation or (iv) any obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheet of such Person.

 

“Operating Lease” of a Person means any lease of real 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.

 

“OSHA” shall mean the Occupational Safety and Health Act of 1970, as amended from time to time, and any successor statute.

 

“Other Taxes” shall mean 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.

 

“Paid in Full,” “Pay in Full” or “Payment in Full” means, with respect to any Obligations, (a) the payment in full in cash of all such Obligations (other than (i) contingent indemnification obligations to the extent no claim giving rise thereto has been asserted, (ii) Treasury Management Obligations (unless the Administrative Agent has commenced to exercise its remedies pursuant to Section 8.1 and such Treasury Management Obligations are then due and payable) and (iii) Hedging Obligations that, by their terms or in accordance any consent obtained from the counterparty thereto, are not required to continue to be secured by the Collateral under the Loan Documents) (unless the Administrative Agent has commenced to exercise its remedies pursuant to Section 8.1 and such Hedging Obligations are then due and payable), (b) the termination or expiration of all of the Commitments and (c) in connection with the termination or expiration of the Revolving Commitments, either (i) the cancellation and return to the Administrative Agent of all Letters of Credit or (ii) the cash collateralization (or the delivery of a back-to-back letter of credit reasonably acceptable to the Administrative Agent in form and content and from an issuer reasonably acceptable to the Administrative Agent) of all Letters of Credit pursuant to the terms and conditions of this Agreement and otherwise in a manner reasonably acceptable to the Administrative Agent.

 

“Parent Company” shall mean, with respect to a Lender, the bank holding company (as defined in Federal Reserve Board Regulation Y), if any, of such Lender, and/or Person owning, beneficially or of record, directly or indirectly, a majority of the shares of such Lender.

 

“Participant” shall have the meaning set forth in Section 10.4(d).

 

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“Payment Office” shall mean the office of the Administrative Agent located at 303 Peachtree Street, N.E., Atlanta, Georgia 30308, or such other location as to which the Administrative Agent shall have given written notice to the Borrower and the other Lenders.

 

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

 

“Permitted Acquisition” means any transaction consummated after the date hereof, in which the Borrower or a Subsidiary acquires all or substantially all of the assets or outstanding Capital Stock of any Person or any division or business line of any Person, or merges or consolidates with any Person (with any such acquisition being referred to as an “Acquired Business” and any such Person, division or line of business being the “Target”), provided that, with respect to such transaction, subject to Section 1.7:  (a) at the closing of such transaction, after giving effect thereto, no Default or Event of Default shall have occurred and be continuing (provided that, solely with respect to a Limited Condition Acquisition funded by Incremental Term Loan Commitments, the Lenders providing such Incremental Term Loan Commitments may agree to a “funds certain provision” that does not impose as a condition to funding thereof that no Default or Event of Default (other than any Default or Event of Default under Section 8.1(a), (b), (h), (i) or (j) shall have occurred and be continuing at the time such Limited Condition Acquisition is consummated, in which event the condition to funding thereof shall instead be that (A) no Default or Event of Default shall have occurred and be continuing on the Limited Condition Acquisition Test Date with respect to such Limited Condition Acquisition and (B) no Default or Event of Default under Section 8.1(a), (b), (h), (i) or (j) shall have occurred and be continuing at the time such Limited Condition Acquisition is consummated), (b)  such acquisition is not a “hostile” acquisition and has been approved by the Board of Directors and/or shareholders of the Borrower, the applicable Subsidiary and the Target, (c) at least 5 Business Days prior to the closing of such transaction (or such shorter period as the Administrative Agent may accept), the Borrower shall give written notice of such transaction to the Administrative Agent (which shall promptly deliver a copy to the Lenders) (the “Acquisition Notice”), which shall include (i) either (A) the final acquisition agreement or the then current draft of the acquisition agreement or (B) a reasonably detailed description of the material terms of such Permitted Acquisition (including, without limitation and if available, the purchase price and method and structure of payment) and (ii) all available financial statements of the Target and its Subsidiaries covering the prior three years (or such lesser period for which such financial statements are available), (d)(1) if the Borrower is a party to such merger, then the Borrower shall be the surviving entity of such merger, (2) if a Subsidiary Loan Party is a party to such merger, then (A) such Subsidiary Loan Party shall be the surviving entity of such merger or (B) the surviving entity shall become a Subsidiary Loan Party concurrently with the consummation of such merger, or (3) in all other cases, the surviving entity of any merger shall be a Subsidiary, and the surviving entity shall not be a Foreign Subsidiary, (e) the Acquired Business shall be in substantially the same line of business as the Borrower and its Subsidiaries or in a line of business reasonably related or incidental to the line of business of the Borrower and its Subsidiaries, (f) at the time it gives the Acquisition Notice, the Borrower shall deliver to the Administrative Agent pro forma financial statements for next succeeding two-year period giving effect to the acquisition, (g) the Administrative Agent shall have received copies of the acquisition agreement and all other material documents relating to the acquisition and such additional documentation regarding the acquisition as it shall reasonably require, (h) if the

 

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Acquired Business or the Target is an accredited, Title IV eligible institution and the total consideration for the transaction exceeds $25,000,000, such Acquired Business or the Target is in good standing with its institutional Accreditor (it being understood that, for purposes hereof, an Acquired Business or the Target shall be deemed not to be in good standing if it shall have received an order, notice or other decision from its institutional Accreditor to the effect that the accreditation of such Acquired Business or the Target is or will be withdrawn, revoked or terminated); and (i) the Borrower shall have delivered to the Administrative Agent (which shall promptly deliver a copy to the Lenders) a certificate, executed by a Responsible Officer of the Borrower, demonstrating in sufficient detail that, on a pro forma basis after giving effect to such acquisition and assuming that such acquisition was consummated on the first day of the most recently ended period of four consecutive Fiscal Quarters the pro forma Leverage Ratio shall not be greater than 1.75 to 1 (provided that, solely with respect to a Limited Condition Acquisition funded by Incremental Term Loan Commitments, the Lenders providing such Incremental Term Loan Commitments may agree to a “funds certain provision” that such ratio shall be tested on the Limited Condition Acquisition Test Date applicable to such Limited Condition Acquisition).

 

“Permitted Amendment” shall have the meaning provided in Section 2.28(c).

 

“Permitted Encumbrances” shall mean:

 

(i)                                     Liens imposed by law for taxes or other governmental charges not at the time delinquent or thereafter payable without penalty or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves are being maintained in accordance with GAAP;

 

(ii)                                  statutory Liens of landlords, suppliers, carriers, warehousemen, mechanics, materialmen, and similar Liens arising by operation of law in the ordinary course of business for amounts not at the time delinquent or thereafter payable without penalty or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves are being maintained in accordance with GAAP;

 

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

 

(iv)                              deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

 

(v)                                 judgment and attachment liens not giving rise to an Event of Default or Liens created by or existing from any litigation or legal proceeding that are currently being contested in good faith by appropriate proceedings and with respect to which adequate reserves are being maintained in accordance with GAAP;

 

(vi)                              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

 

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affected property or materially interfere with the ordinary conduct of business of the Borrower and its Subsidiaries taken as a whole;

 

(vii)                           leases, licenses, subleases or sublicenses granted to other Persons in the ordinary course of business which do not (x) interfere in any material respect with the business of the Borrower and its Subsidiaries taken as a whole or (y) secure any Indebtedness for borrowed money;

 

(viii)                        any interest or title of (x) a lessor or sublessor under any lease or sublease or (y) a licensor or sublicensor under any license or sublicense, in each case entered into in the ordinary course of business, so long as such interest or title relate solely to the assets subject thereto;

 

(ix)                              banker’s liens, rights of setoff and other similar Liens that are customary in the banking industry and existing solely with respect to cash and other amounts on deposit in one or more accounts (including securities accounts) maintained by the Borrower or its Subsidiaries;

 

(x)                                 Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;

 

(xi)                              Liens of a collection bank arising under Section 4-210 of the Uniform Commerical Code on items in the course of collection;

 

(xii)                           Liens arising from precautionary UCC financing statement filings (or similar filings under other applicable Law) regarding operating leases entered into by the Borrower or any of its Subsidiaries in the ordinary course of business;

 

(xiii)                        licenses of patents, trademarks, copyrights and other intellectual property rights reasonably entered into in the ordinary course of business which do not secure any Indebtedness for borrowed money;

 

(xiv)                       good faith deposits required in connection with any investment transaction permitted under Section 7.4;

 

(xv)                          to the extent constituting a Lien, escrow arrangements securing indemnification obligations associated any investment transaction permitted under Section 7.4;

 

(xvi)                       Liens (x) on advances of cash or Permitted Investments in favor of the seller of any property to be acquired by the Borrower or any of its Subsidiaries in an Investment permitted pursuant to Section 7.4 to be applied against the purchase price for such Investment; provided, that (I) the aggregate amount of such advances of cash or Permitted Investments shall not exceed the purchase price of such Investment and (II) the property is acquired within 365 days following the date of the first such advance so made; and (y) consisting of an agreement to dispose of any property in a Disposition permitted under Section 7.6, in each case, solely to the extent such Investment or disposition, as the case may be, would have been permitted on the date of the creation of such Lien; and

 

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(xvii)                    Liens of any Governmental Authority on Exempt Student Financial Aid Funds;

 

provided, that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness (other than clauses (i), (ii), (ix), (x) and (xi), but, with respect to clauses (i) and (ii), only to the extent being contested in good faith and by appropriate proceedings, and provided that the Borrower maintains adequate reserves for such contest in accordance with GAAP, and, with respect to all such clauses, only to the extent such Indebtedness is otherwise permitted by this Agreement).

 

“Permitted Investments” shall mean:

 

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

 

(ii)                                  commercial paper having the highest rating, at the time of acquisition thereof, of S&P or Moody’s and in either case maturing within six months from the date of acquisition thereof;

 

(iii)                               certificates of deposit, bankers’ acceptances and time deposits maturing within 180 days of 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 Lender or any other commercial bank organized under the laws of the United States or any state thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000;

 

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

 

(v)                                 Investments, classified in accordance with GAAP as current assets of the Borrower or any of its Subsidiaries, in money market investment programs registered under the Investment Company Act of 1940, which are administered by reputable financial institutions, and the portfolios of which are limited to Investments of the character, quality and maturity described in clauses (i) through (iv) above; and

 

(vi)                              other short-term investments utilized by Foreign Subsidiaries in accordance with normal investment practices for cash management in investments of a type analogous to the foregoing.

 

“Person” shall mean any individual, partnership, firm, corporation, association, joint venture, limited liability company, trust or other entity, or any Governmental Authority.

 

“Plan” shall mean 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

 

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terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Pledge Agreement” shall mean the Amended and Restated Pledge Agreement, dated as of the date hereof and substantially in the form of Exhibit H, made by the Borrower and the Subsidiary Loan Parties in favor of the Administrative Agent for the benefit of the Secured Parties (as therein defined), pursuant to which the Borrower and each of such Subsidiary Loan Parties shall pledge all of the Capital Stock that it holds in its Subsidiaries to secure the Obligations, as amended, restated, supplemented or otherwise modified from time to time.

 

“Potential Defaulting Lender” shall mean, at any time, a Lender that has, or whose Parent Company has, a non-investment grade rating from Moody’s or S&P or another nationally recognized rating agency.  Any determination that a Lender is a Potential Defaulting Lender will be made by the Administrative Agent in its reasonable discretion acting in good faith.  The Administrative Agent will promptly send to all parties hereto a copy of any notice to the Borrower provided for in this definition.

 

“Pro Rata Share” shall mean (i) with respect to any Revolving Commitment of any Revolving Loan Lender at any time, a percentage, the numerator of which shall be such Revolving Loan Lender’s Revolving Commitment (or if such Revolving Commitments have been terminated or expired or the Loans have been declared to be due and payable, such Lender’s Revolving Credit Exposure), and the denominator of which shall be the sum of such Revolving Commitments of all Revolving Loan Lenders (or if such Revolving Commitments have been terminated or expired or the Loans have been declared to be due and payable, all Revolving Credit Exposure of all Revolving Loan Lenders), (ii) with respect to any Term Loan Commitment of any Term Loan Lender at any time, a percentage, the numerator of which shall be such Term Loan Lender’s Term Loan Commitment (or if such Term Loan Commitments have been terminated or expired or the Loans have been declared to be due and payable, such Term Loan Lender’s Term Loan), and the denominator of which shall be the sum of such Term Loan Commitments of all Term Loan Lenders (or if such Term Loan Commitments have been terminated or expired or the Loans have been declared to be due and payable, all Term Loans of all Term Loan Lenders) and (iii) with respect to all Commitments of any Lender at any time, the numerator of which shall be the sum of such Lender’s Revolving Commitment (or if such Revolving Commitments have been terminated or expired or the Loans have been declared to be due and payable, such Lender’s Revolving Credit Exposure) and Term Loans and the denominator of which shall be the sum of all Lenders’ Revolving Commitments (or if such Revolving Commitments have been terminated or expired or the Loans have been declared to be due and payable, all Revolving Credit Exposure of all Lenders funded under such Commitments) and Term Loans.

 

“Qualified ECP Loan Party” means, in respect of any Swap Obligation, each Loan Party that has total assets exceeding $10,000,000 at the time the relevant Obligations, Guarantee or grant of the relevant security interest becomes effective with respect to such Swap Obligation or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

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“Regulation D” shall mean Regulation D of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.

 

“Related Parties” shall mean, 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.

 

“Release” shall mean any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into the environment (including ambient air, surface water, groundwater, land surface or subsurface strata) or within any building, structure, facility or fixture.

 

“Replacement Rate” has the meaning assigned thereto in Section 2.18.

 

“Required Lenders” shall mean, (a) at any time that there are two Lenders or fewer, Lenders holding 100% of the aggregate outstanding Revolving Commitments and Term Loans at such time or if the Lenders have no Commitments outstanding, then Lenders holding 100% of the Revolving Credit Exposure and Term Loans; and (b) at any other time, Lenders holding more than 50% of the aggregate outstanding Revolving Commitments and Term Loans at such time or if the Lenders have no Commitments outstanding, then Lenders holding more than 50% of the Revolving Credit Exposure and Term Loans; provided, however, that to the extent that any Lender is a Defaulting Lender, such Defaulting Lender and all of its Commitments and Revolving Credit Exposure shall be excluded for purposes of determining Required Lenders.

 

“Requirement of Law” for any Person shall mean the articles or certificate of incorporation, bylaws, partnership certificate and agreement, or limited liability company certificate of organization and agreement, as the case may be, and other organizational and governing documents of such Person, and any law, treaty, rule or regulation, or determination of a Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

“Responsible Officer” shall mean any of the president, the chief executive officer, the chief operating officer, the chief financial officer or the treasurer of the Borrower or such other representative of the Borrower as may be designated in writing by any one of the foregoing with the consent of the Administrative Agent; and, with respect to the financial covenants only, the chief financial officer or the treasurer of the Borrower.

 

“Restricted Payment” shall have the meaning set forth in Section 7.5.

 

“Revolving Commitment” shall mean, with respect to each Lender, the obligation of such Lender to make Revolving Loans to the Borrower and to participate in Letters of Credit and Swingline Loans in an aggregate principal amount not exceeding the amount set forth with respect to such Lender on Schedule II, as such schedule may be amended pursuant to Section 2.24, or in the case of a Person becoming a Lender after the Second Amendment Effective Date through an assignment of an existing Revolving Commitment, the amount of the assigned “Revolving Commitment” as provided in the Assignment and Assumption executed by such Person as an assignee, as the same may be increased or decreased pursuant to terms hereof.

 

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“Revolving Commitment Termination Date” shall mean the earliest of (i) August 1, 2023, (ii) the date on which all Revolving Commitments are terminated pursuant to Section 2.9 and (iii) the date on which all amounts outstanding under this Agreement have been declared or have automatically become due and payable (whether by acceleration or otherwise).

 

“Revolving Credit Exposure” shall mean, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Revolving Loans, LC Exposure and Swingline Exposure.

 

“Revolving Credit Note” shall mean a promissory note of the Borrower payable to the order of a requesting Lender in the principal amount of such Lender’s Revolving Commitment, in substantially the form of Exhibit A.

 

“Revolving Loan” shall mean a loan made by a Lender (other than the Swingline Lender) to the Borrower under its Revolving Commitment, which may either be a Base Rate Loan, an Index Rate Loan or a Eurodollar Loan.

 

“Revolving Loan Lender” shall mean each Lender that has a Revolving Commitment or is the holder of Revolving Credit Exposure.

 

“Sale and Leaseback Transaction” shall have the meaning set forth in Section 7.9.

 

“Sanctions” means any international economic sanction administered or enforced by the United States Government (including without limitation, the U.S. Department of Treasury’s Office of Foreign Assets Control), the European Union, Her Majesty’s Treasury, The United Nations, or other relevant sanctions authority.

 

“S&P” shall mean Standard & Poor’s, a division of McGraw-Hill, Inc., a corporation organized and existing under the laws of the State of New York, its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, “S&P” shall be deemed to refer to any other nationally recognized securities rating agency designated by the Borrower with the consent of the Administrative Agent.

 

“Second Amendment” shall mean the Second Amendment to Second Amended and Restated Revolving Credit and Term Loan Agreement and Amendment to other Loan Documents, dated as of August 1, 2018, by and among the Borrower, the other Loan Parties, the Lenders party thereto and the Administrative Agent.

 

“Second Amendment Effective Date” shall mean the Amendment Effective Date (as such term is defined in the Second Amendment).

 

“Security Agreement” shall mean the Amended and Restated Security Agreement, dated as of the date hereof and substantially in the form of Exhibit G, made by the Borrower and the Subsidiary Loan Parties in favor of the Administrative Agent for the benefit of the Secured Parties (as therein defined), as amended, restated, supplemented or otherwise modified from time to time.

 

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“Security Documents” shall mean the Pledge Agreement, the Security Agreement and each of the security agreements, mortgages and other instruments and documents executed and delivered pursuant to the Security Agreement or pursuant to Section 5.12, as amended, restated, supplemented or otherwise modified from time to time.

 

“Specified Hedge Provider” means a Lender, an Affiliate of any Lender or a Person that was a Lender or an Affiliate of a Lender at the date of entering into a Hedging Transaction and, in the case of an Affiliate, such Affiliate executes and delivers to the Administrative Agent a letter agreement in form and substance reasonably acceptable to the Administrative Agent pursuant to which such Affiliate (i) appoints the Administrative Agent as its agent under the applicable Loan Documents and (ii) agrees to be bound by the provisions of Articles 9 and 10.

 

“Specified Treasury Management Provider” means each Person that provides products of the type described in the definition of “Treasury Management Obligations” to any of the Loan Parties and such Person either (A) is a Lender (or was a Lender at the time that the applicable agreement giving rise to such Treasury Management Obligations was entered into) or (B) an Affiliate of a Lender (or was an Affiliate of a Lender at the time that the applicable agreement giving rise to such Treasury Management Obligations was entered into) that executes and delivers to the Administrative Agent a letter agreement in form and substance reasonably acceptable to the Administrative Agent pursuant to which such Affiliate (i) appoints the Administrative Agent as its agent under the applicable Loan Documents and (ii) agrees to be bound by the provisions of Articles 9 and 10.

 

“STRH” shall mean SunTrust Robinson Humphrey, Inc., in its capacity as a Joint Lead Arranger.

 

“Subsidiary” shall mean, with respect to any Person (the “parent”), any corporation, partnership, joint venture, limited liability company, 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, partnership, joint venture, limited liability company, association or other entity (i) 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 (ii) 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.  Unless otherwise indicated, all references to “Subsidiary” hereunder shall mean a Subsidiary of the Borrower.

 

“Subsidiary Guaranty Agreement” shall mean the Second Amended and Restated Subsidiary Guaranty Agreement, dated as of the date hereof and substantially in the form of Exhibit F, made by all Domestic Subsidiaries (other than, from and after the Second Amendment Effective Date, CEC RDN and any FSHCOs and Excluded JVs) of the Borrower in favor of the Administrative Agent for the benefit of the Guaranteed Parties (as therein defined).

 

“Subsidiary Guaranty Supplement” shall mean each supplement substantially in the form of Schedule II to the Subsidiary Guaranty Agreement executed and delivered by a Domestic

 

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Subsidiary (other than CEC RDN, a FSHCO or an Excluded JV) of the Borrower pursuant to Section 5.11.

 

“Subsidiary Loan Party” shall mean any Domestic Subsidiary (other than CEC RDN, a FSHCO or an Excluded JV) that executes or becomes a party to the Subsidiary Guaranty Agreement.

 

“SU” shall mean Strayer University, LLC, a Maryland limited liability company, formerly known as Strayer University, Inc., a Maryland corporation.

 

“Swap Obligation” means, with respect to any Loan Party, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

 

“Swingline Commitment” shall mean the commitment of the Swingline Lender to make Swingline Loans in an aggregate principal amount at any time outstanding not to exceed $10,000,000.

 

“Swingline Exposure” shall mean, with respect to each Revolving Loan Lender, the principal amount of the Swingline Loans in which such Lender is legally obligated either to make an Index Rate Loan or to purchase a participation in accordance with Section 2.4, which shall equal such Revolving Loan Lender’s Pro Rata Share of all outstanding Swingline Loans.

 

“Swingline Lender” shall mean SunTrust Bank, or any other Lender that may agree to make Swingline Loans hereunder.

 

“Swingline Loan” shall mean a loan made to the Borrower by the Swingline Lender under the Swingline Commitment.

 

“Swingline Note” shall mean the promissory note of the Borrower payable to the order of the Swingline Lender in the principal amount of the Swingline Commitment, substantially the form of Exhibit D.

 

“Swingline Rate” shall mean the Index Rate plus the Applicable Margin.

 

“Synthetic Lease” shall mean a lease transaction under which the parties intend that (i) the lease will be treated as an “operating lease” by the lessee pursuant to Statement of Financial Accounting Standards No. 13, as amended and (ii) the lessee will be entitled to various tax and other benefits ordinarily available to owners (as opposed to lessees) of like property.

 

“Synthetic Lease Obligations” shall mean, with respect to any Person, the sum of (i) all remaining rental obligations of such Person as lessee under Synthetic Leases which are attributable to principal and, without duplication (ii) all rental and purchase price payment obligations of such Person under such Synthetic Leases assuming such Person exercises the option to purchase the lease property at the end of the lease term.

 

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

 

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“Term Loan” shall have the meaning set forth in Section 2.6.

 

“Term Loan Commitment” shall mean, with respect to each Term Loan Lender, the obligation of such Term Loan Lender to make a Term Loan hereunder on the Closing Date, in a principal amount not exceeding the amount set forth with respect to such Lender on Schedule II.  On the Closing Date, the aggregate principal amount of all Term Loan Lenders’ Term Loan Commitments is $125,000,000.

 

“Term Loan Lender” shall mean each Lender that has a Term Loan Commitment or is the holder of a Term Loan.

 

“Term Note” shall mean a promissory note of the Borrower payable to the order of a requesting Term Loan Lender in the principal amount of such Lender’s Term Loan Commitment, in substantially the form of Exhibit B.

 

“Title IV” shall mean Title IV of the Higher Education Act.

 

“Title IV, HEA Programs” shall mean the programs of federal student financial assistance authorized by Title IV.

 

“Treasury Management Obligations” shall mean, collectively, all obligations and other liabilities of any Loan Parties pursuant to any agreements governing the provision to such Loan Parties of treasury or cash management services, including deposit accounts, funds transfer, automated clearing house, zero balance accounts, returned check concentration, controlled disbursement, lockbox, account reconciliation, reporting and trade finance services, overnight draft, credit cards, purchasing cards and commercial cards and other cash management services.

 

“Type”, when used in reference to a 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, the Index Rate or the Base Rate.

 

“Withdrawal Liability” shall mean 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.

 

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

 

Section 1.2.                                 Classifications of Loans and Borrowings.  For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving Loan” or a “Term Loan”) or by Type (e.g. a “Eurodollar Loan,” “Index Rate Loan” or “Base Rate Loan”) or by Class and Type (e.g. “Revolving Eurodollar Loan”).  Borrowings also may be classified and referred to by Class (e.g. “Revolving Borrowing”) or by Type (e.g. “Eurodollar Borrowing”) or by Class and Type (e.g. “Revolving Eurodollar Borrowing”).

 

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Section 1.3.                                 Accounting Terms and Determination.  Unless otherwise defined or specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared, in accordance with GAAP as in effect from time to time, applied on a basis consistent with the most recent audited consolidated financial statements of the Borrower delivered pursuant to Section 5.1(a); provided, that if the Borrower notifies the Administrative Agent that the Borrower wishes to amend any covenant in Article 6 to eliminate the effect of any change in GAAP on the operation of such covenant (or if the Administrative Agent notifies the Borrower that the Required Lenders wish to amend Article 6 for such purpose), then the Borrower’s compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrower and the Required Lenders.  Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including computation of any financial covenant) contained herein, Indebtedness of the Borrower and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 on financial liabilities shall be disregarded.  Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made without giving effect to any change in GAAP occurring after the date of this Agreement regarding the accounting treatment for Operating Leases such that any lease (whether in existence as of the date of this Agreement or thereafter incurred) that would, under GAAP as in effect on the date of this Agreement, be classified as an Operating Lease and as an expense item shall continue to be classified as an Operating Lease and expense item notwithstanding any change in GAAP as to the accounting treatment of such lease after the date of this Agreement.

 

Section 1.4.                                 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”.  In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the word “to” means “to but excluding”.  Unless the context requires otherwise (i) 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 it was originally executed or as it may from time to time be amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (ii) any reference herein to any Person shall be construed to include such Person’s successors and permitted assigns, (iii) the words “hereof”, “herein” and “hereunder” and words of similar import shall be construed to refer to this Agreement as a whole and not to any particular provision hereof, (iv) all references to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles, Sections, Exhibits and Schedules to this Agreement and (v) all references to a specific time shall be construed to refer to the time in the city and state of the Administrative Agent’s principal office, unless otherwise indicated.

 

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Section 1.5.                                 Letter of Credit Amounts.  Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any LC Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

 

Section 1.6.                                 Regulatory Changes in the Consolidated DOE Financial Responsibility Composite Score.  If at any time any change in Title IV or DOE’s implementing regulations or written guidance would affect the computation of the Consolidated DOE Financial Responsibility Composite Score or Section 6.3, 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 Financial Responsibility Composite Score; provided that, until so amended, the definition of the Consolidated DOE Financial Responsibility Composite Score and the Consolidated DOE Financial Responsibility Composite Score required by Section 6.3 shall continue to be computed in accordance with regulations referenced in the definition of the Consolidated DOE Financial Responsibility Composite Score prior to such change therein.

 

Section 1.7.                                 Limited Condition Acquisitions.  Notwithstanding anything set forth herein to the contrary, in connection with any Limited Condition Acquisition, at the Borrowers’ option:

 

(a)                                 to the extent the determination of the Leverage Ratio, the Coverage Ratio or any other relevant ratios and baskets is required with respect to such Limited Condition Acquisition, including in connection with the incurrence of any Indebtedness (it being understood that any Incremental Term Loan Commitment shall additionally remain subject to the terms and conditions of Section 2.24) or Liens and the making of any Permitted Acquisition or other Investments or consolidations, mergers or other fundamental changes pursuant to Section 7.3 in connection with such Limited Condition Acquisition, the satisfaction or the determination thereof and whether any such transaction is permitted hereunder shall be made on the Limited Condition Acquisition Test Date with respect to such Limited Condition Acquisition, and calculated as if such Limited Condition Acquisition and other pro forma events in connection therewith (including the incurrence of Indebtedness) were consummated on such date;

 

(b)                                 any requirement with respect to the occurrence or absence of any Default or Event of Default shall instead be that (A) no Default or Event of Default shall have occurred and be continuing on such Limited Condition Acquisition Test Date and (B) no Default or Event of Default under Section 8.1(a), (b), (h), (i) or (j) shall have occurred and be continuing at the time such Limited Condition Acquisition is consummated; and

 

(c)                                  any requirement with respect to the making of any representations and warranties under the Loan Documents shall instead be that the accuracy of all such representations and warranties shall be determined on such Limited Condition Acquisition Test Date.

 

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ARTICLE 2

 

AMOUNT AND TERMS OF THE COMMITMENTS

 

Section 2.1.                                 General Description of Facilities.  Subject to and upon the terms and conditions herein set forth, (i) the Revolving Loan Lenders hereby establish in favor of the Borrower a revolving credit facility pursuant to which each Revolving Loan Lender severally agrees (to the extent of such Lender’s Revolving Commitment) to make Revolving Loans to the Borrower in accordance with Section 2.2, (ii) the Issuing Bank agrees to issue Letters of Credit in accordance with Section 2.23, (iii) the Swingline Lender agrees to make Swingline Loans in accordance with Section 2.4, (iv) each Revolving Loan Lender agrees to purchase a participation interest in the Letters of Credit and the Swingline Loans pursuant to the terms and conditions hereof; provided, that in no event shall the aggregate principal amount of all outstanding Revolving Loans, Swingline Loans and outstanding LC Exposure exceed at any time the Aggregate Revolving Commitment Amount from time to time in effect; and (v) each Term Loan Lender severally agrees to make a Term Loan to the Borrower in a principal amount not exceeding such Term Loan Lender’s Term Loan Commitment on the Closing Date.

 

Section 2.2.                                 Revolving Loans.  Subject to the terms and conditions set forth herein, each Revolving Loan Lender severally agrees to make Revolving Loans, ratably in proportion to its Pro Rata Share, to the Borrower, from time to time during the Availability Period, in an aggregate principal amount outstanding at any time that will not result in (a) such Revolving Loan Lender’s Revolving Credit Exposure exceeding such Revolving Loan Lender’s Revolving Commitment or (b) the sum of the aggregate Revolving Credit Exposures of all Revolving Loan Lenders exceeding the Aggregate Revolving Commitment Amount.  During the Availability Period, the Borrower shall be entitled to borrow, prepay and reborrow Revolving Loans in accordance with the terms and conditions of this Agreement; provided, that the Borrower may not borrow or reborrow should there exist a Default or Event of Default or should any of the conditions set forth in Section 3.2 not be satisfied or waived as provided in this Agreement.

 

Section 2.3.                                 Procedure for Revolving Borrowings.  The Borrower shall give the Administrative Agent written notice (or telephonic notice promptly confirmed in writing) of each Revolving Borrowing substantially in the form of Exhibit 2.3 (a “Notice of Revolving Borrowing”) (x) prior to 11:00 a.m. (Richmond, Virginia time) on the same Business Day as the requested date of each Base Rate Borrowing or Index Rate Borrowing and (y) prior to 11:00 a.m. (Richmond, Virginia time) three (3) Business Days prior to the requested date of each Eurodollar Borrowing.  Each Notice of Revolving Borrowing shall be irrevocable (unless contingent on the consummation of an anticipated transaction and the Borrower shall, as promptly as practicable, notify the Administrative Agent that such transaction will not occur as scheduled) and shall specify:  (i) the aggregate principal amount of such Borrowing, (ii) the date of such Borrowing (which shall be a Business Day), (iii) the Type of such Revolving Loan comprising such Borrowing and (iv) in the case of a Eurodollar Borrowing, the duration of the initial Interest Period applicable thereto (subject to the provisions of the definition of “Interest Period”).  Each Revolving Borrowing shall consist entirely of Base Rate Loans, Index Rate Loans or Eurodollar Loans, as the Borrower may request, provided, that any Revolving Loans funded on the Closing Date shall be Index Rate Loans.  The aggregate principal amount of each Eurodollar Revolving Borrowing shall be not less than $1,000,000 or a larger multiple of $1,000,000, and the aggregate

 

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principal amount of each Base Rate Revolving Borrowing and Index Rate Revolving Borrowing shall not be less than $1,000,000 or a larger multiple of $500,000; provided, that Index Rate Revolving Loans or Base Rate Revolving Loans, respectively, made pursuant to Section 2.4 or Section 2.23(d) may be made in lesser amounts as provided therein.  At no time shall the total number of Eurodollar Borrowings outstanding at any time exceed eight.  Promptly following the receipt of a Notice of Revolving Borrowing in accordance herewith, the Administrative Agent shall advise each Revolving Loan Lender of the details thereof and the amount of such Revolving Loan Lender’s Revolving Loan to be made as part of the requested Revolving Borrowing.

 

Section 2.4.                                 Swingline Commitment.

 

(a)                                 Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to the Borrower, from time to time during the Availability Period, in an aggregate principal amount outstanding at any time not to exceed the lesser of (i) the Swingline Commitment then in effect and (ii) the difference between the Aggregate Revolving Commitment Amount and the aggregate Revolving Credit Exposures of all Lenders; provided, that the Swingline Lender shall not be permitted to make a Swingline Loan to refinance an outstanding Swingline Loan.  The Borrower shall be entitled to borrow, repay and reborrow Swingline Loans in accordance with the terms and conditions of this Agreement.  The Swingline Lender shall not be required to make any Swingline Loan if there is any Defaulting Lender at the time of any request for such Swingline Loan or the making of a Swingline Loan unless to the extent not otherwise reallocated among all other Lenders that are Non-Defaulting Lenders in accordance with Section 3.2(f), the Borrower has cash collateralized (in accordance with Section 2.23(g)) a portion of the obligations of the Borrower owed to the Swingline Lender in an amount equal to such Defaulting Lender’s Swingline Exposure.

 

(b)                                 The Swingline Lender agrees to make Swingline Loans to the Borrower from time to time in accordance with the treasury and cash management services and products provided to the Borrower by the Swingline Lender (the “Cash Management Swingline Loans”).  For other Swingline Loans, the Borrower shall give the Administrative Agent written notice (or telephonic notice promptly confirmed in writing) of each Swingline Borrowing substantially in the form of Exhibit 2.4 attached hereto (“Notice of Swingline Borrowing”) prior to 1:00 p.m. (Richmond, Virginia time) on the requested date of each Swingline Borrowing.  Each Notice of Swingline Borrowing shall be irrevocable and shall specify:  (i) the principal amount of such Swingline Loan, (ii) the date of such Swingline Loan (which shall be a Business Day) and (iii) the account of the Borrower to which the proceeds of such Swingline Loan should be credited.  The Administrative Agent will promptly advise the Swingline Lender of each Notice of Swingline Borrowing.  Each Swingline Loan shall accrue interest at the Swingline Rate.  The aggregate principal amount of each Swingline Loan shall be not less than $100,000 or a larger multiple of $50,000, or such other minimum amounts agreed to by the Swingline Lender and the Borrower.  Unless the Swingline Lender has received notice from the Administrative Agent or any Lender on or before the Business Day immediately preceding the date the Swingline Lender is to make the requested Swingline Loan directing the Swingline Lender not to make the Swingline Loan because such Swingline Loan is not then permitted hereunder because of the limitations set forth in Section 2.4(a) or that one or more conditions specified in Article 3 are not then satisfied, then, subject to the terms and conditions hereof, the Swingline Lender will make the proceeds of each

 

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Swingline Loan available to the Borrower in Dollars in immediately available funds at the account specified by the Borrower in the applicable Notice of Swingline Borrowing not later than the later of 1:00 p.m. (Richmond, Virginia time) or two hours following the delivery of the Notice of Swingline Borrowing on the requested date of such Swingline Loan.

