Document:

Exhibit 10.1

Exhibit 10.1

PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made and entered into as of
April 27, 2009, by and among (i) SPIRIT MASTER FUNDING, LLC, a Delaware limited liability company
(“SMF”), and SPIRIT MANAGEMENT COMPANY, a Delaware corporation (“SMC”) (references
herein to “Seller” hereunder shall be deemed to be references to SMF and/or SMC as applicable), on
the one hand, and (ii) GRAND CANYON EDUCATION, INC., a Delaware corporation and the
successor-in-interest to Significant Education, LLC, a Delaware limited liability company
(“Purchaser”), on the other hand. Except as otherwise expressly defined herein,
capitalized terms will have the meanings set forth on Exhibit A attached hereto and
incorporated herein by this reference.

Recitals

WHEREAS, Purchaser is a regionally accredited provider of postsecondary education services,
which it offers online and at the Property (as defined below);

WHEREAS, SMF is the owner of the Property and leases the Property to the Purchaser pursuant to
the Lease;

WHEREAS, SMC is the record and beneficial owner of 909,348 shares of Purchaser’s common stock,
par value $0.01 per share (the “Shares”), which Purchaser has the right to acquire at any
time on or prior to November 18, 2011 for an aggregate purchase price of $16,000,000, and which SMC
may not transfer prior to such date; and

WHEREAS, Purchaser desires to purchase from Seller, and Seller desires to sell to Purchaser,
the Property and the Shares upon the terms and conditions set forth herein.

NOW, THEREFORE, for and in consideration of the mutual covenants and promises hereinafter set
forth, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby mutually covenant and agree as follows:

ARTICLE I

PURCHASE OF PROPERTY AND SHARES

Section 1.01. Agreement To Purchase. Purchaser agrees to purchase, and Seller agrees to
sell, in accordance with the terms, conditions and stipulations set forth in this Agreement (the
“Transaction”):

(a) all of SMF’s right, title and interest in and to (i) the real property as more
particularly described on Exhibit B attached hereto, and any and all improvements
thereon and appurtenances thereto (collectively, the “Real Property”); (ii) the
furniture, furnishings and fixtures affixed thereto, if any; (iii) all plans and
specifications, engineering plans and studies, and floor plans and landscape plans
pertaining to the Real Property in Seller’s possession or under its control; (iv) all
mineral, oil and gas rights, water rights, sewer rights and other utility rights allocated
to the Real Property; (v) all

 

 

 

appurtenances,
easements, licenses, privileges and other property interests belonging
or appurtenant to the Real Property; (vi) any roads, streets and ways, public and private,
serving the Real Property (including without limitation, all rights to develop the Real
Property granted by Governmental Authorities having jurisdiction over the Real Property);
and (vii) all other property interests belonging or appurtenant to the Real Property (all of
the foregoing items in clauses (i) through (vii) above, now or hereafter existing,
collectively, the “Property”); provided, that notwithstanding any provision
contained in this Agreement, expressly excluded from the definition of “Property” are the
following items: personal property, appliances, furniture and equipment owned by Tenant or
owned or leased from third parties by the Tenant in possession of the Property pursuant to
the Lease from time to time situated on or used in connection with the Property; and

(b) all of SMC’s right, title and interest in and to the Shares.

Section 1.02. Purchase Price. The purchase price to be paid by Purchaser to Seller for the
Property and the Shares is Fifty Million and 00/100 Dollars ($50,000,000) (the “Purchase
Price”). The Purchase Price, with such adjustments as may be reflected on the closing
settlement statements referenced in Sections 5.01(a)(iv) and 5.02(a)(iv), shall be paid on the
Closing Date by wire transfer of immediately available federal funds to an account designated in
writing by Seller.

Section 1.03. Prorations. All taxes, insurance, utilities and maintenance expenses relating
to the Property for the year of Closing shall be prorated as of the Closing Date and Seller’s
portion thereof shall be paid by the Tenant, to the extent that such expenses are obligations of
the Tenant pursuant to the Lease. All rents paid in advance or payable pursuant to the Lease shall
be prorated as of the Closing Date and shall be paid by Purchaser to Seller or by Seller to
Purchaser, as applicable, at Closing.

Section 1.04. Condition of Property. Seller and Purchaser understand and agree that, except
as expressly provided by the terms of this Agreement, Purchaser’s purchase of the Property and
other rights to be conveyed, sold, transferred and/or assigned pursuant to this Agreement shall be
on an “AS IS” “WHERE IS” physical basis, “WITH ALL FAULTS,” without representation or warranty,
express or implied, with regard to physical condition, including without limitation, any latent or
patent defects, conditions of soils or groundwater, existence or nonexistence of hazardous
materials, quality of construction, workmanship, merchantability or fitness for any particular
purpose as to the physical measurements or useable space thereof. Purchaser hereby acknowledges
that Purchaser occupied the Property prior to Seller’s acquisition thereof; Purchaser has continued
to occupy and operate its business on the Property since Seller’s acquisition thereof; Purchaser
has inspected or will inspect the Property to Purchaser’s satisfaction; and Seller does not plan to
conduct its own inspection and shall not be liable for any latent or patent defects in the
Property. Purchaser acknowledges that, except as expressly set forth in this Agreement, neither
Seller nor any representative or agent of Seller has made any representation or warranty as to any
of the following: (a) the physical or environmental condition (including surface and subsurface
conditions), state of repair, income, expenses, operations of the

 

2

 

Property and surrounding
property; (b) the assignability, assumability, transferability or validity of any licenses,
permits, government approvals, warranties or guaranties relating to the Property or the use and operation thereof; (c) the
accuracy or completeness of any information provided by Seller with respect to the Property; (d)
compliance or noncompliance with local, state or federal statutes, ordinances, orders or
regulations concerning the Property or the use thereof; (e) prior or current operations conducted
on the Property; (f) the operation of any business conducted at the Property; or (g) any matter or
thing affecting or relating to the Property, the Lease or this Agreement not expressly set forth in
this Agreement. Purchaser has not been induced by and has not relied upon any statement,
representation or agreement, whether express or implied, not specifically set forth in this
Agreement. Except as expressly set forth in this Agreement or any other Transaction Document,
Seller shall not be liable or bound in any manner by any oral or written statement, agreement or
information pertaining to the Property, the Tenant, the Lease or this Agreement furnished by any
agent, employee or other Person.

Section 1.05. Purchaser’s Financing Contingency. At or prior to the Closing, Purchaser shall
have obtained a market rate loan for this Transaction in the amount of not less than Twenty Five
Million and 00/100 Dollars ($25,000,000) on terms acceptable to Purchaser, in its sole and absolute
discretion (the “Loan”), which Loan may be secured by the Property and other assets of
Purchaser. If Purchaser notifies Seller prior to the Closing that Purchaser is unable to obtain
the Loan at or prior to the Closing, this Agreement shall terminate, in which event neither
Purchaser nor Seller shall have any further duties or obligations under this Agreement, except as
otherwise provided herein.

Section 1.06. Lease. The parties acknowledge that the Property is currently leased to
Purchaser as Tenant under the Lease, and Seller and Purchaser hereby agree that they shall enter
into, on or before the Closing Date, an unconditional and irrevocable termination of the Lease (the
“Lease Termination”) whereupon, effective upon Closing and except in Tenant’s capacity as
Purchaser under this Agreement and except for those provisions in the Lease that are to survive
termination of the Lease, Tenant shall have no right, title or interest in or to the Property or
any part thereof.

Section 1.07. Amendment to Lockup Restriction; Transfer Instructions. Purchaser currently
has the right to acquire the Shares from SMC at any time prior to November 18, 2011, and the Shares
are subject to a lock-up restriction that restricts SMC’s ability to transfer the Shares prior to
such date (the “Lock-Up Restriction”). On or before the Closing Date, Purchaser and Seller
shall provide written instructions to Computershare Trust Company, N.A., as transfer agent of
Purchaser (“Transfer Agent”), substantially in the form of Exhibit E attached
hereto and incorporated herein (“Transfer Instructions”), directing the Transfer Agent,
effective upon the Closing Date, to change the termination date of the Lock-Up Restriction from
November 18, 2011 to the Closing Date and to transfer the Shares to Purchaser in accordance with
the Transfer Instructions.

 

3

 

ARTICLE II

DUE DILIGENCE IN RESPECT OF THE PROPERTY

Section 2.01. Title Insurance.

(a) Title Commitment and Title Policy. Purchaser has ordered an owner’s title
insurance commitment (“Title Commitment”) with respect to the Property issued by the
Title Company, for an owner’s ALTA extended coverage title insurance policy (the “Title
Policy”) in the amount of the Purchase Price, and a copy of the Title Commitment and
copies of the Schedule B-2 exceptions have been delivered to Purchaser.

(b) Title Company. The Title Company is hereby employed by the parties to act as
escrow agent in connection with the Transaction. This Agreement shall be used as
instructions to the Title Company, as escrow agent, which may provide its standard
conditions of acceptance of escrow; provided, however, that in the event of any
inconsistency between such standard conditions of acceptance and the terms of this
Agreement, the terms of this Agreement shall prevail. The Title Company’s receipt of this
Agreement and the opening of an escrow pursuant to this Agreement shall be deemed to
constitute conclusive evidence of the Title Company’s agreement to be bound by the terms and
conditions of this Agreement pertaining to the Title Company.

(c) Title Company Actions. The Title Company is authorized to pay, from any funds held
by it for each party’s respective credit and in accordance with the closing statements
executed by both parties, all amounts set forth on the closing statements as necessary to
procure the delivery of any documents and to pay, on behalf of Purchaser and Seller, all
charges and obligations payable by them, respectively, in connection with the Transaction.
Seller and Purchaser will pay all charges payable by them to the Title Company. The Title
Company shall not cause the consummation of the Transaction unless and until it has received
written instructions from Seller and Purchaser to do so. The Title Company is authorized,
in the event any conflicting demand is made upon it concerning these instructions or the
escrow, at its election, to hold any documents and/or funds deposited hereunder until an
action shall be brought in a court of competent jurisdiction to determine the rights of
Seller and Purchaser or to interplead such documents and/or funds in an action brought in
any such court. Deposit by the Title Company of such documents and funds, after deducting
therefrom its reasonable expenses and attorneys’ fees incurred in connection with any such
court action, shall relieve the Title Company of all further liability and responsibility
for such documents and funds.

(d) Permitted Title Encumbrances. Purchaser has approved the exceptions set forth in
the Title Commitment that are set forth on Exhibit C attached hereto and each of
Seller and Purchaser agrees that it shall take such actions as are necessary to enable the
Title Company to issue the Title Policy subject only to the Permitted Encumbrances.

 

4

 

Section 2.02. Seller Documents. Seller has delivered to Purchaser, with respect to the
Property, all of the following items, to the extent that such items are in Seller’s possession or
under its control (collectively, the “Seller Documents”):

(a) survey or site plan related to the Property (the “Survey”);

(b) every environmental report relating to the Property (the “Environmental
Report”) and any other third party diligence reports relating to the Property;

(c) “as-built” plans and specifications for improvements on the Property;

(d) a certificate of occupancy for the Property;

(e) copies of any existing leases, if any, between Seller and tenants of the Property
other than the Lease;

(f) all drawings, plans, specifications and all engineering reports for and relating to
the Property; and

(g) any other document related to the Property that is reasonably requested by
Purchaser, either prior to or after Closing.

Except as expressly set forth in this Agreement, Seller makes no representation or warranty
regarding the Seller Documents, or any other materials relating to the Property delivered to
Purchaser.

Section 2.03. Survey. Purchaser may order an update to the Survey (or a new survey) if
required by the Title Company or otherwise required by Purchaser in connection with the Loan.

Section 2.04. Environmental. Purchaser may, at its sole cost and expense, order an update to
the Environmental Report or a new Phase I environmental assessment report, if deemed necessary by
Purchaser in its sole discretion.

Section 2.05. Inspections. Purchaser has performed whatever investigations, tests and
inspections upon the Property that Purchaser deemed appropriate (collectively, the
“Inspections”) prior to the Closing Date. Purchaser hereby waives any objections based
upon the Inspections.

ARTICLE III

CLOSING

Section 3.01. Closing Date. Subject to the provisions of Article V of this Agreement, the
closing date of the Transaction (the “Closing”) shall occur on or before April 30, 2009
(the “Closing Date”).

 

5

 

Section 3.02. Actions Relating to the Transaction. On or before the Closing Date or as
otherwise mutually agreed upon by Seller and Purchaser:

(a) the parties shall deposit with the Title Company and the Transfer Agent, as
applicable, all documents (including without limitation, the executed Transaction Documents)
necessary to comply with the parties’ respective obligations with respect to the Transaction
contemplated hereunder;

(b) Purchaser shall deposit the Purchase Price and the parties shall deposit any other
funds required hereunder with the Title Company, in a timely manner to permit the
consummation of the Transaction on the Closing Date; and

(c) (i) possession of the Property, free and clear of all tenants or other parties in
possession, except for Purchaser as Tenant, and any subtenants of Tenant, and (ii) ownership
of the Shares, free and clear of all liens and encumbrances, shall be delivered to
Purchaser.

Section 3.03. Transaction Costs. Except as otherwise expressly set forth in this Agreement,
all costs associated with the Transaction, including without limitation, updates (if any) of the
Survey, the cost of the premium related to the Title Policy and all reasonable endorsements
thereto, recording fees, transfer taxes and all closing and escrow costs, shall be shared one-half
by Purchaser and one-half by Seller; provided, however, that notwithstanding the foregoing, each
party shall bear its own attorneys’ fees and costs in connection with the Transaction, and
Purchaser shall bear all costs associated with its procurement of the Loan, including without
limitation, any endorsements to any lender’s title insurance policy, and the fees, if any, charged
by the Transfer Agent in connection with the transfer of the Shares to Purchaser.

ARTICLE IV

REPRESENTATIONS WARRANTIES AND COVENANTS

Section 4.01. Seller. Seller represents and warrants to, and covenants with, Purchaser as
follows:

(a) Organization and Authority. Seller is duly organized or formed, validly existing
and in good standing under the laws of its state of formation. Seller has all requisite
power and authority to execute, deliver and perform its obligations under this Agreement and
all of the other Transaction Documents, and to carry out the Transaction. The Person who
has executed this Agreement on behalf of Seller has been duly authorized to do so.

(b) Enforceability of Documents. Upon execution by Seller, this Agreement and the
other Transaction Documents shall constitute the legal, valid and binding obligations of
Seller, enforceable against Seller in accordance with their respective terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
arrangement, moratorium, or other similar laws relating to or affecting the rights of
creditors generally, or by general equitable principles.

 

6

 

(c) No Other Agreements and Options. Except as set forth in the Lease, Seller has made
no commitment, obligation, or agreement, including, without limitation, any right of first
refusal, option to purchase or lease granted to a third party, which could prevent Seller
from completing or impair Seller’s ability to complete the sale of the Property under this
Agreement, or which would bind Purchaser subsequent to consummation of the Transaction.

(d) No Violations. The authorization, execution, delivery and performance of this
Agreement and the other Transaction Documents will not (i) violate any provisions of the
organizational documents of Seller, (ii) result in a violation of or a conflict with, or
constitute a default (or an event which, with or without due notice or lapse of time, or
both, would constitute a default) under any other document, instrument or agreement to which
Seller is a party or by which Seller, the Property or any of the property of Seller is
subject or bound, (iii) result in the creation or imposition of any lien, restriction,
charge or limitation of any kind, upon the Property or the Shares, or (iv) to Seller’s
actual knowledge, without inquiry, violate any applicable law, statute, regulation, rule,
ordinance, code, rule or order of any court or Governmental Authority.

(e) Consents and Approvals. No consent, approval, waiver, license, permit, order or
authorization of, or registration, declaration or filing with, any Governmental Authority,
and no consent, approval, waiver or other similar authorization of any other Person, is
required to be obtained by or on behalf of Seller as a result of, or in connection with, or
as a condition of the lawful execution, delivery and performance of this Agreement or the
consummation of the Transaction contemplated hereby.

(f) Compliance. Except as may be contained in any Seller Document delivered to
Purchaser, Seller has not received notification from any Governmental Authority or other
third party that the Property or the condition or use thereof is in violation of (i) any
applicable statutes, regulations, rules, ordinances, codes, licenses, permits, orders and
approvals of any Governmental Authority having jurisdiction over the Property, (ii) any
restrictions, covenants and encumbrances of record with respect to the Property, or (iii)
any agreements, contracts, insurance policies and conditions applicable to the Property or
the ownership, operation, use or possession thereof.

(g) Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering Laws.
Without in any way limiting the provisions of Section 4.01(f), Seller is not currently
identified on the OFAC List, and is not a Person with whom a citizen of the United States is
prohibited from engaging in transactions by any trade embargo, economic sanction, or other
prohibition of United States law or regulation.

(h) Litigation. Seller has not received notification from any Governmental Authority
or third party of any legal, administrative, arbitration or other proceeding, claim or
action pending or involving or, to Seller’s actual knowledge without inquiry, threatened
against or with respect to the Property before any Governmental Authority.

 

7

 

(i) Title to Property. Title to the Property is vested in Seller. Upon Closing, title
to the Property shall be vested in Purchaser or its nominee or assigns (if any), free and
clear of all liens, restrictions, encroachments and easements, except for the Permitted
Encumbrances.

(j) Title to Shares. Seller is the sole record and beneficial owner of the Shares; and
except for the Lock-Up Restriction, (i) Seller has good and valid title to the Shares, free
and clear of all liens or encumbrances, and free and clear of any rights and restrictions of
any nature other than those imposed by applicable federal and state securities laws ; and
(ii) Seller is not bound by any contract, agreement, arrangement, commitment or
understanding (written or oral) with, and has not granted any option, right or other
interest to, any Person with respect to the Shares. Seller will transfer to Purchaser legal
and beneficial ownership, and good and valid title, to the Shares, free and clear of all
liens and encumbrances.

