PLEDGE AND
INTERCREDITOR AGREEMENT
Dated as of May 16, 2003
By and Among
DEVRY INC.
AND
GLOBAL EDUCATION INTERNATIONAL, INC.
AND
CERTAIN OF THEIR SUBSIDIARIES
as the Grantors
THE BANKS PARTY HERETO,
THE NOTEHOLDERS PARTY HERETO,
And
BANK OF AMERICA, N.A., as Collateral Agent
TABLE OF CONTENTS
SECTION HEADING PAGE
Section 1. Defined Terms 2
Section 2.1. U.S. Pledged Stock 11
Section 2.2. Offshore Pledged Stock 12
Section 2.3. Letter of Credit Cash Collateral. 13
Section 3. Representations and Warranties 13
Section 4. Covenants 14
Section 5. Collateral Agent May Perform 16
Section 6.1. Administration of Pledged Stock 16
Section 7. Power of Attorney 17
Section 8. Grantors Indemnification 18
Section 9. Defaults and Remedies 18
Section 10.1. Application of Proceeds of U.S. Pledged Stock 20
Section 10.2. Application of Proceeds of Offshore Pledged
Stock and GEI Restricted Stock 21
Section 10.3. Letters of Credit 22
Section 10.4. Payments 22
Section 11. Preferential Payments and Special Trust
Account 23
Section 12. Invalidated Payments 24
Section 13. Appointment of Collateral Agent 24
Section 14. Decisions Relating to Administration and
Exercise of Remedies Vested in the Required
GEI Secured Parties and the Required Secured
Parties 24
Section 15. Information 26
Section 16. Additional Parties 28
Section 17. Disclaimers, Indemnity, Successor Collateral
Agent, Etc. 28
Section 18. Continuing Agreement 30
Section 19. Miscellaneous 31
Section 20. Grantors' Waivers and Consents 33
Section 21. Intercreditor Provisions 36
Section 22.1. Consent to Jurisdiction; Service of Process;
Judgement Currency; Waiver of Jury Trial 36
Section 22.2. Service of Process upon Agent 37
Exhibit A - U.S. Pledged Stock
Exhibit B - Offshore Pledged Stock
Exhibit C-1 - Form of Acknowledgment to Pledge and Intercreditor
Agreement for Additional Lender under an Additional
Bank Credit Agreement
Exhibit C-2 - Form of Acknowledgment to Pledge and Intercreditor
Agreement for Additional Noteholders under an
Additional Note Agreement
Exhibit D - Pledge and Intercreditor Agreement Joinder
PLEDGE AND
INTERCREDITOR AGREEMENT
THIS PLEDGE AND INTERCREDITOR AGREEMENT (as the same may be amended or
modified from time to time, this "Agreement") is dated as of May 16, 2003, by
and among DeVry Inc., a Delaware corporation ("DeVry"), Global Education
International, Inc. a Barbados corporation ("GEI", and, together with DeVry,
the "Obligors"), certain subsidiaries of the Obligors party hereto or who may
become a party hereto by executing and delivering a Pledge and Intercreditor
Agreement Joinder (a "Joinder") as hereinafter defined (such subsidiaries, the
Obligors and any other Person which grants any Collateral to the Collateral
Agent hereunder or any other security document securing the Secured
Obligations, are collectively referred to as the "Grantors"), the Bank of
America, N.A., in its capacity as Bank Agent, the Noteholders, and Bank of
America, N.A., in its capacity as Collateral Agent hereunder.
RECITALS:
A. Pursuant to the terms of that certain Credit Agreement dated as of
even date herewith (as amended, restated, superseded or otherwise modified
from time to time, the "Bank Credit Agreement") among the Obligors, Bank of
America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and
the banks and other lenders or institutions from time to time party thereto
(together with any Additional Lenders, the "Banks"), the Banks are extending
credit to the Obligors on the terms provided therein. The obligations of
DeVry under the Bank Credit Agreement are unconditionally guaranteed by
certain U.S. Subsidiaries of DeVry, and the obligations of GEI under the Bank
Credit Agreement are unconditionally guaranteed by DeVry, by certain U.S.
Subsidiaries of DeVry and by certain Offshore Subsidiaries of GEI.