 

(c)                                  The Swingline Lender, at any time and from time to time in its sole discretion, may, on behalf of the Borrower (which hereby irrevocably authorizes and directs the Swingline Lender to act on its behalf), give a Notice of Revolving Borrowing to the Administrative Agent requesting the Revolving Loan Lenders (including the Swingline Lender) to make Index Rate Loans in an amount equal to the unpaid principal amount of any Swingline Loan.  Each Revolving Loan Lender will make the proceeds of its Index Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Swingline Lender in accordance with Section 2.7, which will be used solely for the repayment of such Swingline Loan.  The Swingline Lender agrees that it shall give such Notice of Revolving Borrowing on the last Business Day of each calendar week if any Swingline Loans are then outstanding.

 

(d)                                 If for any reason an Index Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Revolving Loan Lender (other than the Swingline Lender) shall purchase an undivided participating interest in such Swingline Loan in an amount equal to its Pro Rata Share thereof on the date that such Index Rate Borrowing should have occurred.  On the date of such required purchase, each Revolving Loan Lender shall promptly transfer, in immediately available funds, the amount of its participating interest to the Administrative Agent for the account of the Swingline Lender.  If such Swingline Loan bears interest at a rate other than the Index Rate, such Swingline Loan shall automatically become an Index Rate Loan on the effective date of any such participation and interest shall become payable on demand.

 

(e)                                  Each Revolving Loan Lender’s obligation to make an Index Rate Loan pursuant to Section 2.4(c) or to purchase the participating interests pursuant to Section 2.4(d) shall be absolute and unconditional and shall not be affected by any circumstance, including without limitation (i) any setoff, counterclaim, recoupment, defense or other right that such Revolving Loan Lender or any other Person may have or claim against the Swingline Lender, the Borrower or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of any Revolving Loan Lender’s Revolving Commitment, (iii) the existence (or alleged existence) of any event or condition which has had or could reasonably be expected to have a Material Adverse Effect, (iv) any breach of this Agreement or any other Loan Document by the Borrower, the Administrative Agent or any Revolving Loan Lender or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.  If such amount is not in fact made available to the Swingline Lender by any Revolving Loan Lender, the Swingline Lender shall be entitled to recover such amount on demand from such Lender, together with accrued interest thereon for each day from the date of demand thereof (i) at the Federal Funds Rate until the second Business Day after such demand and (ii) at the Base Rate at all times thereafter.  Until such time as such Revolving Loan Lender makes its required payment, the Swingline Lender shall be deemed to continue to have outstanding Swingline Loans in the amount of the unpaid participation for all purposes of the Loan Documents.  In addition, such Revolving Loan Lender shall be deemed to have assigned any and all payments made of principal and interest on its Revolving Loans and any other amounts

 

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due to it hereunder, to the Swingline Lender to fund the amount of such Revolving Loan Lender’s participation interest in such Swingline Loans that such Revolving Loan Lender failed to fund pursuant to this Section 2.4, until such amount has been purchased in full.

 

Section 2.5.                                 Reserved.

 

Section 2.6.                                 Term Loans.  Subject to the terms and conditions set forth herein, each Term Loan Lender severally agrees to make a single loan (each, a “Term Loan”) to the Borrower on the Closing Date in an aggregate principal amount not to exceed the Term Loan Commitment of such Term Loan Lender; provided, that if for any reason the full amount of such Term Loan Lender’s Term Loan Commitment is not fully drawn on the Closing Date, the undrawn portion thereof shall automatically be cancelled.  The Term Loans may be, from time to time, Base Rate Loans, Index Rate Loans or Eurodollar Loans or a combination thereof; provided, that on the Closing Date all Term Loans shall be Index Rate Loans.  The execution and delivery of this Agreement by the Borrower and the satisfaction of all conditions precedent pursuant to Section 3.1 shall be deemed to constitute the Borrower’s request to borrow the Term Loans on the Closing Date.

 

Section 2.7.                                 Funding of Borrowings.

 

(a)                                 Each Lender will make available each Loan to be made by it hereunder on the proposed date thereof by wire transfer in immediately available funds by 1:00 p.m. (Richmond, Virginia time) to the Administrative Agent at the Payment Office; provided, that the Swingline Loans will be made as set forth in Section 2.4.  The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts that it receives, in like funds by the close of business on such proposed date, to an account maintained by the Borrower with the Administrative Agent or at the Borrower’s option, by effecting a wire transfer of such amounts to an account designated by the Borrower to the Administrative Agent.

 

(b)                                 Unless the Administrative Agent shall have been notified by any Lender prior to 5:00 p.m. (Richmond, Virginia time) one (1) Business Day prior to the date of a Borrowing in which such Lender is to participate 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 amount available to the Administrative Agent on such date, and the Administrative Agent, in reliance on such assumption, may make available to the Borrower on such date a corresponding amount.  If such corresponding amount is not in fact made available to the Administrative Agent by such Lender on the date of such Borrowing, the Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender together with interest at the Federal Funds Rate until the second Business Day after such demand and thereafter at the Base Rate.  If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Administrative Agent together with interest at the rate specified for such Borrowing.  Nothing in this subsection shall be deemed to relieve any Lender from its obligation to fund its Pro Rata Share of any Borrowing hereunder or to prejudice any rights which the Borrower may have against any Lender as a result of any default by such Lender hereunder.

 

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(c)                                  All Revolving Borrowings shall be made by the Lenders on the basis of their respective Pro Rata Shares.  All Term Loan Borrowings shall be made by the Lenders on the basis of their respective Pro Rata Shares.  No Lender shall be responsible for any default by any other Lender in its obligations hereunder, and each Lender shall be obligated to make its Loans provided to be made by it hereunder, regardless of the failure of any other Lender to make its Loans hereunder.

 

Section 2.8.                                 Interest Elections.

 

(a)                                 On the Closing Date, each Revolving Loan funded on such date shall be an Index Rate Loan, each Term Loan funded on such date shall be an Index Rate Loan and each Swingline Loan shall be an Index Rate Loan.  After the Closing Date, each Borrowing initially shall be of the Type specified in the applicable Notice of Borrowing, and in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such Notice of Borrowing, provided that only Revolving Loans, Swingline Loans and Term Loans may be borrowed as Index Rate Loans.  Thereafter, the Borrower may elect to convert such Borrowing into a different Type or to continue such Borrowing, and in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section 2.8.  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 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 2.8, the Borrower shall give the Administrative Agent prior written notice (or telephonic notice promptly confirmed in writing) of each Borrowing that is to be converted or continued, as the case may be, substantially in the form of Exhibit 2.8 attached hereto (a “Notice of Conversion/Continuation”), (x) prior to 11:00 a.m. (Richmond, Virginia time) on the same Business Day as the requested date of a conversion into a Base Rate Borrowing or an Index Rate Borrowing and (y) prior to 11:00 a.m. (Richmond, Virginia time) three (3) Business Days prior to a continuation of or conversion into a Eurodollar Borrowing or of a Eurodollar Borrowing into a Borrowing of another Type.  Each such Notice of Conversion/Continuation shall be irrevocable and shall specify (i) the Borrowing to which such Notice of Conversion/Continuation applies and if different options are being elected with respect to different portions thereof, the portions thereof that are to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) shall be specified for each resulting Borrowing); (ii) the effective date of the election made pursuant to such Notice of Conversion/Continuation, which shall be a Business Day, (iii) whether the resulting Borrowing is to be a Base Rate Borrowing, an Index Rate Borrowing or a Eurodollar Borrowing; and (iv) if the resulting Borrowing is to be a Eurodollar Borrowing, the Interest Period applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of “Interest Period.”  If any such Notice of Conversion/Continuation requests a Eurodollar Borrowing but does not specify an Interest Period, the Borrower shall be deemed to have selected an Interest Period of one month.  The principal amount of any resulting Borrowing shall satisfy the minimum borrowing amount for Eurodollar Borrowings, Index Rate Borrowings and Base Rate Borrowings set forth in Section 2.3.

 

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(c)                                  If, on the expiration of any Interest Period in respect of any Eurodollar Borrowing, the Borrower shall have failed to deliver a Notice of Conversion/Continuation, then, unless such Borrowing is repaid as provided herein, the Borrower shall be deemed to have elected to convert such Borrowing to a Base Rate Borrowing.  No Borrowing may be converted into, or continued as, a Eurodollar Borrowing if a Default or an Event of Default exists, unless the Administrative Agent and each of the Lenders shall have otherwise consented in writing.  No conversion of any Eurodollar Loans shall be permitted except on the last day of the Interest Period in respect thereof.

 

(d)                                 Upon receipt of any Notice of Conversion/Continuation, the Administrative Agent shall promptly notify each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

 

(e)                                  If a Notice of Borrowing or a Notice of Conversion/Continuation does not specify a Type, the Borrower shall be deemed to have requested an Index Rate Borrowing with respect to the Revolving Loans.

 

Section 2.9.                                 Optional Reduction and Termination of Commitments.

 

(a)                                 Unless previously terminated, all Revolving Commitments, Swingline Commitments and LC Commitments shall terminate on the Revolving Commitment Termination Date.  The Term Loan Commitments shall terminate on the Closing Date upon the making of the Term Loans pursuant to Section 2.6.

 

(b)                                 Upon at least three (3) Business Days’ prior written notice (or telephonic notice promptly confirmed in writing) to the Administrative Agent (which notice shall be irrevocable unless contingent on the consummation of an anticipated refinancing or other transaction and the Borrower shall, as promptly as practicable, notify the Administrative Agent that such refinancing or other transaction will not occur as scheduled), the Borrower may reduce the Aggregate Revolving Commitments in part or terminate the Aggregate Revolving Commitments in whole; provided, that (i) any partial reduction shall apply to reduce proportionately and permanently the Revolving Commitment of each Lender, (ii) any partial reduction pursuant to this Section 2.9 shall be in an amount of at least $5,000,000 and any larger multiple of $1,000,000, and (iii) no such reduction shall be permitted which would reduce the Aggregate Revolving Commitment Amount to an amount less than the outstanding Revolving Credit Exposures of all Lenders.  Any such reduction in the Aggregate Revolving Commitment Amount below the sum of the principal amount of the Swingline Commitment and the LC Commitment shall result in a proportionate reduction (rounded to the next lowest integral multiple of $100,000) in the Swingline Commitment and the LC Commitment.

 

(c)                                  The Borrower may terminate the unused amount of the Revolving Commitment of a Defaulting Lender or Potential Defaulting Lender upon not less than two Business Days’ prior notice to the Administrative Agent (which will promptly notify the Lenders thereof), and in such event the provisions of Section 2.22 will apply to all amounts thereafter paid by the Borrower for the account of such Defaulting Lender or Potential Defaulting Lender under this Agreement (whether on account of principal, interest, fees, indemnity or other amounts), provided that such termination will not be deemed to be a waiver or release of any claim the

 

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Borrower, the Administrative Agent, the Issuing Bank, the Swingline Lender or any Lender may have against such Defaulting Lender or Potential Defaulting Lender. The Borrower’s rights under this Section 2.9(c) are in addition to its rights to replace a Defaulting Lender or Potential Defaulting Lender pursuant to Section 2.26.

 

Section 2.10.                          Repayment of Loans.

 

(a)                                 The outstanding principal amount of all Revolving Loans shall be due and payable (together with accrued and unpaid interest thereon) on the Revolving Commitment Termination Date.

 

(b)                                 The principal amount of each Swingline Borrowing shall be due and payable (together with accrued and unpaid interest thereon) on the Revolving Commitment Termination Date.

 

(c)                                  The Borrower unconditionally promises to pay to the Administrative Agent, for the account of each Term Loan Lender, the then unpaid principal amount of the Term Loan of such Term Loan Lender in installments payable on the last day of each March, June, September and December, commencing March 31, 2013, with each such installment being in the aggregate principal amount for all Term Loan Lenders (i) for each installment due during calendar years 2013 and 2014, in the amount of 0.625% of the aggregate original principal amount of the Term Loans and (ii) for each installment due during calendar years 2015 and 2016, in the amount of 1.25% of the aggregate original principal amount of the Term Loans; provided, that, to the extent not previously paid, the aggregate unpaid principal balance of the Term Loans shall be due and payable on the Maturity Date.

 

Section 2.11.                          Evidence of Indebtedness.

 

(a)                                 Each Lender shall maintain in accordance with its usual practice appropriate records evidencing the Indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender from time to time, including the amounts of principal and interest payable thereon and paid to such Lender from time to time under this Agreement.  The Administrative Agent shall maintain appropriate records in which shall be recorded (i) the Revolving Commitment and Term Loan Commitment of each Lender, (ii) the amount of each Loan made hereunder by each Lender, the Class and Type thereof and the Interest Period applicable thereto, (iii) the date of each continuation thereof pursuant to Section 2.8, (iv) the date of each conversion of all or a portion thereof to another Type pursuant to Section 2.8, (v) the date and amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder in respect of such Loans and (vi) both the date and amount of any sum received by the Administrative Agent hereunder from the Borrower in respect of the Loans and each Lender’s Pro Rata Share thereof.  The entries made in such records shall be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded, absent manifest error; provided, that the failure or delay of any Lender or the Administrative Agent in maintaining or making entries into any such record or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans (both principal and unpaid accrued interest) of such Lender in accordance with the terms of this Agreement.

 

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(b)                                 At the request of any Lender (including the Swingline Lender) at any time, the Borrower agrees that it will execute and deliver to such Lender, as applicable, a Revolving Credit Note and/or a Term Note and, in the case of the Swingline Lender only, a Swingline Note, payable to the order of such Lender.

 

Section 2.12.                          Optional Prepayments.  The Borrower shall have the right at any time and from time to time to prepay any Borrowing, in whole or in part, without premium or penalty, by giving written notice (or telephonic notice promptly confirmed in writing) to the Administrative Agent no later than (i) in the case of prepayment of any Eurodollar Borrowing, 11:00 a.m. (Richmond, Virginia time) not less than three (3) Business Days prior to any such prepayment, (ii) in the case of any prepayment of any Base Rate Borrowing or an Index Rate Borrowing, 11:00 a.m. (Richmond, Virginia time) on the Business Day of such prepayment, and (iii) in the case of Swingline Borrowings, 11:00 a.m. (Richmond, Virginia time) on the date of such prepayment, provided that no notice shall be required for the prepayment of any Cash Management Swingline Loans.  Each such notice shall be irrevocable (unless contingent on the consummation of an anticipated refinancing or other transaction and the Borrower shall, as promptly as practicable, notify the Administrative Agent that such refinancing or other transaction will not occur as scheduled) and shall specify the proposed date of such prepayment and the principal amount of each Borrowing or portion thereof to be prepaid.  Upon receipt of any such notice, the Administrative Agent shall promptly notify each affected Lender of the contents thereof and of such Lender’s Pro Rata Share of any such prepayment.  If such notice is given, the aggregate amount specified in such notice shall be due and payable on the date designated in such notice, together with accrued interest to such date on the amount so prepaid in accordance with Section 2.14(d); provided, that if a Eurodollar Borrowing is prepaid on a date other than the last day of an Interest Period applicable thereto, the Borrower shall also pay all amounts required pursuant to Section 2.20.  Each partial prepayment of any Loan (other than a Swingline Loan) shall be in an amount that would be permitted in the case of an advance of a Revolving Borrowing of the same Type pursuant to Section 2.2 or in the case of a Swingline Loan pursuant to Section 2.4.  Each prepayment of a Borrowing shall be applied ratably to the Loans comprising such Borrowing, and in the case of a prepayment of a Term Loan Borrowing, to principal installments in such order of maturity as the Borrower may direct.

 

Section 2.13.                          Mandatory Prepayments.

 

(a)                                 Reserved.

 

(b)                                 Reserved.

 

(c)                                  Reserved.

 

(d)                                 Reserved.

 

(e)                                  If at any time the Revolving Credit Exposure of all Lenders exceeds the Aggregate Revolving Commitment Amount, as reduced pursuant to Section 2.9 or otherwise, the Borrower shall immediately repay Swingline Loans and Revolving Loans in an amount equal to such excess, together with all accrued and unpaid interest on such excess amount and any amounts due under Section 2.20.  Each prepayment shall be applied first to the Swingline Loans

 

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to the full extent thereof, second to the Base Rate Loans to the full extent thereof, and finally to Eurodollar Loans to the full extent thereof.  If after giving effect to prepayment of all Swingline Loans and Revolving Loans, the Revolving Credit Exposure of all Lenders exceeds the Aggregate Revolving Commitment Amount, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to such excess plus any accrued and unpaid fees thereon to be held as collateral for the LC Exposure.  Such account shall be administered in accordance with Section 2.23(g) hereof.

 

Section 2.14.                          Interest on Loans.

 

(a)                                 The Borrower shall pay interest on each Base Rate Loan at the Base Rate in effect from time to time and on each Eurodollar Loan at the Adjusted LIBO Rate for the applicable Interest Period in effect for such Loan, plus, in each case, the Applicable Margin in effect from time to time.  The Borrower shall pay interest on each Index Rate Loan at the Index Rate plus the Applicable Margin in effect from time to time.  The interest rate on Index Rate Loans shall be established based on the Index Rate in effect on the first Index Rate Determination Date, and shall be adjusted on each Index Rate Determination Date thereafter to reflect the Index Rate then in effect.

 

(b)                                 The Borrower shall pay interest on each Swingline Loan at the Swingline Rate in effect from time to time.

 

(c)                                  While an Event of Default exists or after acceleration, at the option of the Required Lenders, the Borrower shall pay interest (“Default Interest”) with respect to all Eurodollar Loans and at the rate otherwise applicable for the then-current Interest Period plus an additional 2% per annum until the last day of such Interest Period, and thereafter, and with respect to all Index Rate Loans (including all Swingline Loans) and Base Rate Loans and all other Obligations hereunder (other than Loans), at an all-in rate in effect for Base Rate Loans, plus an additional 2% per annum.

 

(d)                                 Interest on the principal amount of all Loans shall accrue from and including the date such Loans are made to but excluding the date of any repayment thereof.  Interest on all outstanding Base Rate Revolving Loans and Base Rate Term Loans shall be payable monthly in arrears on the last day of each calendar month, and on the Revolving Commitment Termination Date or the Maturity Date, as the case may be.  Interest on all outstanding Index Rate Revolving Loans, Index Rate Term Loans and Swingline Loans shall be payable monthly in arrears on the last day of each calendar month and on the Revolving Commitment Termination Date or the Maturity Date, as the case may be.  Interest on all outstanding Eurodollar Loans shall be payable on the last day of each Interest Period applicable thereto, and, in the case of any Eurodollar Loans having an Interest Period in excess of three months, on each day which occurs every three months after the initial date of such Interest Period, and on the Revolving Commitment Termination Date or the Maturity Date, as the case may be.  Interest on any Loan which is converted into a Loan of another Type or which is repaid or prepaid shall be payable on the date of such conversion or on the date of any such repayment or prepayment (on the amount repaid or prepaid) thereof.  All Default Interest shall be payable on demand.

 

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(e)                                  The Administrative Agent shall determine each interest rate applicable to the Loans hereunder and shall promptly notify the Borrower and the Lenders of such rate in writing (or by telephone, promptly confirmed in writing).  Any such determination shall be conclusive and binding for all purposes, absent manifest error.

 

Section 2.15.                          Fees.

 

(a)                                 The Borrower shall pay to the Administrative Agent for its own account fees in the amounts and at the times previously agreed upon in writing by the Borrower and the Administrative Agent.

 

(b)                                 The Borrower agrees to pay to the Administrative Agent for the account of each Revolving Loan Lender a commitment fee, which shall accrue at the Applicable Percentage per annum (determined daily in accordance with Schedule I) on the daily amount of the unused Revolving Commitment of such Revolving Loan Lender during the Availability Period.  For purposes of computing commitment fees with respect to the Revolving Commitments, the Revolving Commitment of each Revolving Loan Lender shall be deemed used to the extent of the outstanding Revolving Loans and LC Exposure, but not Swingline Exposure, of such Revolving Loan Lender.

 

(c)                                  The Borrower agrees to pay (i) to the Administrative Agent, for the account of each Revolving Loan Lender, a letter of credit fee with respect to its participation in each Letter of Credit, which shall accrue at a rate per annum equal to the Applicable Margin for Eurodollar Loans then in effect on the average daily amount of such Revolving Loan Lender’s LC Exposure attributable to such Letter of Credit during the period from and including the date of issuance of such Letter of Credit to but excluding the date on which such Letter of Credit expires or is drawn in full (including without limitation any LC Exposure that remains outstanding after the Revolving Commitment Termination Date) and (ii) to the Issuing Bank for its own account a fronting fee, which shall accrue at the rate of 0.25% per annum on the average daily amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the Availability Period (or until the date that such Letter of Credit is irrevocably cancelled, whichever is later), as well as the Issuing Bank’s standard fees with respect to issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder.  Notwithstanding the foregoing, if the Required Lenders elect to increase the interest rate on the Loans to the Default Interest pursuant to Section 2.14(c), the rate per annum used to calculate the letter of credit fee pursuant to clause (i) above shall automatically be increased by an additional 2% per annum.

 

(d)                                 The Borrower shall pay to the Administrative Agent, for the ratable benefit of each Lender, the upfront fee previously agreed upon by the Borrower and the Administrative Agent, which shall be due and payable on the Closing Date.

 

(e)                                  Accrued fees under paragraphs (b) and (c) above shall be payable quarterly in arrears on the last day of each March, June, September and December, commencing on December 31, 2012, and on the Revolving Commitment Termination Date (and if later, the date the Loans and LC Exposure shall be repaid in their entirety); provided further, that any such fees accruing after the Revolving Commitment Termination Date shall be payable on demand.

 

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(f)                                   Anything herein to the contrary notwithstanding, during such period as a Lender is a Defaulting Lender, such Defaulting Lender will not be entitled to any fees accruing during such period pursuant to paragraphs (b) and (c) above (without prejudice to the rights of the Lenders other than Defaulting Lenders in respect of such fees) and the pro rata payment provisions of Section 2.22 will automatically be deemed adjusted to reflect the provisions of this Section.  Such fees shall accrue, but shall only be payable pursuant to Section 2.27(b).

 

Section 2.16.                          Computation of Interest and Fees.  Subject to the following sentence, all computations of interest and fees hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest or fees are payable (to the extent computed on the basis of days elapsed).  Interest hereunder based on the Administrative Agent’s prime lending rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year) and paid for the actual number of days elapsed (including the first day but excluding the last day).  Each determination by the Administrative Agent of an interest amount or fee hereunder shall be made in good faith and, except for manifest error, shall be final, conclusive and binding for all purposes.

 

Section 2.17.                          Inability to Determine Interest Rates.

 

(a)                                 If prior to the commencement of any Interest Period for any Eurodollar Borrowing or on the Index Rate Determination Date for any Index Rate Borrowing or a Base Rate Borrowing bearing interest at a rate determined by reference to the Index Rate,

 

(i)                                     the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrower) that, by reason of circumstances affecting the relevant interbank market, adequate means do not exist for ascertaining LIBOR for such Interest Period or the Index Rate on such Index Rate Determination Date, or

 

(ii)                                  the Administrative Agent shall have received notice from the Required Lenders that the Adjusted LIBO Rate or the Index Rate does not adequately and fairly reflect the cost to such Lenders (or Lender, as the case may be) of making, funding or maintaining their (or its, as the case may be) Eurodollar Loans for such Interest Period or its Index Rate Loans or its Base Rate Loans bearing interest at a rate determined by reference to the Index Rate, as applicable, the Administrative Agent shall give written notice (or telephonic notice, promptly confirmed in writing) to the Borrower and to the Lenders as soon as practicable thereafter.  Until the Administrative Agent shall notify the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) the obligations of the Lenders to make Eurodollar Revolving Loans or Index Rate Loans or Base Rate Loans bearing interest at a rate determined by reference to the Index Rate or to continue or convert outstanding Loans as or into Eurodollar Loans or Index Rate Loans or Base Rate Loans bearing interest at a rate determined by reference to the Index Rate shall be suspended and (ii) all such affected Loans shall be converted into Base Rate Loans on the last day of the then current Interest Period applicable thereto and all Index Rate Loans shall automatically be converted to Base Rate Loans, unless, in either case, the Borrower prepays such Loans in accordance with this Agreement.  Unless the Borrower notifies the Administrative Agent at least one Business Day before the date of any Eurodollar Revolving Borrowing or Index Rate Revolving Borrowing for which a Notice

 

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of Revolving Borrowing has previously been given that it elects not to borrow on such date, then such Revolving Borrowing shall be made as a Base Rate Borrowing.

 

(b)                                 Notwithstanding anything to the contrary in Section 2.17(a) above, if at any time the Administrative Agent determines (such determination to be conclusive absent manifest error) that (i) the circumstances described in Section 2.17(a)(i) have arisen and that such circumstances are unlikely to be temporary, (ii) any applicable interest rate specified herein is no longer a widely recognized benchmark rate for newly originated loans in the U.S. syndicated loan market in the applicable currency or (iii) the Adjusted LIBO Rate or the Index Rate is not available or published on a current basis by the supervisor for the administrator of the Adjusted LIBO Rate or the Index Rate, and such change is unlikely to be temporary, then the Administrative Agent and the Borrower shall endeavor to establish an alternate rate of interest to the Adjusted LIBO Rate or the Index Rate for all purposes of this Agreement that gives due consideration to the then prevailing market convention for determining a rate of interest for syndicated loans in the United States at such time.  In connection with the establishment and application of the Replacement Rate, this Agreement and the other Loan Documents shall be amended solely with the consent of the Administrative Agent and the Borrower pursuant to an amendment to this Agreement to reflect such alternate rate of interest and such other related changes to this Agreement as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section 2.17(b).  Notwithstanding anything to the contrary in this Agreement or the other Loan Documents (including, without limitation, Section 10.2), such amendment shall become effective without any further action or consent of any other party to this Agreement so long as the Administrative Agent shall not have received, within five (5) Business Days of the delivery of such amendment to the Lenders, written notices from such Lenders that in the aggregate constitute Required Lenders, with each such notice stating that such Lender objects to such amendment (which such notice shall note with specificity the particular provisions of the amendment to which such Lender objects).  To the extent the Replacement Rate is approved by the Administrative Agent in connection with this clause (b), the Replacement Rate shall be applied in a manner consistent with market practice; provided that, in each case, to the extent such market practice is not administratively feasible for the Administrative Agent, such Replacement Rate shall be applied as otherwise reasonably determined by the Administrative Agent (it being understood that any such modification by the Administrative Agent shall not require the consent of, or consultation with, any of the Lenders).

 

Section 2.18.                          Illegality.  If any Change in Law shall make it unlawful or impossible for any Lender to make, maintain or fund any Eurodollar Loan or Index Rate Loan or Base Rate Loan bearing interest at a rate determined by reference to the Index Rate and such Lender shall so notify the Administrative Agent, the Administrative Agent shall promptly give notice thereof to the Borrower and the other Lenders, whereupon until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such suspension no longer exist, the obligation of such Lender to make Eurodollar Loans or Index Rate Loans or Base Rate Loans bearing interest at a rate determined by reference to the Index Rate, or to continue or convert outstanding Loans as or into Eurodollar Loans or Index Rate Loans or Base Rate Loans bearing interest at a rate determined by reference to the Index Rate, shall be suspended.  In the case of the making of a Eurodollar Revolving Borrowing, Eurodollar Term Loan Borrowing, Index Rate Borrowing or a Base Rate Borrowing bearing interest at a rate determined by reference to the Index Rate, such Lender’s Revolving Loan or Term Loan, as applicable, shall be made as a Base

 

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Rate Loan as part of the same Revolving Borrowing or Term Loan Borrowing, as the case may be, for the same Interest Period and if the affected Eurodollar Loan is then outstanding, such Loan shall be converted to a Base Rate Loan either (i) on the last day of the then current Interest Period applicable to such Eurodollar Loan if such Lender may lawfully continue to maintain such Loan to such date or (ii) immediately if such Lender shall determine that it may not lawfully continue to maintain such Eurodollar Loan to such date, and immediately in the case of an Index Rate Loan or a Base Rate Loan bearing interest at a rate determined by reference to the Index Rate.  Notwithstanding the foregoing, the affected Lender shall, prior to giving such notice to the Administrative Agent, designate a different Applicable Lending Office if such designation would avoid the need for giving such notice and if such designation would not otherwise be disadvantageous to such Lender in the good faith exercise of its discretion.  Notwithstanding anything to the contrary in Section 2.17(a) above, if at any time the Administrative Agent determines (such determination to be conclusive absent manifest error) that a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which the Adjusted LIBO Rate or the Index Rate shall no longer be used for determining interest rates for loans, then the Administrative Agent and the Borrower shall endeavor to establish an alternate rate of interest to the Adjusted LIBO Rate or the Index Rate for all purposes of this Agreement (any such alternate interest rate described in this Section 2.18 or Section 2.17(b), a “Replacement Rate”) that gives due consideration to the then prevailing market convention for determining a rate of interest for syndicated loans in the United States at such time.  In connection with the establishment and application of the Replacement Rate, this Agreement and the other Loan Documents shall be amended solely with the consent of the Administrative Agent and the Borrower pursuant to an amendment to this Agreement to reflect such alternate rate of interest and such other related changes to this Agreement as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section 2.18.  Notwithstanding anything to the contrary in this Agreement or the other Loan Documents (including, without limitation, Section 10.2), such amendment shall become effective without any further action or consent of any other party to this Agreement so long as the Administrative Agent shall not have received, within five (5) Business Days of the delivery of such amendment to the Lenders, written notices from such Lenders that in the aggregate constitute Required Lenders, with each such notice stating that such Lender objects to such amendment (which such notice shall note with specificity the particular provisions of the amendment to which such Lender objects).  To the extent the Replacement Rate is approved by the Administrative Agent in connection with this Section 2.18, the Replacement Rate shall be applied in a manner consistent with market practice; provided that, in each case, to the extent such market practice is not administratively feasible for the Administrative Agent, such Replacement Rate shall be applied as otherwise reasonably determined by the Administrative Agent (it being understood that any such modification by the Administrative Agent shall not require the consent of, or consultation with, any of the Lenders).

 

Section 2.19.                          Increased Costs.

 

(a)                                 If any Change in Law shall:

 

(i)                                     impose, modify or deem applicable any reserve, special deposit or similar requirement that is not otherwise included in the determination of the Adjusted LIBO Rate or the Index Rate hereunder against assets of, deposits with or for the account of, or credit

 

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extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate or the Index Rate) or the Issuing Bank; or

 

(ii)                                  impose on any Lender or on the Issuing Bank or the eurodollar interbank market any other condition affecting this Agreement or any Eurodollar Loans or Index Rate Loans or Base Rate Loans bearing interest at a rate determined by reference to the Index Rate made by such Lender or any Letter of Credit or any participation therein;

 

and the result of either of the foregoing is to increase the cost to such Lender of making, converting into, continuing or maintaining a Eurodollar Loan or Index Rate Loan or Base Rate Loan bearing interest at a rate determined by reference to the Index Rate or to increase the cost to such Lender or the Issuing Bank of participating in or issuing any Letter of Credit or to reduce the amount received or receivable by such Lender or the Issuing Bank hereunder (whether of principal, interest or any other amount), then the Borrower shall promptly pay, upon written notice (which shall include a statement setting forth the basis for such demand and a calculation of the amount thereof in reasonable detail) from and demand by such Lender on the Borrower (with a copy of such notice and demand to the Administrative Agent), to the Administrative Agent for the account of such Lender, within ten days after the date of such notice and demand, the additional amount or amounts sufficient to compensate such Lender or the Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered.

 

(b)                                 If any Lender or the Issuing Bank shall have determined that on or after the date of this Agreement any Change in Law regarding capital requirements or liquidity 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 Parent Company) as a consequence of its obligations hereunder or under or in respect of any Letter of Credit to a level below that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s Parent Company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Bank’s policies or the policies of such Lender’s or the Issuing Bank’s Parent Company with respect to capital adequacy or liquidity), from time to time, within ten days after receipt by the Borrower of written demand (which shall include a statement setting forth the basis for such demand and a calculation of the amount thereof in reasonable detail) by such Lender (with a copy thereof to the Administrative Agent), the Borrower shall pay to such Lender such additional amounts as will compensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s Parent Company for any such reduction suffered.

 

(c)                                  A certificate of a Lender or the Issuing Bank setting forth the basis for such demand and a calculation of the amount or amounts necessary to compensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s Parent Company, as the case may be, specified in paragraph (a) or (b) of this Section 2.19 shall be delivered to the Borrower (with a copy to the Administrative Agent) and shall be conclusive, absent manifest error; provided, however, that notwithstanding anything to the contrary in paragraph (a) or (b) of this Section 2.19, it shall be a condition to a Lender’s or Issuing Bank’s or the Issuing Bank’s Parent Company’s exercise of its rights, if any, under this Section 2.19 that such Lender or Issuing Bank or the Issuing Bank’s Parent Company shall generally be exercising similar rights with respect to other borrowers where available.  The Borrower shall pay any such Lender or the Issuing Bank, as the case may be, such amount or amounts within 10 days after receipt thereof.

 

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(d)                                 Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section 2.19 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 under this Section 2.19 for any increased costs or reductions incurred more than six (6) months prior to the date that such Lender or the Issuing Bank notifies the Borrower of 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 such six-month period shall be extended to include the period of such retroactive effect.