(k) Condemnation; Blighted Areas; Wetlands. Seller has not received notification from
any Governmental Authority or third party of any pending or contemplated (i) condemnation or
eminent domain proceedings affecting the Property, (ii) declaration of the Property being
located in a blighted area, or (iii) designation of the Property as wetlands.

(l) Environmental. Except as may be contained in an Environmental Report, Seller has
not received any written or oral notice or other communication regarding the Property from
any Person (including but not limited to a Governmental Authority) relating to (i) Hazardous
Materials, Regulated Substances or underground storage tanks, or remediation thereof, (ii)
the possible liability of any Person pursuant to any Hazardous Materials Law, (iii) other
environmental conditions in connection with the Property, or (iv) any actual or potential
administrative or judicial proceedings in connection with any of the foregoing.

(m) Securities Law Matters.

(i) Seller is an institutional “accredited investor” as defined in Rule 501
under the Securities Act of 1933, as amended.

(ii) The decision to sell the Shares as part of the Transaction has been made
by Seller, and Seller confirms that it has undertaken an independent analysis of the
merits and risks of a sale of the Shares, based on Seller’s own financial
circumstances.

(iii) Seller has had the opportunity to review publicly available information
regarding Purchaser and to ask questions of, and receive answers from, Purchaser
concerning such information (it being understood that Seller has neither requested
nor received material, non-public information from Purchaser).

 

8

 

(iv) In making a decision to sell the Shares, Seller has not received or relied
on any communication, investment advice, or recommendation from Purchaser.

All representations, warranties and covenants of Seller made in this Agreement, except as
otherwise expressly set forth herein, shall survive for one (1) year following Closing.

Section 4.02. Purchaser. Purchaser represents and warrants to, and covenants with, Seller as
follows:

(a) Organization and Authority. Purchaser is duly organized and formed, validly
existing and in good standing under the laws of its state of formation. Purchaser has all
requisite power and authority to execute, deliver and perform its obligations under this
Agreement and all of the other Transaction Documents and to carry out the Transaction. The
Person who has executed this Agreement on behalf of Purchaser has been duly authorized to do
so.

(b) Enforceability of Documents. Upon execution by Purchaser, this Agreement and the
other Transaction Documents shall constitute the legal, valid and binding obligations of
Purchaser, enforceable against Purchaser in accordance with their respective terms, except
as such enforcement may be limited by bankruptcy, insolvency, reorganization, arrangement,
moratorium, or other similar laws relating to or affecting the rights of creditors
generally, or by general equitable principles.

(c) Litigation. There are no actions or proceedings pending against or involving
Purchaser before any Governmental Authority which in any way adversely affect or may
adversely affect Purchaser or Purchaser’s ability to perform under this Agreement and the
other Transaction Documents.

(d) OFAC List. Purchaser is not currently identified on the OFAC List, and is not a
Person with whom a citizen of the United States is prohibited from engaging in transactions
by any trade embargo, economic sanction, or other prohibition of United States law,
regulation, or executive order of the President of the United States.

(e) Bankruptcy Petition. Purchaser hereby agrees that it shall not institute against,
or join any other Person in instituting against, Seller, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding, or any other proceeding under any federal
or state bankruptcy or similar law. The provisions of this Section shall survive Closing or
termination of this Agreement.

(f) Consents and Approvals. No consent, approval, waiver, license, permit, order or
authorization of, or registration, declaration or filing with, any Governmental Authority,
and no consent, approval, waiver or other similar authorization of any other Person, is
required to be obtained by or on behalf of Purchaser as a result of, or in connection with,
or as a condition of the lawful execution, delivery and performance of this Agreement or the
consummation of the Transaction contemplated hereby.

 

9

 

All representations, warranties and covenants of Purchaser made in this Agreement, except as
otherwise expressly set forth herein, shall survive for one (1) year following Closing.

ARTICLE V

CONDITIONS PRECEDENT TO CLOSING

Section 5.01. Purchaser’s Conditions to Closing. Purchaser shall not be obligated to effect
the Closing until the fulfillment (or written waiver by Purchaser) of all of the following
conditions:

(a) Seller shall have delivered to the Title Company each of the following items:

(i) fully executed Deed, Lease Termination and all other Transaction Documents;

(ii) a duly executed FIRPTA affidavit from Seller in the form attached hereto
as Exhibit D (“Non-Foreign Seller Certificate”);

(iii) other documents that may be required by the Title Company for issuance of
the Title Policy;

(iv) a closing settlement statement reflecting the credits, prorations, and
adjustments contemplated by or specifically provided for in this Agreement;

(v) all documents required to be delivered by this Agreement and the other
Transaction Documents with respect to the Property; and

(vi) such further documents as reasonably may be required in order to fully and
legally effect the Transaction.

(b) Purchaser shall have received the Title Commitment and the Title Company’s
irrevocable commitment to insure title by means of the Title Policy, in form and substance
acceptable to Purchaser.

(c) Purchaser’s lender shall have received from the Title Company an irrevocable
commitment to issue an ALTA lender’s policy of title insurance, in form and substance
acceptable to Purchaser’s lender.

(d) Purchaser’s lender shall have funded the Loan.

(e) The Transaction shall have been approved by Purchaser’s board of directors.

(f) The acceptance of the Transfer Instructions by Transfer Agent.

 

10

 

Upon the fulfillment or Purchaser’s written waiver of all of the above conditions, Purchaser
shall deposit the Purchase Price with the Title Company for payment to Seller and the Closing of
the Transaction shall occur in accordance with the terms and conditions of this Agreement. Unless
otherwise dated, all of the documents to be delivered at Closing shall be dated as of the Closing
Date.

Section 5.02. Seller’s Conditions Precedent to Closing. Seller shall not be obligated to
effect the Closing until the fulfillment (or written waiver by Seller) of all of the following
conditions:

(a) Purchaser shall have delivered to the Title Company each of the following items:

(i) the Purchase Price in immediately available federal funds;

(ii) fully executed Lease Termination and all other Transaction Documents;

(iii) other documents that may be required by the Title Company for issuance of
the Title Policy;

(iv) a closing settlement statement reflecting the credits, prorations, and
adjustments contemplated by or specifically provided for in this Agreement;

(v) all documents required to be delivered by this Agreement and the other
Transaction Documents with respect to the Property; and

(vi) such further documents as reasonably may be required in order to fully and
legally effect the Transaction.

(b) Seller shall have obtained all third party consents deemed necessary in Seller’s
sole discretion for the release of any Seller mortgage or other document (including any
securitization document) which encumbers the Property.

(c) The delivery of the Transfer Instructions by Purchaser and the acceptance thereof
by Transfer Agent.

ARTICLE VI

DEFAULTS; REMEDIES

Section 6.01. Default. Each of the following shall be deemed an event of default (each, an
“Event of Default”):

(a) if any representation or warranty of a party set forth in this Agreement or any
other Transaction Document is false in any material respect or if a party renders any false
statement; or

 

11

 

(b) if a party fails to keep or perform any of the terms or provisions of this
Agreement or if any condition precedent is not satisfied by the other party.

Section 6.02. Purchaser Remedies. In the event of any Event of Default by Seller, Purchaser
shall be entitled to exercise any one or more of the following remedies:

(a) Purchaser may seek specific performance and/or injunctive relief with respect to
any covenants or agreements of Seller hereunder; and/or

(b) Purchaser may recover damages, including without limitation, Purchaser’s actual and
reasonable out-of-pocket costs related to this Agreement and the Transaction intended
hereunder.

Section 6.03. Seller Remedies. In the event of any Event of Default by Purchaser, Seller
shall be entitled to exercise any one or more of the following remedies:

(a) Seller may seek specific performance and/or injunctive relief with respect to any
covenants or agreements of Purchaser hereunder; and/or

(b) Seller may recover damages, including without limitation, Seller’s actual and
reasonable out-of-pocket costs related to this Agreement and the Transaction intended
hereunder.

Section 6.04. Waiver. Purchaser and Seller each hereby waive all other rights and remedies
not expressly provided for herein, whether in law or in equity, including, without limitation, any
right to seek rescission with respect to the transfer of, or assert any lien or other claim with
respect to, the Property.

ARTICLE VII

MISCELLANEOUS

Section 7.01. Risk of Loss.

(a) Condemnation. If, prior to Closing, action is initiated to take the Property, or
any portion thereof, by eminent domain proceedings or by deed in lieu thereof, Purchaser may
elect at or prior to Closing, to (i) terminate this Agreement, in which event neither
Purchaser nor Seller shall have any further duties or obligations under this Agreement,
except as otherwise provided herein, or (ii) proceed to close, in which event all of
Seller’s assignable right, title and interest in and to the award of the condemning
authority, to the extent that the amount of such award does not exceed the Purchase Price,
shall be assigned to Purchaser at Closing and there shall be no reduction in the Purchase
Price.

 

12

 

(b) Casualty. Seller assumes all risks and liability for damage to or injury occurring
to the Property by fire, storm, accident, or any other casualty or cause until Closing has
been consummated. If the Property, or any part thereof, suffers any damage prior to Closing
from fire or other casualty, which Seller, at its sole option, does not elect
to repair, Purchaser may elect at or prior to Closing, to (i) terminate this Agreement,
in which event neither Purchaser nor Seller shall have any further duties or obligations
under this Agreement, except as otherwise provided herein; or (ii) consummate Closing, in
which event all of Seller’s right, title and interest in and to the proceeds of any
insurance covering such damage (less an amount equal to any expense and costs incurred by
Seller to repair or restore the Property and any portion paid or to be paid on account of
the loss of rents or other income from the Property for the period prior to the Closing
Date, all of which shall be payable to Seller), to the extent that the amount of such
insurance does not exceed the Purchase Price, shall be assigned to Purchaser at Closing.

Section 7.02. Notices. All notices, demands, designations, certificates, requests, offers,
consents, approvals, appointments and other instruments given pursuant to this Agreement
(collectively called “Notices”) shall be in writing and given by (a) hand delivery; (b)
express overnight delivery service; (c) certified or registered mail, return receipt requested; or
(d) electronic mail message, and shall be deemed to have been delivered upon (i) receipt, if hand
delivered; (ii) the next Business Day, if delivered by a reputable express overnight delivery
service; (iii) the third Business Day following the day of deposit of such notice with the United
States Postal Service, if sent by certified or registered mail, return receipt requested; or (iv)
transmission. Notices shall be provided to the parties and addresses (or facsimile numbers, as
applicable) specified below:

	 	 	 	 	 
	 

	 	If to Purchaser:
	 	Grand Canyon Education, Inc.
	 

	 	 	 	3300 West Camelback Road
	 

	 	 	 	Phoenix, AZ 85017
	 

	 	 	 	Attention: Daniel E. Bachus, Chief Financial Officer
	 

	 	 	 	Telephone: (602) 639-6648
	 

	 	 	 	Facsimile: (602) 639-7846
	 

	 	 	 	E-Mail: dbachus@gcu.edu
	 
	 	 	 	 
	 

	 	With a copy To:
	 	Grand Canyon Education, Inc.
	 

	 	 	 	3300 West Camelback Road
	 

	 	 	 	Phoenix, AZ 85017
	 

	 	 	 	Attention: Christopher C. Richardson, General Counsel
	 

	 	 	 	Telephone: (602) 639-6820
	 

	 	 	 	Facsimile: (602) 639-7846
	 

	 	 	 	E-Mail: crichardson@gcu.edu
	 
	 	 	 	 
	 

	 	and	 	DLA Piper LLP (US)
	 

	 	 	 	2525 East Camelback Road Suite 1000
	 

	 	 	 	Phoenix, AZ 85016-4232
	 

	 	 	 	Attention: David P. Lewis
	 

	 	 	 	Telephone: (480) 606-5126
	 

	 	 	 	Facsimile: (480) 606-5526
	 

	 	 	 	E-Mail:
david.lewis@dlapiper.com

 

13

 

	 	 	 	 	 
	 

	 	If to Seller:
	 	Spirit Master Funding, LLC
	 

	 	 	 	14631 North Scottsdale Road, Suite 200
	 

	 	 	 	Scottsdale, AZ 85254-2711
	 

	 	 	 	Attention: Mr. Gregg Seibert
	 

	 	 	 	Telephone: (480) 606-0820
	 

	 	 	 	Facsimile: (480) 606-0826
	 

	 	 	 	E-Mail:
gseibert@spiritfinance.com
	 
	 	 	 	 
	 

	 	 	 	Spirit Management Company
	 

	 	 	 	14631 North Scottsdale Road, Suite 200
	 

	 	 	 	Scottsdale, AZ 85254-2711
	 

	 	 	 	Attention: Mr. Gregg Seibert
	 

	 	 	 	Telephone: (480) 606-0820
	 

	 	 	 	Facsimile: (480) 606-0826
	 

	 	 	 	E-Mail:
gseibert@spiritfinance.com
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Kutak Rock LLP
	 

	 	 	 	1801 California Street, Suite 3100
	 

	 	 	 	Denver, CO 80202
	 

	 	 	 	Attention: Peggy A. Richter
	 

	 	 	 	Telephone: (303) 297-2400
	 

	 	 	 	Facsimile: (303) 292-7799
	 

	 	 	 	E-Mail:
peggy.richter@kutakrock.com

or to such other address or such other Person as either party may from time to time hereafter
specify to the other party in a notice delivered in the manner provided above. Whenever in this
Agreement the giving of Notice is required, the giving thereof may be waived in writing at any time
by the Person or Persons entitled to receive such Notice.

Section 7.03. Assignment. Neither Seller nor Purchaser may assign its respective rights and
interests under this Agreement in whole or in part without the prior written consent of the other
party; provided, that so long as written notice thereof is provided to all other parties hereto,
either Seller or Purchaser may (in whole or in part) assign its respective rights and interests
under this Agreement to any lender in connection with the Loan or any other financing provided to
Seller or Purchaser or their respective Affiliates from time to time. No assignment of a party’s
respective rights and interests under this Agreement shall relieve such party of any liability for
the performance of any obligation of such party contained herein.

Section 7.04. Indemnity. Intentionally deleted.

Section 7.05. Release.

(a) Expressly excluding any Losses or claims (i) related to all provisions of the Lease
which are to survive the expiration or termination of the Lease, which provisions shall
remain in full force and effect and shall not be subject to this Section 7.05(a), and (ii)
arising under or related to this Agreement, which shall not be subject to this Section
7.05(a) and are expressly excluded herefrom, each party hereby releases the
other party from all Losses and claims of whatever nature, whether known or unknown,
which such party now has, or in the future may have with respect to the Property, the Lease
and the Tenant.

 

14

 

(b) Effective as of the Closing Date, Seller hereby fully and forever releases and
discharges Purchaser and its directors, officers, stockholders, agents, representatives,
affiliates, and each person who controls any of them within the meaning of Section 15 of the
Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as
amended (each, a “Released Party”) of and any and all claims, accusations, demands,
liabilities, obligations, responsibilities, suits, actions and causes of action, whether
liquidated or unliquidated, fixed or contingent, known or unknown, or otherwise, that Seller
ever had, now has, or may hereafter have or claim to have against the Released Parties, in
each case, arising out of, relating to, or otherwise connected with the Shares or Seller’s
ownership of the Shares; provided, however, that notwithstanding the foregoing, Seller
retains all of its rights under this Agreement.

(c) Each party hereto agrees that, to the fullest extent permitted by law, it will not
prosecute, nor allow to be prosecuted on its behalf, in any administrative agency, whether
state or federal, or in any court, whether state or federal, any claim or demand of any type
related to the matters released in this Section 7.05.

Section 7.06. Brokerage Commission. Each of the parties represents and warrants to the other
that it has not dealt with, negotiated through or communicated with any broker, finder or
intermediary for or on account of or in connection with this Transaction. Each party shall
indemnify, defend and hold harmless each other party from and against any and all claims, loss,
costs and expenses, including reasonable attorneys’ fees, resulting from any claims that may be
made against such party by any other broker, finder or intermediary claiming a commission or fee
by, through or under the other party. The parties’ respective obligations under this Section 7.06
shall survive Closing or termination of this Agreement.

Section 7.07. Reporting Requirements. The parties agree to comply with any and all reporting
requirements applicable to the Transaction which are set forth in any law, statute, ordinance,
rule, regulation, order or determination of any Governmental Authority, and further agree upon
request, to furnish the other party with evidence of such compliance.

Section 7.08. Disclosure. Except as expressly provided in Section 7.07, in this Section 7.08
and by law or judicial action, neither Seller nor Purchaser will make any public disclosure of this
Agreement or the other Transaction Documents, the Transaction or the provisions of the Transaction
Documents without the prior written consent of the other party hereto. The parties also agree
that, notwithstanding any provision contained in this Agreement, any party (and each employee,
representative or other agent of any party) may disclose to any and all Persons, without limitation
of any kind, any matter required under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended.

Section 7.09. Time is of the Essence. The parties hereto expressly agree that time is of the
essence with respect to this Agreement.

 

15

 

Section 7.10. Non-Business Days. If the Closing Date or the date for delivery of a notice or
performance of some other obligation of a party falls on a Saturday, Sunday or legal holiday in the
state in which any Property is located, then the Closing Date or such notice or performance shall
be postponed until the next Business Day.

Section 7.11. Waiver and Amendment. No provision of this Agreement shall be deemed waived or
amended except by a written instrument unambiguously setting forth the matter waived or amended and
signed by the party against which enforcement of such waiver or amendment is sought. Waiver of any
matter shall not be deemed a waiver of the same or any other matter on any future occasion.