B. Pursuant to the terms of that certain Note Purchase Agreement dated
as of even date herewith (as amended, restated, superseded or otherwise
modified from time to time, the "Note Agreement"), among the Obligors and the
several Purchasers named in Schedule A thereto (together with any successors
and assigns, the "Noteholders"), DeVry is selling, and the Noteholders are
purchasing from DeVry, its $75,000,000 Floating Rate Senior Notes, Series A,
due April 30, 2010 (the "DeVry Notes"), and GEI is selling, and the
Noteholders are purchasing from GEI, its $50,000,000 Floating Rate Senior
Notes, Series B, Due April 30, 2010 (the "GEI Notes" and, together with the
DeVry Notes, are collectively referred to as the "Senior Notes"). The
obligations of DeVry under the DeVry Notes and the Note Agreement are
unconditionally guaranteed by certain U.S. Subsidiaries of DeVry, and the
obligations of GEI under the GEI Notes and the Note Agreement are
unconditionally guaranteed by DeVry, by certain U.S. Subsidiaries of DeVry and
by certain Offshore Subsidiaries of GEI.
C. As a condition to the extension of financial accommodations to be
given under the Bank Credit Agreement by the Banks, and as a condition
precedent to the purchase of the Senior Notes by the Noteholders pursuant to
the Note Agreement, the Secured Parties (as defined below) are requiring that
the Obligors and the other Grantors and the Collateral Agent enter into this
Agreement to secure the obligations of each Grantor in respect of the
Financing Agreements, and to appoint the Collateral Agent as collateral agent
for and on behalf of the Secured Parties, as otherwise more particularly set
forth herein.
D. The Banks or other financial institutions (collectively, the
"Additional Lenders") may from time to time enter into one or more Additional
Bank Credit Agreements with one or more of the Obligors.
E. One or more of the Obligors may from time to time enter into one or
more agreements either refinancing all or any portion of the Senior Note
Obligations or selling one or more additional series of senior notes (the
"Additional Senior Notes") to certain purchasers (collectively, the
"Additional Noteholders").
F. The Grantors have determined that the execution and delivery of
this Agreement is in furtherance of their corporate purposes and in their best
interest and that they will derive substantial benefit, whether directly or
indirectly, from the execution of this Agreement, having regard for all
relevant facts and circumstances.
NOW, THEREFORE, in consideration of the premises and for the purpose of
inducing the purchase and acceptance of the Senior Notes by the Noteholders
and the extension of financial accommodations by the Banks pursuant to the
Bank Credit Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
do hereby covenant and agree as follows:
Section 1. Defined Terms. As used in this Agreement, the following
terms have the meanings indicated below, all such definitions to be equally
applicable to singular and plural forms of the terms defined:
"Acceleration Premium Obligations" means all obligations of any Obligors
to pay a "Prepayment Premium" (as defined in the Note Agreement) to the
Noteholders as a result of the acceleration of the Senior Note Obligations
payable under Section 12.1 of the Note Agreement and all obligations of any
Obligor to pay a prepayment premium or make-whole amount under any Additional
Note Agreement.
"Additional Bank Credit Agreement" means any agreement entered into from
time to time by any Obligor pursuant to which some or all of the Banks or
other financial institutions agree to extend credit to such Obligor(s);
provided that each Additional Lender thereunder or an agent acting on behalf
of all such Additional Lenders has executed an acknowledgment to this
Agreement in the form attached hereto as Exhibit C-1.
"Additional Grantor" means any Grantor that has executed a joinder to
this Agreement in the form of Exhibit D hereto.
"Additional Lenders" has the meaning ascribed to that term in the
recitals hereto.
"Additional Note Agreement" means any agreement pursuant to which any
Obligor issues and sells one or more series of Additional Senior Notes;
provided that each Additional Noteholder purchasing such Additional Senior
Notes issued pursuant thereto has executed an acknowledgment to this Agreement
in form attached hereto as Exhibit C-2.
"Additional Noteholders" has the meaning ascribed to that term in the
recitals hereto.
"Additional Noteholders Documents" means, with respect to any Additional
Note Agreement, such Additional Note Agreement, the Additional Senior Notes
issued pursuant to such Additional Note Agreement and any Guaranty of a
Grantor of the obligations thereunder.
"Additional Senior Debt" means debt for borrowed money, other than debt
evidenced by the Senior Notes and debt under the Bank Credit Agreement, which
is not subordinated in right of payment to any other obligation of Grantors.
"Additional Senior Notes" has the meaning ascribed to that term in the
recitals hereto.
"Affiliate" as applied to any Person, means any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including with
correlative meanings, the terms "controlling," "controlled by" and "under
common control with"), as applied to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of that Person, whether through the ownership of
voting securities or by contract or otherwise.