 

Section 2.20.                          Funding Indemnity.  In the event of (a) the payment of any principal of a Eurodollar Loan other than on the last day of the Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion or continuation of a Eurodollar Loan other than on the last day of the Interest Period applicable thereto, or (c) the failure by the Borrower to borrow, prepay, convert or continue any Eurodollar Loan on the date specified in any applicable notice (regardless of whether such notice is withdrawn or revoked), then, in any such event, the Borrower shall compensate each Lender, within five (5) Business Days after written demand from such Lender, for any loss, cost or expense attributable to such event.  In the case of a Eurodollar Loan, such loss, cost or expense shall be deemed to include an amount determined by such Lender to be the excess, if any, of (A) the amount of interest that would have accrued on the principal amount of such Eurodollar Loan if such event had not occurred at the Adjusted LIBO Rate applicable to such Eurodollar Loan 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 Eurodollar Loan) over (B) the amount of interest that would accrue on the principal amount of such Eurodollar Loan for the same period if the Adjusted LIBO Rate were set on the date such Eurodollar Loan was prepaid or converted or the date on which the Borrower failed to borrow, convert or continue such Eurodollar Loan.  A certificate as to any additional amount payable under this Section 2.20 submitted to the Borrower by any Lender (with a copy to the Administrative Agent) shall be conclusive, absent manifest error.  The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.

 

Section 2.21.                          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 or withholding for any Indemnified Taxes or Other Taxes; provided, that if the Borrower shall be required to deduct or withhold 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 or withholdings (including deductions or withholdings applicable to additional sums payable under this Section 2.21) the Administrative Agent, any Lender or the Issuing Bank (as the case may be) shall receive an amount equal to the sum it would have received had no such deductions or withholdings been made, (ii) the Borrower shall make such deductions or withholdings and (iii) the Borrower shall pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law.

 

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(b)                                 In addition, the Borrower shall pay any Other Taxes 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 five (5) Business Days after written demand therefor, for the 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 2.21) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto that may become payable by the Administrative Agent, such Lender or the Issuing Bank, 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 setting forth in reasonable detail the calculation thereof and 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 Code or any treaty to which the United States 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, 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.  Without limiting the generality of the foregoing, each Foreign Lender agrees that it will deliver to the Administrative Agent and the Borrower (or in the case of a Participant, to the Lender from which the related participation shall have been purchased), as appropriate, two (2) duly completed copies of (i) Internal Revenue Service Form W-8 ECI, or any successor form thereto, certifying that the payments received from the Borrower hereunder are effectively connected with such Foreign Lender’s conduct of a trade or business in the United States; or (ii) Internal Revenue Service Form W-8 BEN or W-8 BEN-E, as applicable, or any successor form thereto, certifying that such Foreign Lender is entitled to benefits under an income tax treaty to which the United States is a party which reduces the rate of withholding tax on payments of interest; or (iii) Internal Revenue Service Form W-8 BEN or W-8 BEN-E, as applicable, or any successor form prescribed by the Internal Revenue Service, together with a certificate (A) establishing that the payment to the Foreign Lender qualifies as “portfolio interest” exempt from U.S. withholding tax under Code section 871(h) or 881(c), and (B) stating that (1) the Foreign Lender is not a bank for purposes of Code section 881(c)(3)(A), or the obligation of the Borrower hereunder is not, with respect to such Foreign Lender, a loan agreement entered into in the ordinary course of its trade or business, within the meaning of that section; (2) the Foreign Lender is not a 10% shareholder of the Borrower within the meaning of Code section 871(h)(3) or 881(c)(3)(B); and (3) the Foreign Lender is not a controlled foreign corporation that is related to the Borrower within the meaning

 

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of Code section 881(c)(3)(C); or (iv) such other Internal Revenue Service forms as may be applicable to the Foreign Lender, including Internal Revenue Service Forms W-8 IMY or W-8 EXP.  Each such Foreign Lender shall deliver to the Borrower and the Administrative Agent such forms on or before the date that it becomes a party to this Agreement (or in the case of a Participant, on or before the date such Participant purchases the related participation).  Any Lender that is a “United States Person” as defined in Section 7701(a)(30) of the Code shall deliver to the Borrower and the Administrative Agent on or before the date on that it becomes a party to this Agreement executed originals of Internal Revenue Service Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax.  In addition, each Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by such Lender pursuant to this Section 2.21(e).  Each Lender shall promptly notify the Borrower and the Administrative Agent at any time that it determines that it is no longer in a position to provide any previously delivered certificate to the Borrower (or any other form of certification adopted by the Internal Revenue Service for such purpose).

 

(f)                                   If a payment made to a Lender under any Loan Document would be subject to U.S. Federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by any applicable law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by any Requirement of Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this paragraph (f), “FATCA” shall include any amendments made to FATCA after the First Amendment Effective Date.  Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.  For purposes of determining withholding Taxes imposed under FATCA, from and after the First Amendment Effective Date, the Borrower and the Administrative Agent shall treat (and the Lenders hereby authorize the Administrative Agent to treat) this Agreement as not qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

 

(g)                                  Treatment of Certain Refunds.  If the Administrative Agent, a Lender or the Issuing Bank determines, in its sole discretion exercised in good faith, 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, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent, such Lender or the Issuing Bank, as the case may be, 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, such Lender or the Issuing Bank, agrees to repay the amount paid over to the Borrower (plus any penalties,

 

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interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent, such Lender or the Issuing Bank in the event the Administrative Agent, such Lender or the Issuing Bank is required to repay such refund to such Governmental Authority.  This paragraph shall not be construed to require the Administrative Agent, any Lender or the Issuing Bank to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.

 

Section 2.22.                          Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

 

(a)                                 Each Borrowing hereunder, each payment by the Borrower on account of any commitment fee or Letter of Credit fee (other than the fronting fee payable solely to the Issuing Bank) and any reduction of the Revolving Commitments of the Revolving Loan Lenders shall be made pro rata according to the respective Pro Rata Shares of the relevant Lenders.  Each payment (other than prepayments) in respect of principal or interest in respect of the Loans and each payment in respect of fees payable hereunder shall be applied to the amounts of such obligations owing to the Lenders pro rata according to the respective amounts then due and owing to the Lenders.

 

(b)                                 Each payment (including each prepayment) of the Term Loans shall be allocated among the Term Loan Lenders holding such Term Loans pro rata based on the principal amount of such Term Loans held by such Term Loan Lenders.  Voluntary prepayments shall be applied as provided in Section 2.12, and all other prepayments shall be applied pro rata to the remaining installments of such Term Loans.  Amounts prepaid on account of the Term Loans may not be reborrowed.

 

(c)                                  Each payment (including each prepayment) by the Borrower on account of principal of and interest on the Revolving Loans shall be made pro rata according to the respective outstanding principal amounts of the Revolving Loans then held by the Revolving Loan Lenders.  Each payment in respect of LC Disbursements in respect of any Letter of Credit shall be made to the Issuing Bank that issued such Letters of Credit.

 

(d)                                 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 Sections 2.19, 2.20 or 2.21, or otherwise) prior to 12:00 noon (Richmond, Virginia time) on the date when due, in immediately available funds, free and clear of any defenses, rights of set-off, counterclaim, or withholding or deduction of taxes.  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 to the Administrative Agent at the Payment Office, except payments to be made directly to the Issuing Bank or Swingline Lender as expressly provided herein and except that payments pursuant to Sections 2.19, 2.20 and 2.21 and 10.3 shall be made directly to the Persons entitled thereto.  The Administrative Agent shall distribute any such payments 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 made payable for the period of such extension.  All payments hereunder shall be made in Dollars.

 

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(e)                                  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, (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 and (iii) last, towards payment of all other Obligations then due, ratably among the parties entitled thereto in accordance with the amounts of such Obligations then due to such parties.  For the avoidance of doubt, notwithstanding any other provision of any Loan Document, no payment received directly or indirectly from any Loan Party that is not a Qualified ECP Loan Party shall be applied directly or indirectly by the Administrative Agent to the payment of any Excluded Swap Obligation.

 

(f)                                   If any Lender shall, by exercising any right of set-off or counterclaim or otherwise (including through the exercise of remedies against any Borrower or any Guarantor that is not a Qualified ECP Loan Party), obtain payment in respect of any principal of or interest on any of its Revolving Loans or participations in LC Disbursements or Swingline Loans that would result 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 (to the extent that this provision does not impair the legality under applicable laws, statutes or regulations of this Agreement or any other Loan Document or otherwise violate applicable law) 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 or 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.

 

(g)                                  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 Lenders or the Issuing Bank, as the case may be, the amount or amounts due.  In such event, if the

 

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Borrower has not in fact made such payment, then each of the 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.

 

(h)                                 If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.4(c), 2.4(d), 2.7(b), 2.22(d), 2.23(d) or (e) or 10.3(d), 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 2.23.                          Letters of Credit.

 

(a)                                 During the Availability Period, each Issuing Bank, in reliance upon the agreements of the other Revolving Loan Lenders pursuant to Section 2.23(d), agrees to issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Revolving Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $100,000 (or such other amount as may be agreed to by the Issuing Bank); (iii) the Borrower may not request any Letter of Credit, if, after giving effect to such issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Revolving Credit Exposure of all Lenders would exceed the Aggregate Revolving Commitment Amount and (iv) except as provided in Section 3.2(f), the Issuing Bank shall not be required to issue any Letter of Credit if there is any Defaulting Lender or Potential Defaulting Lender at the time of such request or issuance.  Each Revolving Loan Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Revolving Loan Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit (i) on the Closing Date with respect to all Existing Letters of Credit and (ii) on the date of issuance with respect to all other Letters of Credit.  Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Revolving Loan Lender by an amount equal to the amount of such participation.

 

(b)                                 To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days (or such earlier date as may be agreed to by the Issuing Bank and the Administrative Agent) prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, extended or renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit.  In addition to the satisfaction of the conditions in Article 3 the issuance of such

 

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Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control; provided, further that the following are specific conditions under which the Issuing Bank may refuse to issue Letters of Credit:

 

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

 

(ii)                                  the issuance of such Letter of Credit would violate one or more policies of the Issuing Bank applicable to letters of credit generally; or

 

(iii)                               such Letter of Credit is to be denominated in a currency other than Dollars.

 

(c)                                  At least two Business Days (or such earlier date as may be agreed to by the Issuing Bank and the Administrative Agent) prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof.  Unless the Issuing Bank has received notice from the Administrative Agent or any Revolving Loan Lender on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in Section 2.23(a), or that one or more conditions specified in Article 3 are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices.

 

(d)                                 The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof.  The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a 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 Revolving Loan Lenders with respect to such LC Disbursement.  The Borrower shall be irrevocably and unconditionally obligated to reimburse the

 

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Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind.  Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. (Richmond, Virginia time) on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Revolving Loan Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided, that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable.  The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Revolving Loan Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.7.  The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement.

 

(e)                                  If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Revolving Loan Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Revolving Loan Lender purchased pursuant to subsection (a) in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred.  Each Revolving Loan Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including without limitation (i) any setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.  On the date that such participation is required to be funded, each Revolving Loan Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank.  Whenever, at any time after the Issuing Bank has received from any such Revolving Loan Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Revolving Loan Lender its Pro Rata Share of such payment; provided, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it.

 

(f)                                   To the extent that any Revolving Loan Lender shall fail to pay any amount required to be paid pursuant to paragraphs (d) or (e) above on the due date therefor, such Revolving Loan Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided, that if such Revolving Loan Lender shall fail to make such

 

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payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Revolving Loan Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.14(c).

 

(g)                                  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 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 Issuing Bank and the Revolving Loan Lenders, an amount in cash equal to the LC Exposure as of such date plus any accrued and unpaid fees thereon; provided, that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in clause (h) or (i) of Section 8.1.  Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement.  The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account.  The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this paragraph.  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 and 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 had not been reimbursed and to the extent 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, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents.  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 so applied as aforesaid) shall be returned to the Borrower within three Business Days after all Events of Default have been cured or waived.

 

(h)                                 Promptly following the end of each calendar quarter, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit outstanding at the end of such Fiscal Quarter.  Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding.

 

(i)                                     The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances:

 

(i)                                     Any lack of validity or enforceability of any Letter of Credit or this Agreement;

 

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(ii)                                  The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction;

 

(iii)                               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;

 

(iv)                              Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit;

 

(v)                                 Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section 2.23, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder; or

 

(vi)                              The existence of a Default or an Event of Default.

 

Neither the Administrative Agent, the Issuing Bank, the Lenders nor any Related Party of any of the foregoing 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 above), 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 shall not be construed to excuse (i) the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive 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 due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof or (ii) the Issuing Bank or any Related Party of any of the foregoing from the Issuing Bank’s gross negligence or willful misconduct as determined in a final, nonappealable judgment of a court of competent jurisdiction.  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 due 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 that 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 the contrary, or refuse to accept

 

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and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

 

(j)                                    Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, performance under Letters of Credit by the Issuing Bank, its correspondents, and the beneficiaries thereof will be governed by the rules of the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued) and to the extent not inconsistent therewith, the governing law of this Agreement set forth in Section 10.5.

 

Section 2.24.                          Increase of Commitments; Additional Lenders.

 

(a)                                 The Borrower may, upon at least 10 days’ written notice (or such shorter period as may be permitted by the Administrative Agent in its sole discretion) to the Administrative Agent (who shall promptly provide a copy of such notice to each Revolving Loan Lender), propose to (i) increase either the Aggregate Revolving Commitments or (ii) establish one or more incremental term loan commitments (any such incremental term loan commitment, an “Incremental Term Loan Commitment”) to make an incremental term loan (any such incremental term loan, an “Incremental Term Loan”), by an aggregate amount not to exceed the sum of (x) $150,000,000 and (y) if either of such increase to the Aggregate Revolving Commitments or such Incremental Term Loan is incurred in connection with a Permitted Acquisition, any amounts (which for purposes of clarity, do not include any amounts incurred in reliance upon clause (x)) so long as the pro forma Leverage Ratio (determined (1) after giving effect to such acquisition and assuming that such acquisition was consummated on the first day of the most recently ended period of four consecutive Fiscal Quarters and (2) in connection with any Limited Condition Acquisition, in accordance with Section 1.7(a)) shall not be greater than 1.75 to 1 (it being understood that the increase of Aggregate Revolving Commitments and Incremental Term Loan Commitments may be incurred under clause (y) of this Section 2.24(a) regardless of whether there is capacity under clause (x) hereof) (the amount of any such increase or incremental term loan commitment (which shall be in minimum increments of $10,000,000), the “Additional Commitment Amount”).  In any event, no more than four (4) such elections shall be made during the term of this Agreement.

 

(b)                                 In the case of a request to increase the Aggregate Revolving Commitments, each Revolving Loan Lender shall have the right for a period of 5 Business Days following receipt of such notice, to elect by written notice to the Borrower and the Administrative Agent to increase its Revolving Commitment by a principal amount equal to its Pro Rata Share of the Additional Commitment Amount.

 

(c)                                  In the case of a request for Incremental Term Loan Commitments, or if any Revolving Loan Lender shall not elect to increase its Revolving Commitment pursuant to subsection (a) of this Section 2.24, the Borrower may designate another bank or other financial institution (which may be, but need not be, one or more of the existing Lenders) which at the time agrees to, in the case of any such Person that is an existing Lender, increase its Revolving Commitment or provide an Incremental Term Loan Commitment and in the case of any other such Person (an “Additional Lender”), which at the time agrees to become a party to this

 

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Agreement, if not already a Lender; provided, however, that any new bank or financial institution must be acceptable to the Administrative Agent, which acceptance will not be unreasonably withheld, conditioned or delayed.  The sum of the increases in the Revolving Commitments of the existing Lenders pursuant to this subsection (c) plus the Revolving Commitments of the Additional Lenders shall not in the aggregate exceed the unsubscribed amount of the Additional Commitment Amount in the case of a request to increase the Aggregate Revolving Commitments.

 

(d)                                 No Lender (or any successor thereto) shall have any obligation to increase its Revolving Commitment or its other obligations under this Agreement and the other Loan Documents or provide an Incremental Term Loan Commitment, and any decision by a Lender to increase its Revolving Commitment or provide an Incremental Term Loan Commitment shall be made in its sole discretion independently from any other Lender.

 

(e)                                  An increase in the aggregate amount of the Revolving Commitments or the establishment of Incremental Term Loan Commitments pursuant to this Section 2.24 shall become effective upon the receipt by the Administrative Agent of a supplement or joinder in form and substance reasonably satisfactory to the Administrative Agent executed by the Borrower and by each Additional Lender and by each other Revolving Loan Lender whose Revolving Commitment is to be increased, setting forth the new Revolving Commitments or the Incremental Term Loan Commitments of such Lenders and setting forth the agreement of each Additional Lender to become a party to this Agreement and to be bound by all the terms and provisions hereof, and, to the extent requested by such Additional Lender or such other Revolving Loan Lender whose Revolving Commitment is to be increased, Revolving Notes evidencing such increase in the Revolving Commitment or promissory notes evidencing the incurrence of such Incremental Term Loan Commitment, and such evidence of appropriate corporate authorization on the part of the Borrower and the Guarantors with respect to the increase in the Revolving Commitments or the incurrence of the Incremental Term Loan Commitments and such opinions of counsel for the Borrower and the Guarantors with respect to the increase in the Revolving Commitments or the incurrence of the Incremental Term Loan Commitments as the Administrative Agent may reasonably request, and, in the case of the incurrence of the Incremental Term Loan Commitments, an amendment to this Agreement as mutually agreed by the Borrower, the Administrative Agent and the Additional Lenders or such other Lenders, in each case who are providing such Incremental Term Loan Commitment; provided that (i) the terms and conditions applicable to Incremental Term Loans may be materially different from those of the Revolving Loans to the extent such differences are reasonably acceptable to the Administrative Agent and (ii) the interest rates, maturity, mandatory prepayment provisions and amortization schedule applicable to such Incremental Term Loans shall be determined by the Borrower and the Lenders holding the Incremental Term Loan Commitments.  In connection with the foregoing, and notwithstanding anything in Section 10.2 to the contrary, the Administrative Agent, the Borrower, the Guarantors and the Additional Lenders or existing Lenders participating in the Additional Commitment Amount, as applicable, may enter into such amendments to this Agreement as may be necessary or appropriate (in the Administrative Agent’s judgment) to incorporate the terms of Additional Commitment Amount into the terms of this Agreement, and to provide the Additional Lenders with the benefits of this Agreement that are available to the other Lenders in the same Class as such Additional Lenders.

 

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(i)                                     Notwithstanding anything to the contrary set forth in Section 3.2, an increase in the aggregate amount of the Revolving Commitments or the establishment of Incremental Term Loan Commitments pursuant to this Section 2.24 shall be subject to, at the time of and immediately after giving effect to such proposed increase in the aggregate amount of the Revolving Commitments or establishment of Incremental Term Loan Commitments and the use of the proceeds thereof, no Default or Event of Default shall have occurred and be continuing and all representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects (other than those representations and warranties that are expressly qualified by a Material Adverse Effect or other materiality, in which case such representations and warranties shall be true and correct in all respects) on such date, except for representations and warranties that expressly relate to an earlier date, which shall be true and correct in all material respects (or in all respects, as applicable) as of such earlier date; provided that, solely with respect to the establishment of Incremental Term Loan Commitments entered into in connection with the financing of a Limited Condition Acquisition, the Lenders providing such Incremental Term Loan Commitments may agree to a “funds certain provision” that:

 

(ii)                                  does not impose as a condition to funding thereof that no Default or Event of Default (other than any Default or Event of Default under Section 8.1(a), (b), (h), (i) or (j)) shall have occurred and be continuing at the time such Limited Condition Acquisition is consummated, in which event the condition to funding thereof shall instead be that (x) no Default or Event of Default shall have occurred and be continuing on the Limited Condition Acquisition Test Date with respect to such Limited Condition Acquisition and (y) no Default or Event of Default under Section 8.1(a), (b), (h), (i) or (j) shall have occurred and be continuing at the time such Limited Condition Acquisition is consummated; and

 

(iii)                               provides that the only representations and warranties the making of which shall be a condition to funding thereof shall be (x) certain “specified representations” agreed to by the Lenders providing such Commitments and (y) the representations and warranties made by or with respect to the applicable target in the Limited Condition Acquisition Agreement that are material to the interests of the Lenders, but only to the extent that the Borrower (or any of its Subsidiaries) has the right to terminate the Borrower’s (or such Subsidiary’s) obligations under such Limited Condition Acquisition Agreement or to decline to consummate the transactions contemplated by such Limited Condition Acquisition Agreement as a result of a breach of such representations or warranties in such Limited Condition Acquisition Agreement (or the failure of such representations or warranties to be true and correct or to satisfy the closing conditions in such Limited Condition Acquisition Agreement applicable to such representations or warranties).

 

(f)                                   Upon the acceptance of any such agreement by the Administrative Agent, the Aggregate Revolving Commitment Amount shall automatically be increased by the amount of the Revolving Commitments added through such agreement and Schedule II shall automatically be deemed amended to reflect the Incremental Term Loan Commitments or Revolving Commitments of all Lenders after giving effect to the addition of such Incremental Term Loan Commitments or Revolving Commitments.

 

(g)                                  Upon any increase in the aggregate amount of the Revolving Commitments pursuant to this Section 2.24 that is not pro rata among all Revolving Loan

 

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Lenders, (x) within five Business Days, in the case of any Base Rate Loans then outstanding, and at the end of the then current month with respect thereto, in the case of any Index Rate Loans then outstanding, and at the end of the then current Interest Period with respect thereto, in the case of any Eurodollar Loans then outstanding, the Borrower shall prepay such Loans in their entirety and, to the extent the Borrower elects to do so and subject to the conditions specified in Article 3, the Borrower shall reborrow the Revolving Loans from the Revolving Loan Lenders in proportion to their respective Revolving Commitments after giving effect to such increase, until such time as all outstanding Revolving Loans are held by the Revolving Loan Lenders in proportion to their respective Commitments after giving effect to such increase); provided that with respect to this subclause (x), (A) the prepayment to, and borrowing from, any existing Lender shall be effected by book entry to the extent that any portion of the amount prepaid to such Lender will be subsequently borrowed from such Lender and (B) the existing Revolving Loan Lenders, as applicable, and the Additional Lenders shall make and receive payments among themselves, in a manner acceptable to the Administrative Agent, so that, after giving effect thereto, the Loans of such Lenders are held ratably by the Lenders of such Class in accordance with the respective Commitments of such Class of such Lenders (after giving effect to such Additional Commitment Amount), and (y) effective upon such increase, the amount of the participations held by each Revolving Loan Lender in each Letter of Credit then outstanding shall be adjusted automatically such that, after giving effect to such adjustments, the Lenders shall hold participations in each such Letter of Credit in proportion to their respective Revolving Commitments.

 

(h)                                 The Additional Lenders or existing Lenders providing an Incremental Term Loan Commitment shall be included in any determination of the Required Lenders and such Lenders will not constitute a separate voting class for any purposes under this Agreement.

 

Section 2.25.                          Mitigation of Obligations.  If any Lender requests compensation under Section 2.19, 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 2.21, 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 sole judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable under Section 2.19 or Section 2.21, 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 costs and expenses incurred by any Lender in connection with such designation or assignment.

 

Section 2.26.                          Replacement of Lenders.  If any Lender is unable to fund any Eurodollar Loan or Index Rate Loan pursuant to Section 2.17(ii) or  Section 2.18 or if any Lender requests compensation under Section 2.19, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority of the account of any Lender pursuant to Section 2.21, or if any Lender is a Defaulting Lender or Potential Defaulting Lender or defaults in its obligation to fund Loans hereunder or comply with the provisions of Section 2.21(e) or if any Lender does not provide its consent to any proposed waiver or amendment which is not effective unless consented to by the Required Lenders (or such higher percentage or proportion of the Lenders as herein provided), then the Borrower may, at its sole expense and effort, upon notice

 

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to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions set forth in Section 10.4(b)) all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender); provided, that (i) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not be unreasonably withheld (provided that such consent shall not be required to the extent an assignment pursuant to Section 10.4 to such assignee would not require the consent of the Administrative Agent), (ii) such Lender shall have received payment of an amount equal to the outstanding principal amount of all Loans owed to it, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (in the case of such outstanding principal and accrued interest) and from the Borrower (in the case of all other amounts) and (iii) in the case of a claim for compensation under Section 2.19 or payments required to be made pursuant to Section 2.21, 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 2.27.                          Defaulting Lender.  If a Lender becomes, and during the period it remains, a Defaulting Lender, the following provisions shall apply with respect to any outstanding LC Exposure and any outstanding Swingline Exposure of such Defaulting Lender:

 

(a)                                 the Borrower will, not less than one Business Day after demand by the Administrative Agent (at the direction of the Issuing Bank and/or the Swingline Lender, as the case may be), (i) to the extent not otherwise reallocated among all other Lenders that are Non-Defaulting Lenders in accordance with Section 3.2(f), cash collateralize (in accordance with Section 2.23(g)) a portion of the obligations of the Borrower owed to the Issuing Bank and the Swingline Lender equal to such Defaulting Lender’s LC Exposure or Swingline Exposure, as the case may be, (ii) in the case of such Swingline Exposure, prepay all Swingline Loans or (iii) make other arrangements reasonably satisfactory to the Administrative Agent, and to the Issuing Bank and the Swingline Lender, as the case may be, in their reasonable discretion to protect them against the risk of non-payment by such Defaulting Lender; and

 

(b)                                 any amount paid by the Borrower for the account of a Defaulting Lender under this Agreement (whether on account of principal, interest, fees, indemnity payments or other amounts) will not be paid or distributed to such Defaulting Lender, but will instead be retained by the Administrative Agent in a segregated non-interest-bearing account until the termination of the Commitments and payment in full of all obligations of the Borrower hereunder and will be applied by the Administrative Agent, to the fullest extent permitted by law, to the making of payments from time to time in the following order of priority:  first to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent under this Agreement, second to the payments of any amounts owing by such Defaulting Lender to the Issuing Bank or the Swingline Lender (pro rata as to the respective amounts owing to each of them) under this Agreement, third to the payment of post-default interest and then current interest due and payable to Lenders other than Defaulting Lenders, ratably among them in accordance with the amounts of such interest then due and payable to them, fourth to the payment of fees then due and payable to the Non-Defaulting Lenders hereunder, ratably among them in accordance with the amount of such fees then due and payable to them, fifth to pay principal and

 

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unreimbursed LC Disbursements then due and payable to the Non-Defaulting Lenders hereunder ratably in accordance with the amounts then due and payable to them, sixth to the ratable payment of other amounts then due and payable to the Non-Defaulting Lenders, and seventh after the termination of the Commitments and payment in full of all obligations of the Borrower hereunder, to pay amounts owing under this Agreement to such Defaulting Lender or as a court of competent jurisdiction may otherwise direct.

 

Section 2.28.                          Certain Permitted Amendments.

 

(a)                                 The Borrower may, by written notice to the Administrative Agent from time to time make one or more offers (each, a “Loan Modification Offer”) to all the Lenders to make one or more Permitted Amendments pursuant to procedures reasonably specified by the Administrative Agent and reasonably acceptable to the Borrower.  Such notice shall set forth (i) the terms and conditions of the requested Permitted Amendment and (ii) the date on which such Permitted Amendment is requested to become effective (which shall not be less than 10 Business Days nor more than 30 Business Days after the date of such notice, in each case, unless otherwise agreed to by the Administrative Agent).  Notwithstanding anything to the contrary in Section 10.2, each Permitted Amendment shall only require the consent of the Borrower, the Administrative Agent and those Lenders that accept the applicable Loan Modification Offer (such Lenders, the “Accepting Lenders”), and each Permitted Amendment shall become effective only with respect to the Loans and Revolving Commitments of the Accepting Lenders.  In connection with any Loan Modification Offer, the Borrower may, at its sole option, terminate or reduce the aggregate Revolving Commitments, and/or repay or reduce any Term Loans, of one or more of the Lenders that are not Accepting Lenders.  Additionally, to the extent the Borrower has reduced the Revolving Commitments and/or Term Loans of such Lenders, it may request any other financial institution (with the consent of the Administrative Agent, such consent not to be unreasonably conditioned, delayed or withheld) to provide a commitment to make loans on the terms set forth in such Loan Modification Offer in an amount not to exceed the amount of the Revolving Commitments and Term Loans reduced pursuant to the preceding sentence.  Notwithstanding any other provision hereof, the Borrower shall not be entitled to have more than one Loan Modification Offer outstanding at any one time, nor to make more than five Loan Modification Offers during the term of the Loans.

 

(b)                                 The Borrower and each Accepting Lender shall execute and deliver to the Administrative Agent a Loan Modification Agreement and such other documentation as the Administrative Agent shall reasonably specify to evidence the acceptance of the Permitted Amendments and the terms and conditions thereof.  The Administrative Agent shall promptly notify each Lender as to the effectiveness of each Loan Modification Agreement.  Each of the parties hereto hereby agrees that, upon the effectiveness of any Loan Modification Agreement, this Agreement shall be deemed amended to the extent (but only to the extent) necessary to reflect the existence and terms of the Permitted Amendment evidenced thereby and only with respect to the Loans and Revolving Commitments of the Accepting Lenders, including any amendments necessary to treat the applicable Loans and/or Revolving Commitments of the Accepting Lenders as a new “Class” of loans and/or revolving commitments hereunder.  Notwithstanding the foregoing, no Permitted Amendment shall become effective unless the Administrative Agent, to the extent reasonably requested by the Administrative Agent, shall have received legal opinions,

 

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board resolutions, officer’s and secretary’s certificates and other documentation consistent with those delivered on the Closing Date under this Agreement.

 

(c)                                  “Permitted Amendments” means any or all of the following:  (i) an extension of the Maturity Date and/or the Revolving Commitment Termination Date applicable solely to the Loans and/or Revolving Commitments of the Accepting Lenders, (ii) a delay in the timing of any scheduled amortization payments to be made in respect of the Term Loans of any Accepting Lender, (iii) an increase in the interest rate with respect to the Loans and/or Revolving Commitments of the Accepting Lenders, (iv) the inclusion of additional fees to be payable to the Accepting Lenders in connection with the Permitted Amendment (including any upfront fees), (v) such amendments to this Agreement and the other Loan Documents as shall be appropriate, in the reasonable judgment of the Administrative Agent, to provide the rights and benefits of this Agreement and other Loan Documents to each new “Class” of loans and/or commitments resulting therefrom, provided, that (A) the allocation of the participation exposure with respect to any then-existing or subsequently issued or made Letter of Credit or Swingline Loan as between the revolving commitments of such new “Class” and the Revolving Commitments of the then-existing Lenders shall be made on a pro rata basis as between the revolving commitments of such new “Class” and the Revolving Commitments of the then-existing Revolving Loan Lenders, (B) the LC Commitment and Swingline Commitment may not be extended without the prior written consent of the Issuing Bank or the Swingline Lender, as applicable, and only to the extent the LC Commitment or Swingline Commitment so extended does not exceed the aggregate Revolving Commitments extended pursuant to clause (i) above, (C) payments of principal and interest on Loans (including loans of Accepting Lenders) shall continue to be shared pro rata in accordance with Section 2.22, except that notwithstanding Section 2.22, the Loans and Revolving Commitments of the Lenders that are not Accepting Lenders may be repaid and terminated on their applicable Maturity Date and/or Revolving Commitment Termination Date, as the case may be, without any pro rata reduction of the revolving commitments and repayment of loans of Accepting Lenders with a different Maturity Date and/or Revolving Commitment Termination Date, and (vi) such other amendments to this Agreement and the other Loan Documents as shall be appropriate, in the reasonable judgment of the Administrative Agent, to give effect to the foregoing Permitted Amendments.  The expenses of the transactions contemplated by this Section 2.28 shall be paid by the Borrower in accordance with Section 10.3(a).

 

(d)                                 This Section 2.28 shall supersede any provision in Section 10.2 to the contrary.  Notwithstanding any reallocation into extending and non-extending “Classes” in connection with a Permitted Amendment, all Loans to the Borrower under this Agreement shall rank pari passu in right of payment.

 

ARTICLE 3

 

CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT

 

Section 3.1.                                 Conditions To Effectiveness.  The obligations of the Lenders (including the Swingline Lender) to make Loans and the obligation of the Issuing Bank to issue any Letter

 

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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 10.2).(4)

 

(a)                                 The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Closing Date, including reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder, under any other Loan Document and under any agreement with the Administrative Agent or STRH (including the Fee Letter).

 

(b)                                 The Administrative Agent (or its counsel) shall have received the following:

 

(i)                                     a counterpart of this Agreement signed by or on behalf of each party hereto or written evidence satisfactory to the Administrative Agent (which may include telecopy transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement;

 

(ii)                                  duly executed Notes payable to each Lender requesting a note (including the Swingline Note payable to the Swingline Lender);

 

(iii)                               the Subsidiary Guaranty Agreement duly executed by each Subsidiary Loan Party;

 

(iv)                              the Security Agreement duly executed by the Borrower and each Subsidiary Loan Party;

 

(v)                                 the Pledge Agreement duly executed by the Borrower and each Subsidiary Loan Party;

 

(vi)                              copies of duly executed payoff letters, in form and substance satisfactory to Administrative Agent, executed by each holder of existing Indebtedness or the agent thereof, and a Perfection Certificate (as defined in the Security Agreement) with respect to the Loan Parties dated the Closing Date and duly executed by a Responsible Officer of the Borrower; together with (a) the results of a search of the Uniform Commercial Code filings (or equivalent filings) made with respect to the Loan Parties in the states (or other jurisdictions) of formation of such Persons and in which the chief executive office of each such Person is located and in the other jurisdictions in which such Persons maintain property or do business, together with copies of the financing statements (or similar documents) disclosed by such search, (b) UCC-3 or other appropriate termination statements, in form and substance satisfactory to Administrative Agent, releasing all liens of such holders or agent upon any of the personal property of the Borrower and its Subsidiaries and (c) any other releases, terminations or other documents reasonably required by the Administrative Agent to evidence the payoff of such Indebtedness;

 

(4)  Conditions set forth in Section 3.1 were satisfied, and the Closing Date occurred, on November 8, 2012.