Section 7.12. Personal Liability. Notwithstanding anything to the contrary provided in this
Agreement, it is specifically understood and agreed, such agreement being a primary consideration
for the execution of this Agreement by the parties, that (a) there shall be absolutely no personal
liability on the part of any shareholder, director, officer, manager, member or employee of any
party with respect to any of the terms, covenants and conditions of this Agreement; (b) each party
(“First Party”) waives all claims, demands and causes of action against the shareholders,
directors, officers, managers, members or employees of the other party (“Second Party”) in
the event of any breach by the Second Party of any of the terms, covenants and conditions of this
Agreement to be performed by the Second Party; and (c) the First Party shall look solely to the
assets of the Second Party for the satisfaction of each and every remedy in the event of any breach
by the Second Party of any of the terms, covenants and conditions of this Agreement to be performed
by the Second Party, such exculpation of liability to be absolute and without any exception
whatsoever.

Section 7.13. Headings; Internal References. The headings of the various sections and
exhibits of this Agreement have been inserted for reference only and shall not to any extent have
the effect of modifying the express terms and provisions of this Agreement. Unless stated to the
contrary, any references to any section, subsection, exhibit and the like contained herein are to
the respective section, subsection, exhibit and the like of this Agreement.

Section 7.14. Construction Generally. This is an agreement between parties who are
experienced in sophisticated and complex matters similar to the Transaction and the other
Transaction Documents, is entered into by both parties in reliance upon the economic and legal
bargains contained herein and therein, and shall be interpreted and construed in a fair and
impartial manner without regard to such factors as the party which prepared the instrument, the
relative bargaining powers of the parties or the domicile of any party. Seller and Purchaser were
each represented by legal counsel competent in advising them of their obligations and liabilities
hereunder.

Section 7.15. Further Assurances. Each of the parties agrees, whenever and as often as
reasonably requested so to do by the other party or the Title Company, to execute, acknowledge, and
deliver, or cause to be executed, acknowledged, or delivered, any and all such further conveyances,
assignments, confirmations, satisfactions, releases, instruments, or other documents as may be
necessary, expedient or proper, in order to complete any and all conveyances, transfers, sales and
assignments herein provided and to do any and all other acts
and to execute, acknowledge and deliver any and all documents as so requested in order to
carry out the intent and purpose of this Agreement.

 

16

 

Section 7.16. Attorneys’ Fees. In the event of any controversy, claim, dispute or proceeding
between the parties concerning this Agreement, the prevailing party shall be entitled to recover
all of its reasonable attorneys’ fees and other costs in addition to any other relief to which it
may be entitled.

Section 7.17. Entire Agreement. This Agreement, all other Transaction Documents, and all
other certificates, instruments or agreements to be delivered hereunder and thereunder constitute
the entire agreement between the parties with respect to the subject matter hereof, and there are
no other representations, warranties or agreements, written or oral, between Seller and Purchaser
with respect to the subject matter of this Agreement. Notwithstanding anything in this Agreement to
the contrary, upon the execution and delivery of this Agreement by Seller and Purchaser, (a) this
Agreement shall supersede any previous discussions, agreements, term sheets, letters of intent, or
commitment letters relating to the Transaction, including without limitation, any and all
agreements related to confidentiality, exclusivity, non-competition, non-solicitation of employees,
non-solicitation or pursuit of any business opportunity represented by the Transaction, or any
other term or condition which restricts any business activity of Seller or its Affiliates, (b) the
terms and conditions of this Agreement shall control notwithstanding that such terms are
inconsistent with or vary from those set forth in any of the foregoing agreements, and (c) this
Agreement may only be amended by a written agreement executed by Seller and Purchaser. The
provisions of this Section shall survive Closing.

Section 7.18. Recording. This Agreement shall not be recorded in any office of any
Governmental Authority; provided, that Purchaser may file this Agreement with the Securities and
Exchange Commission as required by law.

Section 7.19. Forum Selection; Jurisdiction; Venue; Choice of Law. For purposes of any
action or proceeding arising out of this Agreement, the parties hereto expressly submit to the
jurisdiction of all federal and state courts located in the State of Arizona, and consent that they
may be served with any process or paper by registered mail or by personal service within or without
the State of Arizona in accordance with applicable law. Nothing contained in this section shall
limit or restrict the right of Seller to commence any proceeding in the federal or state courts
located in the state or states in which the Property is located to the extent Seller deems such
proceeding necessary or advisable to exercise remedies available under this Agreement.

Section 7.20. Separability; Binding Effect; Governing Law. Each provision hereof shall be
valid and shall be enforceable to the extent not prohibited by law. If any provision hereof or the
application thereof to any Person or circumstance shall to any extent be invalid or unenforceable,
the remaining provisions hereof, or the application of such provision to Persons or circumstances
other than those as to which it is invalid or unenforceable, shall not be affected thereby.
Subject to the provisions of Section 7.03, all provisions contained in this Agreement shall be
binding upon, inure to the benefit of and be enforceable by the successors and assigns of each
party hereto, including, without limitation, any United States trustee, any debtor-in-possession or
any trustee appointed from a private panel, in each case to the same extent as if
each successor and assign were named as a party hereto. This Agreement shall be governed by,
and construed in accordance with, the laws of the state of Arizona, without giving effect to its
conflict of laws principles.

 

17

 

Section 7.21. Survival. Except for the conditions of Closing set forth in Article V, which
shall be satisfied or waived in writing as of the Closing Date, and except as otherwise expressly
set forth herein, all representations, warranties, agreements, obligations and indemnities of
Seller and Purchaser set forth in this Agreement shall survive Closing.

Section 7.22. Waiver of Jury Trial and Certain Damages. THE PARTIES HERETO SHALL AND THEY
HEREBY DO INTENTIONALLY WAIVE ANY AND ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER ON ANY MATTERS WHATSOEVER
ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT AND/OR ANY CLAIM OR INJURY OR DAMAGE
RELATED THERETO. THE PARTIES FURTHER WAIVE THE RIGHT TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND
INDIRECT DAMAGES FROM THE OTHER PARTY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT WITH
RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND/OR ANY DOCUMENT
CONTEMPLATED HEREIN OR RELATED HERETO.

Section 7.23. Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, and all such counterparts shall be deemed to constitute one
and the same instrument. The parties agree that transmission of this Agreement by telecopy shall
be deemed a transmission of this Agreement for all purposes.

Section 7.24. IRC Section 1031 Exchange of Property. The parties agree that, with respect to
the Property, a party may elect to complete an Internal Revenue Code 1031 tax-deferred exchange
that will not affect the terms and conditions of this Agreement; provided, however, that (a) the
non-requesting party will cooperate with the requesting party to complete such exchange in a timely
manner on the conditions that the non-requesting party shall not be obligated to pay, suffer or
incur any additional expenses, liabilities or delays as a result of cooperating in the requesting
party’s exchange and the non-requesting party shall not be obligated to acquire any other real
property in connection with such exchange; (b) the non-requesting party shall not have any
liability to the requesting party for failure of the exchange to qualify under the Internal Revenue
Code and Treasury Regulations; (c) any assignment(s) made by the requesting party in connection
with such exchange shall not relieve the requesting party of its obligations under this Agreement;
(d) the requesting party shall cause all documentation necessary or appropriate in connection with
such exchange to be prepared and available for execution no later than the Closing Date; and (e)
the completion of one or more tax-deferred exchanges is not a condition to the performance
by the requesting party of its obligations set forth in this Agreement.

[Remainder of page intentionally left blank; signature page(s) to follow]

 

18

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered
as of the Closing Date.

	 	 	 	 	 	 	 
	 	 	SELLER:	 	 
	 
	 	 	 	 	 	 
	 	 	SPIRIT MASTER FUNDING, LLC, a 

Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Spirit Finance Corporation,

a Maryland corporation, as Property Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Spirit Finance Capital Management, LLC, a

Delaware limited liability company, as Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael T. Bennett	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Printed Name: Michael T. Bennett	 	 
	 

	 	 	 	Tile: Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	SPIRIT MANAGEMENT COMPANY, a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael T. Bennett	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Printed Name: Michael T. Bennett	 	 
	 

	 	 	 	Tile: Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	PURCHASER:	 	 
	 
	 	 	 	 	 	 
	 	 	GRAND CANYON EDUCATION, INC., a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Daniel E. Bachus	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Printed Name: Daniel E. Bachus	 	 
	 

	 	 	 	Title: Chief Financial Officer	 	 

 

 

 

EXHIBIT A

DEFINED TERMS

The following terms shall have the following meanings for all purposes of this Agreement:

“Affiliate” or any derivation thereof, means any Person which directly or indirectly controls,
is under common control with, or is controlled by any other Person. For purposes of this
definition, “controls,” “under common control with” and “controlled by” means the possession,
directly or indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through ownership of voting securities or otherwise.

“Agreement” means this Purchase and Sale Agreement.

“Business Day” means a day on which banks located in Scottsdale, Arizona are not required or
authorized to remain closed.

“Closing” shall have the meaning set forth in Section 3.01.

“Closing Date” means the date specified as the closing date in Section 3.01.

“Deed” means that special warranty deed (or its equivalent under the laws of the State of
Arizona) whereby Seller conveys to Purchaser all of Seller’s right, title and interest in and to
the Property.

“Environmental Report” has the meaning set forth in Section 2.02(b).

“Event of Default” has the meaning set forth in Section 6.01.

“First Party” has the meaning set forth in Section 7.12.

“Governmental Authority” means the United States of America, any state, local or other
political subdivision thereof, any other entity exercising executive, judicial, regulatory or
administrative functions of or pertaining to government and any corporation or other entity owned
or controlled (through stock or capital ownership or otherwise) by any of the foregoing.

“Hazardous Materials” includes: (a) oil, petroleum products, flammable substances, explosives,
radioactive materials, hazardous wastes or substances, toxic wastes or substances or any other
materials, contaminants or pollutants which pose a hazard to the Property or to Persons on or about
the Property, cause the Property to be in violation of any local, state or federal law or
regulation (including without limitation, any Hazardous Materials Law), or are defined as or
included in the definition of “hazardous substances”, “hazardous wastes”, “hazardous materials”,
“toxic substances”, “contaminants”, “pollutants”, or words of similar import under any applicable
local, state or federal law or under the regulations adopted, orders issued, or publications
promulgated pursuant thereto, including, but not limited to: (i) the Comprehensive Environmental
Response, Compensation and

 

 

 

Liability Act of 1980, as amended, 42 U.S.C. §9601, et seq.; (ii) the Hazardous Materials Transportation Act, as amended, 49 U.S.C. §1801,
et seq.; (iii) the Resource Conservation and Recovery Act, as amended, 42 U.S.C. §6901, et seq.;
and (iv) regulations adopted and publications promulgated pursuant to the aforesaid laws; (b)
asbestos in any form which is or could become friable, urea formaldehyde foam insulation,
transformers or other equipment which contain dielectric fluid containing levels of polychlorinated
biphenyls in excess of fifty (50) parts per million; (c) underground storage tanks; and (d) any
other chemical, material or substance, exposure to which is prohibited, limited or regulated by any
governmental authority or which may or could pose a hazard to the health and safety of the
occupants of the Property or the owners and/or occupants of any adjoining property.

“Hazardous Materials Laws” includes any and all federal, state and local laws, rules,
regulations, statutes, and requirements pertaining or relating to the environmental condition of
the Property or to Hazardous Materials.

“Inspections” has the meaning set forth in Section 2.05.

“Lease” means that certain Lease Agreement dated June 28, 2004, between Spirit Master Funding,
LLC, a Delaware limited liability company, as successor-in-interest to Spirit Finance Acquisitions,
LLC, a Delaware limited liability company, as landlord, and Tenant, together with all amendments,
modifications and guaranties relating thereto.

“Lease Termination” has the meaning set forth in Section 1.06.

“Loan” has the meaning set forth in Section 1.05.

“Lock-Up Restriction” has the meaning set forth in Section 1.07.

“Losses” means any and all claims, lawsuits, suits, liabilities (including, without
limitation, strict liabilities), actions, proceedings, obligations, debts, damages, losses, costs,
expenses, diminutions in value, fines, interest, penalties, interest, charges, fees, expenses,
judgments, decrees, awards, amounts paid in settlement and damages of whatever kind or nature
(including, without limitation, attorneys’ fees, court costs and costs incurred in the
investigation, defense and settlement of claims).

“Non-Foreign Seller Certificate” has the meaning set forth in Section 5.01(a)(ii).

“Notices” has the meaning set forth in Section 7.02.

“OFAC List” means the list of specially designated nationals and blocked Persons subject to
financial sanctions that is maintained by the U.S. Treasury Department, Office of Foreign Assets
Control and any other similar list maintained by the U.S. Treasury Department, Office of Foreign
Assets Control pursuant to any legal requirements, including, without limitation, trade embargo,
economic sanctions, or other prohibitions imposed by Executive Order of the President of the United
States. The OFAC List currently is accessible through the internet website
www.treas.gov/ofac/t11sdn.pdf.

“Permitted Encumbrances” means the lien of any real estate taxes, water and sewer charges, not
yet due and payable; those matters as may be set forth on the Survey; and those
recorded easements, restrictions, liens and encumbrances set forth as exceptions in the Title
Commitment and in the Title Policy to be issued by Title Company to Purchaser and approved by
Purchaser as shown on the attached Exhibit C to this Agreement.

 

A-2

 

“Person” means any natural person, firm, corporation, partnership, limited liability company,
other entity, state, political subdivision of any state, the United States of America, any agency
or instrumentality of the United States of America, any other public body or other organization or
association.

“Property” has the meaning set forth in Section 1.01(a).

“Purchase Price” means the amount specified in Section 1.02.

“Real Property” has the meaning set forth in Section 1.01(a).

“Regulated Substances” means “petroleum” and “petroleum-based substances” or any similar terms
described or defined in any Hazardous Materials Laws and any applicable federal, state, county or
local laws applicable to or regulating underground storage tanks.

“Released Party” has the meaning set forth in Section 7.05(b).

“Second Party” has the meaning set forth in Section 7.12.

“Seller Documents” has the meaning set forth in Section 2.02.

“Shares” has the meaning set forth in the Recitals.

“Survey” has the meaning set forth in Section 2.02(a).

“Tenant” means Grand Canyon Education, Inc., a Delaware corporation and the
successor-in-interest to Significant Education, LLC, a Delaware limited liability company.

“Title Commitment” has the meaning set forth in Section 2.01(a).

“Title Company” means Fidelity National Title, 60 East Rio Salado Parkway, Suite 1110,
Phoenix, Arizona 85281.

“Title Policy” has the meaning set forth in Section 2.01(a).

“Transaction” has the meaning set forth in Section 1.01.

“Transaction Documents” means this Agreement, the Lease Termination, the Deed, the Non-Foreign
Seller Certificate, the Transfer Instructions, any and all documents referenced herein and therein,
and such other documents, payments, instruments and certificates as are reasonably required by the
Title Company.

“Transfer Agent” has the meaning set forth in Section 1.07.

“Transfer Instructions” has the meaning set forth in Section 1.07.