"Bank of America" means Bank of America, N.A..
"Banks" has the meaning ascribed to that term in recitals hereto.
"Bank Agent" means Bank of America, N.A. in its capacity as
Administrative Agent under the Bank Credit Agreement, together with any
successors as administrative agent under the Bank Credit Agreement.
"Bank Credit Agreement" has the meaning ascribed to that term in
recitals hereto.
"Bank Credit Obligations" has the meaning ascribed to the term
"Obligations" in the Bank Credit Agreement and any analogous term in any
Additional Bank Credit Agreement.
"Bank Documents" has the meaning ascribed to the term "Loan Documents"
in the Bank Credit Agreement or any analogous term in any Additional Bank
Credit Agreement, any Guaranty of a Grantor of the obligations of any Obligor
thereunder, any documents delivered pursuant to a Hedging Transaction with a
Bank and any other collateral document given to a Bank or the Collateral
Agent.
"Bank Outstandings" means the sum, without duplication of, (i) the
aggregate principal amount of all outstanding loans (whether revolving loans
or swing line loans or base rate loans or eurodollar rate loans) made under
the Bank Credit Agreement or any Additional Bank Credit Agreement, plus
(ii) all outstanding Letter of Credit Usage.
"Bankruptcy Proceeding" means, with respect to any Person, a general
assignment by such Person for the benefit of its creditors, or the institution
by or against such Person of any proceeding seeking relief as debtor, or
seeking to adjudicate such Person as bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment or composition of such Person or its
debts, under any law relating to bankruptcy, insolvency, reorganization or
relief of debtors, or seeking appointment of a receiver, trustee, custodian or
other similar official for such Person or for any substantial part of its
property.
"Code" means the Uniform Commercial Code as the same may from time to
time be in effect in any applicable jurisdiction.
"Collateral" means the U.S. Pledged Stock, the Offshore Pledged Stock,
the GEI Restricted Stock, Letter of Credit Cash Collateral, any additional
collateral granted pursuant to Section 19(b) and any other collateral held or
received by any Secured Party to secure payment of any Secured Obligation.
"Collateral Agent" means Bank of America, N.A. in its capacity as
collateral agent hereunder and any successor collateral agent appointed
pursuant to Section 17(g).
"Collateral Agent-Related Persons" means the directors, officers,
employees and agents of the Collateral Agent.
"Default Rate" has the meaning ascribed to that term in Section 5.
"DeVry Notes" has the meaning ascribed to such term in the Recitals.
"DeVry Obligations" means the obligations of DeVry under (i) the Bank
Credit Agreement, (ii) any Additional Bank Credit Agreement, (iii) the Note
Agreement, (iv) any Additional Note Agreement, (v) the DeVry Notes, (vi) any
Additional Senior Notes issued by DeVry after the date of this Agreement, and
(vii) any Interest Rate Protection/Currency Swap Agreement entered into by
DeVry or any U.S. Subsidiary.
"Directing Party" means, with respect to any particular instruction
given to the Collateral Agent, each Party that has given such instruction to
the Collateral Agent.
"Enforcement" means the commencement of enforcement, collection
(including judicial or non-judicial foreclosure) or similar proceedings with
respect to the Collateral.
"Equity Interests" means, (i) with respect to any corporation, any
capital stock of such corporation, (ii) with respect to any partnership or
limited partnership, any partnership or limited partnership interest in such
partnership or limited partnership, (iii) with respect to any limited
liability company, any membership interest in such limited liability company,
and (iv) with respect to any other business entity, any equity or ownership
interest in such business entity.
"Event of Default" has the meaning ascribed to such term in Section 9.
"Fees and Charges" means any fees, indemnities or other expenses the
payment of which is required by the Bank Credit Agreement, any Additional Bank
Credit Agreement, the Note Agreement or any Additional Note Agreement.
"Financing Agreements" means the Bank Documents, the Noteholder
Documents, any Additional Noteholder Documents, this Agreement, each other
security document securing the Secured Obligations, and any other instruments,
documents or agreements entered into in connection with any Secured Obligation
or Financing Agreement.
"GAAP" means generally accepted accounting principles applicable from
time to time in the United States of America.
"GEI" has the meaning assigned thereto in the recitals hereto.
"GEI Notes" has the meaning ascribed to such term in the Recitals.