 

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(vii)                           Reserved;

 

(viii)                        a certificate of the Secretary or Assistant Secretary of each Loan Party in form and substance acceptable to the Administrative Agent, attaching and certifying copies of its bylaws and of the resolutions of its boards of directors, or partnership agreement or limited liability company agreement, or comparable organizational documents and authorizations, authorizing the execution, delivery and performance of the Loan Documents to which it is a party and certifying the name, title and true signature of each officer of such Loan Party executing the Loan Documents to which it is a party;

 

(ix)                              certified copies of the articles or certificate of incorporation, certificate of organization or limited partnership, or other registered organizational documents of each Loan Party, together with certificates of good standing or existence, as may be available from the Secretary of State of the jurisdiction of organization of such Loan Party;

 

(x)                                 Reserved;

 

(xi)                              favorable written opinion of Hogan Lovells US LLP, counsel to the Loan Parties, addressed to the Administrative Agent and each of the Lenders, and covering such matters relating to the Loan Parties, the Loan Documents and the transactions contemplated therein as the Administrative Agent or the Required Lenders shall reasonably request;

 

(xii)                           a certificate, in form and substance acceptable to the Administrative Agent, dated the Closing Date and signed by a Responsible Officer, certifying that (x) no Default or Event of Default exists, (y) all representations and warranties of each Loan Party set forth in the Loan Documents are true and correct in all material respects (or, if qualified by materiality, in all respects) and (z) since December 31, 2011, there shall have been no change which has had or could reasonably be expected to have a Material Adverse Effect;

 

(xiii)                        with respect to any Loan to be funded on the Closing Date, if any, a duly executed Notice of Borrowing;

 

(xiv)                       with respect to any Loan to be funded on the Closing Date, if any, a duly executed funds disbursement agreement, together with a report setting forth the sources and uses of the proceeds of the Loans to be disbursed on the Closing Date;

 

(xv)                          certified copies of all consents, approvals, authorizations, registrations and filings and orders required to be made or obtained under any Requirement of Law, or by any Contractual Obligation of each Loan Party, in connection with the execution, delivery and performance of the Loan Documents by each Loan Party, and the validity and enforceability of the Loan Documents against each Loan Party or any of the transactions contemplated thereby, and such consents, approvals, authorizations, registrations, filings and orders shall be in full force and effect and all applicable waiting periods shall have expired, and no investigation or inquiry by any Governmental Authority regarding the Loans or any transaction being financed with the proceeds thereof shall be ongoing;

 

(xvi)                       Reserved;

 

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(xvii)                    copies of the consolidated and consolidating balance sheets, income statements, cash flows and operating budget of the Borrower setting forth projections for the five Fiscal Years next succeeding the Closing Date, and setting forth in reasonable detail the assumptions underlying such projections;

 

(xviii)                 copies of (A) the internally prepared quarterly financial statements of Borrower and its Subsidiaries on a consolidated basis for the Fiscal Quarter ending on September 30, 2012, and (B) the audited consolidated financial statements for Borrower and its Subsidiaries for the Fiscal Years ending December 31, 2008, December 31, 2009, December 31, 2010, and December 31, 2011;

 

(xix)                       a duly completed and executed Compliance Certificate of the Borrower, including pro forma calculations of the financial covenants set forth in Article 6 (other than Section 6.3) hereof as of September 30, 2012;

 

(xx)                          a copy of, or a certificate as to coverage under, the insurance policies required by the applicable provisions of the Security Documents, each of which shall be endorsed or otherwise amended to include a customary lender’s loss payable endorsement and to name the Administrative Agent as additional insured, in form and substance satisfactory to the Administrative Agent;

 

(xxi)                       Reserved; and

 

(xxii)                    such other documents, certificates or information as the Administrative Agent or the Required Lenders may reasonably request, all in form and substance reasonably satisfactory to the Administrative Agent or the Required Lenders.

 

(c)                                  The Administrative Agent shall have received (i) to the extent required by the Pledge Agreement, the certificates representing the shares of Capital Stock pledged pursuant to the Pledge Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the Borrower or the applicable Subsidiary Loan Party, as pledgor; (ii) to the extent required by the Security Agreement, the certificates representing the shares of Capital Stock pledged pursuant to the Security Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof and (iii) to the extent required by the Security Agreement or the Pledge Agreement, each promissory note pledged to the Administrative Agent pursuant to the Pledge Agreement and the Security Agreement endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank satisfactory to the Administrative Agent) by the pledgor thereof.

 

(d)                                 Each document (including, without limitation, any Uniform Commercial Code financing statement) required by the Security Documents or under law or reasonably requested by the Administrative Agent to be filed, registered or recorded in order to create in favor of the Administrative Agent, for the benefit of the Lenders, a perfected Lien on the Collateral described therein, prior and superior in right to any other Person (other than with respect to Liens permitted by Section 7.2), shall be in proper form for filing, registration or recordation.

 

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Section 3.2.                                 Each Credit Event.  Subject to Section 2.24, 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 any Letter of Credit is subject to the satisfaction of the following conditions:

 

(a)                                 at the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default or Event of Default shall exist;

 

(b)                                 at the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, all representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects (or, if qualified by materiality, in all respects) on and as of the date of such Borrowing or the date of issuance, amendment, extension or renewal of such Letter of Credit (except to the extent stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date), in each case before and after giving effect thereto;

 

(c)                                  Reserved;

 

(d)                                 the Borrower shall have delivered the required Notice of Borrowing, or, in the case of any Letter of Credit, any other notice required pursuant to Section 2.23;

 

(e)                                  Reserved; and

 

(f)                                   to the extent any Lender is a Defaulting Lender or a Potential Defaulting Lender, at the time of such Swingline Loan or issuance of such Letter of Credit, the cost or loss to the Issuing Bank or the Swingline Lender, as the case may be, that would result therefrom is fully covered or eliminated by (i) with respect to such Letter of Credit, (x) the LC Exposure of such Defaulting Lender or Potential Defaulting Lender being reallocated among all other Lenders that are Non-Defaulting Lenders in proportion with their Pro Rata Share, but only to the extent that, after giving effect to such reallocation, the Revolving Credit Exposure of each Non-Defaulting Lender does not exceed such Non-Defaulting Lender’s Pro Rata Share of the Aggregate Revolving Commitment Amount; and (y) to the extent that such LC Exposure of such Defaulting Lender or Potential Defaulting Lender exceeds the amount that is permitted to be reallocated pursuant to the immediately preceding clause (x), the Borrower having provided cash collateral to the Administrative Agent to hold on behalf of the Borrower, on terms and conditions reasonably satisfactory to the Issuing Bank and the Administrative Agent, in an amount equal to such excess, (ii) with respect to any Swingline Loan, the Borrower having provided cash collateral to the Administrative Agent to hold on behalf of the Borrower, on terms and conditions reasonably satisfactory to the Swingline Lender and the Administrative Agent, in an amount equal to the Swingline Exposure of such Defaulting Lender or Potential Defaulting Lender, or (iii) the Borrower making other arrangements reasonably satisfactory to the Administrative Agent and the Issuing Bank or the Swingline Lender, as applicable, in their reasonable discretion to protect them against the risk of non-payment by such Defaulting Lender or Potential Defaulting Lender; provided that none of the foregoing will constitute a waiver or release of any claim the Borrower, the Administrative Agent, the Issuing Bank, the Swingline Lender or any other Lender may have

 

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against such Defaulting Lender, or cause such Defaulting Lender or Potential Defaulting Lender to be a Non-Defaulting Lender.

 

Each Borrowing and each issuance, amendment, extension or renewal of any 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 3.2.

 

Section 3.3.                                 Delivery of Documents.  All of the Loan Documents, certificates, legal opinions and other documents and papers referred to in this Article 3, unless otherwise specified, shall be delivered to the Administrative Agent for the account of each of the Lenders.

 

ARTICLE 4

 

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Administrative Agent and each Lender as follows:

 

Section 4.1.                                 Existence; Power.  Each of the Loan Parties (i) is duly organized, validly existing and in good standing as a corporation, partnership or limited liability company under the laws of the jurisdiction of its organization, (ii) has all requisite power and authority to carry on its business as now conducted, and (iii) is duly qualified to do business, and is in good standing, in each jurisdiction where such qualification is required, except in a case where a failure to be so qualified could not reasonably be expected to result in a Material Adverse Effect.

 

Section 4.2.                                 Organizational Power; Authorization.  The execution, delivery and performance by each Loan Party of the Loan Documents to which it is a party are within such Loan Party’s organizational powers and have been duly authorized by all necessary organizational, and if required, shareholder, partner or member, action.  This Agreement has been duly executed and delivered by the Borrower, and constitutes, and each other Loan Document to which any Loan Party is a party, when executed and delivered by such Loan Party, will be duly executed and delivered by such Loan Party, and will constitute, valid and binding obligations of the Borrower or such Loan Party (as the case may be), enforceable against it in accordance with their respective terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.

 

Section 4.3.                                 Governmental Approvals; No Conflicts.  The execution, delivery and performance by the Borrower of this Agreement, and by each Loan Party of the other Loan Documents to which it is a party (a) do not require any consent or approval of, registration or filing with, or any action by, any Governmental Authority, except those as have been obtained or made and are in full force and effect, (b) will not violate any Requirements of Law applicable to the Borrower or any of its Subsidiaries or any judgment, order or ruling of any Governmental Authority, (c) will not violate or result in a default under any indenture, material agreement or other material instrument binding on the Borrower or any of its Subsidiaries or any of its assets or give rise to a right thereunder to require any payment to be made by the Borrower or any of its

 

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Subsidiaries and (d) will not result in the creation or imposition of any Lien (other than Liens permitted by Section 7.2) on any asset of the Borrower or any of its Subsidiaries.

 

Section 4.4.                                 Financial Statements.  The Borrower has furnished to each Lender (i) the audited consolidated balance sheet of the Borrower and its Subsidiaries as of December 31, 2017, and the related consolidated statements of income, shareholders’ equity and cash flows for the Fiscal Year then ended with a written report thereon prepared by PriceWaterhouse Coopers and (ii) the unaudited consolidated balance sheet of the Borrower and its Subsidiaries as of March 31, 2018, and the related unaudited consolidated statements of income and cash flows for the Fiscal Quarter and year-to-date period then ending, certified by a Responsible Officer.  Such financial statements fairly present in all material respects the consolidated financial condition of the Borrower and its Subsidiaries as of such dates and the consolidated results of operations for such periods in conformity with GAAP consistently applied, subject to year-end audit adjustments and the absence of footnotes in the case of the statements referred to in clause (ii).  Since December 31, 2017, there has been no event, circumstance or condition which has had or would reasonably be expected to have, singly or in the aggregate, a Material Adverse Effect.

 

Section 4.5.                                 Litigation and Environmental Matters.

 

(a)                                 No litigation, investigation or proceeding of or before any arbitrators or Governmental Authorities is pending against or, to the knowledge of any Responsible Officer of the Borrower or any other officer of the Borrower having primary responsibility therefor, threatened against or affecting the Borrower or any of its Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination that could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect or (ii) which in any manner draws into question the validity or enforceability of this Agreement or any other Loan Document.

 

(b)                                 Except for the matters set forth on Schedule 4.5 or as 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, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.

 

Section 4.6.                                 Compliance with Laws and Agreements.  The Borrower and each Subsidiary is in compliance with (a) all Requirements of Law and all judgments, decrees and orders of any Governmental Authority and (b) all indentures, agreements or other instruments binding upon it or its properties, except where non-compliance, either singly or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

 

Section 4.7.                                 Investment Company Act, Etc.  Neither the Borrower nor any of its Subsidiaries is an “investment company” or is “controlled” by an “investment company”, as such terms are defined in, or is required to register under, the Investment Company Act of 1940, as amended.

 

Section 4.8.                                 Taxes.  The Borrower and its Subsidiaries have timely filed or caused to be filed all Federal income tax returns and all other material tax returns that are required to be

 

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filed by them, and have paid all Federal and other material taxes shown to be due and payable on such returns or on any assessments made against it or its property and all other material taxes, fees or other charges imposed on it or any of its property by any Governmental Authority, except where the same are currently being contested in good faith by appropriate proceedings and for which the Borrower or such Subsidiary, as the case may be, has set aside on its books adequate reserves in accordance with GAAP.  The charges, accruals and reserves on the books of the Borrower and its Subsidiaries in respect of such taxes are adequate, and no tax liabilities that could be materially in excess of the amount so provided are anticipated.

 

Section 4.9.                                 Margin Regulations.  None of the proceeds of any of the Loans or Letters of Credit will be used, directly or indirectly, for “purchasing” or “carrying” any “margin stock” or to extend credit to others for the purpose of purchasing or carrying “margin stock,” with the respective meanings of each of such terms under Regulation U of the Board of Governors of the Federal Reserve System as now and from time to time hereafter in effect or for any purpose that violates the provisions of the Regulation U.  Neither the Borrower nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying “margin stock.”

 

Section 4.10.                          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.  The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan, and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of all such underfunded Plans.

 

Section 4.11.                          Ownership of Property.

 

(a)                                 Each of the Borrower and its Subsidiaries has good title to, or valid leasehold interests in, all of its real and personal property material to the operation of its business, including all such properties reflected in the most recent audited consolidated balance sheet of the Borrower referred to in Section 4.4 or purported to have been acquired by the Borrower or any Subsidiary after said date (except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens other than Liens permitted by this Agreement.  Except as could not reasonably be expected to result in a Material Adverse Effect, all leases that individually or in the aggregate are material to the business or operations of the Borrower and its Subsidiaries are valid and subsisting and are in full force.

 

(b)                                 Each of the Borrower and its Subsidiaries owns, or is licensed, or otherwise has the right, to use, all patents, trademarks, service marks, trade names, copyrights and other intellectual property material to its business, and the use thereof by the Borrower and its Subsidiaries does not infringe on the rights of any other Person except as could not reasonably be expected to result in a Material Adverse Effect.

 

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(c)                                  The properties of the Borrower and its Subsidiaries are insured with financially sound and reputable insurance companies which are not Affiliates of the Borrower, in such amounts with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Borrower or any applicable Subsidiary operates.

 

Section 4.12.                          Disclosure.  None of the reports (including, without limitation, all reports that the Borrower is required to file with the Securities and Exchange Commission), financial statements, certificates or other information furnished by or on behalf of the Borrower to the Administrative Agent or any Lender in connection with the negotiation or syndication of this Agreement or any other Loan Document or delivered hereunder or thereunder (as modified or supplemented by any other information so furnished, including, without limitation, all reports that the Borrower is required to file with the Securities and Exchange Commission) contains when furnished any material misstatement of fact or omits to state any material fact necessary to make the statements herein or in any of the reports, financial statements, certificates or other information furnished by or on behalf of the Borrower, taken as a whole, in light of the circumstances under which they were made, not materially misleading; provided, that with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions that management of the Borrower believed to be reasonable at the time such projected financial information was prepared (it being recognized by the Administrative Agent and each Lender that projections as to future events are not to be viewed as facts or guaranties of future performance, that actual results during the period or periods covered by such projections may differ from the projected results and that such differences may be material and that the Borrower makes no representation that such projections will be in fact realized).

 

Section 4.13.                          Labor Relations.  Except as could not reasonably be expected to have a Material Adverse Effect, (i) there are no strikes, lockouts or other material labor disputes or grievances against the Borrower or any of its Subsidiaries, or, to the knowledge of any Responsible Officer of the Borrower or any other officer of the Borrower having primary responsibility therefor, threatened against or affecting the Borrower or any of its Subsidiaries, and (ii) no significant unfair labor practice, charges or grievances are pending against the Borrower or any of its Subsidiaries, or to the knowledge of any Responsible Officer of the Borrower or any other officer of the Borrower having primary responsibility therefor, threatened against any of them before any Governmental Authority.  All payments due from the Borrower or any of its Subsidiaries pursuant to the provisions of any collective bargaining agreement have been paid or accrued as a liability on the books of the Borrower or any such Subsidiary, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

 

Section 4.14.                          Subsidiaries.  Schedule 4.14 sets forth the name of, the ownership interest of the Borrower or any Subsidiary in, the jurisdiction of incorporation or organization of, and the type of, each Subsidiary and identifies each Subsidiary that is a Subsidiary Loan Party, in each case as of the Closing Date.

 

Section 4.15.                          Insolvency.  After giving effect to the execution and delivery of the Loan Documents and the making of the Loans under this Agreement, the Borrower and the Loan Parties, taken as a whole on a consolidated basis, (a) will not be “insolvent,” within the meaning

 

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of such term as defined in § 101 of Title 11 of the United States Code, as amended from time to time, (b) will not be unable to pay their debts generally as such debts become due, or (c) will not have an unreasonably small capital to engage in any business or transaction, whether current or contemplated.

 

Section 4.16.                          Anti-Corruption Laws; Sanctions.  The Borrower and any Subsidiary conduct their business in compliance with the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 and other similar anti-corruption legislation (collectively, the “Anti-Corruption Laws”) and any Sanctions to the extent applicable to such Borrower or any Subsidiary.

 

Section 4.17.                          OFAC.  No Loan Party nor any Subsidiary nor any of its respective officers, or to the knowledge of any Loan Party, any employee, director, agent or Affiliate thereof (i) is a person whose property or interest in property is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) or any Sanctions, (ii) engages in any dealings or transactions prohibited by Section 2 of such executive order, or is otherwise associated with any such person in any manner violative of Section 2 or any Sanctions, or (iii) is a person on the list of Specially Designated Nationals and Blocked Persons or subject to the limitations or prohibitions under any other U.S. Department of Treasury’s Office of Foreign Assets Control regulation or executive order.

 

Section 4.18.                          Patriot Act.  Each Loan Party is in compliance, in all material respects, with (i) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (ii) the Uniting And Strengthening America By Providing Appropriate Tools Required To Intercept And Obstruct Terrorism (USA Patriot Act of 2001).  No part of the proceeds of the Loans will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

 

Section 4.19.                          Security Documents.

 

(a)                                 (i) The Security Agreement, upon execution and delivery thereof by the parties thereto, will create in favor of the Administrative Agent, for the ratable benefit of the Lenders, a legal, valid and enforceable security interest in the Collateral (as defined in the Security Agreement) and the proceeds thereof, in which a security interest may be perfected under the Uniform Commercial Code as in effect at the relevant time by filing of financing statements, and (ii) the Lien created under the Security Agreement is (or will be, upon the filing of appropriate financing statements and grants of security in intellectual property and the execution of appropriate control agreements) a fully perfected first-priority Lien on, and security interest in, all right, title and interest of the Loan Parties in such Collateral), in each case prior and superior in right to any other Person, other than with respect to Liens permitted by Section

 

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7.2, in the case of each of clauses (i) and (ii) above, to the extent required by the Security Agreement.

 

(b)                                 Intentionally Deleted.

 

(c)                                  Schedule 4.19 lists completely and correctly as of the Closing Date all real property owned and leased by the Borrower and the Subsidiaries and the addresses thereof.  As of the Closing Date, the Borrower and the Subsidiaries have valid leases in all the leased real property set forth on Schedule 4.19 and good and marketable title in all the owned real property set forth on Schedule 4.19.

 

(d)                                 (i) The Pledge Agreement, upon execution and delivery thereof by the parties thereto, will create in favor of the Administrative Agent, for the ratable benefit of the Lenders, a legal, valid and enforceable security interest in the Pledged Collateral (as defined in the Pledge Agreement) and the proceeds thereof, in which a security interest may be perfected under the Uniform Commercial Code as in effect at the relevant time by filing of financing statements or obtaining control or possession, and (ii) the Lien created under the Pledge Agreement is (or will be, upon the filing of appropriate financing statements, the execution of appropriate control agreements and delivery of certificated securities and instruments to the Administrative Agent) a fully perfected first-priority Lien on, and security interest in, all right, title and interest of the Parent in such Pledged Collateral, in each case prior and superior in right to any other Person, other than with respect to Liens permitted by Section 7.2, in the case of each of clauses (i) and (ii) above, to the extent required by Pledge Agreement.

 

ARTICLE 5

 

AFFIRMATIVE COVENANTS

 

The Borrower covenants and agrees that so long as any Lender has a Commitment hereunder or any Obligation remains unpaid or outstanding (other than indemnities and other similar contingent obligations surviving the termination of this Agreement for which no claim has been made and which are unknown and not calculable at the time of termination):

 

Section 5.1.                                 Financial Statements and Other Information.  The Borrower will deliver to the Administrative Agent (which the Administrative Agent shall forward to each Lender):

 

(a)                                 as soon as available and in any event, in the case of the consolidated statements required hereunder only, within 120 days after the end of each Fiscal Year of Borrower, a copy of the annual audited report for such Fiscal Year for the Borrower and its Subsidiaries, containing a consolidated balance sheet of the Borrower and its Subsidiaries as of the end of such Fiscal Year and the related consolidated statements of income, stockholders’ equity and cash flows (together with, in the case of consolidated financial statements, all footnotes thereto) of the Borrower and its Subsidiaries for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, all in reasonable detail and, in the case of the consolidated financial statements only, reported on by PriceWaterhouse Coopers or other independent public accountants of nationally recognized standing (without a “going

 

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concern” or like qualification, exception or explanation and without any qualification or exception as to scope of such audit, except for customary qualifications pertaining to debt maturities with respect to the Loans occurring within 12 months of such audit) to the effect that such financial statements present fairly in all material respects the financial condition and the results of operations of the Borrower and its Subsidiaries for such Fiscal Year on a consolidated basis in accordance with GAAP and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards;

 

(b)                                 as soon as available and in any event within 45 days after the end of each Fiscal Quarter of the Borrower, an unaudited consolidated balance sheet of the Borrower and its Subsidiaries as of the end of such Fiscal Quarter and the related unaudited consolidated statement of income and consolidated statement of cash flows of the Borrower and its Subsidiaries for such Fiscal Quarter and the then elapsed portion of such Fiscal Year, setting forth in each case in comparative form the figures for the corresponding quarter and the corresponding portion of Borrower’s previous Fiscal Year (it being understood that quarterly financial statements are not required to have footnote disclosures and are subject to normal year-end adjustments);

 

(c)                                  as of the earlier of the date required by the DOE for annual delivery or the date actually delivered to the DOE for each calendar year, and in any event not later than July 1 of such calendar year, a calculation of the Consolidated DOE Financial Responsibility Composite Score for the Borrower as of the end of the immediately preceding Fiscal Year, attached as an exhibit to a DOE Compliance Certificate signed by the principal executive officer and the principal financial officer of the Borrower;

 

(d)                                 concurrently with the delivery of the financial statements referred to in clauses (a) and (b) above, a Compliance Certificate signed by the principal executive officer and the principal financial officer of the Borrower;

 

(e)                                  within 60 days after the end of each Fiscal Year, a budget and projection of the Borrower and its Subsidiaries for the next succeeding Fiscal Year;

 

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

 

(g)                                  promptly upon such change, written notice of any change (i) in any Loan Party’s corporate name, (ii) in the jurisdiction of organization or formation of any Loan Party, (iii) in any Loan Party’s identity or form of organization or (iv) in any Loan Party’s Federal Taxpayer Identification Number.  The Borrower agrees not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the Uniform Commercial Code or otherwise that are required in order for the Administrative Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral.  The Borrower also agrees promptly to notify the Administrative Agent if any material portion of the Collateral is damaged or destroyed; and

 

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(h)                                 promptly following any request therefor by the Administrative Agent, such other information regarding the results of operations, business affairs and financial condition of the Borrower or any Subsidiary as the Administrative Agent or any Lender may reasonably request.

 

Notwithstanding any other provision of this Agreement, Lenders and Administrative Agent acknowledge and agree that nothing in this Agreement or the other Loan Documents shall require the Borrower and its Subsidiaries to disclose education records and information from such records in a manner inconsistent with the requirements of the Family Educational Rights and Privacy Act, 20 U.S.C. 1232g (or any successor statute); its implementing regulations, 34 C.F.R. pt. 99 (or any successor regulation); applicable accreditation standards, policies, and procedures; and applicable state laws and regulations.

 

Section 5.2.                                 Notices of Material Events.

 

(a)                                 The Borrower will furnish to the Administrative Agent prompt written notice of the following (which the Administrative Agent shall forward to each Lender):

 

(i)                                     the occurrence of any Default or Event of Default;

 

(ii)                                  the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or, to the knowledge of any Responsible Officer of the Borrower or any other officer of the Borrower having primary responsibility therefor, affecting the Borrower or any Subsidiary which could reasonably be expected to result in a Material Adverse Effect;

 

(iii)                               the occurrence of any event or any other development by which the Borrower or any of its Subsidiaries (i) fails to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) becomes subject to any Environmental Liability, (iii) receives notice of any claim with respect to any Environmental Liability, or (iv) becomes aware of any basis for any Environmental Liability and in each of the preceding clauses, which individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect;

 

(iv)                              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 liability of the Borrower and its Subsidiaries in an aggregate amount exceeding $5,000,000;

 

(v)                                 the occurrence of any default or event of default, or the receipt by Borrower or any of its Subsidiaries of any written notice of an alleged default or event of default, respect of any Material Indebtedness of the Borrower or any of its Subsidiaries; and

 

(vi)                              any other development that results in a Material Adverse Effect.

 

(b)                                 Each notice delivered under this Section 5.2 shall be accompanied by a written statement of a Responsible Officer setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

 

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Section 5.3.                                 Existence; Conduct of Business.  The Borrower will, and will cause each other Loan Party to, do or cause to be done all things necessary to preserve, renew and maintain in full force and effect (a) its legal existence and (b) its respective rights, licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade names, the loss of which could reasonably be expected to result in a Material Adverse Effect, and will continue to engage in the same business as presently conducted or such other businesses that are reasonably related thereto; provided, that nothing in this Section 5.3 shall prohibit any merger, consolidation, liquidation, dissolution or disposition permitted under Section 7.3 or Section 7.6.

 

Section 5.4.                                 Compliance with Laws, Etc; Maintenance of Licenses and Accreditations.  The Borrower will, and will cause each of its Subsidiaries to, comply with all laws, rules, regulations and requirements of any Governmental Authority applicable to its business and properties, including without limitation, all Environmental Laws, ERISA, OSHA and rules, regulations and requirements of the DOE (including any regulatory test of financial responsibility), except where the failure to do so, either individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.  The Borrower will, and will cause each of its Subsidiaries to, maintain all licenses and accreditations required for the operation of its business and properties, the loss of which could not reasonably be expected to result in a Material Adverse Effect.

 

Section 5.5.                                 Payment of Obligations.  The Borrower will, and will cause each of its Subsidiaries to, pay and discharge at or before maturity, all of Federal and other material tax liabilities, assessments and governmental charges (including without limitation all tax liabilities and claims that could result in a statutory Lien) 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 5.6.                                 Books and Records.  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 shall be made of all dealings and transactions in relation to its business and activities to the extent necessary to prepare the consolidated financial statements of Borrower in conformity with GAAP.

 

Section 5.7.                                 Visitation, Inspection, Etc.  The Borrower will, and will cause each of its Subsidiaries to, permit any representative of the Administrative Agent or any Lender, to visit and inspect its properties, to examine its books and records and to make copies and take extracts therefrom, to discuss its affairs, finances and accounts with any of its officers and with its independent certified public accountants, all at such reasonable times and as often as the Administrative Agent or any Lender may reasonably request after reasonable prior notice to the Borrower; provided, however, if an Event of Default has occurred and is continuing, no prior notice shall be required.  All such inspections and examinations by the Administrative Agent or any Lender shall be at the Borrower’s expense; provided, that so long as no Event of Default exists, the Borrower shall only be required to reimburse for one such inspection or examination each Fiscal Year.

 

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Section 5.8.                                 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 good working order and condition, ordinary wear and tear and casualty events excepted, (b) maintain with financially sound and reputable insurance companies, insurance with respect to its properties and business, and the properties and business of its Subsidiaries, against loss or damage of the kinds customarily insured against by companies in the same or similar businesses operating in the same or similar locations and (c) at all times shall name Administrative Agent as additional insured or loss payee on all property and liability policies of the Borrower and its Subsidiaries (which policies shall be endorsed or otherwise amended to include a customary lender’s loss payable endorsement and to name the Administrative Agent as additional insured or loss payee, in form and substance reasonably satisfactory to the Administrative Agent).  At the request of the Administrative Agent, the Borrower will deliver to the Administrative Agent certificates or other evidence of the insurance policies required hereby in form and substance reasonably satisfactory to the Administrative Agent.  Notwithstanding the foregoing, so long as no Event of Default exists, the Borrower and its Subsidiaries may retain all or any portion of the proceeds of any insurance of the Borrower and its Subsidiaries (and the Administrative Agent shall promptly remit to the Borrower or the applicable Subsidiary any proceeds with respect to such insurance received by the Administrative Agent, so long as no Event of Default exists).

 

Section 5.9.                                 Use of Proceeds and Letters of Credit.  The Borrower will use the proceeds of all Loans to refinance the Indebtedness of the Borrower under the Existing Credit Agreement and pay transactional expenses related thereto, finance the repurchase of shares of the Capital Stock of the Borrower, refinance any Indebtedness of Capella outstanding as of the Second Amendment Effective Date that is required by the Capella Acquisition Agreement to be repaid upon the consummation of the Capella Acquisition, finance working capital needs and Permitted Acquisitions and pay transactional expenses related thereto and for other general corporate purposes of the Borrower and its Subsidiaries.  No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that would violate Regulations T, U, or X of the Board of Governors of the Federal Reserve System.  Specifically, no part of the proceeds of any Loan will be used to purchase or carry “margin stock” or to extend credit to others for the purpose of purchasing or carrying “margin stock.”  All Letters of Credit will be used for general corporate purposes. The Borrower, its Subsidiaries and their respective directors, officers, employees and agents shall not use the proceeds of the Loans, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended, or in violation of any applicable Sanctions.

 

Section 5.10.                          Intentionally Deleted.

 

Section 5.11.                          Additional Subsidiaries.  If any Domestic Subsidiary (other than CEC RDN, a FSHCO or an Excluded JV) is acquired or formed after the Closing Date, the Borrower will promptly notify the Administrative Agent thereof and, within thirty (30) days (or such longer period as the Administrative Agent shall agree in its discretion) after any such Subsidiary is acquired or formed, will cause such Subsidiary to become a Subsidiary Loan Party.  A

 

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Domestic Subsidiary (other than CEC RDN, a FSHCO or an Excluded JV) shall become an additional Subsidiary Loan Party by executing and delivering to the Administrative Agent a Subsidiary Guaranty Supplement, a Security Agreement and such other Security Documents as are required by Section 5.12, accompanied by (i) all other Loan Documents related thereto, (ii) certified copies of certificates or articles of incorporation or organization, by-laws, membership operating agreements, and other organizational documents, appropriate authorizing resolutions of the board of directors of such Subsidiaries, and, to the extent requested by the Administrative Agent, opinions of counsel comparable to those delivered pursuant to Section 3.1, and (iii) such other documents as the Administrative Agent may reasonably request.  No Subsidiary that becomes a Subsidiary Loan Party shall thereafter cease to be a Subsidiary Loan Party or be entitled to be released or discharged from its obligations under the Subsidiary Guaranty Agreement or its respective Security Agreement or other Security Documents, except as otherwise provided in this Agreement.

 

Section 5.12.                          Further Assurances.  The Borrower will, and will cause each of its Subsidiaries to, execute any and all further documents, financing statements, agreements and instruments, and take all further action (including filing Uniform Commercial Code and other financing statements, mortgages and deeds of trust) that may be required under applicable law, or that the Required Lenders or the Administrative Agent may reasonably request, in each case, subject to the agreements set forth in this Agreement, the Security Agreement or the Pledge Agreement, in order to effectuate the transactions contemplated by the Loan Documents and in order to grant, preserve, protect and perfect the validity and first priority of the security interests created or intended to be created by the Security Documents (subject to any Liens permitted by Section 7.2).  In addition, from time to time, subject to the agreements set forth in this Agreement, the Security Agreement and the Pledge Agreement, the Borrower will, at its cost and expense, promptly secure the Obligations by pledging or creating, or causing to be pledged or created, perfected security interests in all real and personal property of the Loan Parties other than (x) owned real property (i) listed on Schedule 4.19 or (ii) otherwise having a fair market value of less than $2,000,000 at the time of acquisition, (y) leased real property and (z) Excluded Collateral.  Such security interests and Liens will be created under the Security Documents and other security agreements, mortgages, deeds of trust and other instruments and documents in form and substance reasonably satisfactory to the Administrative Agent, and the Borrower shall deliver or cause to be delivered to the Administrative Agent all such additional instruments and documents (including legal opinions, title insurance policies and lien searches) as the Administrative Agent shall reasonably request to evidence compliance with this Section 5.12.  The Borrower agrees to provide such evidence as the Administrative Agent shall reasonably request as to the perfection and priority status of each such security interest and Lien.  In furtherance of the foregoing, the Borrower will give prompt notice to the Administrative Agent of the acquisition by the Borrower or any of the Subsidiary Loan Parties of any owned real property after the Closing Date having a fair market value in excess of $2,000,000 at the time of acquisition.

 

Section 5.13.                          Anti-Corruption Laws; Sanctions.  Each Borrower and any Subsidiary will conduct their business in material compliance with the Anti-Corruption Laws and any Sanctions to the extent applicable to any Borrower or any Subsidiary.

 

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ARTICLE 6

 

FINANCIAL COVENANTS

 

The Borrower covenants and agrees that so long as any Lender has a Commitment hereunder or any Obligation remains unpaid or outstanding (other than indemnities and other similar contingent obligations surviving the termination of this Agreement for which no claim has been made and which are unknown and not calculable at the time of termination):

 

Section 6.1.                                 Leverage Ratio.  The Borrower will maintain, as of the last day of each Fiscal Quarter, commencing with the Fiscal Quarter ending December 31, 2012, a Leverage Ratio of not greater than 2.00 to 1.

 

Section 6.2.                                 Coverage Ratio.  The Borrower will maintain, as of the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending December 31, 2012, a Coverage Ratio of not less than 1.75 to 1.

 

Section 6.3.                                 Consolidated DOE Financial Responsibility Composite Score.  The Borrower will maintain, as of the end of each Fiscal Year, commencing with the Fiscal Year ending December 31, 2012, a Consolidated DOE Financial Responsibility Composite Score of not less than 1.5.