 

A-3

 

EXHIBIT B

LEGAL DESCRIPTION OF PROPERTY

PARCEL NO.1:

THAT PART OF THE SOUTHWEST QUARTER OF SECTION 14, TOWNSHIP 2 NORTH, RANGE 2 EAST OF THE GILA AND
SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT THE SOUTHWEST CORNER OF SAID SECTION 14;

THENCE NORTH 89 DEGREES 57 MINUTES 00 SECONDS EAST ALONG THE SOUTH LINE OF SAID SOUTHWEST QUARTER
OF SECTION 14, A DISTANCE OF 689.83 FEET;

THENCE LEAVING SAID SOUTH LINE, NORTH 00 DEGREES 03 MINUTES 00 SECONDS WEST, 40.00 FEET TO A POINT
ON THE NORTH 40 FOOT RIGHT-OF-WAY LINE OF CAMELBACK ROAD, SAID POINT ALSO BEING THE TRUE POINT OF
BEGINNING;

THENCE LEAVING SAID NORTH 40 FOOT RIGHT-OF-WAY LINE, NORTH 00 DEGREES 18 MINUTES 11 SECONDS WEST,
650.01 FEET;

THENCE SOUTH 89 DEGREES 57 MINUTES 00 SECONDS WEST, 650.01 FEET TO A POINT ON THE EAST 40 FOOT
RIGHT-OF-WAY LINE OF 35TH AVENUE;

THENCE ALONG SAID EAST 40 FOOT RIGHT-OF-WAY LINE, NORTH 00 DEGREES 18 MINUTES 11 SECONDS WEST,
649.77 FEET;

THENCE LEAVING SAID EAST 40 FOOT RIGHT-OF-WAY LINE, NORTH 89 DEGREES 41 MINUTES 49 SECONDS EAST,
50.00 FEET;

THENCE NORTH 00 DEGREES 18 MINUTES 11 SECONDS WEST, 50.00 FEET;

THENCE SOUTH 89 DEGREES 41 MINUTES 49 SECONDS WEST, 50.00 FEET TO A POINT ON SAID EAST 40 FOOT
RIGHT-OF-WAY LINE;

THENCE ALONG SAID EAST 40 FOOT RIGHT-OF-WAY LINE, NORTH 00 DEGREES 18 MINUTES 11 SECONDS WEST,
186.36 FEET;

THENCE LEAVING SAID EAST 40 FOOT RIGHT-OF-WAY LINE, NORTH 89 DEGREES 53 MINUTES 58 SECONDS EAST,
279.00 FEET;

THENCE NORTH 00 DEGREES 18 MINUTES 11 SECONDS WEST, 413.41 FEET;

THENCE SOUTH 85 DEGREES 07 MINUTES 27 SECONDS EAST, 684.34 FEET;

THENCE NORTH 89 DEGREES 54 MINUTES 29 SECONDS EAST, 1630.12 FEET;

 

 

 

THENCE SOUTH 00 DEGREES 01 MINUTES 05 SECONDS EAST, 353.82 FEET;

THENCE SOUTH 89 DEGREES 53 MINUTES 58 SECONDS WEST, 430.00 FEET;

THENCE SOUTH 00 DEGREES 01 MINUTES 05 SECONDS EAST, 1538.01 FEET TO A POINT ON SAID NORTH 40 FOOT
RIGHT-OF-WAY LINE OF CAMELBACK ROAD;

THENCE ALONG SAID NORTH 40 FOOT RIGHT-OF-WAY LINE, SOUTH 89 DEGREES 57 MINUTES 00 SECONDS WEST,
511.63 FEET;

THENCE LEAVING SAID NORTH 40 FOOT RIGHT-OF-WAY LINE, NORTH 86 DEGREES 14 MINUTES 11 SECONDS WEST,
180.42 FEET TO A POINT ON THE NORTH 52 FOOT RIGHT-OF-WAY LINE OF CAMELBACK ROAD;

THENCE ALONG SAID NORTH 52 FOOT RIGHT-OF-WAY LINE, SOUTH 89 DEGREES 57 MINUTES 00 SECONDS WEST,
229.00 FEET;

THENCE LEAVING SAID NORTH 52 FOOT RIGHT-OF-WAY LINE, SOUTH 44 DEGREES 51 MINUTES 44 SECONDS WEST,
16.94 FEET TO A POINT ON SAID NORTH 40 FOOT RIGHT-OF-WAY LINE;

THENCE ALONG SAID NORTH 40 FOOT RIGHT-OF-WAY LINE, SOUTH 89 DEGREES 57 MINUTES 00 SECONDS WEST,
568.64 FEET TO THE TRUE POINT OF BEGINNING;

EXCEPT THAT PORTION DESCRIBED AS FOLLOWS:

COMMENCING AT THE WEST QUARTER CORNER OF SAID SECTION 14;

THENCE SOUTH 00 DEGREES 18 MINUTES 11 SECONDS EAST, 650.11 FEET ALONG THE WEST LINE OF SAID SECTION
14;

THENCE DEPARTING SAID WEST LINE, NORTH 89 DEGREES 41 MINUTES 49 SECONDS EAST, 319.00 FEET TO THE
EAST LINE OF THE WEST 319.00 FEET OF SAID SECTION 14 AND THE POINT OF BEGINNING;

THENCE DEPARTING SAID EAST LINE OF THE WEST 319.00 FEET OF SECTION 14, SOUTH 85 DEGREES 07 MINUTES
27 SECONDS EAST, 684.34 FEET;

THENCE NORTH 89 DEGREES 54 MINUTES 29 SECONDS EAST, 1629.29 FEET TO THE NORTH-SOUTH MID-SECTION
LINE OF SAID SECTION 14;

THENCE SOUTH 00 DEGREES 01 MINUTES 59 SECONDS EAST, 353.82 FEET ALONG SAID NORTH-SOUTH MID-SECTION
LINE OF SECTION 14;

THENCE SOUTH 89 DEGREES 53 MINUTES 58 SECONDS WEST, 2309.17 FEET TO SAID EAST LINE OF THE WEST
319.00 FEET OF SECTION 14;

THENCE NORTH 0 DEGREES 18 MINUTES 11 SECONDS WEST, 413.43 FEET ALONG SAID EAST LINE OF THE WEST
319.00 FEET OF SECTION 14 TO THE POINT OF BEGINNING;

 

B-2

 

AND EXCEPT A TRACT OF LAND FOR A WELL SITE SITUATED IN THE NORTHWEST QUARTER OF THE SOUTHWEST
QUARTER OF SECTION 14, TOWNSHIP 2 NORTH, RANGE 2
EAST OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA, MORE PARTICULARLY
DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT 1389.80 FEET NORTH AND 40.00 FEET EAST OF THE SOUTHWEST CORNER OF SAID SECTION
14;

THENCE NORTH 18.00 FEET;

THENCE EAST 50.00 FEET;

THENCE SOUTH 18.00 FEET;

THENCE WEST 50.00 FEET TO THE POINT OF BEGINNING.

PARCEL NO.2:

THE NORTH 506.50 FEET OF THE EAST 430 FEET OF THE NORTHEAST QUARTER OF THE SOUTHWEST QUARTER OF
SECTION 14, TOWNSHIP 2 NORTH, RANGE 2 EAST OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA
COUNTY, ARIZONA;

EXCEPT THAT PORTION CONVEYED TO THE CITY OF PHOENIX BY QUIT CLAIM DEED RECORDED AUGUST 8, 1960 IN
DOCKET 3376, PAGE 212:

AND ALSO EXCEPT THAT PORTION CONVEYED TO THE CITY OF PHOENIX BY QUIT CLAIM DEED RECORDED JULY 2,
2002 IN INSTRUMENT NO. 2002-0677117.

PARCEL NO.3:

THAT PORTION OF THE NORTH HALF OF THE SOUTHWEST QUARTER OF SECTION 14, TOWNSHIP 2 NORTH, RANGE 2
EAST OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY ARIZONA, BEING MORE PARTICULARLY
DESCRIBED AS FOLLOWS:

COMMENCING AT THE WEST QUARTER CORNER OF SAID SECTION 14;

THENCE SOUTH 00 DEGREES 18 MINUTES 11 SECONDS EAST, 650.11 FEET ALONG THE WEST LINE OF SAID SECTION
14;

THENCE DEPARTING SAID WEST LINE, NORTH 89 DEGREES 41 MINUTES 49 SECONDS EAST 319.00 FEET TO THE
EAST LINE OF THE WEST 319.00 FEET OF SAID SECTION 14 AND THE POINT OF BEGINNING;

THENCE DEPARTING SAID EAST LINE OF THE WEST 319.00 FEET OF SECTION 14, SOUTH 85 DEGREES 07 MINUTES
27 SECONDS EAST, 684.34 FEET;

THENCE NORTH 89 DEGREES 54 MINUTES 29 SECONDS EAST, 1629.29 FEET TO THE NORTH-SOUTH MID-SECTION
LINE OF SAID SECTION 14;

THENCE SOUTH 00 DEGREES 01 MINUTES 59 SECONDS EAST, 353.82 FEET ALONG SAID NORTH SOUTH MID-SECTION
LINE OF SECTION 14;

 

B-3

 

THENCE SOUTH 89 DEGREES 53 MINUTES 58 SECONDS WEST, 2309.17 FEET TO SAID EAST LINE OF THE WEST
319.00 FEET OF SECTION 14;

THENCE NORTH 00 DEGREES 18 MINUTES 11 SECONDS WEST, 413.43 FEET ALONG SAID EAST LINE OF THE WEST
319.00 FEET OF SECTION 14 TO THE POINT OF BEGINNING;

EXCEPT THAT PORTION DESCRIBED AS FOLLOWS:

COMMENCING AT THE WEST QUARTER CORNER OF SAID SECTION 14;

THENCE SOUTH 00 DEGREES 18 MINUTES 11 SECONDS EAST ALONG THE WEST LINE OF SAID SOUTHWEST QUARTER OF
SECTION 14, A DISTANCE OF 650.11 FEET;

THENCE LEAVING SAID WEST LINE, NORTH 89 DEGREES 41 MINUTES 49 SECONDS EAST 319.00 FEET TO THE EAST
LINE OF THE WEST 319.00 FEET OF SAID SOUTHWEST QUARTER OF SECTION 14;

THENCE LEAVING SAID EAST LINE, SOUTH 85 DEGREES 07 MINUTES 27 SECONDS, EAST 684.34 FEET;

THENCE NORTH 89 DEGREES 54 MINUTES 29 SECONDS EAST, 93.28 FEET TO THE TRUE POINT OF BEGINNING;

THENCE CONTINUING NORTH 89 DEGREES 54 MINUTES 29 SECONDS EAST, 601.41 FEET;

THENCE SOUTH 00 DEGREES 06 MINUTES 02 SECONDS EAST, 375.81 FEET;

THENCE SOUTH 89 DEGREES 53 MINUTES 58 SECONDS WEST, 601.41 FEET;

THENCE NORTH 00 DEGREES 06 MINUTES 02 SECONDS WEST, 375.70 FEET TO THE TRUE POINT OF BEGINNING.

IMPROVED PROPERTY COMMONLY KNOWN AS 3300 WEST CAMELBACK ROAD, PHOENIX, ARIZONA.

APN NOS. 153-17005F, 153-17-002D

 

B-4

 

EXHIBIT C

PERMITTED ENCUMBRANCES

See attached.

 

 

 

PERMITTED EXCEPTIONS

	1.	 	Property taxes, which are a lien not yet due and payable, including any assessments collected
with taxes to be levied for the year 2009.

	 
	2.	 	The liabilities and obligations imposed upon said Land by reason of: (a) inclusion thereof
within the boundaries of the Salt River Project Agricultural Improvement and Power District;
(b) membership of the owner thereof in the Salt River Valley Water Users Association, and
Arizona corporation and (c) the terms of any Water Right Application made under the
reclamation laws of the United States for the purposes of obtaining water rights for said
Land.

	 
	3.	 	The right of entry reserved to the State of Arizona, its lessees and permittees, to prospect
for mine and remove the minerals or materials reserved to it pursuant to Arizona Revised
Statues.

	 
	4.	 	Water rights, claims or title to water, whether or not disclosed by the public records.

	 
	5.	 	Reservations, exceptions and provisions contained in the Patent from the United States of
America, or in the acts authorizing the issuance thereof.

	 
	6.	 	Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a
document:

Purpose: Gas Main

Recording Date: March 4, 1958

Recorded in Docket 2416, page 237.

	7.	 	Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a
document:

Purpose: Transmission Line

Recording Date: September 27, 1960

Recorded in Docket 3433, page 436.

	8.	 	Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a
document:

Purpose: Transmission Line

Recording Date: September 1 1961

Recorded in Docket 3830, page 547.

	9.	 	Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a
document:

Purpose: Transmission Line

Recording Date: June 18, 1962

Recorded in Docket 4183, page 307 and superseded by Easement recorded in Docket 8983, page
152.

 

 

 

	10.	 	Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a
document:

Purpose: Gas Main

Recording Date: October 1, 197 1

Recorded in Docket 43 18, page 333.

	11.	 	Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a
document:

Purpose: Gas Main

Recording Date: April 10, 1963

Recorded in Docket 4533, page 447.

	12.	 	Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a
document:

Purpose: Transmission Lines

Recording Date: June 3, 1963

Recorded in Docket 4600, page 285.

	13.	 	Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a
document:

Purpose: Underground Power

Recording Date: June 12, 1973

Recorded in Docket 10 146, page 154 and re-recorded in Docket 101 77, page 65.

	14.	 	Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a
document:

Purpose: Traffic control

Recording Date: October 7, 1974

Recorded in Docket 10860, page 5 14.

	15.	 	Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a
document:

Purpose: Fire Hydrant

Recording Date: August 22, 1975

Recorded in Docket 1 130 1, page 47.

	16.	 	Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a
document:

Purpose: Underground Power

Recording Date: June 15, 1976

Recorded in Docket 1 1720, page 33 1.

	17.	 	Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a
document:

Purpose: Overhead and Underground Power

Recording Date: September 28, 1979

Recorded in Docket 1393 1, page 653.

 

 

 

	18.	 	Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a
document:

Purpose: Overhead and Underground Power

Recording Date: August 28, 198 1

Recorded in Docket 1548 1, page 746.

	19.	 	Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a
document:

Purpose: Underground Power

Recording Date: June 28, 1982

Recorded in Docket 16 1 16, page 535.
(Affects Parcel 1)

	20.	 	Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a
document:

Purpose: Underground Power Lines

Recording Date: February 18, 1983

Recording No. 1983-061652.
(Parcel 2)

	21.	 	Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a
document:

Purpose: Water Lines

Recording Date: February 2 1, 1985

Recording No. 1985-076753.

	22.	 	Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a
document:

Purpose: Overhead and Underground Power

Recording Date: May 29, 1985

Recording No. 1985-243447.

	23.	 	Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a
document:

Purpose: Water Lines

Recording Date: August 8, 1985

Recording No. 1985-373649.

	24.	 	Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a
document:

Purpose: Water Lines

Recording Date: April 18, 1986

Recording No. 1986- 189452.

 

 

 

	25.	 	Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a
document:

Purpose: Underground Power

Recording Date: July 20, 1990

Recording No. 1990-325704

(Affects Parcel 1)

	26.	 	Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a
document:

Purpose: Underground Power Lines

Recording Date: June 9, 1992

Recording No. 1992-3 1 1994

(Parcel 2)

	27.	 	Notice of Telecommunication Service and Non-Exclusive Access Agreement dated 06/25/1997,
recorded June 25, 1997 in Recording No. 1997-0428849.

	28.	 	Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a
document:

Purpose: Power Distribution

Recording Date: April 15,2002

Recording No. 2002-0382407

(Parcel 1)

	29.	 	Ordinance No. 5-29492 Authorizing Dedication of Easements dated 1011 612002, recorded October
23,2002 in Recording No. 2002-1 100596.

	30.	 	Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a
document:

Purpose: Electric Lines

Recording Date: January 29,2004

Recording No. 2004-0088432

(Parcel 1)

	31.	 	Easement(s) for the purpose(s) shown below and rights incidental thereto as set forth in a
document:

Purpose: Power Distribution

Recording Date: July 28,2006

Recording No. 2006- 1009212

(Parcel 1)

 

 

 

	32.	 	Memorandum of Agreement (Arizona) dated 0112612007, recorded February 8,2007 in Recording No.
2007-0 162347.

	33.	 	Memorandum of PCS Site Agreement dated 8/09/2000 recorded August 15, 2000 in Recording No.
2000-0621095, as affected by that certain Subordination, Non-Disturbance and Attornment
Agreement recorded in Instrument No. _____.

	34.	 	Memorandum of Lease by and between Grand Canyon University, kc., an Arizona non-profit
corporation, as lessor, and Verizon Wireless (VAW) LLC, d/b/a Verizon Wireless, recorded April
4, 2003 in Recording No. 2003-0423487, as affected by that certain Subordination,
Non-Disturbance and Attornment Agreement recorded in Instrument No. _____.

	35.	 	Discrepancies, conflicts in boundary lines, shortages in area, encroachments, or any other
matters which a correct ALTA survey would disclose and which are not shown by the public
records.

 

 

 

EXHIBIT D

FIRPTA AFFIDAVIT

NON-FOREIGN SELLER CERTIFICATE

	 	 	 	 	 	 	 	 	 
	STATE OF                     

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	ss:
	 	 
	COUNTY OF                     

	 	 	)	 	 	 	 	 

Section 1445 of the Internal Revenue Code (the “Code”) provides that a transferee of a
U.S. real property interest must withhold tax if the transferor is a foreign person. For U.S. tax
purposes (including Section 1445 of the Code), the owner of a disregarded entity (which has legal
title to a U.S. real property interest under local law), and not the disregarded entity, will be
the transferor of such property. To inform                     , a                     
(“Transferee”) that withholding of tax is not required upon the disposition of a U.S. real
property interest by SPIRIT MASTER FUNDING, LLC, a Delaware limited liability company
(“Transferor”) the undersigned, on behalf of Transferor, hereby certifies to Transferee,
the following:

1. Transferor is not a “foreign corporation,” “foreign partnership,” “foreign trust,”
or “foreign estate” (as those terms are defined in the Code and the Income Tax Regulations
promulgated thereunder);

2. Transferor is not a disregarded entity as defined in §1.1445-2(b)(2)(iii) of the
Code;

3. Transferor’s U.S. employer identification number is                     ; and

4. Transferor’s office address is Suite 200, 14631 North Scottsdale Road, Scottsdale,
Arizona 85254-2711.

Transferor understands that this certification may be disclosed to the Internal Revenue
Service by Transferee and that any false statement contained herein could be punished by fine,
imprisonment, or both.

Under penalties of perjury, the undersigned hereby declares that (a) I have examined this
certification and to the best of my knowledge and belief it is true, correct, and complete, and (b)
I have authority to sign this document on behalf of Transferor.

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	SPIRIT MASTER FUNDING, LLC, a Delaware

limited liability company	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Spirit Finance Corporation, a Maryland

corporation, as Property Manager	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Spirit Finance Capital Management, LLC, a

Delaware limited liability company, as Manager	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:
	 	Senior Vice President	 	 

Subscribed and sworn to before me this ____ day of April, 2009.

	 	 	 	 	 
	Notary Public:

	 	 
 

	 	 

(SEAL)

	 	 	 	 	 
	My Commission Expires:

	 	 
 

	 	 

D-2

 

 

 

EXHIBIT E

TRANSFER INSTRUCTIONS

April ___ 2009

Computershare Trust Company, N.A.

350 Indiana Street, Suite 800

Golden, Colorado 80401

Attn: Kim Porter

Re: Grand Canyon Education, Inc. / Spirit Management Company

Dear Ms. Porter:

This letter relates to 909,348 shares (the “Shares”) of common stock, par value $0.01 (the “Common
Stock”), of Grand Canyon Education, Inc. (the “Company”) owned in book-entry form by Spirit
Management Company (Holder Account No. C0000000311) (“Spirit”). Pursuant to a purchase and sale
agreement, dated April [27], 2009, by and among the Company, Spirit, and other parties thereto (the
“Agreement”), a copy of which (excluding exhibits) is attached to this letter as Exhibit A,
Spirit has agreed to, among other things, sell the Shares to the Company. The Shares are currently
subject to a lock-up restriction that restricts Spirit’s ability to transfer the Shares prior to
November 18, 2011 (the “Lock-Up Restriction”).

On behalf of the Company and Spirit, and in furtherance of the foregoing, Computershare Trust
Company, N.A. is hereby instructed (a) to change the termination date of the Lock-Up Restriction
from November 18, 2011 to the date hereof; (b) to transfer the Shares in the name of and on the
books of the Company, pursuant to the stock power attached to this letter as Exhibit B; and
(c) to cancel the Shares and classify the Shares as authorized and available for issuance by the
Company.

Please contact us if you have any questions or concerns.

 

 

 

Computershare Trust Company, N.A.

April _____, 2009

Page 2

Very truly yours,

DLA Piper LLP (US), on behalf of the Company

Jeffrey C. DeBruin

Associate

And

Kutak Rock LLP, on behalf of Spirit

Peggy A. Richter

Partner

	 	 	 
	cc:

	 	Christopher C. Richardson (via
email: crichardson@gcu.edu) 

Michael T. Bennett (via email: mbennett@spiritfinance.com)

David P. Lewis (via email: david.lewis@dlapiper.com)

E-2

 

 

 

Exhibit A

Purchase and Sale Agreement

(See attached.)

 

 

 

Exhibit B

Stock Power

(See attached.)Exhibit 10.2

Exhibit 10.2

LOAN AGREEMENT

This LOAN AGREEMENT (this “Agreement”) is dated as of April 27, 2009, by and between
BANK OF AMERICA, N.A., a national banking association (the “Bank”) and GRAND CANYON
EDUCATION, INC., a Delaware corporation (the “Borrower”).

FACTUAL BACKGROUND

The Borrower has requested that the Bank provide a Loan in order for the Borrower to purchase
the property used by the Borrower to operate Grand Canyon University. The Bank is willing to make
such a Loan on the terms and conditions set forth herein.

AGREEMENT

Therefore, in consideration of the mutual covenants and agreements herein contained,
the parties hereto covenant and agree as follows:

	1.	 	VARIABLE RATE TERM LOAN AMOUNT AND TERMS

	1.1	 	Loan Amount.

The Bank agrees to provide a Loan to the Borrower in the principal amount of Twenty-Five Million
Six Hundred Seventy Five Thousand and no/100 Dollars ($25,675,000.00) (the “Loan”).

	1.2	 	Single Disbursement of Loan.

The Loan shall be made by a single disbursement upon the Borrower’s satisfaction of the conditions
contained in Article 5 of this Agreement, which the Bank and the Borrower agree will be on
April 28, 2009.

	1.3	 	Repayment Terms.

	(a)	 	The Borrower will pay accrued interest on the principal balance of the Loan commencing on
June 1, 2009, and thereafter on the same day of each month, until payment in full of the Loan,
such interest to be computed in accordance with Section 1.4.

	(b)	 	The Borrower will also make principal payments in equal monthly installments of One Hundred
Forty Two Thousand Six Hundred Thirty Eight and 89/100 Dollars ($142,638.89) beginning on June
1, 2009 and on the first (1st) day of each month thereafter. In addition to the foregoing
monthly payments of principal, not later than April 30, 2014 (the “Maturity Date”) the
Borrower shall repay to the Bank the remaining unpaid principal, all accrued and unpaid
interest and all other amounts payable under this Agreement or the Deed of Trust, as defined
in Article 3 below.

 

1

 

	(c)	 	Upon not less than ten (10) banking days irrevocable written notice received by the Bank from
the Borrower, the Borrower may prepay the Loan in full or in part only on the first (1st) day
of the calendar month that is so noted in such notice. Any such noticed
prepayment shall be unconditionally due on such stated date for such prepayment in
the notice. Such prepayment must be accompanied with (i) the payment of any
termination, reinvestment, or breakage costs incurred by the Bank if such
prepayment is not received on the first (1st) day of the calendar month that is
noted in such prepayment notice; and (ii) a prepayment fee as follows:

	 	 	 	 	 
	Date of Prepayment	 	Percentage of Prepaid Amount	 
	 
	Prior to March 31, 2010
	 	 	2.00	%
	Prior to March 31, 2011
	 	 	1.00	%
	Prior to March 31, 2012
	 	 	0.50	%

Provided that, if the prepayment is a prepayment in full and made in connection with either:

(A) a refinancing transaction, the proceeds of which are used to
both (x) repay the Loan and all other amounts payable to the Bank in
full, and (y) to finance material improvements to the real property
and improvements thereon comprising the Collateral (as defined
below); or

(B) a new market tax credit financing transaction, the proceeds of
which are used to repay the Loan and all other amounts payable to
the Bank in full;

then a prepayment fee as follows:

	 	 	 	 	 
	Date of Prepayment	 	Percentage of Prepaid Amount	 
	 
	Prior to March 31, 2010
	 	 	1.00	%
	Prior to March 31, 2011
	 	 	0.50	%
	Prior to March 31, 2012
	 	 	0.25	%

Provided further that, if the Bank is either the only lender or is the primary lender of any
financing covered by clause (A) of the preceding sentence, then no prepayment fee will be
required.

Each such prepayment will be applied (A) first, to the payment of any such
termination, reinvestment, or breakage fee; (B) second, to the Prepayment Fee; and
then; (C) third, to the most remote payment of principal due under this Agreement.
The Borrower shall also pay to the Bank, in addition to any late fee or default, interest on
any noticed prepayment that is not timely made, all costs, expenses, fees and losses
incurred by Bank as a result of such failure, including any termination, reinvestment or
breakage fee.

 

2

 

	1.4	 	Interest Rate.

	(a)	 	The interest rate on the unpaid amount of the Loan shall be a rate per year equal to the BBA
LIBOR Rate (Adjusted Periodically), plus three hundred fifty (350) basis points.

	(b)	 	The interest rate will be adjusted on the first (1st) day of every calendar month (the
“Adjustment Date”) and remain fixed until the next Adjustment Date. If the Adjustment
Date in any particular month would otherwise fall on a day that is not a banking day then, at
the Bank’s option, the Adjustment Date for that particular calendar month will be the first
banking day immediately following thereafter.

	(c)	 	The BBA LIBOR Rate (Adjusted Periodically) is a rate of interest equal to the rate per annum
equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by
Reuters (or another commercially available source providing quotations of BBA LIBOR as
selected by the Bank from time to time) as determined for each Adjustment Date at
approximately 11:00 a.m. London time two (2) London Banking Days prior to the Adjustment Date,
for U.S. Dollar deposits (for delivery on the first day of such interest period) with a term
of one month, as adjusted from time to time in the Bank’s sole discretion for reserve
requirements, deposit insurance assessment rates and other regulatory costs. If such rate is
not available at such time for any reason or if the Bank determines in its sole discretion
that such rate no longer accurately reflects its cost of funds, then the rate for that
interest period will be determined by such alternate method as reasonably selected by the Bank
provided that the effect of such alternative method is to provide for an interest rate that is
generally comparable in market performance and fluctuation as the BBA LIBOR immediately prior
to such rate not being available or not reflecting the cost of funds. A “London Banking
Day” is a day on which banks in London are open for business and dealing in offshore
dollars.

	2.	 	FEES AND EXPENSES

	2.1	 	Fees.

	(a)	 	Loan Fee. The Borrower agrees to pay a loan fee in the amount of One Hundred Twenty
Eight Thousand Three Hundred Seventy Five and no/100 Dollars ($128,375.00). This loan fee
shall be paid by the Borrower on the date of this Agreement and shall be fully paid and
non-refundable upon receipt by the Bank.

	(b)	 	Late Fee. The Borrower agrees to pay a late fee in an amount equal to four percent
(4%) of the amount of any delinquent payment of principal or interest that is more than ten
(10) calendar days late. The imposition and payment of a late fee shall not constitute a
waiver of the Bank’s rights with respect to the default. This fee shall be in addition to the
accrual of interest at the default rate of interest pursuant to Section 4.6 below.

 

3

 

	2.2	 	Expenses.

The Borrower agrees to repay the Bank within ten (10) days after request or invoice for all
expenses and costs incurred by the Bank in connection with the Loan, which may include, but
are not limited to, filing, recording and search fees, appraisal fees, survey fees, title report
fees, title insurance premiums, and documentation fees.

	2.3	 	Reimbursement of Costs and Expenses.

	(a)	 	The Borrower agrees to also reimburse the Bank for any costs or expenses it incurs in the
preparation of this Agreement, any agreement, document or instrument required by this
Agreement, including, without limitation, the Deed of Trust, as defined in Article 3
below and any agreement, document or instrument required pursuant to Article 5 below.
Expenses shall include, but are not limited to, reasonable attorneys’ fees and costs,
including any allocated costs of the Bank’s in-house counsel to the extent permitted by
applicable law.

	(b)	 	The Borrower agrees to also reimburse the Bank for the cost and expense of periodic field
examinations of the Collateral, and appraisals of the Collateral, at such intervals as the
Bank may reasonably require; provided, however, that so long as there is no Event of Default,
Borrower shall not be required to pay for more than one (1) appraisal each calendar year
following the disbursement of the Loan. The actions described in this paragraph shall
include, without limitation, the actions taken pursuant to Section 7.23 below, and may
be performed by employees of the Bank or by independent appraisers.

	3.	 	DEED OF TRUST AND COLLATERAL

The Borrower’s obligations to the Bank under this Agreement will be secured by the property rights
and interests covered by the following (the “Collateral”):

A Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated as
of April 27, 2009 (the “Deed of Trust”) which shall cover the approximately
89.6 acres of land located at 3300 West Camelback Road, Phoenix, Arizona 85017-3030
and the other property, rights and interest described in the Deed of Trust.

The Deed of Trust and any other document executed at any time by the Borrower to secure the Loan
are collectively, the “Collateral Documents”.

	4.	 	DISBURSEMENTS, PAYMENTS AND COSTS

	4.1	 	Disbursements and Payments.

	(a)	 	Each payment by the Borrower will be made in U.S. Dollars and immediately available funds by
debit to a deposit account, as described in this Agreement or otherwise authorized by the
Borrower. For payments not made by direct debit, payments will be made by mail to the address
shown on the Borrower’s statement or at one of the Bank’s banking centers in Phoenix, Arizona,
or at such other banking center designated by the Bank, or by such other method as may be
permitted or directed by the Bank.

	(b)	 	The Bank may honor instructions for repayments or prepayments given by any one of the
individuals authorized to sign this Loan Agreement or the Deed of Trust on behalf of the
Borrower, or any other individual designated in a writing delivered to the Bank by any one
of such authorized signers (each an “Authorized Individual”).

 

4

 

	(c)	 	For any payment under this Agreement made by debit to a deposit account, the Borrower will
maintain sufficient immediately available funds in the deposit account to cover such debit.
If there are insufficient immediately available funds in the deposit account on the date the
Bank enters any such debit authorized by this Agreement, the Bank may reverse the debit.

	(d)	 	The disbursement of the Loan by the Bank and each payment by the Borrower will be evidenced
by records kept by the Bank, and shall be conclusive, absent manifest error. In addition, the
Bank may, at its discretion, require the Borrower to sign a promissory note to further
evidence the Loan, and the Borrower’s obligation to repay the Loan, plus interest.

	(e)	 	Not later than five (5) calendar days prior to the date each payment of principal and
interest or any fees, costs or expenses from the Borrower becomes due (each a “Due
Date”), the Bank will mail to the Borrower a statement of the amounts that will be due on
the stated Due Date (the “Billed Amount”). The due date for any payment by Borrower
shall not be delayed or postponed if for any reason (A) Bank does not timely mail any such
statement; or (B) Borrower does not timely receive such statement. The calculations in each
such billing statement will be made on the assumption that no payments will be made between
the date of the billing statement and the Due Date, and that there will be no changes in the
applicable interest rate. If the Billed Amount differs from the actual amount due on the
stated Due Date (the “Accrued Amount”), the discrepancy will be treated as follows:

	 	(i)	 	If the Billed Amount is less than the Accrued Amount, the Billed Amount for the
following Due Date will be increased by the amount of the discrepancy. The Borrower
will not be in default by reason of any such discrepancy.

	 	(ii)	 	If the Billed Amount is more than the Accrued Amount, the Billed Amount for the
following Due Date will be decreased by the amount of the discrepancy.

	 	 	Regardless of any such discrepancy, interest will continue to accrue
based on the actual amount of principal outstanding without
compounding. Interest shall also accrue on any fees, costs or
expenses that are not paid by the Borrower upon presentment of the
amount to the Borrower. The Bank will not pay the Borrower interest
on any overpayment.

	 
	4.2	 	Telephone and Telefax Authorization.

	(a)	 	The Bank may honor telephone, telefax or e-mail instructions for repayments or prepayments
given, or purported to be given, by any one of the Authorized Individuals.

	(b)	 	The Borrower will fully indemnify and hold the Bank harmless from all liability, loss, and
costs in connection with any act resulting from telephone, telefax or e-mail instructions the
Bank reasonably believes are made by any Authorized Individual. This
section will survive this Agreement’s
termination, and will benefit the Bank
and its officers, employees, and
agents.

 

5

 

	4.3	 	Direct Debit.

	(a)	 	The Borrower agrees that on each Due Date the Bank will debit the Billed Amount from one of
Borrower’s accounts with the Bank as designated in writing by the Borrower (the
“Designated Account”).

	4.4	 	Banking Days.

Unless otherwise provided in this Agreement, a banking day is a day other than a Saturday,
Sunday or other day on which commercial banks are authorized to close, or are in fact closed, in
the State of Arizona, and, if such day relates to amounts bearing interest at an offshore rate (if
any), means any such day on which dealings in dollar deposits are conducted among banks in the
offshore dollar interbank market. All payments and disbursements which would be due on a day which
is not a banking day will be due on the next banking day. All payments received on a day which is
not a banking day will be applied to the credit on the next banking day.

	4.5	 	Interest Calculation.

Except as otherwise stated in this Agreement, all interest and fees, if any, will be computed
on the basis of a 360-day year and the actual number of days elapsed. This results in more
interest or a higher fee than if a 365-day year is used. Installments of principal which are not
paid when due under this Agreement shall continue to bear interest until paid.

	4.6	 	Default Rate.

Following the occurrence of an Event of Default or after maturity of or after judgment has
been rendered on any obligation under this Agreement, all amounts outstanding under this Agreement,
including any (i) interest; or (ii) fees, costs or expenses which are not paid within two (2)
business days after the date when due, will at the option of the Bank bear interest at a rate which
is six hundred (600) basis points higher than the Interest Rate from such date until the date
received by Bank. This may result in the compounding of interest. This will not constitute a
waiver of any default and shall be in addition to the late fee pursuant to Section 2.1(b).

	5.	 	CONDITIONS

Before the Bank is required to make the Loan pursuant to this Agreement, it must receive any
documents and other items it may reasonably require, in form and content acceptable to the Bank,
including any items specifically listed below.

	5.1	 	Authorizations.

Evidence that the execution, delivery and performance by the Borrower of this Agreement and
any instrument or agreement required under this Agreement have been duly authorized.

 

6

 

	5.2	 	Governing Documents.

A copy of the Borrower’s organizational and operating documents.

	5.3	 	Deed of Trust.

Signed, acknowledged and properly recorded (which recording may be contemporaneous with the closing
of the Loan pursuant to an escrow to close the Loan) original Deed of Trust.

	5.4	 	Title Insurance.

An ALTA lender’s title insurance policy (on a form acceptable to the Bank and from a title
company acceptable to the Bank), for Twenty Five Million Six Hundred Seventy Five and no/100
Dollars ($25,675,000.00), insuring the Bank’s lien pursuant to the Deed of Trust, with only such
exceptions and exclusions as may be approved by the Bank and together with such endorsements as the
Bank may require (the “Title Policy”).

	5.5	 	Payment of Fees, Costs and Expenses.

Payment of all fees and other amounts due and owing to the Bank, including without limitation
payment of all accrued and unpaid expenses incurred by the Bank as required by the Section
2.3 entitled “Reimbursement of Costs and Expenses.” The payment of all Reimbursement
Costs accruing prior to the date of this Agreement shall be set forth in the Closing Statement
referenced in Section 7.1 and shall be paid out of the proceeds of the Loan pursuant
thereto.

	5.6	 	Good Standing.

Certificates of good standing for the Borrower from the State of Delaware and the State of Arizona.

	5.7	 	Legal Opinion.

A written opinion from the Borrower’s legal counsel, covering such matters as valid corporate
existence, authority to borrow, confirmation that entering into this Agreement will not cause a
violation of any other lending agreement, and any other matters the Bank may require. The legal
counsel and the terms of the opinion must be acceptable to the Bank.

	5.8	 	Insurance.

Evidence of insurance coverage, as required pursuant to either (i) Section 7.14 of this
Agreement or (ii) the Collateral Documents.

	5.9	 	Environmental Information.

	 	(i)	 	Phase 1. An environmental Phase 1 site assessment prepared by a
qualified third party consultant approved by the Bank concerning any potential toxic or
hazardous condition with respect to the real property collateral, together with a
certification signed by the Borrower regarding the environmental information
provided to the Bank (the “Phase 1”); and

 

7

 

	 	(ii)	 	Lead Safe. Borrower shall deliver to the Bank documentation evidencing
that the property covered by the Deed of Trust is operated in a lead safe manner; and

	 	(iii)	 	Asbestos Plan. Borrower shall deliver to the Bank a copy of the
Borrower’s Asbestos Operations and Maintenance Plan and the Bank shall have determined
such Plan to be acceptable.