 

ARTICLE 7

 

NEGATIVE COVENANTS

 

The Borrower covenants and agrees that so long as any Lender has a Commitment hereunder or any Obligation remains outstanding (other than indemnities and other similar contingent obligations surviving the termination of this Agreement for which no claim has been made and which are unknown and not calculable at the time of termination):

 

Section 7.1.                                 Indebtedness and Preferred Stock.  The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness, except:

 

(a)                                 Indebtedness created pursuant to the Loan Documents;

 

(b)                                 Indebtedness of the Borrower and its Subsidiaries existing on the date hereof and set forth on Schedule 7.1 and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof (immediately prior to giving effect to such extension, renewal or replacement) or shorten the maturity or the weighted average life thereof;

 

(c)                                  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; provided, that such Indebtedness is incurred prior to or within 180 days after such acquisition or the completion of

 

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such construction or improvements or extensions, renewals, and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof (immediately prior to giving effect to such extension, renewal or replacement) or shorten the maturity or the weighted average life thereof; provided further, that the aggregate principal amount of such Indebtedness does not exceed $30,000,000 at any time outstanding;

 

(d)                                 Indebtedness of the Borrower owing to any Subsidiary Loan Party and of any Subsidiary owing to the Borrower or any other Subsidiary Loan Party;

 

(e)                                  Guarantees (i) by the Borrower or any Subsidiary Loan Party of Indebtedness of any other Loan Party and by any Subsidiary of Indebtedness of the Borrower or any Subsidiary Loan Party and (ii) by any Loan Party of Indebtedness of any Subsidiary that is not a Loan Party to the extent constituting an Investment permitted pursuant to Section 7.4;

 

(f)                                   Indebtedness of any Person which becomes a Subsidiary after the date of this Agreement; provided, that such Indebtedness exists at the time that such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and the aggregate principal amount of such Indebtedness permitted under this Section 7.1(f) shall not exceed $15,000,000 outstanding at any time;

 

(g)                                  Indebtedness in respect of Hedging Obligations permitted by Section 7.10;

 

(h)                                 unsecured earn-outs or similar deferred or contingent obligations, seller promissory notes and payment obligations in respect of non-competition agreements incurred in connection with any Permitted Acquisition or other Investment permitted hereunder; provided that each such seller promissory note shall be subordinated in right of payment to the Obligations on terms reasonably acceptable to the Administrative Agent; and

 

(i)                                     other unsecured Indebtedness of the Borrower or its Subsidiaries in an aggregate principal amount not to exceed $15,000,000 at any time outstanding.

 

The Borrower will not, and will not permit any Subsidiary to, issue any preferred stock or other preferred equity interests that (i) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise, (ii) is or may become redeemable or repurchaseable by the Borrower or such Subsidiary at the option of the holder thereof, in whole or in part; provided that, in each case of the foregoing clauses (i) and (ii), other than repurchase obligations of such Capital Stock upon the occurrence of a change of control so long as the terms of such Capital Stock provide that the issuer thereof will not redeem or repurchase any such Capital Stock pursuant to such provisions prior to the Payment in Full of all Obligations, or (iii) is convertible or exchangeable at the option of the holder thereof for Indebtedness or preferred stock or any other preferred equity interests described in this paragraph, on or prior to, in the case of clause (i), (ii) or (iii), the 91st day following the Revolving Commitment Termination Date or the Maturity Date, whichever is later.

 

Section 7.2.                                 Negative Pledge.  The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien on any of its assets or property now owned or hereafter acquired or, except:

 

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(a)                                 Liens securing the Obligations, provided, however, that no Liens may secure Hedging Obligations without securing all other Obligations on a basis at least pari passu with such Hedging Obligations and subject to the priority of payments set forth in Section 2.22 or Section 8.2 of this Agreement;

 

(b)                                 Permitted Encumbrances;

 

(c)                                  any Liens on any property or asset of the Borrower or any Subsidiary existing on the Closing Date set forth on Schedule 7.2; provided, that such Lien shall not apply to any other property or asset of the Borrower or any Subsidiary;

 

(d)                                 purchase money Liens upon or in any fixed or capital assets to secure the purchase price or the cost of construction or improvement of such fixed or capital assets or to secure Indebtedness incurred solely for the purpose of financing the acquisition, construction or improvement of such fixed or capital assets (including Liens securing any Capital Lease Obligations); provided, that (i) such Lien secures Indebtedness permitted by Section 7.1(c), (ii) such Lien attaches to such asset concurrently or within 180 days after the acquisition, improvement or completion of the construction thereof; (iii) such Lien does not extend to any other asset; and (iv) the principal amount of the Indebtedness secured thereby does not exceed the cost of acquiring, constructing or improving such fixed or capital assets;

 

(e)                                  Liens on property or Capital Stock of any Person that becomes a Subsidiary after the Second Amendment Effective Date in accordance with the terms of this Agreement; provided that such Liens (i) exist at the time such Person becomes a Subsidiary and are not created in contemplation of or in connection with such Person becoming a Subsidiary, (ii) do not extend to any property owned by the Borrower or its other Subsidiaries and (iii) the aggregate principal amount of Indebtedness does not exceed the amount permitted pursuant to Section 7.1(f);

 

(f)                                   Liens on property at the time the Borrower or any of its Subsidiaries acquires the property (including by way of merger with or into the Borrower or any Subsidiary); provided that such Liens (i) exist at the time of such acquisition and are not created in contemplation or in connection with such acquisition, and (ii) do not extend to any other property owned by the Borrower or its Subsidiaries;

 

(g)                                  extensions, renewals, or replacements of any Lien referred to in paragraphs (a) through (f) of this Section 7.2; provided, that the principal amount of the Indebtedness secured thereby is not increased and that any such extension, renewal or replacement is limited to the assets originally encumbered thereby; and

 

(h)                                 Liens securing Indebtedness (other than for borrowed money) in an aggregate principal amount outstanding at any time that does not exceed $5,000,000 and such Liens do not encumber the Capital Stock of any Subsidiary.

 

Section 7.3.                                 Fundamental Changes.  The Borrower will not, and will not permit any Subsidiary to, merge into or consolidate into any other Person, or permit any other Person to merge into or consolidate with it, or sell, lease, transfer or otherwise dispose of (in a single transaction or a series of transactions) all or substantially all of its assets (in each case, whether

 

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now owned or hereafter acquired) or all or substantially all of the stock of any of its Subsidiaries (in each case, whether now owned or hereafter acquired) or liquidate or dissolve; provided, that if at the time thereof and immediately after giving effect thereto, no Default or Event of Default shall have occurred and be continuing (i) the Borrower or any Subsidiary may merge with a Person if (x) the Borrower is the surviving Person or (y) if the Borrower is not a party to such merger, such Subsidiary is the surviving Person or the surviving Person is a Subsidiary and to extent required by Section 5.11, shall become a Subsidiary Loan Party pursuant to Section 5.11 at the time required therein, (ii) any Subsidiary may merge into another Subsidiary; provided, that if any party to such merger is a Subsidiary Loan Party, the Subsidiary Loan Party shall be the surviving Person or the surviving Person shall become a Subsidiary Loan Party pursuant to Section 5.11, (iii) any Subsidiary may sell, transfer, lease or otherwise dispose of all or substantially all of its assets to the Borrower or to a Subsidiary Loan Party or in connection with a Disposition permitted pursuant to Section 7.6, (iv) the Borrower or any Subsidiary may sell, lease, transfer or otherwise dispose all or substantially all of the stock of any of its Subsidiaries in connection with a Disposition permitted pursuant to Section 7.6 and (v)  any Subsidiary  may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders and in the case of any liquidation or dissolution of a Subsidiary Loan Party, all of its assets are transferred to, and all of its liabilities and obligations are assumed by, the Borrower or another Subsidiary Loan Party upon giving effect to such liquidation or dissolution; provided, that any merger permitted pursuant to this Section 7.3 involving a Person that is not a wholly-owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 7.4.

 

Section 7.4.                                 Investments, Loans, Etc.  The Borrower will not, and will not permit any of its Subsidiaries to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly-owned Subsidiary prior to such merger), any Capital Stock, evidence 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 (all of the foregoing being collectively called “Investments”), or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person that constitute a business unit, or create or form any Subsidiary, except:

 

(a)                                 Investments (other than Permitted Investments) existing on the date hereof and set forth on Schedule 7.4 (including Investments in Subsidiaries);

 

(b)                                 Permitted Investments;

 

(c)                                  Guarantees constituting Indebtedness permitted by Section 7.1;

 

(d)                                 Investments made by the Borrower in or to any Subsidiary Loan Party and by any Subsidiary to the Borrower or in or to a Subsidiary Loan Party;

 

(e)                                  loans or advances to employees, officers or directors of the Borrower or any Subsidiary in the ordinary course of business for travel, relocation and related expenses;

 

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provided, however, that the aggregate amount of all such loans and advances does not exceed $1,000,000 outstanding at any time;

 

(f)                                   repurchases of shares of Capital Stock and options to purchase shares of Capital Stock of the Borrower or any Excluded JV from minority owners of such Excluded JV, and provided, that for the purpose of this clause (f) at the time such repurchase is made and after giving effect thereto (i) no Default or Event of Default has occurred and is continuing nor would occur and (ii) the Borrower would be in compliance with the financial covenants contained in Article 6 (other than Section 6.3) on a pro forma basis;

 

(g)                                  (i) Permitted Acquisitions and earnest money deposits in connection therewith and (ii) Investments made by any Person existing at the time such Person becomes a Subsidiary or consolidates, amalgamates or merges with the Borrower or any of its Subsidiaries in connection with a Permitted Acquisition or other Investment permitted hereunder, so long as such Investments were not made in contemplation of such Person becoming a Subsidiary or of such consolidation, amalgamation or merger;

 

(h)                                 Hedging Transactions permitted by Section 7.10;

 

(i)                                     Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss;

 

(j)                                    Investments consisting of receivables and notes received from students in the ordinary course of business;

 

(k)                                 the Capella Acquisition and the Investments of Capella and its Subsidiaries existing on the Second Amendment Effective Date, so long as such Investments were not made in contemplation of Capella and its Subsidiaries becoming Subsidiaries of the Borrower;

 

(l)                                     Investments made in or to CEC RDN; provided, however, that the aggregate amount of such Investments shall not exceed the costs required to keep CEC RDN’s charter active until it is dissolved and the costs associated with dissolving CEC RDN; and

 

(m)                             Other Investments which in the aggregate do not exceed $50,000,000 in any Fiscal Year.

 

Section 7.5.                                 Restricted Payments.  The Borrower will not, and will not permit its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any dividend on any class of its Capital Stock, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, retirement, defeasance or other acquisition of, any shares of Capital Stock or Indebtedness subordinated to the Obligations of the Borrower or any Guarantee thereof or any options, warrants, or other rights to purchase such Capital Stock or such Indebtedness, whether now or hereafter outstanding (each, a “Restricted Payment”), except for (i) dividends payable by the Borrower solely in shares of any class of its common stock, (ii) Restricted Payments made by any Subsidiary to the Borrower or to another Subsidiary, on at least a pro rata basis with any other shareholders if such Subsidiary is not

 

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wholly owned by the Borrower and other wholly owned Subsidiaries, (iii) repurchases of shares of Capital Stock and options to purchase shares of Capital Stock permitted by Section 7.4(f); and (iv) cash dividends and distributions paid on the Capital Stock of the Borrower; provided, for the purpose of this clause (iv) that at the time such dividend or distribution is paid and after giving effect thereto (x) no Default or Event of Default has occurred and is continuing nor would occur and (y) the Borrower would be in compliance with the financial covenants contained in Article 6 (other than Section 6.3) on a pro forma basis.

 

Section 7.6.                                 Sale of Assets.  The Borrower will not, and will not permit any of its Subsidiaries to, convey, sell, lease, assign, transfer or otherwise dispose of, any of its assets, business or property, whether now owned or hereafter acquired, or, in the case of any Subsidiary, issue or sell any shares of such Subsidiary’s Capital Stock to any Person other than the Borrower or a Subsidiary Loan Party (or to qualify directors if required by applicable law) (each, a “Disposition”), except:

 

(a)                                 the sale or other disposition for fair market value of obsolete or worn out property or other property not necessary for operations disposed of in the ordinary course of business;

 

(b)                                 the sale of inventory and Permitted Investments in the ordinary course of business;

 

(c)                                  Dispositions permitted by Sections 7.3, 7.4 and 7.5;

 

(d)                                 leases, subleases, licenses or sublicenses of real or personal property in the ordinary course of business, in each case that do not materially interfere with the business of the Borrower and its Subsidiaries taken as a whole;

 

(e)                                  Dispositions of Permitted Investments for fair market value or otherwise in connection with transactions not otherwise prohibited by this Agreement;

 

(f)                                   so long as no Event of Default has occurred and is continuing or would occur after giving effect thereto, the Disposition of delinquent notes or accounts receivable in the ordinary course of business of purposes of collection only (and not for the purpose of any bulk sale, financing or securitization transaction);

 

(g)                                  Dispositions of equipment or real property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement property; and

 

(h)                                 any other Disposition in an aggregate amount not to exceed $25,000,000 in any Fiscal Year.

 

Section 7.7.                                 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) in the ordinary course of business at prices and

 

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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 any Subsidiary Loan Party not involving any other Affiliates, (c) any Restricted Payments permitted by Section 7.5 and any Investments permitted by Section 7.4, (d) customary directors’ fees and expenses to Persons who are not otherwise employees of the Borrower or any of its Subsidiaries, (e) employment agreements, employee benefit and compensation plans, as determined in good faith by the board of directors or senior management of the Borrower and (f) the payment of customary fees and reimbursement of reasonable out-of-pocket costs of, and customary indemnities provided to or on behalf of, directors, officers and employees of the Borrower and its Subsidiaries in the ordinary course of business.

 

Section 7.8.                                 Restrictive Agreements.  The Borrower will not, and will not permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement that prohibits, restricts or imposes any condition upon (a) the ability of the Borrower or any Subsidiary to create, incur or permit any Lien upon any of its assets or properties, whether now owned or hereafter acquired, or to transfer any of its property or assets to the Borrower or any Subsidiary of the Borrower or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to its Capital Stock, 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 (i) the foregoing shall not apply to restrictions or conditions imposed by law or by this Agreement or any other Loan Document, (ii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is sold and such sale is permitted hereunder, (iii) clause (a) shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions and conditions apply only to the property or assets securing such Indebtedness, (iv) clause (a) shall not apply to customary provisions in leases, licenses and other similar agreements restricting the assignment thereof, (v) clause (a) shall not apply to negative pledge covenants contained in any agreements relating to Indebtedness permitted to be incurred pursuant to the provisions of this Agreement that (i) are not in any respect more restrictive than the restrictions contained in this Agreement and (ii) do not prohibit the granting of Liens to secure the Obligations, (vi) clause (a) shall not apply to any negative pledge or transfer restriction in respect of any property or assets contained in any agreement providing for the Disposition of such property or assets in a transaction permitted by Section 7.6, (vii) the foregoing shall not apply to contractual obligations that are binding on a Subsidiary at the time such Subsidiary first becomes a Subsidiary, so long as such contractual obligations were not entered into in contemplation of such Person becoming a Subsidiary and (viii) the foregoing shall not apply to restrictions and conditions imposed by organizational documents or any joint venture agreement or any agreement evidencing Indebtedness of an Excluded JV.

 

Section 7.9.                                 Sale and Leaseback Transactions.  The Borrower will not, and will not permit any of the Subsidiaries to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereinafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred (each such transaction, a “Sale and Leaseback Transaction”), unless such Sale and Leaseback Transaction is otherwise permitted by Sections 7.1 and 7.6.

 

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Section 7.10.                          Hedging Transactions.  The Borrower will not, and will not permit any of the Subsidiaries to, enter into any Hedging Transaction, other than Hedging Transactions entered into in the ordinary course of business to hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in the conduct of its business or the management of its liabilities.  Solely for the avoidance of doubt, the Borrower acknowledges that a Hedging Transaction entered into for speculative purposes or of a speculative nature (which shall be deemed to include any Hedging Transaction under which the Borrower or any of the Subsidiaries is or may become obliged to make any payment (i) in connection with the purchase by any third party of any Capital Stock or any Indebtedness or (ii) as a result of changes in the market value of any Capital Stock or any Indebtedness (excluding Indebtedness of the Borrower or its Subsidiaries under this Agreement and the other Loan Documents or as permitted to be incurred pursuant to this Agreement) is not a Hedging Transaction entered into in the ordinary course of business to hedge or mitigate risks.

 

Section 7.11.                          Amendment to Material Documents.  The Borrower will not, and will not permit any of its Subsidiaries to, amend, modify or waive any of its rights in a manner materially adverse to the Lenders under (a) its certificate of incorporation, bylaws or other organizational documents or (b) Contractual Obligations evidencing, governing, securing or otherwise related to Material Indebtedness.

 

Section 7.12.                          Intentionally Deleted.

 

Section 7.13.                          Accounting Changes.  The Borrower will not, and will not permit any of its Subsidiaries to, make any significant change in accounting treatment or reporting practices, except as required by GAAP, or change the Fiscal Year of the Borrower or of any of its Subsidiaries, except to change the fiscal year of a Subsidiary to conform its fiscal year to that of the Borrower.

 

Section 7.14.                          Sanctions and Anti-Corruption Laws.  The Borrower, its Subsidiaries and their respective directors, officers, employees and agents shall not use the proceeds of the Loans, directly or indirectly, in any manner that would result in a violation of applicable Sanctions or in violation of any applicable Anti-Corruption Laws.

 

ARTICLE 8

 

EVENTS OF DEFAULT

 

Section 8.1.                                 Events of Default.  If any of the following events (each an “Event of Default”) shall occur:

 

(a)                                 the Borrower shall fail to pay any principal of any Loan or of 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 or otherwise; or

 

(b)                                 the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount payable under clause (a) of this Section 8.1) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three (3) Business Days; or

 

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(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 (including the Schedules attached thereto) and any amendments or modifications hereof or waivers hereunder, or in any certificate, report, financial statement or other document submitted to the Administrative Agent or the Lenders by any Loan Party or any representative of any Loan Party pursuant to or in connection with this Agreement or any other Loan Document (including any Compliance Certificate and any DOE Compliance Certificate) shall prove to be incorrect in any material respect (or, if qualified by materiality, then in all respects) when made or deemed made or submitted; or

 

(d)                                 the Borrower shall fail to observe or perform any covenant or agreement contained in Section 5.1(a), 5.1(b), 5.1(c), 5.2(a)(i), or 5.3(a) (with respect to the Borrower’s or any Loan Party’s existence) or Articles 6 or 7; or

 

(e)                                  any Loan Party shall fail to observe or perform any covenant or agreement contained in this Agreement (other than those referred to in clauses (a), (b) and (d) above) or any other Loan Document, and such failure shall remain unremedied for 30 days after the earlier of (i) any Responsible Officer of the Borrower becomes aware of such failure, or (ii) notice thereof shall have been given to the Borrower by the Administrative Agent or any Lender; or

 

(f)                                   intentionally deleted; or

 

(g)                                  the Borrower or any Subsidiary (whether as primary obligor or as guarantor or other surety) shall fail to pay any principal of, or premium or interest on, any Material Indebtedness that is outstanding, when and as the same shall become due and payable (whether at scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument evidencing or governing such Indebtedness; or any other event shall occur or condition shall exist under any agreement or instrument relating to such Indebtedness and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or permit the acceleration of, the maturity of such Indebtedness; or any such Indebtedness shall be declared to be due and payable, or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption), purchased or defeased, or any offer to prepay, redeem, purchase or defease such Indebtedness shall be required to be made, in each case prior to the stated maturity thereof (other than customary non-default mandatory prepayment requirements associated with asset sales, casualty events or equity issuances); or

 

(h)                                 the Borrower or any Subsidiary Loan Party shall (i) commence a voluntary case or other proceeding or file any petition seeking liquidation, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a custodian, trustee, receiver, liquidator or other similar official of it or any substantial part of its property, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (i) of this Section 8.1, (iii) apply for or consent to the appointment of a custodian, trustee, receiver, liquidator or other similar official for the Borrower or any such Subsidiary Loan Party or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition

 

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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; or

 

(i)                                     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 Loan Party or its debts, or any substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency or other similar law now or hereafter in effect or (ii) the appointment of a custodian, trustee, receiver, liquidator or other similar official for the Borrower or any Subsidiary Loan Party or for a substantial part of its assets, and in any such case, such proceeding or petition shall remain undismissed for a period of 60 days or an order or decree approving or ordering any of the foregoing shall be entered; or

 

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

 

(k)                                 an ERISA Event shall have occurred that, when taken together with other ERISA Events that have occurred, would reasonably be expected to result in a Material Adverse Effect; or

 

(l)                                     any judgment or order for the payment of money in excess of $20,000,000 in the aggregate (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage) shall be rendered against the Borrower or any Subsidiary, and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be a period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect or such judgment is not discharged; or

 

(m)                             any non-monetary judgment or order shall be rendered against the Borrower or any Subsidiary that would reasonably be expected to have a Material Adverse Effect, and there shall be a period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect or such judgment is not discharged; or

 

(n)                                 a Change in Control shall occur or exist; or

 

(o)                                 any provision of any Subsidiary Guaranty Agreement shall for any reason cease to be valid and binding on, or enforceable against, any Subsidiary Loan Party, or any Subsidiary Loan Party shall so state in writing, or any Subsidiary Loan Party shall seek to terminate its Subsidiary Guaranty Agreement; or

 

(p)                                 any security interest purported to be created by any Security Document shall cease to be, or shall be asserted by the Borrower or any other Loan Party not to be, a valid, perfected, first priority (except as otherwise permitted in this Agreement or such Security Document) security interest in the securities, assets or properties covered thereby (other than as a result solely of any action or inaction by the Administrative Agent or any Lender); or

 

(q)                                 any “Event of Default” shall have occurred and be continuing under any other Loan Document;

 

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then, and in every such event (other than an event with respect to the Borrower described in clause (h), (i) or (j) of this Section 8.1) and at any time thereafter during the continuance of such event, the Administrative Agent may with the consent of the Required Lenders, and upon the written request of the Required Lenders shall, by notice to the Borrower, take any or all of the following actions, at the same or different times:  (i) terminate the Commitments, whereupon the Commitment of each Lender shall terminate immediately, (ii) declare the principal of and any accrued interest on the Loans, and all other Obligations owing hereunder, to be, whereupon the same 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, (iii) exercise all remedies contained in any other Loan Document, and (iv) exercise any other remedies available at law or in equity; and that, if an Event of Default specified in any of clause (h), (i) or (j) shall occur, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon, and all fees, and all other Obligations 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.

 

Section 8.2.                                 Application of Proceeds from Collateral.  All proceeds from each sale of, or other realization upon, all or any part of the Collateral by the Administrative Agent or any of the Lenders after an Event of Default arises shall be applied as follows:

 

(a)                                 first, to the reimbursable expenses of the Administrative Agent incurred in connection with such sale or other realization upon the Collateral, until the same shall have been paid in full;

 

(b)                                 second, to the fees and other reimbursable expenses of the Administrative Agent and the Issuing Bank then due and payable pursuant to any of the Loan Documents, until the same shall have been paid in full;

 

(c)                                  third, to all reimbursable expenses, if any, of the Lenders then due and payable pursuant to any of the Loan Documents, until the same shall have been paid in full;

 

(d)                                 fourth, to the fees due and payable under Sections 2.15(b) and (c) of this Agreement and interest then due and payable under the terms of this Agreement, until the same shall have been paid in full;

 

(e)                                  fifth, to the aggregate outstanding principal amount of the Term Loans (allocated pro rata among the Term Loan Lenders in respect of their Pro Rata Shares), to the aggregate outstanding principal amount of the Revolving Loans, the LC Exposure and, to the extent secured by Liens, the Net Mark-to-Market Exposure of the Borrower and its Subsidiaries, until the same shall have been paid in full, allocated pro rata among any Lender, any Affiliate of any Lender or any Specified Hedge Provider, based on their respective pro rata shares of the aggregate amount of such Revolving Loans, LC Exposure and Net Mark-to-Market Exposure and to the Treasury Management Obligations maintained with any Specified Treasury Management Provider;

 

(f)                                   sixth, to additional cash collateral for the aggregate amount of all outstanding Letters of Credit until the aggregate amount of all cash collateral held by the

 

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Administrative Agent pursuant to this Agreement is equal to 105% of the LC Exposure after giving effect to the foregoing clause fifth; and

 

(g)                                  to the extent any proceeds remain, to the Borrower or other parties lawfully entitled thereto.

 

All amounts allocated pursuant to the foregoing clauses second through sixth to the Lenders as a result of amounts owed to the Lenders under the Loan Documents shall be allocated among, and distributed to, the Lenders pro rata based on their respective Pro Rata Shares; provided, however, that all amounts allocated to that portion of the LC Exposure comprised of the aggregate undrawn amount of all outstanding Letters of Credit pursuant to clause fifth and sixth shall be distributed to the Administrative Agent, rather than to the Lenders, and held by the Administrative Agent in an account in the name of the Administrative Agent for the benefit of the Issuing Bank and the Revolving Loan Lenders as cash collateral for the LC Exposure, such account to be administered in accordance with Section 2.23(g).  For the avoidance of doubt, notwithstanding any other provision of any Loan Document, no payment received directly or indirectly from any Loan Party that is not a Qualified ECP Loan Party shall be applied directly or indirectly by the Administrative Agent to the payment of any Excluded Swap Obligation.

 

ARTICLE 9

 

THE ADMINISTRATIVE AGENT

 

Section 9.1.                                 Appointment of Administrative Agent.

 

(a)                                 Each Lender irrevocably appoints SunTrust Bank as the Administrative Agent and authorizes it to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent under this Agreement and the other Loan Documents, together with all such actions and powers that are reasonably incidental thereto.  The Administrative Agent may perform any of its duties hereunder or under the other Loan Documents by or through any one or more sub-agents or attorneys-in-fact appointed by the Administrative Agent.  The Administrative Agent and any such sub-agent or attorney-in-fact may perform any and all of its duties and exercise its rights and powers through their respective Related Parties.  The exculpatory provisions set forth in this Article shall apply to any such sub-agent or attorney-in-fact and the Related Parties of the Administrative Agent, any such sub-agent and any such attorney-in-fact 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.

 

(b)                                 The Issuing Bank shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith until such time and except for so long as the Administrative Agent may agree at the request of the Required Lenders to act for the Issuing Bank with respect thereto; provided, that the Issuing Bank shall have all the benefits and immunities (i) provided to the Administrative Agent in this Article with respect to any acts taken or omissions suffered by the Issuing Bank in connection with Letters of Credit issued by it or proposed to be issued by it and the application and agreements for letters of credit pertaining to the Letters of Credit as fully as if the term “Administrative Agent” as used in this

 

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Article included the Issuing Bank with respect to such acts or omissions and (ii) as additionally provided in this Agreement with respect to the Issuing Bank.

 

Section 9.2.                                 Nature of Duties of Administrative Agent.  The Administrative Agent shall not have any duties or obligations except those expressly set forth in this Agreement and the other 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 or an Event of 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 those discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.2), 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 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, its sub-agents or attorneys-in-fact 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 10.2) or in the absence of its own gross negligence or willful misconduct as determined by a final, non-appealable judgment of a court of competent jurisdiction.  The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents or attorneys-in-fact selected by it with reasonable care.  The Administrative Agent shall not be deemed to have knowledge of any Default or Event of Default unless and until written notice thereof (which notice shall include an express reference to such event being a “Default” or “Event of Default” hereunder) is given to the Administrative Agent by the Borrower or any 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 thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements, or other terms and 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 3 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 may consult with legal counsel (including counsel for the Borrower) concerning all matters pertaining to such duties.

 

Section 9.3.                                 Lack of Reliance on the Administrative Agent.  Each of the Lenders, the Swingline Lender and the Issuing Bank 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 of the Lenders, the Swingline Lender and the Issuing Bank 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 has deemed appropriate, continue to make its own decisions in taking or not taking of any action under or based on this Agreement, any related agreement or any document furnished hereunder or thereunder.

 

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Section 9.4.                                 Certain Rights of the Administrative Agent.  If the Administrative Agent shall request instructions from the Required Lenders with respect to any action or actions (including the failure to act) in connection with this Agreement, the Administrative Agent shall be entitled to refrain from such act or taking such act, unless and until it shall have received instructions from such Lenders, and the Administrative Agent shall not incur liability to any Person by reason of so refraining.  Without limiting the foregoing, no Lender shall have any right of action whatsoever against the Administrative Agent as a result of the Administrative Agent acting or refraining from acting hereunder in accordance with the instructions of the Required Lenders where required by the terms of this Agreement.

 

Section 9.5.                                 Reliance by 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 in good faith by it to be genuine and to have been signed, sent or made by the proper Person.  The Administrative Agent may also rely upon any statement made to it orally or by telephone and believed in good faith 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 (including counsel for the Borrower), independent public 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 such counsel, accountants or experts.

 

Section 9.6.                                 The Administrative Agent in its Individual Capacity.  The bank serving as the Administrative Agent shall have the same rights and powers under this Agreement and any other Loan Document in its capacity as a Lender as any other Lender and may exercise or refrain from exercising the same as though it were not the Administrative Agent; and the terms “Lenders”, “Required Lenders”, “holders of Notes”, or any similar terms shall, unless the context clearly otherwise indicates, include the Administrative Agent in its individual capacity.  The bank acting as the Administrative Agent 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 Affiliate of the Borrower as if it were not the Administrative Agent hereunder.

 

Section 9.7.                                 Successor Administrative Agent.

 

(a)                                 The Administrative Agent may resign at any time by giving notice thereof to the Lenders and the Borrower.  Upon any such resignation, the Required Lenders shall have the right to appoint a successor Administrative Agent, which shall be a commercial bank organized under the laws of the United States of America or any state thereof or a bank which maintains an office in the United States, having a combined capital and surplus of at least $500,000,000, subject to the approval by the Borrower provided that no Event of Default shall exist at such time.  If no successor Administrative Agent shall have been so appointed, and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent meeting the above requirements.

 

(b)                                 Upon the acceptance of its appointment as the Administrative Agent hereunder by a successor, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative

 

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Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement and the other Loan Documents.  If within 45 days after written notice is given of the retiring Administrative Agent’s resignation under this Section 9.7 no successor Administrative Agent shall have been appointed and shall have accepted such appointment, then on such 45th day (i) the retiring Administrative Agent’s resignation shall become effective, (ii) the retiring Administrative Agent shall thereupon be discharged from its duties and obligations under the Loan Documents (except that in the case of any Collateral held by the Administrative Agent on behalf of the Lenders or the Issuing Bank under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such Collateral until such time as a successor Administrative Agent is appointed, provided, however, that the retiring Administrative Agent shall have no duties or obligations in respect thereof other than as imposed by the UCC or other applicable law) and (iii) the Required Lenders shall thereafter perform all duties of the retiring Administrative Agent under the Loan Documents until such time as the Required Lenders appoint a successor Administrative Agent as provided above.  After any retiring Administrative Agent’s resignation hereunder, the provisions of this Article shall continue in effect for the benefit of such retiring Administrative Agent and its representatives and agents in respect of any actions taken or not taken by any of them while it was serving as the Administrative Agent.

 

Section 9.8.                                 Authorization to Execute other Loan Documents.

 

(a)                                 Each Lender authorizes the Administrative Agent to enter into each of the Loan Documents to which it is a party and to take all action contemplated by such Loan Documents.  Each Lender agrees (except to the extent provided in Section 9.7(b) following the resignation of the Administrative Agent) that no Lender, other than the Administrative Agent acting on behalf of all Lenders, shall have the right individually to seek to realize upon the security granted by any Loan Document, it being understood and agreed that such rights and remedies may be exercised solely by the Administrative Agent for the benefit of the Lenders, upon the terms of the Loan Documents.  Each Lender further authorizes the Administrative Agent, and, at the request of the Borrower, the Administrative Agent shall, release any Subsidiary Loan Party from its obligations under the Subsidiary Guaranty Agreement and any other Loan Documents to which it is a party in connection with any sale, liquidation, dissolution or other disposition of such Subsidiary Loan Party; provided, that such sale, liquidation, dissolution or other disposition is otherwise permitted under the Loan Documents.

 

(b)                                 In the event that any Collateral is pledged by any Person as collateral security for the Obligations, the Administrative Agent is hereby authorized to execute and deliver on behalf of the Lenders any Loan Documents necessary or appropriate to grant and perfect a Lien on such Collateral in favor of the Administrative Agent on behalf of the Lenders.

 

(c)                                  The Lenders hereby authorize the Administrative Agent, and the Administrative Agent hereby agrees, to release any Lien granted to or held by the Administrative Agent upon any Collateral (i) upon Payment in Full of all of the Obligations; (ii) as permitted by, but only in accordance with, the terms of the applicable Loan Document; (iii) if approved, authorized or ratified in writing by the Required Lenders, unless such release is required to be approved by all of the Lenders hereunder; or (iv) the release or subordination of any Lien on any assets which (A) are transferred or disposed of in accordance with the terms of this Agreement or (B) become subject to a Lien permitted by Section 7.2(d), (e) or (f) in respect of which the

 

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applicable transaction documents do not permit such asset to be included in the Collateral hereunder.  In connection with any such release or subordination, the Administrative Agent shall promptly (x) execute and deliver to the Borrower, at the Borrower’s expense, all documents that the Borrower shall reasonably request to evidence such release or subordination and (y) deliver to the Borrower, at the Borrower’s expense, any portion of such Collateral so released in possession of the Administrative Agent.  In addition, the Administrative Agent shall, at the Borrower’s request, and at the Borrower’s expense, file UCC financing statement terminations or amendments and take such other actions as shall be reasonably required by the Borrower to evidence the release of any Excluded Collateral.  Upon request by the Administrative Agent at any time, the Lenders will confirm in writing the Administrative Agent’s authority to release particular types or items of Collateral pursuant to this Section 9.8(c).  Notwithstanding any other provision of this Agreement to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Obligations arising under Hedging Transactions and Treasury Management Obligations unless the Administrative Agent has received written notice thereof, together with such supporting documentation as the Administrative Agent may request, from the applicable Specified Hedge Provider or Specified Treasury Management Provider, as the case may be.