	5.10	 	Survey. 

Delivery of an Aerial Survey covering the real property covered by the Deed of Trust to the Bank
and the Title Company.

	5.11	 	Other Required Documentation.

	(a)	 	Fully executed Purchase and Sale Agreement and all related documents in connection with the
transaction (the “Purchase Transaction”) among Borrower, on the one hand, and Spirit
Master Funding, LLC and Spirit Management Company (collectively, “Spirit”), on the
other hand (the “Purchase and Sale Agreement”) regarding the real property covered by
the Deed of Trust, including, without limitation, the proper recording of a Warranty Deed in
favor of the Borrower for the real property covered by the Deed of Trust.

	(b)	 	All documents and certificates set forth on the Closing Checklist delivered to Borrower from
the legal counsel of the Bank regarding the Loan (the “Closing Checklist”).

	(c)	 	All documents and certificates required by the Title Insurance Company as a condition to its
issuance of the Title Policy, and all endorsements thereto.

	(d)	 	An Appraisal, by an MAI Appraiser selected and retained by the Bank, of the real property
covered by the Deed of Trust in a form acceptable to the Bank, and disclosing a current
appraised value of not less than Thirty Nine Million Five Hundred Thousand and no/100 Dollars
($39,500,000.00).

	6.	 	REPRESENTATIONS AND WARRANTIES

When the Borrower signs this Agreement, and until the Bank is repaid in full, the Borrower makes
the following representations and warranties as of and on each day the Loan remains outstanding.

	6.1	 	Formation.

Borrower is duly formed and validly existing under the laws of the State of Delaware.

 

8

 

	6.2	 	Authorization.

This Agreement, and any instrument or agreement required hereunder, are within the Borrower’s
corporate powers, have been duly authorized, and do not conflict with any of its organizational or
governing documents.

	6.3	 	Enforceable Agreement and Deed of Trust.

This Agreement and the Collateral Documents are each a legal, valid and binding agreement of the
Borrower, enforceable against the Borrower in accordance with their respective terms. In addition,
any instrument or agreement required under this Agreement, when executed and delivered, will be
similarly legal, valid, binding and enforceable.

	6.4	 	Good Standing.

In each state in which the Borrower does business, it is properly licensed, in good standing, and,
where required, in compliance with fictitious name statutes, except where such failure to be so
licensed, in good standing and in compliance has not and would not reasonably be expected to have a
material adverse effect on the Borrower or its business.

	6.5	 	No Conflicts.

This Agreement does not conflict with any law, agreement, or obligation by which the Borrower is
bound.

	6.6	 	Financial Information.

All financial and other information that has been or will be supplied to the Bank is sufficiently
complete to give the Bank accurate and complete knowledge, in all material respects, of the
Borrower’s financial condition, including all material contingent liabilities. Since the date of
the most recent financial statement provided to the Bank, there has been no material adverse change
in the business condition (financial or otherwise), operations, properties or prospects of the
Borrower.

 

9

 

	6.7	 	Lawsuits.

As of the date of this Agreement, there is no lawsuit, tax claim or other dispute pending, overtly
threatened in writing or, to Borrower’s actual knowledge, otherwise threatened against the Borrower
(or any of the Borrower’s property) which, if lost, would materially impair the Borrower’s
financial condition or ability to repay the Loan, except as have been disclosed in writing to the
Bank or as have otherwise been disclosed by the Borrower in any periodic report or other filing
made with the Securities and Exchange Commission (the “SEC”) under the Securities Act of
1933, as amended (the “Securities Act”) or the Securities Exchange Act of 1934, as amended
(the “Exchange Act”) (collectively, the “SEC Reports”), or if occurring after the
date of this Agreement, is promptly disclosed to the Bank pursuant to Section 7.13.

	6.8	 	Collateral.

As of the time the Deed of Trust is recorded with the Recorder of Maricopa County, Arizona, the
Collateral is owned by the Borrower free of any title defects or any liens, except those which are
disclosed in the Title Policy referenced in Section 5.4 above or by a UCC financing
statement search.

	6.9	 	Permits, Franchises.

The Borrower possesses all permits, memberships, franchises, contracts and licenses required and
all trademark rights, trade name rights, patent rights, copyrights, and fictitious name rights
necessary to enable it to conduct the business in which it is now engaged except to the extent
Borrower’s failure to possess such permits or other rights has not resulted or would not reasonably
be expected to result in a material adverse effect on Borrower or its business.

	6.10	 	Other Obligations.

As of the date of this Agreement, the Borrower is not in default on any obligation for borrowed
money, any purchase money obligation or any other material lease, commitment, contract, instrument
or obligation.

	6.11	 	Tax Matters.

The Borrower has no knowledge of any pending assessments or adjustments in an amount exceeding One
Hundred Thousand Dollars and no/100 Dollars ($100,000.00) of its income tax for any year and all
taxes due have been paid, except as have been disclosed in writing to the Bank, or if the Borrower
obtains knowledge of such assessment or adjustment after the date of this Agreement, except as is
promptly disclosed to the Bank in writing.

 

10

 

	6.12	 	No Event of Default.

There is no event which is, or with notice or lapse of time or both would be, an Event of Default
under this Agreement or any of the Collateral Documents.

	6.13	 	Insurance.

The Borrower has obtained, and maintains in effect, the insurance coverage required in any of (i)
Section 7.14 of this Agreement, or (ii) pursuant to the Collateral Documents.

	6.14	 	ERISA Plans.

	(a)	 	Each Plan (other than a multiemployer plan) is in compliance in all material respects with
the applicable provisions of ERISA, the Code and other federal or state law. Each Plan has
received a favorable determination letter from the IRS and to the best knowledge of the
Borrower, nothing has occurred which would cause the loss of such qualification. The Borrower
has fulfilled its obligations, if any, under the minimum funding standards of ERISA and the
Code with respect to each Plan, and has not incurred any liability with respect to any Plan
under Title IV of ERISA.

	(b)	 	There are no claims, lawsuits or actions (including by any governmental authority), and there
has been no prohibited transaction or violation of the fiduciary responsibility rules, with
respect to any Plan which has resulted or could reasonably be expected to result in a material
adverse effect on the Borrower or its business.

	(c)	 	With respect to any Plan subject to Title IV of ERISA:

	 	(i)	 	No reportable event has occurred under Section 4043(c) of ERISA for which the
PBGC requires 30-day notice.

	 	(ii)	 	No action by the Borrower or any ERISA Affiliate to terminate or withdraw from
any Plan has been taken and no notice of intent to terminate a Plan has been filed
under Section 4041 of ERISA.

	 	(iii)	 	No termination proceeding has been commenced with respect to a Plan under
Section 4042 of ERISA, and no event has occurred or condition exists which might
constitute grounds for the commencement of such a proceeding.

	(d)	 	The following terms have the meanings indicated for purposes of this Agreement:

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

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

	 	(iii)	 	“ERISA Affiliate” means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of Section
414(b) or (c) of the Code.

 

11

 

	 	(iv)	 	“PBGC” means the Pension Benefit Guaranty Corporation.

	 
	 	(v)	 	“Plan” means a pension, profit-sharing, or stock bonus plan intended to
qualify under Section 401(a) of the Code, maintained or contributed to by the Borrower
or any ERISA Affiliate, including any multiemployer plan within the meaning of Section
4001(a)(3) of ERISA.

	6.15	 	Location of Borrower.

As of the date of this Agreement, the place of business of the Borrower and its chief executive
office are each located at 3300 West Camelback Road, Phoenix, Arizona 85017-3030.

	6.16	 	Closing Checklist.

The Borrower’s Survey Certificate listed on the Closing Checklist and delivered to the Bank is true
and correct in all material respects.

	7.	 	COVENANTS

The Borrower agrees that until the Bank is repaid in full:

	7.1	 	Use of Proceeds.

To use and apply the proceeds of the Loan only according to the Closing Statement dated April 27,
2009 (the “Closing Statement”) in connection with the closing of the Purchase Transaction.

	7.2	 	Financial Information.

To provide the following financial statements and other information; provided, that for so long as
the Borrower is required to file SEC Reports, the Borrower shall be deemed to have satisfied its
obligation to provide such financial statements and other information to the extent such financial
statements and other information are filed by the Borrower on the SEC’s EDGAR filing system and a
copy of each such filing is delivered to the Bank within three (3) calendar days of such filing.

	(a)	 	Copies of each Form 10-K Annual Report for Borrower filed with the SEC. If the Borrower does
not timely file, or is not required to file with the SEC, a Form 10-K Annual Report for
Borrower for any fiscal year, then, within ninety (90) days of each fiscal year end of the
Borrower, the Borrower shall provide to Bank the annual financial statements of Borrower,
certified and dated by an authorized financial officer. The financial statements delivered
separately or included in such Form 10-K Annual Reports must be (i) audited by a Certified
Public Accountant acceptable to the Bank; (ii) prepared on a consolidated basis (if
applicable); and (iii) include a balance sheet, statement of income and statement of cash
flow.

 

12

 

	(b)	 	Copies of each Form 10-Q Quarterly Report for Borrower filed with the SEC. If the Borrower
does not timely file, or is not required to file with the SEC, a Form 10-Q Quarterly Report
for Borrower for any fiscal quarter, then, within sixty (60) days of each
fiscal quarter (other than the fiscal quarter that ends with the fiscal year) the Borrower
shall provide to Bank the quarterly financial statements of Borrower, certified and dated by
an authorized financial officer. The financial statements delivered separately or included
in such Form 10-Q Quarterly Report must be, (i) certified and dated by an authorized
financial officer; (ii) prepared on a consolidated basis (if applicable); and (iii) include
a balance sheet, statement of income and statement of cash flow.

	(c)	 	Copies of each Form 8-K Current Report for Borrower filed with the SEC.

	(d)	 	Promptly, upon sending or receipt, copies of any management letters and correspondence
relating to management letters, sent or received by the Borrower to or from the Borrower’s
auditor. If no management letter is prepared, the Bank may, in its discretion, request a
letter from such auditor stating that no deficiencies were noted that would otherwise be
addressed in a management letter.

	(e)	 	Consolidated Financial Projections covering a three (3) year time period and specifying the
assumptions used in creating the projections (the “Consolidated Financial
Projections”). The Consolidated Financial Projections shall be provided to the Bank no
less often than annually, and within seventy-five (75) days after the end of each fiscal year.

	(f)	 	Promptly upon the Bank’s request, such other books, records, statements, lists of property
and accounts, budgets, forecasts, pipeline reports or other reports as the Bank may reasonably
request.

	(g)	 	Within sixty (60) days of the end of each fiscal quarter (other than a fiscal quarter that
ends on last day of the fiscal year), a compliance certificate of the Borrower, signed by an
authorized financial officer in the form of Exhibit 7.2(g), which shall include,
without limitation, (i) the information and computations (in sufficient detail) to establish
compliance with the financial covenants set forth in Sections 7.3, 7.4, and
7.5 at the end of the period covered by the financial statements then being furnished
for such fiscal quarter, and (ii) a statement whether there existed as of the date of either
such financial statements or the date of the certificate, any default under this Agreement,
and if any such default exists, specifying the nature thereof and the action the Borrower is
taking and proposes to take with respect thereto (the “Quarterly Compliance
Certificate”). The form or delivery of any Quarterly Compliance Certificate does not
change the terms of any financial or other covenant contained in this Agreement.

	(h)	 	Within ninety (90) days of the end of each fiscal year, a compliance certificate of the
Borrower, signed by an authorized financial officer in the form of Exhibit 7.2(h),
which shall include, without limitation, (i) the information and computations (in sufficient
detail) to establish compliance with the financial covenants set forth in Sections
7.3, 7.4, and 7.5 at the end of the period covered by the financial
statements then being furnished for such fiscal year, (ii) the information to establish
compliance with the Educational Covenants contained herein, and (iii) a statement whether
there existed as of the date of such financial statements and whether there exists as of the
date of the certificate, any default under this Agreement, and if any such default exists,
specifying the nature thereof
and the action the Borrower is taking and proposes to take with respect thereto (the
“Annual Compliance Certificate”). The form or delivery of any Annual Compliance
Certificate does not change the terms of any financial or other covenant contained in this
Agreement.

 

13

 

	(i)	 	Not later than the earlier of (A) June 30 of each year, or (B) upon the filing with the DOE
thereof, a copy of the Borrower’s most recent Title IV Compliance Audit (as such term is
defined by the DOE).

	7.3	 	Funded Debt to Adjusted EBITDA Ratio.

To maintain on a consolidated basis a ratio of Funded Debt to Adjusted EBITDA as of the end of each
fiscal quarter and each fiscal year not exceeding as follows:

	 	 	 	 	 
	For all Times During the Following Period of Time	 	Ratio	 
	 
	Closing of Loan — December 30, 2009
	 	 	2.00:1.00	 
	December 31, 2009 — December 30, 2010
	 	 	1.75:1.00	 
	All times from and after December 31, 2010
	 	 	1.50:1.00	 

“Funded Debt” means all outstanding liabilities for borrowed money and other
interest-bearing liabilities, including current and long term debt, less the non-current portion of
Subordinated Liabilities (as defined in Section 7.5 below).

“Adjusted EBITDA” means net income, less income or plus loss from discontinued operations
and extraordinary items, plus income taxes, plus interest expense, plus depreciation, depletion,
and amortization, as adjusted for (i) royalty payments incurred pursuant to an agreement with the
Borrower’s former owner that has been terminated as of April 15, 2008, as disclosed in the SEC
Reports; and (ii) non-cash share based compensation. This ratio will be calculated at the end of
each reporting period for which the Bank requires financial statements, using the results of the
twelve-month period ending with that reporting period.

	7.4	 	Basic Fixed Charge Coverage Ratio.

To maintain on a consolidated basis a Basic Fixed Charge Coverage Ratio as of the end of each
fiscal quarter and each fiscal year of at least 1.50:1.00.

“Basic Fixed Charge Coverage Ratio” means the ratio of (a) the sum of net income plus (i)
royalty payments incurred pursuant to an agreement with the Borrower’s former owner that has been
terminated as of April 15, 2008, as disclosed in the SEC Reports; (ii) non-cash share based
compensation; and (iii) agreed upon, non-cash charges or non-recurring charges, plus interest
expense, and rent expense, to (b) the sum of interest expense, rent expense, the current portion of
long term debt, the current portion of capitalized lease obligations and dividends (but not
including the special distribution made to the stockholders of Borrower in connection with the
initial public offering of Borrower in November 2008).

 

14

 

This ratio will be calculated at the end of each reporting period for which the Bank requires
financial statements, using the results of the twelve-month period ending with that reporting
period. The current portion of long-term liabilities will be measured as of the date of each
calculation.

	7.5	 	Tangible Net Worth.

To maintain on a consolidated basis Tangible Net Worth as of the end of each fiscal quarter and
each fiscal year in an amount equal to at least (i) Thirty One Million Dollars and no/100 Dollars
($31,000,000.00); plus (ii) 70% of the Borrower’s net income for each fiscal quarter
commencing with fiscal quarter that ended as of March 31, 2009 and each fiscal quarter thereafter
(without reduction for any net loss for any fiscal quarter).

“Tangible Net Worth” means the value of total assets including pre-paid royalty payments,
leaseholds and leasehold improvements, and reserves against assets but excluding goodwill, patents,
trademarks, trade names, organization expense, unamortized debt discount and expense, capitalized
or deferred research and development costs, deferred marketing expenses, and other like
intangibles, and monies due from affiliates, officers, directors, employees, shareholders, members
or managers) less total liabilities, including but not limited to accrued and deferred
income taxes, but excluding the non-current portion of Subordinated Liabilities.

“Subordinated Liabilities” means liabilities subordinated to the Borrower’s obligations to
the Bank in a manner acceptable to the Bank in its sole discretion.

	7.6	 	[Intentionally Blank].

	7.7	 	Other Debts.

Not to have outstanding or incur any direct or contingent liabilities or lease obligations (other
than those to the Bank), or become liable for the liabilities of others, without the Bank’s written
consent. This does not prohibit:

	(a)	 	Acquiring goods, supplies, or merchandise on normal trade credit.

	(b)	 	Becoming and remaining liable with respect to subordinated indebtedness, the terms of such
indebtedness and the subordination thereof are reasonably acceptable to Bank and the maturity
date of which is at least one (1) year later than the Maturity Date.

	(c)	 	Endorsing negotiable instruments received in the usual course of business.

	(d)	 	Obtaining surety bonds in the usual course of business.

	(e)	 	Liabilities, lines of credit and leases in existence on the date of this Agreement as
disclosed in writing to the Bank or in the Borrower’s SEC Reports.

	(f)	 	Additional debts and lease obligations for business purposes which are not covered by (a)
through (e) above, and which do not exceed a total aggregate principal amount of Ten Million
and no/100 Dollars ($10,000,000.00) outstanding at any one time.

 

15

 

	7.8	 	Other Liens.

Not to create, assume, or allow any security interest or lien (including judicial liens) on
property the Borrower now or later owns, except:

	(a)	 	Liens and security interests in favor of the Bank.

	(b)	 	Liens for taxes not yet due.

	(c)	 	Liens outstanding on the date of this Agreement disclosed in writing to the Bank.

	(d)	 	Purchase money security interests outstanding on the date of this Agreement, and additional
purchase money security interests in assets acquired after the date of this Agreement, or
liens on any asset existing at the time of acquisition of such asset by the Borrower, or liens
to secure any indebtedness permitted hereby incurred by the Borrower at the time of or within
ninety (90) days after the acquisition of such asset, which indebtedness is incurred for the
purpose of financing all or any part of the purchase price thereof; provided that the total
principal amount of the debts or indebtedness secured by the liens covered by this
Subsection 7.8(d) shall not exceed Ten Million and no/100 Dollars ($10,000,000.00) at
any one time.

	(e)	 	Statutory liens of landlords, liens of collecting banks under the UCC on items in the course
of collection, statutory liens and rights of set-off of banks, statutory liens of carriers,
warehousemen, mechanics, repairmen, workmen and materialmen, and other liens imposed by law,
in each case incurred in the ordinary course of business (i) for amounts not yet overdue or
(ii) for amounts that are overdue and that (in the case of any such amounts overdue for a
period in excess of five (5) days) are being contested in good faith by appropriate
proceedings, so long as such reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made for any such contested amounts.

	(f)	 	Deposits made in the ordinary course of business in connection with workers’ compensation,
unemployment insurance and other types of social security, or to secure the performance of
statutory obligations, bids, surety and appeal bonds, leases, government contracts,
performance bonds, trade contracts, and other similar obligations (exclusive of obligations
for the payment of borrowed money).

	(g)	 	Licenses (with respect to intellectual property and other property), leases or subleases
granted to third parties not interfering in any material respect with ordinary conduct of the
business of Borrower consistent with past and anticipated practices.

	(h)	 	Easements, rights-of-way, restrictions, encroachments, and other minor defects or
irregularities in title, in each case which do not and will not (i) interfere in any material
respect with the ordinary conduct of the business of the Borrower; or (ii) adversely affect
the value of the Collateral in any material respect.

 

16

 

	(i)	 	Any (i) interest or title of a lessor or sublessor under any lease not prohibited by this
Agreement, (ii) lien or restriction that the interest or title of such lessor or sublessor may
be subject to, or (iii) subordination of the interest of the lessee or sublessee under such
lease to any lien or restriction referred to in the preceding clause (ii), so long as the
holder of such lien or restriction agrees to recognize the rights of such lessee or
sublessee under such lease.

	(j)	 	Liens arising from filing UCC financing statements relating solely to leases not prohibited
by this Agreement.

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

	(l)	 	Liens incurred in favor of insurance companies (or their financing affiliates) in connection
with the financing of insurance premiums in the ordinary course of business.

	(m)	 	Any zoning or similar law or right reserved to or vested in any government authority to
control or regulate the use of any real property.

	7.9	 	Maintenance of Assets.

	(a)	 	Not to sell, assign, lease, transfer or otherwise dispose of any part of the Borrower’s
business or the Borrower’s assets except in the ordinary course of the Borrower’s business,
and in no case in an aggregate amount exceeding Five Million and no/100 Dollars
($5,000,000.00) in any fiscal year.

	(b)	 	Not to sell, assign, lease, transfer or otherwise dispose of any assets for less than fair
market value, or enter into any agreement to do so.

	(c)	 	Not to enter into any sale and leaseback agreement covering any of its fixed assets.

	(d)	 	To maintain and preserve all material rights, privileges, and franchises of the Borrower.

	(e)	 	To make any repairs, renewals, or replacements to keep the Collateral in good working
condition.

	7.10	 	Investments.

Not to have any existing, or make any new, investments in any individual or entity, or make any
capital contributions or other transfers of assets to any individual or entity, except for:

	(a)	 	Existing investments disclosed to the Bank in writing.

	 
	(b)	 	Investments in the Borrower’s current subsidiaries.

 

17

 

	(c)	 	Investments consistent with the Borrower’s Investment Policy as of the date of this
Agreement, a copy of which is attached hereto as Exhibit 7.10, as prepared by the
Controller and for purposes of this Section 7.10, any changes thereto that are
approved by the Board of Directors and CFO from time to time with the consent of the Bank,
which
consent will not be unreasonably withheld, which may include investments in any of the
following:

	 	(i)	 	certificates of deposit;

	 	(ii)	 	U.S. treasury bills and other obligations of the federal government; and

	 	(iii)	 	readily marketable securities (including commercial paper, but excluding
restricted stock and stock subject to the provisions of Rule 144 of the Securities and
Exchange Commission).

	7.11	 	Loans to Officers or Affiliates.

Not to make any loans, advances or other extensions of credit (including extensions of credit in
the nature of accounts receivable or notes receivable arising from the sale or lease of goods or
services) to any of the Borrower’s executives, officers or directors (or any relatives of any of
the foregoing), or to any affiliated entities in excess of Five Hundred Thousand and no/100 Dollars
($500,000.00) in the aggregate to all of the foregoing at any one time.

	7.12	 	Additional Negative Covenants.

Not to, without the Bank’s written consent:

	(a)	 	Enter into any consolidation, merger, or other combination, or become a partner in a
partnership, a member of a joint venture, or a member of a limited liability company.

	(b)	 	Acquire or purchase a business or all or substantially all of the assets of a business while
the Loan is outstanding, in an aggregate amount exceeding an amount equal to 25% of the
Borrower’s Tangible Net Worth on the date of each such acquisition or purchase after giving
effect to all prior, and the currently planned acquisition or purchase; provided
that, (i) such acquisition or purchase is consensual (and not hostile) to the selling
party; and (ii) the Borrower, is in compliance with all covenants in this Agreement, and shall
be, on a pro-forma basis, in compliance with all covenants in this Agreement after giving
effect to such acquisition or purchase.

	(c)	 	Engage in any business activities substantially different from the Borrower’s present
business.

	(d)	 	Liquidate or dissolve the Borrower’s business.

	(e)	 	Voluntarily suspend its business for more than ten (10) calendar days in any rolling three
hundred and sixty five (365) day period.

 

18

 

	7.13	 	Notices to Bank.

To promptly notify the Bank in writing of:

	(a)	 	Any lawsuit in which the damages claimed exceed Five Million and no/100 Dollars
($5,000,000.00) against the Borrower or the disclosure of which would be required in an SEC
Report.

	(b)	 	Any material dispute between any governmental authority and the Borrower.

	(c)	 	An Event of Default under this Agreement, or any event which, with notice or lapse of time or
both, would constitute an Event of Default.

	(d)	 	Any material adverse change in the Borrower’s business condition (financial or otherwise),
operations, properties or prospects, the Collateral, or the Borrower’s ability to repay the
Loan.

	(e)	 	Any change in the Borrower’s name, legal structure, principal, place of business, or its
chief executive office.

	(f)	 	Except as otherwise disclosed in any financial statements of Borrower or in any SEC Report,
any actual contingent liabilities of the Borrower in excess of Five Million and no/100 Dollars
($5,000,000.00) in the aggregate and, to Borrower’s knowledge, any such contingent liabilities
which are reasonably foreseeable, where such liabilities would cause an Event of Default.

	7.14	 	Insurance.

	(a)	 	General Business Insurance. To maintain insurance reasonably satisfactory to the
Bank as to amount, nature and carrier covering property damage (including loss of use and
occupancy) to any of the Borrower’s properties, business interruption insurance, public
liability insurance including coverage for contractual liability, product liability and
workers’ compensation, and any other insurance which is usual for the Borrower’s business.
Each policy shall provide for at least thirty (30) days prior notice to the Bank of any
cancellation thereof.

	(b)	 	Insurance Covering Collateral. To maintain insurance required pursuant to the Deed
of Trust. The insurance must be issued by an insurance company reasonably acceptable to the
Bank and must include a lender’s loss payable endorsement in favor of the Bank in a form
acceptable to the Bank.

	(c)	 	Evidence of Insurance. Upon the request of the Bank, to deliver to the Bank a copy
of each insurance policy, or, if permitted by the Bank, a certificate of insurance listing all
insurance in force, and when requested by the Bank, noting the Bank on each such policy as an
additional insured or loss payee, as appropriate.

 

19

 

	7.15	 	Compliance with Laws. 

To comply with the applicable laws (including any fictitious or trade name statute), regulations,
and orders of any government body with authority over the Borrower’s business, except where the
failure to comply would not reasonably be expected to have a material adverse effect on the
Borrower or its business.

	7.16	 	ERISA Plans. 

Promptly during each year, to pay and cause any subsidiaries to pay contributions adequate to meet
at least the minimum funding standards under ERISA with respect to each and every Plan; file each
annual report required to be filed pursuant to ERISA in connection with each Plan for each year;
and notify the Bank within ten (10) calendar days of the occurrence of any Reportable Event that
might constitute grounds for termination of any capital Plan by the Pension Benefit Guaranty
Corporation or for the appointment by the appropriate United States District Court of a trustee to
administer any Plan. “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time. Capitalized terms in this paragraph shall have the meanings defined
within ERISA.

	7.17	 	ERISA Plans — Notices.

With respect to a Plan subject to Title IV of ERISA, to give prompt written notice to the Bank of:

	(a)	 	The occurrence of any reportable event under Section 4043(c) of ERISA for which the PBGC
requires 30-day notice.

	(b)	 	Any action by the Borrower or any ERISA Affiliate to terminate or withdraw from a Plan or the
filing of any notice of intent to terminate under Section 4041 of ERISA.

	(c)	 	The commencement of any proceeding with respect to a Plan under Section 4042 of ERISA.

	7.18	 	Books and Records.

To maintain adequate books and records of its corporate and business activities.

	7.19	 	Audits.

Except as may be prohibited by applicable laws regarding confidentiality, to allow the Bank and its
agents to inspect the Borrower’s properties and examine, audit, and make copies of books and
records at any reasonable time. If any of the Borrower’s properties, books or records are in the
possession of a third party, the Borrower authorizes that third party to permit the Bank or its
agents to have access to perform inspections or audits and to respond to the Bank’s requests for
information concerning such properties, books and records.

 

20

 

	7.20	 	Perfection of Liens.

To help the Bank perfect and protect its security interests in and liens on the Collateral, and
reimburse it for related costs it incurs to perfect, protect or enforce its security interests in
and liens on the Collateral.

	7.21	 	Cooperation.

To take any action reasonably requested by the Bank to carry out the intent of this Agreement.

	7.22	 	Flood and Other Insurance.

If any improved real property comprising the Collateral is located in a designated flood hazard
area, or becomes located in a designated flood hazard area after the date of this Agreement as a
result of any re-mapping of flood insurance maps by the Federal Emergency Management Agency, the
Borrower will be required to maintain flood insurance on the real property and any other portion of
the Collateral within such area.

	7.23	 	Inspections and Appraisals of Real Property.

To allow the Bank and its agents to visit the real property comprising any of the Collateral at any
reasonable time for the purpose of inspecting such property and conducting appraisals thereof, and
deliver to the Bank any financial or other information concerning such property as the Bank may
request. So long as there is no Event of Default, Borrower shall not be required to pay for more
than one (1) appraisal each calendar year following the disbursement of the Loan.

	7.24	 	Use or Leasing of the Real Property Collateral.

	(a)	 	To occupy the real property comprising any of the Collateral for the conduct of its regular
business. The Borrower will not change its intended use of such real property without the
Bank’s prior written approval.

	(b)	 	All leases of any portion of the real property comprising any of the Collateral and spaces
within such real property may be entered into with bona fide third party tenants, financially
capable of performing their obligations under the leases, in arms-length transactions at the
then current market rate for comparable space, area or use. All leases in the aggregate shall
not alter the Borrower’s current occupancy, control or use of the Collateral and shall not
cover any material part of the real property comprising any of the Collateral. The leases
shall not contain any right to purchase such real property or any present or future interest
in any portion of the real property other than the right to use and occupy the premises
demised. The Borrower will promptly obtain and deliver to the Bank such estoppel certificates
and subordination and attornment agreements from tenants as the Bank from time to time may
require provided that so long as there is no Event of Default Borrower shall not be required
to deliver such certificates more frequently than one (1) time per calendar year. The
Borrower will perform all obligations of landlord under all leases.

 

21

 

	7.25	 	Indemnity Regarding Use of Real Property.

To indemnify, defend with counsel acceptable to the Bank, and hold the Bank harmless from and
against all liabilities, claims, actions, damages, costs and expenses (including all legal fees and
expenses of Bank’s counsel) arising out of or resulting from the construction of any improvements
on the real property comprising any of the Collateral, or the ownership, operation, or use of such
real property collateral, whether such claims are based on theories of derivative liability,
comparative negligence or otherwise. The Borrower’s obligations to the Bank under this Section
shall survive termination of this Agreement and repayment of the Borrower’s obligations to the Bank
under this Agreement, and shall also survive as unsecured obligations after any acquisition by the
Bank of the real property comprising any of the Collateral or any part of it by foreclosure or any
other means.

	7.26	 	Educational Covenants.

The following Sections 7.27, 7.28, 7.29, and 7.30 shall be
collectively referred to as the “Educational Covenants.” The following definitions shall
apply to the Educational Covenants. Any term in the Educational Covenants that is not defined
herein shall have the meaning given to them by the DOE or Title IV.

“Title IV” shall mean Title IV of the Higher Education Act of 1965, as amended.

“Title IV Programs” means the programs of federal student financial assistance administered
pursuant to Title IV.

“School” shall mean Grand Canyon University.

“Education Law” means any federal, state, local or similar statute, law, ordinance,
regulation, rule, code, order, or binding standard issued or administered by, or related to, any
Education Agency and applicable to private educational institutions.

“Education Agency” means any entity or organization, whether governmental, government
chartered, private, or quasi-private, that engages in granting or withholding Educational Approvals
for, provides or administers financial assistance to or for students of, or otherwise regulates
private schools in accordance with standards relating to the performance, operation, financial
condition or academic standards of such schools, including, without limitation, the DOE, DHS, state
authorizing or licensing agencies, accrediting bodies, state student aid agencies, state approving
agencies for veterans benefits, and student loan guaranty agencies.

“DHS” means the U.S. Department of Homeland Security.

 “DOE” shall mean the United Stated Department of Education.

 

22

 

	7.27	 	Title IV Accreditation Requirements.

Borrower shall ensure that School maintains all customary accreditation requirements under Title IV
including all licenses, accreditations, certificates, permits, consents, authorizations and other
governmental, regulatory, or accreditation approvals or exemptions (the “Educational
Approvals”) necessary for the School to conduct its business, including all requisite approvals
or exemptions from the DOE, the State of Arizona, the Higher Learning Commission and any other
Education Agency. In addition, the Borrower shall ensure that the School maintains its eligibility
as a “proprietary institution of higher education,” as defined in 34 C.F.R. § 6005.5 under Title
IV, and remains party to, and in material compliance with, a valid Program Participation Agreement
(provisional or otherwise) with the DOE with respect to the School’s operations. Lastly, the
Borrower shall ensure that the School continues to hold a valid Eligibility and Certification
Approval Report (provisional or otherwise) issued by the DOE attesting to its Title IV Program
eligibility. Borrower shall also maintain all other academic accreditations (or substitute a
commercially reasonable substitute academic accreditation) as the Borrower reasonably determines
are necessary for the School to conduct its business provided that, if the Borrower elects to cease
maintaining a material academic accreditation without such substitution, then such election or
determination of the Borrower must be reasonably acceptable to the Bank. Borrower shall give Bank
notice within ten (10) business days of any breach of this Section 7.27.

	7.28	 	DOE Composite Score Requirement. 

Borrower shall ensure that School maintains a DOE Composite Score of not less than 1.50 for any
fiscal year. In addition, Borrower shall ensure that School continues to be in material
compliance with the DOE standards of financial responsibility as set forth at 34 C.F.R. §§ 668.172
- 174. In addition, Borrower shall notify Bank if it is required by the DOE to post a letter of
credit, including a letter of credit due to late funds pursuant to 34 C.F.R. § 668.173.

	7.29	 	Long Term Student Receivables Limitation.

Borrower shall ensure that School does not allow its Long Term Receivables to Students to exceed an
amount equal to ten percent (10%) of the Borrower’s Tangible Net Worth as defined in Section
7.5, and calculated on consolidated basis as of the end of each fiscal quarter and each fiscal
year. In addition, Borrower will ensure that the School continues to comply with the statutory
provision at 20 U.S.C. § 1002(b)(1)(F) requiring that at least ten percent (10%) of its revenues
for any fiscal year are not derived from Title IV Program funds as required by 34 C.F.R. § 600.5.

	7.30	 	Cohort Default Rate.

Borrower shall ensure that School does not allow its Cohort default rate to exceed either (i)
twenty-five percent (25%) as an annual average for any rolling three (3) fiscal year period ending
during the period of time the Loan remains unpaid; or (ii) forty percent (40%) in any fiscal year.
In addition, Borrower shall ensure that School continues to meet the requirements for Federal
Family Education Loan Program loans as published by the DOE; and to the extent the following become
material to the Borrower’s financial results, Borrower shall ensure that School meets the
requirements for Federal Direct Loan Program loans and Federal Perkins loans, as published by the
DOE.

 

23

 

	8.	 	DEFAULT AND REMEDIES

If any of the following events of default (“Event of Default”) occurs, the Bank may do one
or more of the following: declare the Borrower in default, stop making any additional credit
available to the Borrower, and require the Borrower to repay its entire debt immediately and
without prior notice. In addition, if any Event of Default occurs, the Bank shall have all rights,
powers and remedies available under any instruments and agreements required by or executed in
connection with this Agreement, as well as all rights and remedies available at law or in equity.
If an Event of Default occurs under the paragraph entitled “Bankruptcy,” below, with
respect to the Borrower, then the entire debt outstanding under this Agreement will automatically
be due immediately.

	8.1	 	Failure to Pay.

The Borrower fails to make a payment under this Agreement when due, and such failure continues for
three (3) calendar days.

	8.2	 	Other Bank Agreements.

Any default occurs and is continuing under any other agreement the Borrower has with the Bank with
a payment or obligation amount exceeding Fifty Thousand and no/100 Dollars ($50,000.00), if such
default continues after giving effect to any applicable cure period.