 

(d)                                 Upon any sale or transfer of assets constituting Collateral (including any dissolution of a Subsidiary permitted under this Agreement, the shares of which are pledged pursuant to the Security Documents) which is (x) permitted pursuant to the terms of any Loan Documents, or (y) consented to in writing by the Required Lenders or all of the Lenders if the release of such assets is required hereunder to be approved by all of the Lenders, and upon at least (A) five (5) Business Days’ prior written request by the Borrower in the case of clause (x) or (B) ten (10) Business Days’ prior written request by the Borrower in the case of clause (y) (or such shorter period as permitted by the Administrative Agent in its sole discretion), the Administrative Agent shall (and is hereby irrevocably authorized by the Lenders to) execute such documents as may be necessary or reasonably requested by the Borrower (including, if applicable, the return, at the expense of the Borrower, of possessory collateral and the termination of any control agreements) to evidence the release of the Liens granted to the Administrative Agent for the benefit of the Lenders, upon the Collateral that was sold or transferred; provided, however, that (i) the Administrative Agent shall not be required to execute any such document on terms which, in the Administrative Agent’s opinion, would expose the Administrative Agent to liability or create any obligation or entail any consequence other than the release of such Liens without recourse or warranty, and (ii) such release shall not in any manner discharge, affect or impair the Obligations or any Liens upon (or obligations of the Borrower or any Loan Party in respect of) all interests retained by the Borrower or any Loan Party, including (without limitation) the proceeds of the sale, all of which shall continue to constitute part of the Collateral.

 

Section 9.9.                                 Benefits of Article 9.  None of the provisions of this Article 9 (other than the Borrower consent rights provided in Section 9.7(a) or the Borrower rights to guaranty and Lien release as provided in Section 9.8) shall inure to the benefit of the Borrower or of any Person other than Administrative Agent and each of the Lenders and their respective successors and permitted assigns.  Accordingly, neither the Borrower nor any Person other than Administrative Agent and the Lenders (and their respective successors and permitted assigns) shall be entitled to rely upon, or to raise as a defense, the failure of the Administrative Agent or any Lenders to comply with the provisions of this Article 9.

 

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Section 9.10.                          Titled Agents.  Each Lender and each Loan Party agrees that any documentation agent (or co-documentation agent) or syndication agent (or co-syndication agent) or any other titled agent, in such capacity, shall have no duties or obligations under any Loan Documents to any Lender or any Loan Party.  Anything herein to the contrary notwithstanding, none of the Bookrunners, Book Managers, Arrangers, Joint Lead Arrangers or other titled agents listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or the Issuing Bank hereunder.

 

ARTICLE 10

 

MISCELLANEOUS

 

Section 10.1.                          Notices.

 

(a)                                 Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications to any party herein to be effective shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail, return receipt requested, or sent by telecopy, as follows:

 

	
To   the Borrower:
    	
Strategic   Education, Inc.
    
	
 
    	
2303   Dulles Station Boulevard
    
	
 
    	
Herndon,   Virginia 20171
    
	
 
    	
Attention:       Daniel   W. Jackson, Executive Vice

Chief   Financial Officer
    
	
 
    	
Telecopy   Number:       (703) 890-2919
    
	
 
    	
 
    
	
With   a copy to:
    	
Hogan   Lovells US LLP
    
	
 
    	
Columbia   Square
    
	
 
    	
555   Thirteenth Street, NW
    
	
 
    	
Washington,   DC 20004
    
	
 
    	
Attention:        Edward   S. Purdon, Esquire
    
	
 
    	
Telecopy   Number:        (202) 637-5910
    
	
 
    	
 
    
	
To   the Administrative Agent
    	
 
    
	
or   Swingline Lender:
    	
SunTrust   Bank
    
	
 
    	
Agency   Services
    
	
 
    	
303   Peachtree Street, N.E. / 25th Floor
    
	
 
    	
Atlanta,   Georgia 30308
    
	
 
    	
Attention: Agency   Services Manager
    
	
 
    	
Telecopy   Number: (404) 221-2001
    
	
 
    	
 
    
	
With a copy to:
    	
Hunton Andrews Kurth LLP
    
	
 
    	
2200 Pennsylvania Avenue, NW
    
	
 
    	
Washington, DC 20037
    
	
 
    	
Attention:        Kevin   F. Hull, Esquire
    
	
 
    	
Telecopy Number:      (703)   918-4004
    

 

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With   a copy to:
    	
SunTrust   Bank
    
	
 
    	
Agency   Services
    
	
 
    	
303   Peachtree Street, N. E./ 25th Floor
    
	
 
    	
Atlanta,   Georgia 30308
    
	
 
    	
Attention:       Mr. Douglas   Weltz
    
	
 
    	
Telecopy   Number:       (404) 495-2170
    
	
 
    	
 
    
	
To   the Issuing Bank:
    	
SunTrust   Bank
    
	
 
    	
25 Park Place, N. E./Mail Code 3706
    
	
 
    	
Atlanta,   Georgia 30303
    
	
 
    	
Attention:        Phil   Acuff
    
	
 
    	
Telecopy   Number:        (404) 588-8129
    
	
 
    	
 
    
	
To   the Swingline Lender:
    	
SunTrust   Bank
    
	
 
    	
Agency   Services
    
	
 
    	
303   Peachtree Street, N.E./25th Floor
    
	
 
    	
Atlanta,   Georgia 30308
    
	
 
    	
Attention:        Mr. Douglas   Weltz
    
	
 
    	
Telecopy   Number:     (404) 495-2170
    
	
 
    	
 
    
	
To   any other Lender:
    	
the   address set forth in the Administrative Questionnaire or the Assignment and   Assumption Agreement executed by such Lender
    

 

(b)                                 Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto.  All such notices and other communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for overnight (next-day) delivery, or transmitted in legible form by facsimile machine, respectively, or if mailed, upon the third Business Day after the date deposited into the mail or if delivered, upon delivery; provided, that notices delivered to the Administrative Agent, the Issuing Bank or the Swingline Lender shall not be effective until actually received by such Person at its address specified in this Section 10.1.

 

(c)                                  Any agreement of the Administrative Agent and the Lenders herein to receive certain notices by telephone or facsimile is solely for the convenience and at the request of the Borrower.  The Administrative Agent and the Lenders shall be entitled to rely on the authority of any Person purporting to be a Person authorized by the Borrower to give such notice and the Administrative Agent and Lenders shall not have any liability to the Borrower or other Person on account of any action taken or not taken by the Administrative Agent or the Lenders in reliance upon such telephonic or facsimile notice.  The obligation of the Borrower to repay the Loans and all other Obligations hereunder shall not be affected in any way or to any extent by any failure of the Administrative Agent and the Lenders to receive written confirmation of any telephonic or facsimile notice or the receipt by the Administrative Agent and the Lenders of a confirmation

 

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which is at variance with the terms understood by the Administrative Agent and the Lenders to be contained in any such telephonic or facsimile notice.

 

Section 10.2.         Waiver; Amendments.

 

(a)           No failure or delay by the Administrative Agent, the Issuing Bank or any Lender in exercising any right or power hereunder or any other Loan Document, and no course of dealing between the Borrower and the Administrative Agent or any Lender, 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 right or power, preclude any other or further exercise thereof or the exercise of any other right or power hereunder or thereunder.  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 provided by law.  No waiver of any provision of this Agreement or any other 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 10.2, 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 the issuance of a Letter of Credit shall not be construed as a waiver of any Default or Event of Default, regardless of whether the Administrative Agent, any Lender or the Issuing Bank may have had notice or knowledge of such Default or Event of Default at the time.

 

(b)           Except as expressly set forth in Section 2.24, no amendment or waiver of any provision of this Agreement or the other Loan Documents, nor consent to any departure by the Borrower or any Loan Party therefrom, shall in any event be effective unless the same shall be in writing and signed by the Borrower or the applicable Loan Party and the Required Lenders or the Borrower or the applicable Loan Party and the Administrative Agent with the consent of the Required Lenders and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, that no amendment or waiver shall: (i) increase the Commitment of any Lender without the written consent of such Lender (it being understood that a waiver of any Default, Event of Default shall not constitute such an increase), (ii) reduce the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender affected thereby (provided, however, that only the consent of the Required Lenders shall be necessary to (A) amend the definition of “Default Interest” (it being understood that any amendment to the definition of “Default Interest” that reduces the rate of Default Interest that would apply to any Loan or LC Disbursement upon election by the Required Lenders pursuant to Section 2.14(c) that is lower than the then-applicable interest rate on such Loan or LC Disbursement in effect immediately prior to such election shall require the consent of each Lender affected thereby) or waive any obligation of the Borrower to pay (1) Default Interest or (2) Letter of Credit fees by an additional 2% per annum pursuant to the last sentence of Section 2.15(c) or (B) to amend any financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Loan or LC Disbursement or to reduce any fee payable hereunder), (iii) postpone the date fixed for any payment of any principal of, or interest on, any Loan or LC Disbursement or interest thereon or any fees hereunder or reduce the amount of, waive or excuse any such payment or postpone the scheduled date for the termination or reduction of any Commitment, or change the provisions of 

 

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Section 8.2, without the written consent of each Lender affected thereby, (iv) change Section 2.22(b) or (c) or any other provision in the Loan Documents relating specifically to pro rata sharing of payments in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (v) change any of the provisions of this Section 10.2 or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders which are required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the consent of each Lender; (vi) release the Borrower or any guarantor (subject to the provisions of Section 9.8(a)) or limit the liability of the Borrower under the Loan Documents or any such guarantor under any guaranty agreement, without the written consent of each Lender, (vii) release all or substantially all collateral (if any) securing any of the Obligations, or agree to subordinate any Lien in such collateral to any other creditor of the Borrower or any Subsidiary, without the written consent of each Lender, (viii) subordinate the Loans to any other Indebtedness without the consent of all Lenders, (ix) impose additional or more burdensome conditions on a Lender’s ability to assign its Commitments without the consent of each Lender affected thereby or (x) increase the aggregate of all Commitments without the consent of all of the Lenders (other than pursuant to Section 2.24); provided further, that no such agreement shall amend, modify or otherwise affect the rights, duties or obligations of the Administrative Agent, the Swingline Lender or the Issuing Bank without the prior written consent of such Person.  Notwithstanding anything to the contrary contained herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended without the consent of such Lender, and provided that a Defaulting Lender shall have the right to approve or disapprove any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects such Defaulting Lender more adversely than other affected Lenders.  Notwithstanding anything to the contrary contained herein, if a Lender Insolvency Event has occurred with respect to any Lender, then such Lender shall be deemed to have approved any matters set forth in a request for approval or waiver in the event any Lender fails to reply to such a request within the longer of (x) ten (10) Business Days or (y) the time period specified in such request, in each case, after such Lender’s receipt or deemed receipt thereof.  Notwithstanding anything contained herein to the contrary, this Agreement may be amended and restated without the consent of any Lender (but with the consent of the Borrower and the Administrative Agent) if, upon giving effect to such amendment and restatement, such Lender shall no longer be a party to this Agreement (as so amended and restated), the Commitments of such Lender shall have terminated (but such Lender shall continue to be entitled to the benefits of Sections 2.19, 2.20, 2.21 and 10.3), such Lender shall have no other commitment or other obligation hereunder and shall have been paid in full all principal, interest and other amounts owing to it or accrued for its account under this Agreement.

 

Without limiting the foregoing rights of the Lenders set forth above in this Section 10.2, each Lender hereby irrevocably authorizes the Administrative Agent on its behalf, and without further consent, to enter into amendments or modifications to this Agreement (including, without limitation, amendments to this Section 10.2) or any of the other Loan Documents or to enter into additional Loan Documents as the Administrative Agent reasonably deems appropriate solely for purposes of effectuating the terms of (i) Section 2.24 (including, without limitation, as applicable, (1) to permit the Incremental Term Loans to share ratably in the benefits of this Agreement and the other Loan Documents, (2) to include the Incremental Term Loan Commitments or outstanding Incremental Term Loans in any determination of (i) Required

 

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Lenders or (ii) similar required lender terms applicable thereto, and (3) to provide for the Incremental Term Loans on such terms similar to those applicable hereunder and under the other Loan Documents to the Term Loans, including the right to receive mandatory prepayments customary for a facility of this type, or on such other terms in accordance with Section 2.24) or (ii) Section 2.17(b) and/or Section 2.18 in order to implement any Replacement Rate or otherwise effectuate the terms of Section 2.17(b) and/or Section 2.18 in accordance with the terms thereof.

 

Section 10.3.         Expenses; Indemnification.

 

(a)           The Borrower shall pay (i) all reasonable documented out-of-pocket costs and expenses of the Administrative Agent and its Affiliates (but limited, in the case of legal fees and expenses, to the reasonable and documented out-of-pocket fees, disbursements and other charges of one firm of outside counsel to all such persons taken as a whole and, if necessary, of one counsel in any relevant material jurisdiction to such Persons, taken as a whole), in connection with the syndication of the credit facilities provided for herein, the preparation and administration of the Loan Documents and any amendments, modifications or waivers thereof (whether or not the transactions contemplated in this Agreement or any other Loan Document shall be consummated), (ii) all reasonable documented 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 documented out-of-pocket costs and expenses (but limited, in the case of legal fees and expenses, to the reasonable and documented out-of-pocket fees, disbursements and other charges of one firm of outside counsel to all such persons taken as a whole and, solely in the case of an actual or potential conflict of interest, one additional outside counsel to all such affected persons taken as a whole, and, if necessary, of one local counsel in any relevant jurisdiction to such persons, taken as a whole and, solely in the case of an actual or potential conflict of interest, one additional local counsel in such relevant jurisdiction to all such affected persons taken as a whole)) incurred by the Administrative Agent, the Issuing Bank or any Lender in connection with the enforcement or protection of its rights in connection with this Agreement and the other Loan Documents, including its rights under this Section 10.3, or in connection with the Loans made or any Letters of Credit issued hereunder, including all such documented out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.  The Borrower shall pay to the Administrative Agent or STRH or the other Joint Lead Arrangers, as applicable, all fees due from time to time under the Fee Letter.

 

(b)           The Borrower shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender and the Issuing Bank, 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, penalties and related expenses (but limited, in the case of legal fees and expenses, to the reasonable and documented out-of-pocket fees, disbursements and other charges of one counsel to all Indemnitees taken as a whole and, solely in the case of an actual or potential conflict of interest, one additional counsel to all affected Indemnitees, taken as a whole, and, if reasonably necessary, one local counsel in any relevant jurisdiction to all Indemnitees, taken as a whole and, solely in the case of an actual or potential conflict of interest, one additional local counsel to all affected Indemnitees, taken as a whole), and shall indemnify and hold harmless each Indemnitee from all fees and time charges

 

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and disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Borrower or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or proposed 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 actual or alleged 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, whether brought by a third party or by the Borrower or any other Loan Party, 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, penalties or related expenses (w) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee, (x) result from a claim brought by the Borrower or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Borrower or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction, (y) constitute amounts in respect of Excluded Taxes or (z) settlements effected without the Borrower’s prior written consent (such consent not to be unreasonably withheld, delayed or conditioned), provided, however, that the foregoing indemnity will apply to any such settlement in the event that the Borrower was offered the ability to assume the defense of the action that was the subject matter of such settlement and elected not to assume such defense or if there is a final judgment against an Indemnitee in any such proceeding.

 

(c)           The Borrower shall pay, and hold the Administrative Agent and each of the Lenders harmless from and against, any and all present and future stamp, documentary, and other similar taxes (other than Excluded Taxes) with respect to this Agreement and any other Loan Documents, any collateral described therein, or any payments due thereunder, and save the Administrative Agent and each Lender harmless from and against any and all liabilities with respect to or resulting from any delay or omission to pay such taxes.

 

(d)           To the extent that the Borrower fails to pay any amount required to be paid to the Administrative Agent, the Issuing Bank or the Swingline Lender under clauses (a), (b) or (c) hereof, 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 unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided, that the unreimbursed expense or indemnified payment, 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.

 

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

 

(f)            All amounts due under this Section 10.3 shall be payable promptly after written demand therefor.

 

Section 10.4.         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, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender, and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of paragraph (b) of this Section, (ii) by way of participation in accordance with the provisions of paragraph (d) of this Section or (iii) by way of pledge or assignment of a security interest subject to the restrictions of paragraph (g) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void).  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, Participants to the extent provided in paragraph (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b)           Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that any such assignment shall be subject to the following conditions:

 

(i)            Minimum Amounts.

 

(A) in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

 

(B) in any case not described in paragraph (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans and Revolving Credit Exposure outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans and Revolving Credit Exposure 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 or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date) shall not be less than $5,000,000 (or the entire Commitment, if less), and in minimum additional increments

 

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of $1,000,000, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed).

 

(ii)           Proportionate Amounts.  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 with respect to the Loans, Revolving Credit Exposure or the Commitment assigned, except that this clause (ii) shall not prohibit any Lender from assigning all or a portion of its rights and obligations among separate Commitments on a non-pro rata basis.

 

(iii)          Required Consents.  No consent shall be required for any assignment except to the extent required by paragraph (b)(i)(B) of this Section and, in addition:

 

(A) the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (x) an Event of Default under any of clauses (a), (b), (h), (i) or (j) of Section 8.1 of this Agreement has occurred and is continuing at the time of such assignment or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within five (5) Business Days after having received notice thereof;

 

(B) the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for (x) assignments in respect of (1) a Revolving Commitment if such assignment is to a Person that is not a Lender with a Commitment in respect of such facility, an Affiliate of such a Lender or an Approved Fund or (2) a funded Term Loan to a Person who is not a Lender, an Affiliate of a Lender or an Approved Fund and (y) assignments by Defaulting Lenders; and

 

(C) the consent of the Issuing Bank (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding), and the consent of the Swingline Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment in respect of the Revolving Commitments.

 

(iv)          Assignment and Assumption.  The parties to each assignment shall deliver to the Administrative Agent (A) a duly executed Assignment and Assumption, (B) a processing and recordation fee of $3,500, (C) an Administrative Questionnaire unless the assignee is already a Lender and (D) the documents required under Section 2.21(e) if such assignee is a Foreign Lender.

 

(v)           No Assignment to Borrower.  No such assignment shall be made to the Borrower or any of the Borrower’s Affiliates or Subsidiaries.

 

(vi)          No Assignment to Natural Persons.  No such assignment shall be made to a natural person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural Person) or a Competitor.

 

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Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c) of this Section 10.4, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement 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 2.19, 2.20, 2.21 and 10.3 with respect to facts and circumstances occurring prior to the effective date of such assignment.  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph 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 (d) of this Section 10.4.  If the consent of the Borrower to an assignment is required hereunder (including a consent to an assignment which does not meet the minimum assignment thresholds specified above), the Borrower shall be deemed to have given its consent five Business Days after the date notice thereof has actually been delivered by the assigning Lender (through the Administrative Agent) to the Borrower, unless such consent is expressly refused by the Borrower prior to such fifth Business Day.

 

(c)           The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices in Atlanta, Georgia 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 Commitments of, and principal amount of the Loans and Revolving Credit Exposure 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 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 and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

 

(d)           Any Lender may at any time, without the consent of, or notice to, the Borrower, the Administrative Agent, the Swingline Lender or the Issuing Bank sell participations to any Person (other than a natural person, the Borrower, any of the Borrower’s Affiliates or Subsidiaries or any Competitor) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent, the Lenders, Issuing Bank and Swingline Lender shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.

 

(e)           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 with respect to the

 

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following to the extent affecting such Participant:  (i) increase the 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 thereon, or reduce any fees payable hereunder, without the written consent of each Lender affected thereby, (iii) postpone the date fixed for any payment of any principal of, or interest on, any Loan or LC Disbursement or interest thereon or any fees hereunder or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date for the termination or reduction of any Commitment, without the written consent of each Lender affected thereby, (iv) change Section 2.22(b) or (c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (v) change any of the provisions of this Section 10.4 or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders which are required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the consent of each Lender; (vi) release any guarantor (subject to the provisions of Section 9.8(a)) or limit the liability of any such guarantor under any guaranty agreement without the written consent of each Lender except to the extent such release is expressly provided under the terms of the Guaranty Agreement; or (vii) release all or substantially all collateral (if any) securing any of the Obligations.  Subject to paragraph (e) of this Section 10.4, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.19, 2.20, and 2.21 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section 10.4.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.7  as though it were a Lender, provided such Participant agrees to be subject to Section 2.19 as though it were a Lender.

 

(f)            A Participant shall not be entitled to receive any greater payment under Section 2.19 and Section 2.21 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 2.21 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 2.21(e) as though it were a Lender.

 

(g)           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; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

 

Section 10.5.         Governing Law; Jurisdiction; Consent to Service of Process.

 

(a)           This Agreement and the other Loan Documents shall be construed in accordance with and be governed by the law (without giving effect to the conflict of law principles thereof) of the Commonwealth of Virginia.  EACH LOAN DOCUMENT (OTHER THAN AS OTHERWISE EXPRESSLY SET FORTH IN A LOAN DOCUMENT) WILL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE COMMONWEALTH OF VIRGINIA.

 

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(b)           The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the non-exclusive jurisdiction of the United States District Court of the Eastern District of Virginia, Alexandria Division, and of any state court of the Commonwealth of Virginia sitting in Fairfax County, Virginia, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Loan Document or the transactions contemplated hereby or thereby, 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 Virginia state court or, to the extent permitted by applicable law, 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 the Borrower or its properties in the courts of any jurisdiction.

 

(c)           The Borrower irrevocably and unconditionally waives any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding described in paragraph (b) of this Section 10.5 and brought in any court referred to in paragraph (b) of this Section 10.5.  Each of the parties hereto irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

(d)           Each party to this Agreement irrevocably consents to the service of process in the manner provided for notices in Section 10.1.  Nothing in this Agreement or in any other Loan Document will affect the right of any party hereto to serve process in any other manner permitted by law.

 

Section 10.6.         WAIVER OF JURY TRIAL.  EACH PARTY HERETO IRREVOCABLY 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 THIS AGREEMENT OR 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 AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

Section 10.7.         Right of Setoff.

 

(a)           In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, each Lender and the Issuing Bank and any Affiliate

 

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thereof shall have the right, at any time or from time to time upon the occurrence and during the continuance of an Event of Default, without prior notice to the Borrower, any such notice being expressly waived by the Borrower to the extent permitted by applicable law, to set off and apply against all deposits (general or special, time or demand, provisional or final) owned by the Borrower at any time held or other obligations at any time owing by such Lender and the Issuing Bank or such Affiliate to or for the credit or the account of the Borrower against any and all Obligations held by such Lender or the Issuing Bank or such Affiliate, as the case may be, irrespective of whether such Lender or the Issuing Bank or such Affiliate shall have made demand hereunder and although such Obligations may be unmatured.  The setoff rights provided in this Section 10.7 shall not apply to funds held by or on behalf of the Borrower and its Subsidiaries in trust for other persons, including, without limitation, funds received under the Title IV, HEA Programs that are held in trust for the beneficiaries provided under 34 C.F.R. 668.161(b).  Each Lender and the Issuing Bank agree promptly to notify the Administrative Agent and the Borrower after any such set-off and any application made by such Lender and the Issuing Bank or any Affiliate thereof, as the case may be; provided, that the failure to give such notice shall not affect the validity of such set-off and application.

 

(b)           To the extent that any payment by or on behalf of any Loan Party is made to the Administrative Agent, the Issuing Bank or any Lender, or the Administrative Agent, the Issuing Bank or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent, the Issuing Bank or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any bankruptcy, insolvency or similar debtor relief laws or otherwise, then (i) to the extent of such recovery the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (ii) each Lender and the Issuing Bank severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect.  The obligations of the Lenders and the Issuing Bank under clause (ii) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.

 

Section 10.8.         Counterparts; Integration.  This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by telecopy or by email, in pdf format), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.  This Agreement, the Fee Letter, the other Loan Documents, and any separate letter agreement(s) relating to any fees payable to the Administrative Agent constitute the entire agreement among the parties hereto and thereto regarding the subject matters hereof and thereof and supersede all prior agreements and understandings, oral or written, regarding such subject matters.  Delivery of an executed counterpart of a signature page of this Agreement and any other Loan Document by telecopy or by email, in pdf format, shall be effective as delivery of a manually executed counterpart of this Agreement or such other Loan Document.

 

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Section 10.9.         Survival.  All covenants, agreements, representations and warranties made by the Borrower herein, in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement 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 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 2.19, 2.20, 2.21, and 10.3 and Article 9 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 provision hereof.  All representations and warranties made herein, in the Loan Documents, in the certificates, reports, notices, and other documents delivered pursuant to this Agreement shall survive the execution and delivery of this Agreement and the other Loan Documents, and the making of the Loans and the issuance of the Letters of Credit.

 

Section 10.10.      Severability.  Any provision of this Agreement or any other Loan Document held to be illegal, invalid or unenforceable in any jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of such illegality, invalidity or unenforceability without affecting the legality, validity or enforceability of the remaining provisions hereof or thereof; and the illegality, invalidity or unenforceability of a particular provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

Section 10.11.      Confidentiality.  Each of the Administrative Agent, the Issuing Bank and each Lender agrees to maintain the confidentiality of any information provided to it by the Borrower or any Subsidiary, except that such information may be disclosed (i) to any Related Party of the Administrative Agent, the Issuing Bank or any such Lender, including without limitation accountants, legal counsel and other advisors, (ii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (iii) to the extent requested by any regulatory agency or authority, (iv) to the extent that such information becomes publicly available other than as a result of a breach of this Section 10.11, or which becomes available to the Administrative Agent, the Issuing Bank, any Lender or any Related Party of any of the foregoing on a non-confidential basis from a source other than the Borrower, (v) in connection with the exercise of any remedy hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (vi) subject to provisions substantially similar to this Section 10.11, to any actual or prospective assignee or Participant or any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to a Loan Party and its obligations or (vii) with the consent of the Borrower.  Any Person required to maintain the confidentiality of any information as provided for in this Section 10.11 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 its own confidential information.

 

110

 

Section 10.12.      Interest Rate Limitation.  Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which may be treated as interest on such Loan under applicable law (collectively, the “Charges”), shall exceed the maximum lawful rate of interest (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by a Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section 10.12 shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Rate to the date of repayment, shall have been received by such Lender.

 

Section 10.13.      Waiver of Effect of Corporate Seal.  The Borrower represents and warrants that neither it nor any other Loan Party is required to affix its corporate seal to this Agreement or any other Loan Document pursuant to any requirement of law or regulation, agrees that this Agreement is delivered by Borrower under seal and waives any shortening of the statute of limitations that may result from not affixing the corporate seal to this Agreement or such other Loan Documents.

 

Section 10.14.      Patriot Act.  The Administrative Agent and each Lender hereby notifies the Loan Parties that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender or the Administrative Agent, as applicable, to identify such Loan Party in accordance with the Patriot Act.  Each Loan Party shall, and shall cause each of its Subsidiaries to, provide to the extent commercially reasonable, such information and take such other actions as are reasonably requested by the Administrative Agent or any Lender in order to assist the Administrative Agent and the Lenders in maintaining compliance with the Patriot Act.

 

Section 10.15.      Publicity.  With the prior written consent of the Borrower, the Administrative Agent or any Lender may publish customary advertising material relating to the transactions contemplated by this Agreement and the Loan Documents using the Borrower’s name, logos or trademarks.

 

Section 10.16.      Acknowledgement and Consent to Bail-In of EEA Financial Institutions.  Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

 

111

 

(a)           the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

 

(b)           the effects of any Bail-in Action on any such liability, including, if applicable:

 

(i)            reduction in full or in part or cancellation of any such liability;

 

(ii)           a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

 

(iii)          the variation of the terms of such liability  in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

 

(remainder of page left intentionally blank)

 

112

 

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.

 

	
 
    	
BORROWER:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
STRATEGIC   EDUCATION, INC.,   a Maryland corporation, formerly known as Strayer Education, Inc., a   Maryland corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT]

 

 

	
 
    	
ADMINISTRATIVE   AGENT:
    
	
 
    	
 
    
	
 
    	
SUNTRUST   BANK
    
	
 
    	
as Administrative Agent, as Issuing Bank and as   Swingline Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT]

 

 

	
 
    	
LENDERS:
    
	
 
    	
 
    
	
 
    	
SUNTRUST   BANK
    
	
 
    	
as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT]

 

 

	
 
    	
PNC   BANK, NATIONAL ASSOCIATION
    
	
 
    	
as Lender and as Issuing Bank
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT]

 

 

	
 
    	
BANK   OF AMERICA, N.A.
    
	
 
    	
as Lender and as Issuing Bank
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT]

 

 

	
 
    	
BANK   OF MONTREAL
    
	
 
    	
as Lender and as Issuing Bank
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT]

 

 

	
 
    	
ASSOCIATED   BANK
    
	
 
    	
as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT]

 

 

	
 
    	
BANK   OF THE WEST
    
	
 
    	
as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT]

 

 

	
 
    	
TD   BANK, N.A.
    
	
 
    	
as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT]

 

 

	
 
    	
UNION   BANK & TRUST
    
	
 
    	
as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT]

 

 

Schedule I

 

APPLICABLE MARGIN FOR THE LOANS AND

APPLICABLE PERCENTAGE

 

	
Pricing
   Level
    	
 
    	
Leverage Ratio
    	
 
    	
Applicable Margin
   for Eurodollar Loans
   and Index Rate
   Loans
    	
 
    	
Applicable
   Margin for Base
   Rate Loans
    	
 
    	
Applicable
   Percentage for
   Commitment Fee
    
	
I
    	
 
    	
Less than or equal to 1.00:1
    	
 
    	
1.500% per annum
    	
 
    	
1.500% per annum
    	
 
    	
0.200% per annum
    
	
II
    	
 
    	
Greater than 1.00:1.00 but less than or equal to   1.50:1.00
    	
 
    	
1.750% per annum
    	
 
    	
1.750% per annum
    	
 
    	
0.250% per annum
    
	
III
    	
 
    	
Greater than 1.50:1.00
    	
 
    	
2.000% per annum
    	
 
    	
2.000% per annum
    	
 
    	
0.300% per annum
    

 

 

Schedule II

 

COMMITMENT AMOUNTS

 

	
Lender
    	
 
    	
Revolving Commitment Amount
    	
 
    
	
SunTrust Bank
    	
 
    	
$
    	
55,000,000
    	
 
    
	
PNC Bank,   National Association
    	
 
    	
$
    	
55,000,000
    	
 
    
	
Bank of America,   N.A.
    	
 
    	
$
    	
35,000,000
    	
 
    
	
Bank of Montreal
    	
 
    	
$
    	
35,000,000
    	
 
    
	
Associated Bank
    	
 
    	
$
    	
20,000,000
    	
 
    
	
Bank of the West
    	
 
    	
$
    	
20,000,000
    	
 
    
	
TD Bank, N.A.
    	
 
    	
$
    	
20,000,000
    	
 
    
	
Union   Bank & Trust
    	
 
    	
$
    	
10,000,000
    	
 
    
	
Total
    	
 
    	
$
    	
250,000,000amgp_EX10_2

		
			Exhibit 10.2
		

		
			Execution Version
		

		
			CREDIT AGREEMENT
		

		
			THIS CREDIT AGREEMENT (this “Agreement“) is entered into as of May 9, 2018, by and between ANTERO MIDSTREAM GP LP, a Delaware limited partnership (“Borrower“), and WELLS FARGO BANK, NATIONAL ASSOCIATION (together with its successors and assigns permitted hereunder, “Bank“).
		

		
			RECITALS
		

		
			Borrower has requested that Bank extend credit to Borrower as described below, and Bank has agreed to provide such credit to Borrower on the terms and conditions contained herein.
		

		
			NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Bank and Borrower hereby agree as follows:
		

		
			ARTICLE I
		

		
			DEFINITIONS AND ACCOUNTING TERMS
		

		
			SECTION 1.1      DEFINITIONS.    As used in this Agreement, the following terms shall have the meanings set forth below:
		

		
			“2024 Notes Indenture” means that certain Indenture, dated as of September 13, 2016, among Partners and Antero Midstream Finance Corporation, a Delaware corporation, as issuers, the guarantors party thereto and Wells Fargo Bank, National Association, as trustee, as amended and supplemented from time to time.
		

		
			“Applicable Subsidiary” means any direct or indirect Subsidiary of Borrower, other than Partners and its direct or indirect Subsidiaries or Partners GP and its direct or indirect Subsidiaries.
		

		
			“Base Rate” means for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect for such day as publicly announced from time to time by Bank as its “prime rate” and (c) the Eurodollar Rate plus 1.00%. The “prime rate” is a rate set by Bank based upon various factors including Bank's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in such rate announced by Bank shall take effect at the opening of business on the day specified in the public announcement of such change.
		

		
			“Borrowing” means an extension of credit in the form of Loans made by Bank to Borrower pursuant to Section 2.1.
		

		
			“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the laws of, or are in fact closed in, the state of New York.
		

		
			

		 

 

		

		
			“Change in Control” means an event or series of events by which:
		

		
			(a)        Borrower shall fail to directly or indirectly own and control beneficially and of record (free and clear of all Liens other than Liens in favor of Bank under the Loan Documents provided that, this exception shall not apply to any foreclosure with respect to such Liens) 100% of the Equity Interests of Partners GP;
		

		
			(b)        Borrower shall fail to directly or indirectly own and control beneficially and of record (free and clear of all Liens other than Liens in favor of Bank under the Loan Documents; provided that, this exception shall not apply to any foreclosure with respect to such Liens) 100% of all of the Equity Interests of each Applicable Subsidiary (other than Series B Units issued as of the Closing Date);
		

		
			(c)        Partners GP shall cease to be the general partner of Partners;
		

		
			(d)        the General Partner shall cease to be the general partner of Borrower;
		

		
			(e)        the Sponsors shall cease to own greater than 50% of the voting or economic interest in the General Partner; or
		

		
			(f)        during any period of 12 consecutive months, a majority of the members of the board of managers or other equivalent governing body of the General Partner cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body, (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body, or (iv) whose election or nomination to that board or other equivalent governing body was approved by the same Persons that had the power to designate, appoint or elect the individuals referred to in clauses (i) and (ii) above at the time such individuals were designated, appointed or elected.
		

		
			“Credit Agreement Termination” shall occur upon termination of the Line of Credit and payment in full and performance of all Obligations (other than (A) contingent indemnification obligations and (B) obligations and liabilities under Secured Cash Management Agreements as to which arrangements satisfactory to Bank shall have been made).
		

		
			“Closing Date” means the first date all the conditions precedent in Section 4.1 are satisfied or waived in accordance with Section 8.1.
		

		
			“Collateral” has the meaning given such term in the Guaranty and Collateral Agreement.
		

		
			“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium,
		

		
			
		

		
			

		 

		

			-2-

		

 

		

		
			rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
		

		
			“Equity Interests” means, with respect to any Person, all of the incentive distribution rights of such Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.  For the avoidance of doubt, any reference to Equity Interests will exclude the Series B Units.
		

		
			“ERISA” has the meaning given such term in Section 3.9.
		

		
			“Eurodollar Rate” means the rate per annum equal to (i) LIBOR, at approximately 11:00 a.m., London time determined two London Banking Days prior to such date for dollar deposits being delivered in the London interbank market for a term of one month commencing that day or (ii) if such published rate is not available at such time for any reason, the rate per annum determined by Bank to be the rate at which deposits in dollars for delivery on the date of determination in same day funds in the approximate amount of the Loan being made or maintained and with a term equal to one month would be offered by Wells Fargo's London Branch to major banks in the London interbank Eurodollar market at their request at the date and time of determination; provided that at no time shall the Eurodollar Rate be less than 0.00%.
		

		
			“Event of Default” has the meaning given such term in Section 7.1.
		

		
			“Excluded Assets” has the meaning given such term in the Guaranty and Collateral Agreement.
		

		
			“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank on such day on such transactions as determined by Bank; provided that in no event shall the Federal Funds Rate be less than zero.
		

		
			“Fee Letter” means that certain Fee Letter dated as of April 27, 2018, between Borrower and Bank.
		

		
			
		

		
			

		 

		

			-3-

		

 

		

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

		
			“General Partner” means AMGP GP LLC, a Delaware limited liability company.
		

		
			“Governing Body” means, for any entity, such entity’s board of directors, board of managers, manager or similar governing body.
		

		
			“Guaranty and Collateral Agreement” means, collectively, the Guaranty and Collateral Agreement dated as of the Closing Date, made by the Loan Parties in favor of Bank, and any joinder thereto delivered pursuant to Section 5.10.
		

		
			“Guarantor” means the Applicable Subsidiaries as of the Closing Date, and any Applicable Subsidiary required to execute and deliver the Guaranty and Collateral Agreement or any supplement to the Guaranty and Collateral Agreement pursuant to Section 5.10.
		

		
			“Interest Payment Date” means the last Business Day of each March, June, September and December and the Maturity Date.
		

		
			“IDR Holdings” means Antero IDR Holdings LLC, a Delaware limited liability company.
		

		
			"Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way, other encumbrance on title to Real Property or Easements, or financing lease having substantially the same economic effect as any of the foregoing).
		

		
			“Line of Credit” has the meaning given such term in Section 2.1(a).
		

		
			“Line of Credit Note” has the meaning given such term in Section 2.1(b).
		

		
			“Loan” means an extension of credit by Bank to Borrower under the Line of Credit.
		

		
			“Loan Documents” has the meaning given such term in Section 3.2.
		

		
			“Loan Party” means Borrower and any Guarantor.
		

		
			“London Banking Day” means any day on which dealings in dollar deposits are conducted by and between banks in the London interbank eurodollar market.
		

		
			
		

		
			

		 

		

			-4-

		

 

		

		
			“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, assets or financial condition of the Borrower and its Applicable Subsidiaries, taken as a whole; (b) a material impairment of the rights and remedies of Bank under any Loan Document, or of the ability of any Loan Party to perform its obligations under any Loan Document to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party.
		

		
			“Maturity Date” means May 6, 2019.
		

		
			"Moody's" means Moody's Investors Service, Inc. and any successor thereto.
		

		
			“Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan or Secured Cash Management Agreement, including, without limitation, any accrued and unpaid interest thereon, in each case whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party of any proceeding under any Debtor Relief Laws naming such Loan Party as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.
		

		
			“Partners” means Antero Midstream Partners LP, a Delaware limited partnership.
		

		
			“Partners Credit Agreement” means that certain Amended and Restated Credit Agreement, dated as of October 26, 2017, among Partners, as borrower, the lenders party thereto from time to time and Wells Fargo Bank, National Association, as administrative agent, swingline lender and an L/C issuer, as amended, restated, amended and restated, replaced by another principal revolving credit facility, supplemented or otherwise modified from time to time.
		

		
			“Partners GP” means Antero Midstream Partners GP LLC, a Delaware limited liability company.
		

		
			“Partners Rating Downgrade” means a downgrade by either S&P or Moody’s, of Partners’ corporate family rating maintained by S&P or Moody’s, as applicable, below the level of such corporate family rating on the Closing Date.
		

		
			“Permitted Liens” means:
		

		
			(i)        Liens pursuant to any Loan Document;
		

		
			(ii)        Liens for taxes not yet delinquent or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person to the extent required by GAAP;
		

		
			
		

		
			

		 

		

			-5-

		

 

		

		
			(iii)      carriers', warehousemen's, mechanics', materialmen's, repairmen's, vendor's, landlords' and other like Liens arising in the ordinary course of business, securing obligations which are not past due for more than 90 days after the date on which such obligations became due, unless being contested in good faith by appropriate proceedings and for which any reserves required by GAAP are maintained;
		

		
			(iv)      pledges or deposits in the ordinary course of business in connection with workers' compensation, unemployment insurance and other social security legislation, other than any Lien imposed by ERISA;
		

		
			(v)        pledges or deposits to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;
		

		
			(vi)      easements, rights-of-way, restrictions (including zoning restrictions), covenants, licenses, encroachments, protrusions and other similar encumbrances, and minor title deficiencies on or with respect to any real property, any easements or any pipeline systems which, in the aggregate, are not substantial in amount, and which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the applicable Person; and for purposes hereof, minor title deficiencies shall include, but not be limited to, minor defects in the chain of title, terms, conditions, exceptions, limitations, easements, servitudes, permits, surface leases and other similar rights in respect of surface operations, flood control, air rights, water rights, rights of others with respect to navigable waters, sewage and drainage rights and easements for pipelines, alleys, highways, telephone lines, power lines, railways and other easements and rights-of-way on, over or in respect of any of the properties of the Borrower or any of its Subsidiaries that are customarily granted in the midstream industry, provided,  however, that such deficiencies do not have, individually or in the aggregate, a Material Adverse Effect;
		

		
			(vii)     Liens securing judgments for the payment of money not constituting an Event of Default;
		

		
			(viii)    Liens (and financing statements associated therewith) securing indebtedness permitted under Section 6.3;  provided that (i) such Liens do not at any time encumber any property other than the property financed by such Indebtedness, improvements and accessions to such property, insurance for such property, and the proceeds of the foregoing, and (ii) the principal amount of the indebtedness secured thereby does not exceed the costs of acquiring such property;
		

		
			(ix)      with respect to easements and leases of real property, Liens securing indebtedness of the owner(s) or master tenant(s) of the underlying real property, provided, that the foreclosure of any such Liens would not extinguish or terminate such easements and leases of real property;
		

		
			
		

		
			

		 

		

			-6-

		

 

		

		
			(x)       rights reserved to or vested in any governmental authority by the terms of any right, power, franchise, grant, license or permit, or by any provision of law, to revoke or terminate any such right, power, franchise, grant, license or permit or to condemn or acquire by eminent domain or similar process;
		

		
			(xi)      rights reserved to or vested by law in any governmental authority to in any manner, control or regulate in any manner any of the properties of the Borrower or any of its Applicable Subsidiaries or the use thereof or the rights and interest of the Borrower or any of its Applicable Subsidiaries therein, in any manner and under any and all Laws;
		

		
			(xii)     Liens of a collecting bank arising in the ordinary course of business under Section 4-208 of the Uniform Commercial Code in effect in the relevant jurisdiction covering only the items being collected upon;
		

		
			(xiii)    any interest or title of a lessor under any lease entered into by the Borrower or an Applicable Subsidiary, including without limitation under any sale leaseback transactions, and covering only the assets so leased;
		

		
			(xiv)    the filing of UCC financing statements solely as a precautionary measure in connection with operating leases, consignment of goods or other similar transactions; and
		

		
			(xv)     any Liens constituting earnest money deposits made by the Borrower or any Applicable Subsidiary in connection with any letter of intent or purchase agreement with respect to any investment or acquisition permitted hereunder which are customary in amount for transactions of the type.
		

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

		
			“Plan” has the meaning given such term in Section 3.9.
		

		
			“Responsible Officer” means the chief executive officer, president, chief financial officer, chief accounting officer, treasurer, assistant treasurer of a Loan Party (or such Loan Party’s general partner, as applicable) and any other officer or employee of the applicable Loan Party (or such Loan Party’s general partner, as applicable) so designated by any of the foregoing officers in a notice to Bank.  Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party (or such Loan Party’s general partner, as applicable) shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party (or such Loan Party’s general partner, as applicable) and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.
		

		
			“Restricted Payment” has the meaning given such term in Section 6.7.
		

		
			
		

		
			

		 

		

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			"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto.
		

		
			“Sanctions” has the meaning given such term in Section 3.1.
		

		
			“Secured Cash Management Agreement” means any agreement to provide cash management services, including treasury, depository, overdraft, credit or debit card, electronic funds transfer and other cash management arrangements that is entered into by and between any Loan Party and Bank or any affiliate thereof.
		

		
			“Series B Units” has the meaning given such term in the limited liability company agreement of IDR Holdings as amended, supplemented or restated from time to time as permitted hereunder.
		

		
			“Series B Unitholders” means the holders of Series B Units.
		

		
			"Solvent" and "Solvency" mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay such debts and liabilities as they mature, (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's property would constitute an unreasonably small capital, and (e) such Person is able to pay its debts and liabilities, contingent obligations and other commitments as they mature in the ordinary course of business. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
		

		
			“Sponsors” means Warburg Pincus LLC, Yorktown Partners LLC, Antero Resources Corporation, Paul M. Rady and Glen C. Warren, Jr. and any of their respective affiliates.
		

		
			“Specified Distributions” means a direct or indirect distribution to Borrower or the Applicable Subsidiaries from Partners in respect of incentive distribution rights.
		

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

		
			
		

		
			

		 

		

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			or Subsidiaries of Borrower.
		

		
			“Suspension of Distributions” means (i) Partners failing to make distributions (including, without limitation, Specified Distributions and any distributions with respect to the common units of Partners) to Borrower or any Applicable Subsidiary in accordance with the limited partnership agreement of Partners, as amended, supplemented or restated from time to time as permitted hereunder or (ii) any Applicable Subsidiary failing to make distributions to Borrower in accordance with such Applicable Subsidiary’s organizational documents as amended, supplemented or restated from time to time as permitted hereunder.
		

		
			“Termination Date” means the earlier to occur of (a) the date this Agreement is terminated in accordance with Section 2.1(f) or Section 7.2 and (b) the Maturity Date.
		

		
			“Wells Fargo” means Wells Fargo Bank, National Association and its successors.
		

		
			SECTION 1.2      TIMES OF DAY.Unless otherwise specified, all references herein to times of day shall be references to Mountain time (daylight or standard, as applicable).
		

		
			ARTICLE II
		

		
			CREDIT TERMS
		

		
			SECTION 2.1    LINE OF CREDIT.
		

		
			(a)    Line of Credit.  Subject to the terms and conditions of this Agreement, Bank hereby agrees to make Loans to Borrower from time to time until the Termination Date, not to exceed at any time the aggregate principal amount of twelve million dollars ($12,000,000.00) (“Line of Credit”), the proceeds of which shall be used solely for general partnership purposes, including for the purpose of making distributions as and when necessary for bona fide tax payments attributable to the income of the Borrower.
		

		
			(b)    Evidence of Debt. Borrower's obligation to repay Loans shall be evidenced by one or more accounts or records maintained by Bank in the ordinary course of business. Upon request of Bank, Borrower shall execute and deliver to Bank a promissory note substantially in the form of Exhibit A (“Line of Credit Note”), which shall evidence Borrowers obligations to repay Loans in addition to such accounts or records, and all terms of which are incorporated herein by this reference. Bank is hereby authorized to note the date, principal amount, maturity date and rate of interest agreed upon by Bank and Borrower for any advance hereunder, and all payments received by Bank in connection with any such advance, on Bank's books and records (either manually or by electronic entry) and/or on any schedule attached to the Line of Credit Note.  The accounts or records maintained by Bank (to the extent not inconsistent with the provisions hereof) and/or amounts noted on the Line of Credit Note shall be conclusive absent manifest error of the amount of the Loans made by Bank to Borrower, and the interest and payments thereon.  Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of Borrower hereunder to pay any amount owing with respect to the Obligations.
		

		
			
		

		
			

		 

		

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			(c)    Borrowing and Repayment.  Borrower may from time to time during the term of the Line of Credit borrow, partially or wholly repay its outstanding borrowings (without penalty), and reborrow; provided that the total outstanding Loans shall not at any time exceed the maximum principal amount available thereunder, as set forth in Section 2.1(a). Each Borrowing shall be made upon Borrower’s irrevocable notice to Bank, which may be given by telephone, no later than 11:00 a.m. on the requested date of such Borrowing. Such notice shall specify the requested date of the Borrowing (which shall be a Business Day) and the requested principal amount of such Borrowing. Delivery of such notice by Borrower shall constitute a representation by Borrower that the conditions in Section 4.2 are met as of the requested borrowing date. Except as otherwise provided herein, each Borrowing shall be in a principal amount of $250,000 or a whole multiple of $50,000 in excess thereof. On the Maturity Date the aggregate unpaid principal amount of all Loans outstanding on such date and all accrued and unpaid interest hereunder shall be immediately due and payable.
		

		
			(d)    Clean-Down.No less frequently than one time during each fiscal quarter of Borrower, immediately after Borrower shall have received the Specified Distributions, Borrower shall use the proceeds of such Specified Distributions to repay Loans, and make any other payments necessary so that the outstanding amount of Loans at such time shall be $0.
		

		
			(e)    Increased Costs. If any changes in law occur that increase the cost to Bank of making or maintaining (or maintaining its ability to make) any advances hereunder or reduce the amount of any sum received or receivable by Bank hereunder (including resulting from a change in law regarding capital requirements that has or would have the effect of reducing the rate of return on Bank’s capital or the capital of Bank’s holding company), then upon request by Bank, Borrower will pay to Bank such additional amount or will compensate Bank for such additional costs incurred or losses suffered.
		

		
			(f)    Termination.Notwithstanding anything else herein to the contrary, and without limiting Section 7.2, this Agreement and Bank’s obligation, if any, to make Loans to Borrower shall terminate:
		

		
			(i)      immediately upon Suspension of Distributions, or if Specified Distributions are paid in a form other than cash;
		

		
			(ii)     immediately upon (A) Bank ceasing to be a “Lender” under the Partners Credit Agreement or (B) all loans and other obligations under the Partners Credit Agreement are paid in full and the commitments thereunder are terminated; or
		

		
			(iii)    on 24-hours’ written notice (a) to Borrower by Bank (including, without limitation, any such written notice to Borrower by Bank upon any Partners Rating Downgrade) or (b) to Bank by Borrower;
		

		
			if this Agreement is terminated pursuant to this Section 2.1(f), then all outstanding Loans, accrued and unpaid interest thereon, and any other outstanding Obligations hereunder shall be due and payable (x) in the case of a termination under (i), (ii) or (iii)(b) above, immediately, and (y) in the case of a termination under (iii)(a) above, within 90 days of such termination.
		

		
			
		

		
			

		 

		

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			SECTION 2.2      INTEREST/FEES.
		

		
			(a)      Interest.  The outstanding principal balance of each Loan shall bear interest at the Base Rate plus a margin rate of interest equal to 1.00% per annum.
		

		
			(b)      Computation and Payment.  Interest shall be computed on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid; provided that any Loan that is repaid on the same day on which it is made shall bear interest for one day.  Interest shall be payable in arrears on each Interest Payment Date applicable and at such other times as may be specified herein, including under Section 2.1(f) and Section 7.2. Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand. For the avoidance of doubt, Borrower’s obligations to pay accrued and unpaid interest under this Section 2.2(b) shall survive any event described in Section 2.1.
		

		
			(c)      Default Interest.At Bank's option upon the occurrence, and during the continuance of an Event of Default, the outstanding principal balance of Loans shall bear interest at an increased rate per annum (computed on the basis of a 360-day year, actual days elapsed) equal to two percent (2%) above the rate of interest from time to time applicable hereunder. Default interest shall be payable on demand.
		

		
			SECTION 2.3      COLLECTION OF PAYMENTS.  Except to the extent expressly specified otherwise in any Loan Document other than this Agreement, Borrower authorizes Bank to collect all amounts due to Bank from Borrower under this Agreement or any other Loan Document (whether for principal, interest or fees, or as reimbursement of drafts paid or other payments made by Bank under any credit subject to this Agreement) by debiting any deposit account maintained by Borrower with Bank for the full amount thereof.  Should there be insufficient funds in Borrower's deposit accounts with Bank to pay all such sums when due, the full amount of such deficiency shall be immediately due and payable by Borrower.
		

		
			SECTION 2.4      COLLATERAL.
		

		
			As security for the Obligations, Borrower shall grant to Bank security interests of first priority in Borrower’s Collateral.
		

		
			As security for the Obligations, Borrower shall cause each Guarantor to grant to Bank security interests of first priority in all Collateral owned by such Guarantor.
		

		
			All of the foregoing shall be evidenced by and subject to the terms of the Guaranty and Collateral Agreement, financing statements, and other documents as Bank shall reasonably require, all in form and substance satisfactory to Bank.  Borrower shall pay to Bank immediately upon demand the full amount of all charges, costs and expenses (to include fees paid to third parties and all allocated costs of Bank personnel), expended or incurred by Bank in connection with any of the foregoing security, including without limitation, filing and recording fees and
		

		
			
		

		
			

		 

		

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			costs of appraisals, audits and title insurance.
		

		
			SECTION 2.5        GUARANTIES.  The payment and performance of the Obligations shall be guaranteed jointly and severally by each Guarantor as evidenced by and subject to the terms of the Guaranty and Collateral Agreement.
		

		
			ARTICLE III
		

		
			REPRESENTATIONS AND WARRANTIES
		

		
			Borrower makes the following representations and warranties to Bank.
		

		
			SECTION 3.1.        LEGAL STATUS.  Each Loan Party is: (a)  a limited partnership or limited liability company, as applicable, duly organized and existing and in good standing under the laws of its state of organization, and is qualified or licensed to do business (and is in good standing as a foreign corporation, if applicable) in all jurisdictions in which such qualification or licensing is required or in which the failure to so qualify or to be so licensed could reasonably be expected to have a Material Adverse Effect; and (b) not the target of any trade or economic sanctions promulgated by the United Nations or the governments of the United States, the United Kingdom, the European Union, or any other jurisdiction in which any Loan Party is located or operates (collectively, “Sanctions”).
		

		
			SECTION 3.2.      AUTHORIZATION AND VALIDITY.  This Agreement, any Line of Credit Note and any other promissory note issued in connection with this Agreement, the Guaranty and Collateral Agreement, the Fee Letter and any control agreements (collectively, the “Loan Documents”) and each contract, instrument and other document required hereby or at any time hereafter delivered to Bank in connection herewith, or other similar agreements delivered to Bank pursuant to Section 4.1 or Section 5.10, have been duly authorized, and upon their execution and delivery in accordance with the provisions hereof will constitute legal, valid and binding agreements and obligations of the Loan Parties party thereto, enforceable in accordance with their respective terms.
		

		
			SECTION 3.3.      NO VIOLATION.  The execution, delivery and performance of each of the Loan Documents by the Loan Parties party thereto do not violate any provision of any law or regulation, or contravene any provision of the organizational and governing documents of such Loan Party, or result in any breach of or default under any contract, obligation, indenture or other instrument to which such Loan Party is a party or by which such Loan Party may be bound.
		

		
			SECTION 3.4.     LITIGATION.  There are no pending, or to the best of Borrower's knowledge threatened, actions, claims, investigations, suits or proceedings by or before any governmental authority, arbitrator, court or administrative agency which could reasonably be expected to have a Material Adverse Effect other than those disclosed by Borrower to Bank in writing prior to the date hereof.
		

		
			SECTION 3.5.     CORRECTNESS OF FINANCIAL STATEMENT.  The annual financial statement of Borrower and its consolidated Subsidiaries dated December 31, 2017, and all interim financial statements delivered to Bank since said date, true copies of which have been
		

		
			
		

		
			

		 

		

			-12-

		

 

		

		
			delivered by Borrower to Bank prior to the date hereof, (a) are complete and correct and present fairly the financial condition of Borrower and its consolidated Subsidiaries, (b) disclose any material liabilities of Borrower and its consolidated Subsidiaries that are required to be reflected or reserved against under GAAP, whether liquidated or unliquidated, fixed or contingent, and (c) have been prepared in accordance with GAAP.  Since the dates of such financial statements there has been no Material Adverse Effect, nor has Borrower or any of its consolidated Subsidiaries mortgaged, pledged, granted a security interest in or otherwise encumbered any of its assets or properties except in favor of Bank or as otherwise permitted by Bank in writing.
		

		
			SECTION 3.6.      INCOME TAX RETURNS.  Borrower has no knowledge of any material pending assessments or adjustments of any Loan Party’s income tax payable by such Loan Party with respect to any year.
		

		
			SECTION 3.7.      NO SUBORDINATION.  There is no agreement, indenture, contract or instrument to which any Loan Party is a party or by which any Loan Party may be bound that requires the subordination in right of payment of any of the Obligations or any other obligation of such Loan Party.
		

		
			SECTION 3.8.     PERMITS, FRANCHISES.  Each Loan Party possesses all permits, consents, approvals, franchises and licenses required and rights to all trademarks, trade names, patents, and fictitious names, if any, necessary to enable it to conduct the business in which it is now engaged in compliance with applicable law or in which the failure to so possess could not reasonably be expected to have a Material Adverse Effect.
		

		
			SECTION 3.9.      ERISA.  Each Loan Party is in compliance in all material respects with all applicable provisions of the Employee Retirement Income Security Act of 1974, as amended or recodified from time to time (“ERISA“). Except as could not reasonably be expected to have a Material Adverse Effect, no Loan Party has violated any provision of any defined employee pension benefit plan (as defined in ERISA) maintained or contributed to by Borrower (each, a “Plan”); no Reportable Event as defined in ERISA has occurred and is continuing with respect to any Plan initiated by any Loan Party; each Loan Party has met its minimum funding requirements under ERISA with respect to each Plan; and each Plan will be able to fulfill its benefit obligations as they come due in accordance with the Plan documents and under GAAP.
		

		
			SECTION 3.10.    OTHER OBLIGATIONS.  No Loan Party is in default on any obligation for borrowed money, any purchase money obligation or any other material lease, commitment, contract, instrument or obligation that could reasonably be expected to have a Material Adverse Effect. No default exists under any organization document of any Loan Party or of Partners.
		

		
			SECTION 3.11.    ENVIRONMENTAL MATTERS.  Except as disclosed by Borrower to Bank in writing prior to the date hereof or as could not reasonably be expected to have a Material Adverse Effect, each Loan Party is in compliance in all respects with all applicable federal or state environmental, hazardous waste, health and safety statutes, and any rules or regulations adopted pursuant thereto, which govern or affect any of such Loan Party's operations and/or properties, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Superfund Amendments and Reauthorization Act
		

		
			
		

		
			

		 

		

			-13-

		

 

		

		
			of 1986, the Federal Resource Conservation and Recovery Act of 1976, and the Federal Toxic Substances Control Act, as any of the same may be amended, modified or supplemented from time to time.  Except as could not reasonably be expected to have a Material Adverse Effect, none of the operations of any Loan Party is the subject of any federal or state investigation evaluating whether any remedial action involving a material expenditure is needed to respond to a release of any toxic or hazardous waste or substance into the environment.  No Loan Party has any contingent liability in connection with any release of any toxic or hazardous waste or substance into the environment that could reasonably be expected to have a Material Adverse Effect.
		

		
			SECTION 3.12.    SOLVENCY.      The Borrower, together with the Applicable Subsidiaries, on a consolidated basis are Solvent.
		

		
			ARTICLE IV
		

		
			CONDITIONS
		

		
			SECTION 4.1.     CONDITIONS OF INITIAL EXTENSION OF CREDIT.  The obligation of Bank to extend any credit contemplated by this Agreement is subject to the fulfillment to Bank's satisfaction of all of the following conditions:
		

		
			(a)    Documentation.  Bank shall have received, in form and substance satisfactory to Bank, each of the following, duly executed:
		

		
			(i)        This Agreement.
		

		
			(ii)       A Line of Credit Note (if requested by Bank).
		

		
			(iii)      The Guaranty and Collateral Agreement, duly executed by each Loan Party, together with:
		

		
			a.   the certificates, if any, representing pledged Equity Interests referred to therein accompanied by undated stock powers executed in blank;
		

		
			b.   proper financing statements in form appropriate for filing under the Uniform Commercial Code in effect in the State of New York as of the Closing Date of all jurisdictions that Bank may deem necessary or desirable in order to perfect the Liens created under the Guaranty and Collateral Agreement, covering the Collateral described in the Guaranty and Collateral Agreement;
		

		
			c.   evidence that all other action that Bank may deem necessary or desirable in order to perfect the Liens created under the Guaranty and Collateral Agreement has been taken; and
		

		
			d.   within 30 days of the Closing Date (or such longer time as Bank may agree in its sole discretion) control agreements, as required pursuant to the terms of the Guaranty and Collateral Agreement and requested
		

		
			
		

		
			

		 

		

			-14-

		

 

		

		
			by, and in form and substance satisfactory to, Bank, duly executed by the appropriate parties, covering Collateral consisting of Deposit Accounts (as defined in the Guaranty and Collateral Agreement) described in the Guaranty and Collateral Agreement.
		

		
			(iv)        Such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as Bank may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party or is to be a party.
		

		
			(v)        Such documents and certifications as Bank may reasonably require to evidence that each Loan Party is duly organized or formed, and that each Loan Party is validly existing, in good standing and qualified to engage in business in each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect with respect to such Loan Party.
		

		
			(vi)        A favorable opinion of Vinson & Elkins L.L.P., counsel to the Loan Parties, addressed to Bank, covering such matters as may be reasonably requested by Bank in connection with herewith.
		

		
			(vii)       A certificate of a Responsible Officer of each Loan Party either (A) attaching copies of all material consents and approvals of third parties that may be required in connection with the execution, delivery and performance by such Loan Party and the validity against such Loan Party of the Loan Documents to which it is a party, and such consents, licenses and approvals shall be in full force and effect, or (B) stating that no such material consents or approvals are so required.
		

		
			(viii)      A certificate signed by a Responsible Officer of Borrower certifying as of the Closing Date (A) that the conditions specified in Section 4.2(a), have been satisfied, (B) that there has been no event or circumstance since December 31, 2017, that has had or could be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect, (C) that there has been no action, suit, investigation or proceeding pending or, to the knowledge of Borrower, threatened in any court before any arbitrator or governmental authority (1) in respect of the closing of this Agreement or (2) that could reasonably be expected to have a Material Adverse Effect, (D) that Borrower does not have any Subsidiaries, other than (1) IDR Holdings, (2) Partners GP and (3) Partners and its direct and indirect Subsidiaries (E) that, after giving pro forma effect to the closing of the transactions contemplated by this Agreement, Borrower and its Applicable Subsidiaries do not have any indebtedness for borrowed money, other than with respect to the indebtedness for borrowed money permitted hereunder and (F) that Partners is in pro forma compliance with the financial covenants set forth in Section 7.11 of the Partners Credit Agreement, both immediately prior to and after giving effect to this Agreement.
		

		
			(ix)       one or more certificates attesting to the Solvency of the Loan Parties on a
		

		
			

		 

		

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			consolidated basis, from the General Partner’s chief financial officer.
		

		
			(x)        Such other documents as Bank may require under any other Section of this Agreement.
		

		
			(b)    Financial Condition.    There shall have been no material adverse change, as determined by Bank, in the financial condition or business of any Loan Party hereunder, nor any material decline, as determined by Bank, in the market value of any Collateral required hereunder or a substantial or material portion of the assets of any Loan Party.
		

		
			(c)    Insurance.  Borrower shall have delivered to Bank evidence of insurance coverage, in form, substance, amounts, covering risks and issued by companies satisfactory to Bank, and where required by Bank, with lender loss payable or additional insured endorsements, as applicable, in favor of Bank.
		

		
			(d)    Fees and Expenses.    All fees and expenses (to the extent such expenses have been invoiced) required to be paid to Bank on or before the Closing Date under the terms of any Loan Document shall have been paid.
		

		
			(e)    Know Your Customer  Bank shall have received, at least five (5) Business Days prior to the Closing Date, and be reasonably satisfied in form and substance with, all documentation and other information required by bank regulatory authorities under applicable “know-your-customer” and anti-money laundering rules and regulations, including but not restricted to the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56) (as amended).
		

		
			SECTION 4.2.    CONDITIONS OF EACH EXTENSION OF CREDIT.  The obligation of Bank to make each extension of credit requested by Borrower hereunder shall be subject to the fulfillment to Bank's satisfaction of each of the following conditions:
		

		
			(a)    Compliance.  The representations and warranties contained herein and in each of the other Loan Documents shall be true and correct in all material respects (except that any such representations and warranties that are qualified by materiality shall be true and correct in all respects) on and as of the date of the signing of this Agreement and on the date of each extension of credit by Bank pursuant hereto, with the same effect as though such representations and warranties had been made on and as of each such date (except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties shall be true and correct in all material respects (except that any such representations and warranties that are qualified by materiality shall be true and correct in all respects) as of such specified earlier date), and on each such date, no Event of Default, and no condition, event or act which with the giving of notice or the passage of time or both would constitute such an Event of Default, shall have occurred and be continuing or shall exist.
		

		
			(b)    Documentation.  Bank shall have received all additional documents which may be reasonably required in connection with such extension of credit.
		

		
			(c)    Payment of Fees.  Bank shall have received payment in full of any fee required by
		

		
			

		 

		

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			any of the Loan Documents to be paid at the time such credit extension is made.
		

		
			ARTICLE V
		

		
			AFFIRMATIVE COVENANTS
		

		
			Borrower covenants that, until the Credit Agreement Termination, Borrower shall, and shall cause each other Loan Party to, as applicable, unless Bank otherwise consents in writing:
		

		
			SECTION 5.1.    PUNCTUAL PAYMENTS.  Punctually pay all principal, interest, fees or other liabilities due under any of the Loan Documents at the times and place and in the manner specified therein, and immediately upon demand by Bank, the amount by which the outstanding principal balance of any credit subject hereto at any time exceeds any limitation on borrowings applicable thereto.
		

		
			SECTION 5.2.    ACCOUNTING RECORDS.  Maintain adequate books and records in accordance with GAAP, and permit any representative of Bank, at any reasonable time, to inspect, audit and examine such books and records, to make copies of the same, and to inspect the properties of the Loan Parties.
		

		
			SECTION 5.3.    FINANCIAL STATEMENTS AND OTHER DELIVERIES.  Provide to Bank all of the following, in form and detail satisfactory to Bank:
		

		
			(a)        As soon as available, but in any event within 90 days after the end of each fiscal year of Borrower, a consolidated balance sheet of Borrower and its Subsidiaries and, if different, Borrower and the Applicable Subsidiaries, in each case as at the end of such fiscal year, and the related consolidated statements of income or operations, changes in stockholders' equity, and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year (or in lieu of such audited financial statements of Borrower and the Applicable Subsidiaries, a detailed reconciliation, reflecting such financial information for Borrower and the Applicable Subsidiaries, on the one hand, and Borrower and its Subsidiaries, on the other hand, reflecting adjustments necessary to eliminate the accounts of Subsidiaries that are not Applicable Subsidiaries (if any) from such consolidated financial statements), all (except with respect to such reconciliation) in reasonable detail and prepared in accordance with GAAP, audited and accompanied by a report and opinion of KPMG LLP or an independent certified public accountant of nationally recognized standing reasonably acceptable to Bank, which report and opinion shall be prepared in accordance with GAAP and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit.
		

		
			(b)        As soon as available, but in any event within 60 days after the end of each of the first three fiscal quarters of each fiscal year of Borrower, a consolidated balance sheet of Borrower and its Subsidiaries and, if different, Borrower and the Applicable Subsidiaries, in each case as at the end of such fiscal quarter, and the related consolidated statements of income or operations, changes in stockholders' equity, and cash flows for such fiscal quarter and for the portion of Borrower's fiscal year then ended, setting forth in each case
		

		
			

		 

		

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			in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year (or in lieu of such financial statements of Borrower and the Applicable Subsidiaries, a detailed reconciliation, reflecting such financial information for Borrower and the Applicable Subsidiaries, on the one hand, and Borrower and its Subsidiaries, on the other hand, reflecting adjustments necessary to eliminate the accounts of Subsidiaries that are not Applicable Subsidiaries (if any) from such consolidated financial statements), all (except with respect to such reconciliation) in reasonable detail, certified by a Responsible Officer of Borrower as fairly presenting the financial condition, results of operations, stockholders' equity and cash flows of Borrower and its Applicable Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes.
		

		
			(c)        Concurrently with the delivery thereof to the administrative agent under the Partners Credit Agreement, a duly completed Compliance Certificate (as defined in the Partners Credit Agreement).
		

		
			SECTION 5.4.    COMPLIANCE; PRESERVATION OF EXISTENCE.  Except as could not reasonably be expected to have a Material Adverse Effect, preserve and maintain all licenses, permits, governmental approvals, rights, privileges and franchises necessary for the conduct of its business. Comply in all material respects with the provisions of all documents pursuant to which the applicable Loan Party is organized and/or which govern such Loan Party’s continued existence. Except as could not reasonably be expected to have a Material Adverse Effect, comply in all material respects with the requirements of all laws, rules, regulations and orders of any jurisdiction in which the Loan Parties are located or doing business, or otherwise is applicable to the Loan Parties.  Comply with the requirements of all laws, rules, regulations and orders of any jurisdiction in which the is the Loan Parties are located or doing business, or otherwise is applicable to the Loan Parties relating to: (a) all Sanctions, (b) all laws and regulations that relate to money laundering, any predicate crime to money laundering, or any financial record keeping and reporting requirements related thereto, (c) the U.S. Foreign Corrupt Practices Act of 1977, as amended, (d) the U.K. Bribery Act of 2010, as amended, and (e) any other applicable anti-bribery or anti-corruption laws and regulations.
		