	8.3	 	Cross-default.

Any default occurs under any agreement in connection with any credit exceeding One Million and
no/100 Dollars ($1,000,000.00) the Borrower or any subsidiary of the Borrower’s has obtained from
anyone else or which the Borrower or any of the Borrower’s subsidiaries has guaranteed, if such
default continues after giving effect to any applicable cure period.

	8.4	 	False Information.

The Borrower has given the Bank materially false or misleading information or representations.

	8.5	 	Bankruptcy.

The Borrower files a bankruptcy petition; or a bankruptcy petition is filed against the Borrower
(and not dismissed within sixty (60) days); or the Borrower makes a general assignment for the
benefit of creditors.

	8.6	 	Receivers.

A receiver or similar official is appointed for a substantial portion of the Borrower’s business
and such appointment is not terminated within ten (10) calendar days, or the business is
terminated.

	8.7	 	Lien Priority.

The Bank fails to have an enforceable first lien (except for any prior liens to which the Bank has
consented in writing or are noted in the Title Policy) on or security interest in any of the
Collateral as security for the Loan or this Agreement.

 

24

 

	8.8	 	[Intentionally Blank].

	8.9	 	Judgments.

Any judgments or arbitration awards are entered against the Borrower, or the Borrower enters into
any settlement agreements, in each case with respect to any litigation or arbitration, in an
aggregate amount of Five Million and no/100 Dollars ($5,000,000.00) or more in excess of any
insurance coverage and (i) said judgments are not stayed or bonded over within thirty (30) days
after entry, or (ii) Borrower does not have sufficient liquidity to satisfy such judgment or award,
as determined by the Bank.

	8.10	 	Material Adverse Change.

A material adverse change occurs in the Borrower’s business condition (financial or otherwise),
operations or properties, which could reasonably adversely affect the Borrower’s ability to repay
the Loan including any action by any government authority.

	8.11	 	Intentionally Omitted.

	8.12	 	Default under Related Documents.

Any Event of Default, as defined therein, or a default occurs (and continues beyond any applicable
notice or cure period and which gives the Bank an immediate right to exercise its remedies as a
result thereof), under any guaranty, subordination agreement, security agreement, deed of trust,
mortgage, or other document required by or delivered in connection with this Agreement or the Loan,
including, without limitation, the Deed of Trust or any other Collateral Document.

	8.13	 	ERISA Plans.

Any one or more of the following events occurs with respect to a Plan of the Borrower subject to
Title IV of ERISA, provided such event or events could reasonably be expected, in the judgment of
the Bank, to subject the Borrower to any tax, penalty or liability (or any combination of the
foregoing) which, in the aggregate, could have a material adverse effect on the financial condition
of the Borrower:

	(a)	 	A reportable event shall occur under Section 4043(c) of ERISA with respect to a Plan.

	(b)	 	Any Plan termination (or commencement of proceedings to terminate a Plan) or the full or
partial withdrawal from a Plan by the Borrower or any ERISA Affiliate.

	8.14	 	Educational Covenants.

A default occurs under any term or condition of the Educational Covenants and such default, if it
is capable of being cured, continues for a period of thirty (30) days.

 

25

 

	8.15	 	Other Breach Under Agreement.

A default occurs under any other term or condition of this Agreement not specifically referred to
in this Article, including any failure by the Borrower to comply with any financial covenants set
forth in this Agreement, whether such failure is evidenced by financial statements delivered to the
Bank or is otherwise known to the Borrower or the Bank.

	8.16	 	Representations and Warranties.

Any representation or warranty of the Borrower or any written certification or other material
written statement of fact made or deemed made by the Borrower or by a Responsible Officer on behalf
of the Borrower, in any other Loan Document, or in any document delivered in connection herewith or
therewith shall be incorrect or misleading in any material respect when made or deemed made.

	9.	 	ENFORCING THIS AGREEMENT; MISCELLANEOUS

	9.1	 	GAAP.

Except as otherwise stated in this Agreement, all financial information provided to the Bank and
all financial covenants will be made under generally accepted accounting principles, consistently
applied.

	9.2	 	Governing Law.

This Agreement shall be governed by and construed in accordance with the laws of Arizona. To the
extent that the Bank has greater rights or remedies under federal law, whether as a national bank
or otherwise, this paragraph shall not be deemed to deprive the Bank of such rights and remedies as
may be available under federal law.

	9.3	 	Successors and Assigns.

This Agreement is binding on the Borrower’s and the Bank’s successors and assignees. The Borrower
agrees that it may not assign this Agreement without the Bank’s prior consent. The Bank may sell
participations in or assign this Loan, and may exchange information about the Borrower (including,
without limitation, any information regarding any hazardous substances) with actual or potential
participants or assignees. If a participation is sold or the Loan is assigned, the purchaser will
have the right of set-off against the Borrower.

	9.4	 	Dispute Resolution Provision.

This paragraph, including the subparagraphs below, is referred to as the “Dispute Resolution
Provision.” This Dispute Resolution Provision is a material inducement for the parties
entering into this agreement.

	(a)	 	This Dispute Resolution Provision concerns the resolution of any controversies or claims
between the parties, whether arising in contract, tort or by statute, including but not
limited to controversies or claims that arise out of or relate to: (i) this Agreement
(including any renewals, extensions or modifications); or (ii) any document related to this
agreement (collectively a “Claim”). For the purposes of this Dispute Resolution
Provision only, the term “parties” shall include any parent corporation, subsidiary or
affiliate of the Bank involved in the servicing, management or administration of any
obligation described or evidenced by this Agreement.

 

26

 

	(b)	 	At the request of any party to this agreement, any Claim shall be resolved by binding
arbitration in accordance with the Federal Arbitration Act (Title 9, U.S. Code) (the
“Act”). The Act will apply even though this Agreement provides that it is governed by
the law of a specified state.

	(c)	 	Arbitration proceedings will be determined in accordance with the Act, the then-current rules
and procedures for the arbitration of financial services disputes of the American Arbitration
Association or any successor thereof (“AAA”), and the terms of this Dispute Resolution
Provision. In the event of any inconsistency, the terms of this Dispute Resolution Provision
shall control. If AAA is unwilling or unable to (i) serve as the provider of arbitration or
(ii) enforce any provision of this arbitration clause, the Bank may designate another
arbitration organization with similar procedures to serve as the provider of arbitration.

	(d)	 	The arbitration shall be administered by AAA and conducted, unless otherwise required by law,
in Phoenix, Arizona. All Claims shall be determined by one arbitrator; however, if Claims
exceed Five Million and no/100 Dollars ($5,000,000.00), upon the request of any party, the
Claims shall be decided by three arbitrators. All arbitration hearings shall commence within
ninety (90) days of the demand for arbitration and close within ninety (90) days of
commencement and the award of the arbitrator(s) shall be issued within thirty (30) days of the
close of the hearing. However, the arbitrator(s), upon a showing of good cause, may extend
the commencement of the hearing for up to an additional sixty (60) days. The arbitrator(s)
shall provide a concise written statement of reasons for the award. The arbitration award may
be submitted to any court having jurisdiction to be confirmed and have judgment entered and
enforced.

	(e)	 	The arbitrator(s) will give effect to statutes of limitation in determining any Claim and may
dismiss the arbitration on the basis that the Claim is barred. For purposes of the application
of any statutes of limitation, the service on AAA under applicable AAA rules of a notice of
Claim is the equivalent of the filing of a lawsuit. Any dispute concerning this arbitration
provision or whether a Claim is arbitrable shall be determined by the arbitrator(s), except as
set forth at subparagraph (h) of this Dispute Resolution Provision. The arbitrator(s) shall
have the power to award legal fees pursuant to the terms of this Agreement.

	(f)	 	This paragraph does not limit the right of any party to: (i) exercise self-help remedies,
such as but not limited to, setoff; (ii) initiate judicial or non-judicial foreclosure against
any real or personal property collateral; (iii) exercise any judicial or power of sale rights,
or (iv) act in a court of law to obtain an interim remedy, such as but not limited to,
injunctive relief, writ of possession or appointment of a receiver, or additional or
supplementary remedies.

 

27

 

	(g)	 	The filing of a court action is not intended to constitute a waiver of the right of any
party, including the suing party, thereafter to require submittal of the Claim to arbitration.

	(h)	 	Any arbitration or trial by a judge of any Claim will take place on an individual basis
without resort to any form of class or representative action (the “Class Action
Waiver”). Regardless of anything else in this Dispute Resolution Provision, the validity
and effect of the Class Action Waiver may be determined only by a court and not by an
arbitrator. The parties to this Agreement acknowledge that the Class Action Waiver is
material and essential to the arbitration of any disputes between the parties and is
nonseverable from the agreement to arbitrate Claims. If the Class Action Waiver is limited,
voided or found unenforceable, then the parties’ agreement to arbitrate shall be null and void
with respect to such proceeding, subject to the right to appeal the limitation or invalidation
of the Class Action Waiver. The Parties acknowledge and agree that under no circumstances
will a class action be arbitrated.

	(i)	 	By agreeing to binding arbitration, the parties irrevocably and voluntarily waive any right
they may have to a trial by jury in respect of any Claim. Furthermore, without intending in
any way to limit this agreement to arbitrate, to the extent any Claim is not arbitrated, the
parties irrevocably and voluntarily waive any right they may have to a trial by jury in
respect of such Claim. This waiver of jury trial shall remain in effect even if the Class
Action Waiver is limited, voided or found unenforceable. WHETHER THE CLAIM IS DECIDED BY
ARBITRATION OR BY TRIAL BY A JUDGE, THE PARTIES AGREE AND UNDERSTAND THAT THE EFFECT OF THIS
AGREEMENT IS THAT THEY ARE GIVING UP THE RIGHT TO TRIAL BY JURY TO THE EXTENT PERMITTED BY
LAW.

	9.5	 	Severability; Waivers.

If any part of this Agreement is not enforceable, the rest of the Agreement may be enforced. The
Bank retains all rights, even if it made the Loan after a default. If the Bank waives a default,
it may enforce a later default. Any consent or waiver under this Agreement must be in writing.

	9.6	 	Attorneys’ Fees.

The Borrower shall reimburse the Bank for any reasonable costs and attorneys’ fees incurred by the
Bank in connection with the enforcement or preservation of any rights or remedies under this
Agreement and any other documents executed in connection with this Agreement, and in connection
with any amendment, waiver, “workout” or restructuring under this Agreement. In the event
of a lawsuit or arbitration proceeding, the prevailing party is entitled to recover costs and
reasonable attorneys’ fees incurred in connection with the lawsuit or arbitration proceeding, as
determined by the court or arbitrator. In the event that any case is commenced by or against the
Borrower under the Bankruptcy Code (Title 11, United States Code) or any similar or successor
statute, the Bank is entitled to recover costs and reasonable attorneys’ fees incurred by the Bank
related to the preservation, protection, or enforcement of any rights of the Bank in such a case.
As used in this paragraph, “attorneys’ fees” includes the allocated costs of the Bank’s
in-house counsel.

 

28

 

	9.7	 	Set-Off.

	(a)	 	In addition to any rights and remedies of the Bank provided by law, upon the occurrence and
during the continuance of any Event of Default under this Agreement, the Bank is authorized,
at any time, to set off and apply any and all Deposits of the Borrower held by the Bank
against any and all Obligations owing to the Bank. The set-off may be made irrespective of
whether or not the Bank shall have made demand under this Agreement or any guaranty, and
although such Obligations may be contingent or unmatured or denominated in a currency
different from that of the applicable Deposits.

	(b)	 	The set-off may be made without prior notice to the Borrower or any other party, any such
notice being waived by the Borrower to the fullest extent permitted by law. The Bank agrees
promptly to notify the Borrower after any such set-off and application; provided,
however, that the failure to give such notice shall not affect the validity of such
set-off and application.

	(c)	 	For the purposes of this Section 9.7, “Deposits” means any deposits (general
or special, time or demand, provisional or final, individual or joint) and any instruments
owned by the Borrower which come into the possession or custody or under the control of the
Bank. “Obligations” means all obligations, now or hereafter existing, of the Borrower
to the Bank under this Agreement and under any other agreement or instrument executed in
connection with this Agreement.

	9.8	 	One Agreement.

This Agreement and any related security or other agreements required by this Agreement,
collectively:

	(a)	 	represent the sum of the understandings and agreements between the Bank and the Borrower
concerning this credit;

	(b)	 	replace any prior oral or written agreements between the Bank and the Borrower concerning
this credit; and

	(c)	 	are intended by the Bank and the Borrower as the final, complete and exclusive statement of
the terms agreed to by them.

In the event of any conflict between this Agreement and any other agreements required by this
Agreement, this Agreement will prevail. Any reference in any related document to a “promissory
note” or a “note” executed by the Borrower and dated as of the date of this Agreement
shall be deemed to refer to this Agreement, as now in effect or as hereafter amended, renewed, or
restated.

	9.9	 	Indemnification.

The Borrower will indemnify and hold the Bank harmless from any loss, liability, damages,
judgments, and costs of any kind relating to or arising directly or indirectly out of (a) this
Agreement or any document required hereunder, (b) any credit extended or committed by the
Bank to the Borrower hereunder, and (c) any litigation or proceeding related to or arising out of
this Agreement, any such document, or any such credit. This indemnity includes but is not limited
to attorneys’ fees (including the allocated cost of in-house counsel). This indemnity extends to
the Bank, its parent, subsidiaries and all of their directors, officers, employees, agents,
successors, attorneys, and assigns. This indemnity will survive repayment of the Borrower’s
obligations to the Bank. All sums due to the Bank hereunder shall be obligations of the Borrower,
due and payable immediately without demand.

 

29

 

	9.10	 	Notices.

Unless otherwise provided in this Agreement or in another agreement between the Bank and the
Borrower, all notices required under this Agreement shall be personally delivered or sent by first
class mail, postage prepaid, or by overnight courier, to the addresses on the signature page of
this Agreement, or sent by facsimile to the fax numbers listed on the signature page, or sent via
electronic mail (e-mail) with attachments in portable document format (PDF) to the e-mail addresses
listed on the signature page, or to such other addresses as the Bank and the Borrower may specify
from time to time in writing. Notices and other communications shall be effective (i) if mailed,
upon the earlier of receipt or five (5) days after deposit in the U.S. mail, first class, postage
prepaid, (ii) if telecopied, when transmitted, (iii) if hand-delivered, by courier or otherwise
(including telegram, lettergram or mailgram), when delivered or (iv) if sent via electronic mail,
upon electronic confirmation of delivery and receipt.

	9.11	 	Headings.

Article and Section headings are for reference only and shall not affect the interpretation or
meaning of any provisions of this Agreement.

	9.12	 	Counterparts.

This Agreement may be executed in as many counterparts as necessary or convenient, and by the
different parties on separate counterparts each of which, when so executed, shall be deemed an
original but all such counterparts shall constitute but one and the same Agreement. A copy of an
executed signature page that is transmitted by facsimile or sent as a PDF file via email shall, for
all purposes, be deemed to be an original.

	9.13	 	Borrower Information; Reporting to Credit Bureaus.

The Borrower authorizes the Bank at any time to verify or check any information given by the
Borrower to the Bank, check the Borrower’s credit references, verify employment, and obtain credit
reports. The Borrower agrees that the Bank shall have the right at all times to disclose and
report to credit reporting agencies and credit rating agencies such information pertaining to the
Borrower and/or all guarantors as is consistent with the Bank’s policies and practices from time to
time in effect.

[Remainder of page is intentionally left blank; signature pages follow]

 

30

 

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

	 	 	 	 	 
	 	GRAND CANYON EDUCATION, INC.,

a Delaware corporation

 	 
	 	By:  	/s/ Dan Bachus
 	 
	 	 	Name:  	Dan Bachus 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	Contact Information for Notice:

 	 
	 	3300 West Camelback Road

Phoenix, Arizona 85017-3030

Attn: Dan Bachus, CFO

 	 
	 	Telephone: 602-639-6648

Facsimile: 602-639-7846

Email: dbachus@gcu.edu

 	 
	 	BANK OF AMERICA, N.A.

 	 
	 	By:  	/s/ David R. Barney
 	 
	 	 	Name:  	David R. Barney 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	Contact Information for Notice:

 	 
	 	201 East Washington Street

AZ1-200-22-32, 22nd Floor

Phoenix, Arizona 85004-2343

Attn: David Barney — Commercial Banking

 	 
	 	Telephone: 602-523-2351

Facsimile: 602-523-2511

Email: david.r.barney@bankofamerica.com
 	 

Federal law requires Bank of America, N.A. (the “Bank”) to provide the following notice.
The notice is not part of the foregoing agreement or instrument and may not be altered. Please
read the notice carefully.

USA PATRIOT ACT NOTICE Federal law requires all financial institutions to obtain, verify
and record information that identifies each person who opens an account or obtains a loan. The
Bank will ask for the Borrower’s legal name, address, tax ID number or social security number and
other identifying information. The Bank may also ask for additional information or documentation
or take other actions reasonably necessary to verify the identity of the Borrower, guarantors or
other related persons.

S-1

 

 

 

EXHIBIT 7.2(g)

FORM OF QUARTERLY COMPLIANCE CERTIFICATE

[To Be Completed]

Exhibit 7.2(g)

 

 

 

EXHIBIT 7.2(h)

FORM OF ANNUAL COMPLIANCE CERTIFICATE

[To Be Completed]

Exhibit 7.2(h)

 

 

 

EXHIBIT 7.10

BORROWER’S INVESTMENT POLICY

[To
Be Completed]

Exhibit 7.10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00161-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00161-of-00352.parquet"}]]