		
			SECTION 5.5.    INSURANCE.  Maintain and keep in force, for each business in which is the Loan Parties are engaged, insurance of the types and in amounts customarily carried in similar lines of business, including but not limited to fire, extended coverage, commercial general liability, and, if required, workers' compensation, with all such insurance carried in amounts reasonably satisfactory to Bank, and deliver to Bank from time to time at Bank's request schedules setting forth all insurance then in effect, together with a lender’s loss payee or additional insured (as applicable) endorsement for all such insurance naming Bank as a lender loss payee or additional insured (as applicable).  Such insurance may be obtained from an insurer or through an insurance agent of Borrower’s choice, provided that any insurer chosen by Borrower is acceptable to Bank on such reasonable grounds as may be permitted under applicable law.
		

		
			SECTION 5.6.    FACILITIES.  Keep all properties useful or necessary to each Loan Party's business, if any, in good repair and condition, and from time to time make necessary
		

		
			
		

		
			

		 

		

			-18-

		

 

		

		
			repairs, renewals and replacements thereto so that such properties shall be fully and efficiently preserved and maintained.
		

		
			SECTION 5.7.    TAXES AND OTHER LIABILITIES.  Pay and discharge when due any and all material indebtedness, obligations, assessments and taxes, both real or personal, including without limitation material federal and state income taxes and state and local property taxes and assessments, except (a) such as the applicable Loan Party may in good faith contest or as to which a bona fide dispute may arise, and (b) for which the applicable Loan Party has made provision, to Bank's satisfaction, for eventual payment thereof in the event such Loan Party is obligated to make such payment.
		

		
			SECTION 5.8.    LITIGATION.  Promptly give notice in writing to Bank of any litigation pending or threatened in writing against any Loan Party which could reasonably be expected to have a Material Adverse Effect.
		

		
			SECTION 5.9.    NOTICE TO BANK.  (a) Promptly (but in no event more than five (5) days after the occurrence of each such event or matter) give written notice to Bank in reasonable detail of:  (i) the occurrence of any Event of Default, or any condition, event or act which with the giving of notice or the passage of time or both would constitute an Event of Default; (ii) any change in the name or the organizational structure of Borrower or the Applicable Subsidiaries; (iii) the occurrence and nature of any Reportable Event or Prohibited Transaction, each as defined in ERISA, or any funding deficiency with respect to any Plan; or (iv) any termination or cancellation of any insurance policy which Borrower is required to maintain, or any uninsured or partially uninsured loss through liability or property damage, or through fire, theft or any other cause affecting Borrower's property and (b) promptly (but in no event more than one (1) Business Day after the occurrence of such event or matter) give written notice to Bank in reasonable detail of any event described in Sections 2.1(f)(i) or (f)(ii)(B);  provided that nothing in this Section 5.9(b), including, but not limited to, Borrower’s failure to provide timely notice as set forth herein, shall prevent, delay or in any other way affect the immediate termination of this Agreement or Bank’s obligation, if any, to make Loans to Borrower, pursuant to Sections 2.1(f)(i) or (f)(ii)(B).
		

		
			SECTION 5.10.    ADDITIONAL SUBSIDIARIES. Upon the formation or acquisition by any Loan Party of any new direct or indirect Subsidiary (unless such new Subsidiary is a direct or indirect Subsidiary of Partners or Partners GP), then Borrower shall, at Borrower's expense:
		

		
			(a)      Within 30 days (or with respect to any Additional Subsidiary that either owns (i) any Equity Interests of IDR Holdings or (ii) any incentive distribution rights owned by IDR Holdings, two (2) Business Days) or such longer period as permitted by Bank in its sole discretion after such formation or acquisition of such Subsidiary, cause such Subsidiary to duly execute and deliver to Bank a joinder to the Guaranty and Collateral Agreement, as reasonably specified by and in form and substance reasonably satisfactory to Bank, guaranteeing Borrower’s obligations under the Loan Documents and securing payment of all the Obligations of such Subsidiary under the Loan Documents, and financing statements and such other documents as are necessary and desirable in Bank’s sole discretion to perfect the Liens created by the Guaranty and Collateral Agreement.
		

		
			
		

		
			

		 

		

			-19-

		

 

		

		
			(b)      Within 30 days (or with respect to any Additional Subsidiary that either owns (i) any Equity Interests of IDR Holdings or (ii) any incentive distribution rights owned by IDR Holdings, two (2) Business Days) or such longer period as permitted by Bank in its sole discretion after such formation or acquisition of such Subsidiary, take such actions, or cause the applicable Loan Party to take such actions, as may be necessary to ensure a valid first priority perfected Lien over 100% of the Equity Interests of such Subsidiary held by Borrower or the applicable Loan Party and over 100% of the Equity Interests held by such Subsidiary.
		

		
			(c)      Within 30 days (or with respect to any Additional Subsidiary that either owns (i) any Equity Interests of IDR Holdings or (ii) any incentive distribution rights owned by IDR Holdings, two (2) Business Days) or such longer period as permitted by Bank in its sole discretion after such formation or acquisition, deliver to Bank, upon the request of Bank in its reasonable discretion, a signed copy of a favorable opinion of counsel for the Loan Parties acceptable to Bank relating to such Guaranty and Collateral Agreement and other documents as Bank may reasonably request.
		

		
			(d)      Within 30 days (or with respect to any Additional Subsidiary that either owns (i) any Equity Interests of IDR Holdings or (ii) any incentive distribution rights owned by IDR Holdings, two (2) Business Days) or such longer period as permitted by Bank in its sole discretion after such formation or acquisition, deliver to Bank documents of the type described in Sections 4.1(b)(v),  (vi), (viii) and (ix) in form and substance reasonably acceptable to Bank.
		

		
			For the avoidance of doubt, in no event will the provisions of this Section 5.10 require the granting or perfection of a security interest in any Excluded Assets.
		

		
			SECTION 5.11.  FURTHER ASSURANCES. Promptly upon reasonable request by Bank, (a) correct any material defect or error that may be discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof and (b) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, certificates, assurances and other instruments as Bank may reasonably require from time to time in order to (i) carry out the purposes of the Loan Documents, (ii) perfect and maintain the validity, effectiveness and priority of the Guaranty and Collateral Agreement and any Liens intended to be created thereunder and (iii) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto Bank the rights granted or now or hereafter intended to be granted thereto under any Loan Document or under any other instrument executed in connection with any Loan Document to which any Loan Party is or is to be a party.
		

		
			ARTICLE VI
		

		
			NEGATIVE COVENANTS
		

		
			Borrower further covenants that, until the Credit Agreement Termination, Borrower will not, and will not permit any Applicable Subsidiary to, without Bank’s prior written consent:
		

		
			
		

		
			

		 

		

			-20-

		

 

		

		
			SECTION 6.1.      USE OF FUNDS.  Use any of the proceeds of any credit extended hereunder except for the purposes stated in Article II hereof, or directly or indirectly use any such proceeds for the purpose of (a) providing financing to, or otherwise funding, any targets of Sanctions; or (b) providing financing for, or otherwise funding, any transaction which would be prohibited by Sanctions or would otherwise cause Bank or any of Bank’s affiliates to be in breach of any Sanctions.
		

		
			SECTION 6.2.      DEPOSIT ACCOUNTS.  Subject to the time period set forth in Section 4.1(a)(iii)(d), neither the Borrower nor any other Loan Party shall hereafter establish and maintain, or otherwise deposit, allow to be deposited or hold any funds in, any deposit account, securities account or commodity account, unless it complies with the provisions (including, without limitation, the notice provisions and the control agreement requirements) regarding such accounts set forth in the Guaranty and Collateral Agreement.
		

		
			SECTION 6.3.      OTHER INDEBTEDNESS.  Create, incur, assume or permit to exist any indebtedness or liabilities resulting from borrowings, swap agreements, loans or advances, whether secured or unsecured, matured or unmatured, liquidated or unliquidated, joint or several, except (a) the liabilities of the Loan Parties to Bank hereunder, and (b) any other liabilities of existing as of, and disclosed to Bank prior to, the Closing Date.
		

		
			SECTION 6.4.      MERGER, CONSOLIDATION, TRANSFER OF ASSETS.  Merge into or consolidate with any other entity; make any substantial change in the nature of an Applicable Subsidiary’s business as conducted as of the Closing Date; acquire all or substantially all of the assets of any other entity; sell lease, transfer or otherwise dispose of any Equity Interests (including, for the avoidance of doubt, any incentive distribution rights) owned by such Loan Party, or sell, lease, transfer or otherwise dispose of all or a substantial or material portion of any Loan Party's assets, except for (i) any sale, lease, disposition or transfer from one Loan Party to another Loan Party or any Applicable Subsidiary that contemporaneously becomes a Loan Party, (ii) a merger of any Applicable Subsidiary into any other Applicable Subsidiary, (iii) a merger of any Applicable Subsidiary into the Borrower so long as the Borrower remains the surviving entity, (iv) any sale, lease, disposition or transfer of any Excluded Assets, and (v) the making of any Restricted Payment permitted by Section 6.7.
		

		
			SECTION 6.5.      GUARANTIES.  Guarantee or become liable in any way as surety, endorser (other than as endorser of negotiable instruments for deposit or collection in the ordinary course of business), accommodation endorser or otherwise for, nor pledge or hypothecate any assets of any Loan Party as security for, any liabilities or obligations of any other person or entity, except any of the foregoing in favor of Bank.
		

		
			SECTION 6.6.      LOANS, ADVANCES, INVESTMENTS.  Make any loans or advances to or investments in any Person or entity, except any of the foregoing (a) existing as of, and disclosed to Bank prior to, the Closing Date, (b) made with the net cash proceeds of a substantially contemporaneous issuance of the Equity Interests of Borrower after the Closing Date, (c) any investments in or into any Applicable Subsidiary, and (d) any transaction permitted pursuant by Section 6.4.
		

		
			
		

		
			

		 

		

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			SECTION 6.7.      RESTRICTED PAYMENTS.  Declare or pay any dividend or distribution either in cash, stock or any other property on the Borrower’s or any Applicable Subsidiary’s Equity Interests or the Series B Units, now or hereafter outstanding, nor redeem, retire, repurchase or otherwise acquire any shares of any class of the Borrower’s or such Applicable Subsidiary’s Equity Interests or any Series B Units, as applicable, now or hereafter outstanding (the foregoing, collectively, “Restricted Payments”); provided that (a) Borrower may make any Restricted Payments as permitted by its organizational documents, (b) Applicable Subsidiaries may make Restricted Payments to Borrower at any time, (c) IDR Holdings may make Restricted Payments to Series B Unitholders if such Restricted Payment is otherwise permitted to be made to the Series B Units under the limited liability company agreement of IDR Holdings as in effect on the Closing Date and (d) to the extent any transaction permitted by Section 6.4 clauses (i) through (iv) constitutes a Restricted Payment, the Borrower or any Applicable Subsidiary may make such Restricted Payment.
		

		
			SECTION 6.8.      PLEDGE OF ASSETS.  Mortgage, pledge, grant or permit to exist a security interest in, or Lien upon, all or any portion of any Applicable Subsidiary's assets now owned or hereafter acquired, except for Permitted Liens and any of the foregoing in favor of Bank or which is existing as of, and disclosed to Bank in writing prior to, the Closing Date.  Notwithstanding anything herein to the contrary, nothing in this Agreement shall permit any security interest in or Lien on any Equity Interest, cash, Deposit Account (as defined in the Guaranty and Collateral Agreement) or Securities Account (as defined in the Guaranty and Collateral Agreement) of Borrower or any Applicable Subsidiary, other than security interests or Liens pursuant to the Loan Documents. For the avoidance of doubt, neither Partners nor any of its Subsidiaries or Partners GP nor any of its Subsidiaries will be restricted by this Section 6.8, except that Partners GP will not mortgage, pledge, grant or permit to exist a security interest in, or Lien upon, the general partner interest in Partners, other than Liens arising by operation of law.
		

		
			SECTION 6.9.      AMENDMENT OF ORGANIZATIONAL DOCUMENTS.   (a) Amend, terminate or otherwise modify, or permit to be amended, terminated or otherwise modified, as applicable, Borrower’s, any Applicable Subsidiary’s, Partners GP’s or Partners’ organizational documents or (b) enter into, permit to be entered into or otherwise suffer to exist any organizational document of any Applicable Subsidiary, in each case to the extent any such amendment, termination or modification, or any such organizational document, would be materially adverse to Bank, other than any such amendment, termination or modification necessary to permit or effect a transaction permitted under Section 6.4 or Section 6.6;  provided that, without limitation, any such amendment, termination or modification, or any such organizational document, that (i) affects the amount of, or the ability to make, distributions to the Borrower or from or to IDR Holdings, (ii) affects what events would constitute a “Suspension of Distributions” hereunder, (iii) has an adverse effect on the validity or perfection of any Liens (or rights and remedies with respect thereto) in favor of Bank under the Loan Documents or (iv) amends the definitions of “ARMM”, “ARMM Credit Agreement”, “ARMM Credit Agreement Default Transfer” or “ARMM Credit Agreement Pledge Transfer” or adversely affects the Bank’s rights under Sections 3.6(a), 3.6(b) 3.6(d) or 7.2(a) of the limited liability company agreement of IDR Holdings will, in each case of (i) through (iv) above, be deemed to be materially adverse to Bank.
		

		
			
		

		
			

		 

		

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			SECTION 6.10.      BURDENSOME AGREEMENTS.Enter into or permit to exist any contract, understanding or other binding agreement that limits the ability of any Subsidiary of the Borrower to make any dividend or distribution either in cash, stock or any other property on such Subsidiary’s Equity Interests to the Borrower or any Applicable Subsidiary, other than (i) the Partners Credit Agreement as in existence on the Closing Date (or modifications thereto that are no more restrictive with respect to distributions or dividends than the Partners Credit Agreement as in existence of the Closing Date), (ii) the 2024 Notes Indenture as in existence on the Closing Date (or modifications thereto that are no more restrictive with respect to distributions or dividends than the 2024 Notes Indenture as in existence on the Closing Date) or (iii) similar provisions in other agreements that are no more restrictive with respect to distributions or dividends than the Partners Credit Agreement and the 2024 Notes Indenture as in existence of the Closing Date.
		

		
			ARTICLE VII
		

		
			EVENTS OF DEFAULT
		

		
			SECTION 7.1.      The occurrence of any of the following shall constitute an “Event of Default” under this Agreement:
		

		
			(a)      Borrower (i) shall fail to pay when due any principal payable under any of the Loan Documents and (ii) shall fail to pay any interest, fees or other amounts payable under any of the Loan Documents within three (3) days after any such amounts are due.
		

		
			(b)      Any financial statement or certificate furnished to Bank in connection with, or any representation or warranty made by Borrower or any other Loan Party under this Agreement or any other Loan Document shall prove to be incorrect, false or misleading in any material respect when furnished or made.
		

		
			(c)       (i) Borrower or any Applicable Subsidiary fails to perform or observe any term, covenant or agreement contained in any of Sections 5.1,  5.3,  5.4,  5.9,  5.10 or Article VI or (ii) any Loan Party fails to perform or observe any term, covenant or agreement (not otherwise specified herein as an “Event of Default”) contained herein or in any other Loan Document, and such failure continues for 30 days.
		

		
			(d)       (i) any “Event of Default” under the Partners Credit Agreement (whether or not waived or otherwise consented to by the Lenders or the Agents, as appropriate thereunder) or (ii) any default in the payment or performance of any obligation, or any defined event of default, under the terms of any contract, instrument or document (other than any of the Loan Documents) pursuant to which Borrower, any other Loan Party hereunder has incurred any debt or other liability to any person or entity, including Bank, in each case, that results in or allows for the acceleration, demand, becoming due, repurchase, prepayment, defeasance or redemption of (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem, any such debt to be made, in each case prior to its stated maturity.
		

		
			(e)      Borrower, an Applicable Subsidiary or Partners GP shall become insolvent, or shall
		

		
			
		

		
			

		 

		

			-23-

		

 

		

		
			suffer or consent to or apply for the appointment of a receiver, trustee, custodian or liquidator of itself or any of its property, or shall generally fail to pay its debts as they become due, or shall make a general assignment for the benefit of creditors; Borrower or an Applicable Subsidiary shall file a voluntary petition in bankruptcy, or seeking reorganization, in order to effect a plan or other arrangement with creditors or any other relief under any Debtor Relief Law, whether now or hereafter in effect; or Borrower or an Applicable Subsidiary shall file an answer admitting the jurisdiction of the court and the material allegations of any involuntary petition; or  Borrower or an Applicable Subsidiary shall be adjudicated a bankrupt, or an order for relief shall be entered against Borrower or an Applicable Subsidiary by any court of competent jurisdiction under any Debtor Relief Law.
		

		
			(f)      The filing of a notice of judgment lien against Borrower or an Applicable Subsidiary; or the recording of any abstract or transcript of judgment against  Borrower or an Applicable Subsidiary in any county or recording district in which  Borrower or an Applicable Subsidiary has an interest in real property; or the service of a notice of levy and/or of a writ of attachment or execution, or other like process, against the assets of Borrower or an Applicable Subsidiary; or the entry of a judgment against Borrower or an Applicable Subsidiary; or any involuntary petition or proceeding pursuant to the any Debtor Relief Law is filed or commenced against Borrower or an Applicable Subsidiary, in each case, to the extent the same and continues undismissed or unstayed for 60 calendar days.
		

		
			(g)      Any Change in Control shall occur.
		

		
			SECTION 7.2.      REMEDIES.  Upon the occurrence of any Event of Default:  (a) all Obligations and any other principal, unpaid interest outstanding and other indebtedness of Borrower under each of the Loan Documents, any term thereof to the contrary notwithstanding, shall at Bank's option and without notice become immediately due and payable without presentment, demand, protest or any notices of any kind, including without limitation, notice of nonperformance, notice of protest, notice of dishonor, notice of intention to accelerate or notice of acceleration, all of which are hereby expressly waived by Borrower; (b) the obligation, if any, of Bank to extend any further credit under any of the Loan Documents shall immediately cease and terminate; and (c) Bank shall have all rights, powers and remedies available under each of the Loan Documents, or accorded by law, including without limitation the right to resort to any or all security for any credit subject hereto and to exercise any or all of the rights of a beneficiary or secured party pursuant to applicable law.  All rights, powers and remedies of Bank may be exercised at any time by Bank and from time to time after the occurrence of an Event of Default, are cumulative and not exclusive, and shall be in addition to any other rights, powers or remedies provided by law or equity. Notwithstanding the foregoing or anything else herein to the contrary, upon the occurrence of an actual or deemed entry of an order for relief, or similar order, with respect to the Borrower under any Debtor Relief Law, this Agreement and the obligation, if any, of Bank to extend any further credit under any of the Loan Documents shall immediately and automatically cease and terminate, and the unpaid principal amount of all outstanding Loans, all accrued and unpaid interest thereon and other Obligations shall become immediately due and payable, in each case, without any further action of Bank.
		

		
			ARTICLE VIII
		

		
			
		

		
			

		 

		

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			MISCELLANEOUS
		

		
			SECTION 8.1.      NO WAIVER.  No delay, failure or discontinuance of Bank in exercising any right, power or remedy under any of the Loan Documents shall affect or operate as a waiver of such right, power or remedy; nor shall any single or partial exercise of any such right, power or remedy preclude, waive or otherwise affect any other or further exercise thereof or the exercise of any other right, power or remedy.  Any waiver, permit, consent or approval of any kind by Bank of any breach of or default under any of the Loan Documents must be in writing and shall be effective only to the extent set forth in such writing.
		

		
			SECTION 8.2.      NOTICES.  All notices, requests and demands which any party is required or may desire to give to any other party under any provision of this Agreement must be in writing delivered to each party at the following address:
		

			
					
						 

					
					
						 

				
	
					
						BORROWER:

					
					
						Antero Midstream GP LP

				
	
					
						 

					
					
						1615 Wynkoop Street

				
	
					
						 

					
					
						Denver, Colorado 80202

				
	
					
						 

					
					
						Attention: Mike Kennedy, Chief Financial Officer

				

		
			 
		

			
					
						 

					
					
						 

				
	
					
						BANK:

					
					
						WELLS FARGO BANK, NATIONAL ASSOCIATION

				
	
					
						 

					
					
						1700 Lincoln St.

				
	
					
						 

					
					
						6th Floor

				
	
					
						 

					
					
						Denver, CO 80203

				

		
			 
		

		
			or to such other address as any party may designate by written notice to all other parties.  Each such notice, request and demand shall be deemed given or made as follows:  (a) if sent by hand delivery, upon delivery; (b) if sent by mail, upon the earlier of the date of receipt or three (3) days after deposit in the U.S. mail, first class and postage prepaid; and (c) if sent by telecopy, upon receipt.
		

		
			SECTION 8.3.        EXPENSES; INDEMNITY AND DAMAGE WAIVER.
		

		
			(a)    Costs and Expenses. Borrower shall pay to Bank immediately upon demand the full amount of all reasonable and documented out-of-pocket payments, advances, charges, costs and expenses, including, to the extent permitted by applicable law (including the reasonable and documented fees, charges and expenses of counsel, which shall be limited to the reasonable and documented fees, charges and expenses of one outside counsel and one local counsel in each applicable jurisdiction, as necessary) expended or incurred by Bank in connection with (a) the negotiation and preparation of this Agreement and the other Loan Documents, Bank's continued administration hereof and thereof, and the preparation of any amendments and waivers hereto and thereto, (b) the enforcement of Bank's rights and/or the collection of any amounts which become due to Bank under any of the Loan Documents, whether or not suit is brought, and (c) the prosecution or defense of any action in any way related to any of the Loan Documents, including without limitation, any action for declaratory relief, whether incurred at the trial or appellate level, in an arbitration proceeding or otherwise, and including any of the foregoing incurred in connection with
		

		
			
		

		
			

		 

		

			-25-

		

 

		

		
			any bankruptcy proceeding (including without limitation, any adversary proceeding, contested matter or motion brought by Bank or any other person) relating to any Loan Party or any other person or entity. Notwithstanding anything in this Agreement to the contrary, reasonable attorneys' fees shall not exceed the amount permitted by law.
		

		
			(b)      Indemnification by Borrower.Borrower shall indemnify Bank, Bank’s affiliates and its and their partners, directors, officers, employees, representatives, agents, trustees and advisors (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities, penalties and related expenses (including the reasonable and documented fees, charges and expenses of counsel, which shall be limited to the reasonable and documented fees, charges and expenses of one outside counsel and one local counsel in each applicable jurisdiction, as necessary, and, in the case of an actual or perceived conflict of interest, additional conflicts counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any third party or by Borrower or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or the use or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or release any toxic substance or hazardous waste on or from any property owned or operated by Borrower or any of its Subsidiaries, or any environmental liability related in any way to 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, whether brought by a third party or by Borrower or any other Loan Party or any of Borrower's or such Loan Party's directors, shareholders or creditors, and regardless of whether any Indemnitee is a party thereto, IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNITEE; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee, or (y) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from a dispute among or between Indemnitees and not involving any act or omission of Borrower or any other Loan Party; provided further that payments of expenses with respect to the negotiation, preparation, due diligence, administration, syndication, closing and enforcement of any of the Loan Documents will be limited to those provided for under Section 8.3(a).
		

		
			(c)      Waiver of Consequential Damages, Etc.  No Indemnitee shall be liable to Borrower, its affiliates or any other Person, and Borrower and its affiliates will not be liable to any Indemnitee, its affiliates or any other Person, for  any claim on any theory of liability, for special, indirect, consequential or 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, the transactions
		

		
			
		

		
			

		 

		

			-26-

		

 

		

		
			contemplated hereby or thereby, any Loan or the use of the proceeds thereof; provided, that, nothing contained in this Section 8.3(c) shall limit Borrower’s indemnification obligations with respect to indirect, consequential or punitive damage claims, to the extent of the indemnification provided in Section 8.3(b)  No Indemnitee referred to in Section 8.3(b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined by a final and nonappealable judgment of a court of competent jurisdiction.
		

		
			(d)      Payments.  All amounts due under this Section 8.3 shall be payable not later than ten (10) Business Days after demand therefor.
		

		
			(e)      Survival.  The agreements in this Section 8.3 shall survive the replacement of Bank, the termination of this Agreement and the repayment, satisfaction or discharge of all the other Obligations.
		

		
			SECTION 8.4.        SUCCESSORS, ASSIGNMENT.  This Agreement shall be binding upon and inure to the benefit of the heirs, executors, administrators, legal representatives, successors and assigns of the parties; provided however, that (i) Borrower may not assign or transfer its interests or rights hereunder or under the other Loan Documents without the prior written consent of Bank and (ii) unless an Event of Default has occurred and is continuing, Bank may not assign or transfer its interests or rights hereunder and under the other Loan Documents without the prior written consent of Borrower. In connection with any assignment or transfer of its rights by Bank permitted hereunder, Bank may disclose all documents and information which Bank now has or may hereafter acquire relating to any credit subject hereto, Borrower or its business, any Bank Subsidiary or its business, any Guarantor hereunder or the business of such Guarantor, if any, or any Collateral required hereunder so long as any recipient of such documents or information executes an agreement agreeing to comply with the confidentiality provisions set forth in Section 8.14.
		

		
			SECTION 8.5.        ENTIRE AGREEMENT; AMENDMENT.  To the full extent permitted by law, this Agreement and the other Loan Documents constitute the entire agreement between Borrower and Bank with respect to the subject matter hereof and thereof, and supersede all prior negotiations, communications, discussions and correspondence concerning the subject matter hereof and thereof.  THIS DOCUMENT AND ALL OTHER DOCUMENTS RELATING TO THE INDEBTEDNESS CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THE ENTIRE AND FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES RELATING TO THE INDEBTEDNESS. This Agreement may be amended or modified only in writing signed by each party hereto.
		

		
			
		

		
			

		 

		

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			SECTION 8.6.        NO THIRD PARTY BENEFICIARIES.  This Agreement is made and entered into for the sole protection and benefit of the parties hereto and their respective permitted successors and assigns, and no other person or entity shall be a third party beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any other of the Loan Documents to which it is not a party.
		

		
			SECTION 8.7.        TIME.  Time is of the essence of each and every provision of this Agreement and each other of the Loan Documents.
		

		
			SECTION 8.8.        SEVERABILITY OF PROVISIONS.  If any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity without invalidating the remainder of such provision or any remaining provisions of this Agreement.
		

		
			SECTION 8.9.        COUNTERPARTS.  This Agreement may be executed in any number of counterparts, each of which when executed and delivered shall be deemed to be an original, and all of which when taken together shall constitute one and the same Agreement. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Agreement
		

		
			SECTION 8.10.        GOVERNING LAW; JURISDICTION; ETC.
		

		
			(a)    GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
		

		
			(b)    SUBMISSION TO JURISDICTION.   EACH OF THE PARTIES TO THIS AGREEMENT IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS 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 AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO 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 COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE 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 IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT ANY PARTY HERETO MAY OTHERWISE HAVE TO BRING ANY ACTION OR
		

		
			
		

		
			

		 

		

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			PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN THE COURTS OF ANY JURISDICTION.
		

		
			(c)    WAIVER OF VENUE.  EACH OF THE PARTIES TO THIS AGREEMENT IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY 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 IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
		

		
			(d)    SERVICE OF PROCESS.  TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 8.2.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
		

		
			SECTION 8.11.    WAIVER OF JURY TRIAL.EACH PARTY HERETO HEREBY IRREVOCABLY 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 OR 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 PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON 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 AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
		

		
			SECTION 8.12.    BUSINESS PURPOSE.  Borrower represents and warrants that each Borrowing hereunder shall be made for (a) a business, commercial, investment, agricultural or other similar purpose, (b) the purpose of acquiring or carrying on a business, professional or commercial activity, or (c) the purpose of acquiring any real or personal property as an investment and not primarily for a personal, family or household use.
		

		
			SECTION 8.13.    RIGHT OF SETOFF; DEPOSIT ACCOUNTS. Upon and after the occurrence of an Event of Default, (a) Borrower hereby authorizes Bank, at any time and from time to time, without notice, which is hereby expressly waived by Borrower, and whether or not Bank shall have declared any credit subject hereto to be due and payable in accordance with the
		

		
			
		

		
			

		 

		

			-29-

		

 

		

		
			terms hereof, to set off against, and to appropriate and apply to the payment of, Borrower’s obligations and liabilities under the Loan Documents (whether matured or unmatured, fixed or contingent, liquidated or unliquidated), any and all amounts owing by Bank to Borrower (whether payable in U.S. dollars or any other currency, whether matured or unmatured, and in the case of deposits, whether general or special (except trust and escrow accounts), time or demand and however evidenced), and (b) pending any such action, to the extent necessary, to hold such amounts as collateral to secure such obligations and liabilities and to return as unpaid for insufficient funds any and all checks and other items drawn against any deposits so held as Bank, in its sole discretion, may elect.  Bank may exercise this remedy regardless of the adequacy of any collateral for the obligations of Borrower to Bank and whether or not Bank is otherwise fully secured.  Borrower hereby grants to Bank a security interest in all deposits and accounts maintained with Bank to secure the payment of all obligations and liabilities of Borrower to Bank under the Loan Documents.
		

		
			A.        SECTION 8.14.  TREATMENT OF CERTAIN INFORMATION; CONFIDENTIALITY.  Bank agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its affiliates and to its affiliates' respective partners, directors, officers, employees, agents, trustees, advisors and representatives (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), (b)  to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or by any order of any court or administrative agency or in any pending legal or administrative proceeding or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) with the consent of the Borrower, (g) to the extent requested by any Person providing insurance to Bank relating to the Borrower and its obligations hereunder (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), (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section 8.14 or (ii) becomes available to Bank or any of its respective affiliates on a nonconfidential basis from a source other than the Borrower or any of its affiliates, which source is not to the knowledge of Bank or any of its respective affiliates in breach of any confidentiality obligations owing to the Borrower or any of its affiliates with respect to such Information, or (iii) to the extent needed to obtain a Committee on Uniform Securities Identification Procedures (CUSIP) number.
		

		
			For purposes of this Section, "Information" means all information received from the Borrower or any Subsidiary or affiliate thereof relating to the Borrower or any Subsidiary thereof or their respective businesses, other than any such information that is available to Bank on a nonconfidential basis prior to disclosure by the Borrower or any Subsidiary or affiliate thereof from a source that is not to the knowledge of Bank or any of its affiliates in breach of any confidentiality obligations owing to the Borrower or any Subsidiary or affiliate thereof with respect to such Information, provided that, in the case of information received from the Borrower
		

		
			
		

		
			

		 

		

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			or any Subsidiary or affiliate thereof 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 8.14 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.
		

		
			Bank acknowledges that (a) the Information may include material non-public information concerning the Borrower or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable law, including United States federal and state securities laws.
		

		
			 
		

		
			 
		

		
			

		 

		

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			IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						ANTERO MIDSTREAM GP LP

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By: AMGP GP LLC, its general partner

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By: 

					
					
						/s/ Alvyn A. Schopp

				
	
					
						 

					
					
						Name:

					
					
						Alvyn A. Schopp

				
	
					
						 

					
					
						Title:

					
					
						Chief Administrative Officer, Regional Senior Vice President and Treasurer

				

		
			 
		

		
			
		

		
			

		 

		

			Signature Page to Credit Agreement

		

 

		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						WELLS FARGO BANK, NATIONAL ASSOCIATION,

				
	
					
						 

					
					
						as Bank

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By: 

					
					
						/s/ Oleg Kogan

				
	
					
						 

					
					
						Name: 

					
					
						Oleg Kogan

				
	
					
						 

					
					
						Title: 

					
					
						Director

				

		
			 
		

		
			 
		

		
			

		 

		

			Signature Page to Credit Agreement

		

 

		

		
			EXHIBIT A
		

		
			FORM OF LINE OF CREDIT NOTE
		

		
			(this “Note”)
		

			
					
						 

					
					
						 

				
	
					
						$12,000,000.00

					
					
						May 9, 2018

				

		
			 
		

		
			FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises to pay to Wells Fargo Bank, National Association (the "Lender"), on the Maturity Date (as defined in the Agreement referred to below) the principal amount of Twelve Million and No/100 Dollars] ($12,000,000.00), or such lesser principal amount of Loans (as defined in such Agreement) due and payable by the Borrower to the Lender on the Maturity Date under that certain Credit Agreement, dated as of May 9, 2018 (as amended, amended and restated, extended, supplemented or otherwise modified in writing from time to time, the "Agreement;" the terms defined therein being used herein as therein defined), among the Borrower and Wells Fargo Bank, National Association, as Bank.
		

		
			The Borrower promises to pay interest on the unpaid principal amount of each Loan from the date of such Loan until such principal amount is paid in full, at such interest rates, and at such times as are specified in the Agreement.  All payments of principal of and interest on this Note shall be made to the Lender in Dollars in immediately available funds.  If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Agreement.
		

		
			This Note is one of the Line of Credit Notes referred to in the Agreement, is entitled to the benefits thereof and is subject to optional and mandatory prepayment in whole or in part as provided therein.  This Note is also entitled to the benefits of the Guaranty (as defined in the Guaranty and Collateral Agreement) and is secured by the Collateral.  Upon the occurrence and continuance of one or more of the Events of Default specified in the Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Agreement.  The Loans made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business.  The Lender may also attach schedules to this Note with respect to the date, amount and maturity of its Loans and payments with respect thereto.
		

		
			The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and, except for notices for which provision is expressly made in the Loan Documents, notice of protest, demand, intent to accelerate, acceleration, dishonor and non-payment of this Note.
		

		
			
		

		
			

		 

		

			Exhibit A

		

		

			Form of Note

		

 

		

		
			THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						ANTERO MIDSTREAM GP LP

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By: 

					
					
						AMGP GP LLC, its general partner

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						 

				
	
					
						 

					
					
						Name:

					
					
						 

				
	
					
						 

					
					
						Title:

					
					
						 

				

		
			 
		

		
			
		

		
			

		 

		

			Exhibit A

		

		

			Form of Note

		

 

		

		
			LOANS AND PAYMENTS WITH RESPECT THERETO
		

			
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Date

					
					
						    

					
					
						Type of 
Loan Made

					
					
						    

					
					
						Amount of 
Loan Made

					
					
						    

					
					
						End of 
Interest 
Period

					
					
						    

					
					
						Amount of 
Principal or 
Interest 
Paid This 
Date

					
					
						    

					
					
						Outstanding 
Principal 
Balance 
This Date

					
					
						    

					
					
						Notation
 Made By

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				

		
			 
		

		 

		

			Exhibit A

		

		

			Form of Note

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