"GEI Obligations" means the obligations of GEI under (i) the Bank Credit
Agreement, (ii) any Additional Bank Credit Agreement, (iii) the Note
Agreement, (iv) any Additional Note Agreement, (v) the GEI Notes, (vi) any
Additional Senior Notes issued by GEI after the date of this Agreement and
(vii) any Interest Rate Protection/Currency Swap Agreement entered into by GEI
or any Offshore. Subsidiary.
"GEI Restricted Stock" has the meaning assigned thereto in
Section 2.1(b).
"GEI Secured Parties" means any Secured Party who is the holder of any
indebtedness, obligations and liabilities of GEI under the Bank Documents, the
Noteholder Documents or any Additional Noteholder Documents.
"Grantors" has the meaning assigned thereto in the introductory
paragraph hereto.
"Guaranty" means, as to any Person, any (a) any obligation, contingent
or otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any indebtedness or other obligation payable or performable by
another Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such indebtedness or other obligation of the payment or performance of such
indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any indebtedness or other
obligation of any other Person, whether or not such indebtedness or other
obligation is assumed by such Person.
"Hedging Exposure" means, on any date of determination for any Hedging
Transaction, the amount, as calculated in good faith and in a commercially
reasonable manner by the Bank that is a Grantor's counterparty for such
Hedging Transaction, which such Bank would pay to a third party (such amount
being expressed as a negative number) or received from a third party (such
amount being expressed as a positive number) in an arm's length transaction as
consideration for the third party's entering into a new transaction with such
Bank in which: (a) such Bank holds the same position in the Hedging
Transaction as it currently holds; (b) the third party holds the same position
as a Grantor currently holds; and (c) the new transaction has economic and
other terms and conditions identical in all respects to such Hedging
Transaction except that (i) the date of calculation shall be deemed to be the
date of commencement of the new transaction and (ii) all period end dates
shall correspond to all period end dates, if any, for such Hedging
Transaction. For purposes of clarification, Hedging Exposure shall include,
without duplication, all Specified Swap Obligations.
"Hedging Transaction" means Specified Swap Contracts and each interest
rate swap transaction, basis swap transaction, forward rate transaction,
commodity swap transaction, equity transaction, equity index transaction,
foreign exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction or any other similar transaction
(including any option with respect to any of these transactions and any
combination of any of the foregoing) entered into by any Grantor from time to
time pursuant to an Interest Rate Protection/Currency Swap Agreement; provided
that such transaction is entered into for purposes of protection from price,
interest rate, or currency fluctuations posed by debt, contract or purchase
order obligations and not for speculative purposes.
"Intercreditor Provisions" has the meaning ascribed to that term in
Section 21.
"Interest Rate Protection/Currency Swap Agreement" means any interest
rate swap, cap, floor, collar, forward rate agreement, or other rate
protection transaction, or any combination of such transactions or agreements
or any option with respect to any such transactions or agreements now existing
or hereafter entered into between any Grantor and any Bank.
"International Holdings" means International Education Holdings, Inc., a
Delaware corporation, the owner of 100% of the outstanding capital stock of
GEI.
"Issuing Bank" means Bank of America, N.A. or any other lender in its
capacity as an issuer of Letters of Credit, and any successor issuers thereto.
"Joinder" shall have the meaning assigned thereto in the introductory
paragraph hereto in the form of Exhibit D or such other form that is
acceptable to the Collateral Agent.
"Letter of Credit Cash Collateral" means any cash collateral furnished
to the Collateral Agent pursuant to section 8.2 of the Bank Credit Agreement
or deposited with or held by the Bank Agent, any Bank or the Collateral Agent
as collateral security for any Letters of Credit.
"Letter of Credit Usage" means, as at any date of determination, without
duplication, the sum of (i) the Maximum Available Amount plus (ii) the
aggregate amount of all drawings under the Letters of Credit honored by the
Banks and not theretofore reimbursed by Obligor.
"Letters of Credit" means the letters of credit issued pursuant to the
Bank Credit Agreement or any Additional Bank Credit Agreement.
"Lien" means any lien, mortgage, pledge, security interest, charge or
encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to
give any security interest).
"Maximum Available Amount" means, as of any date of determination, the
amount that may be drawn under the Letters of Credit (whether or not the
beneficiary thereof shall have presented, or shall be entitled at such time to
present, the drafts or other documents required to draw under the Letters of
Credit).
"Non-Directing Party" means, with respect to any particular instruction
given to the Collateral Agent, each Party that has not given or agreed with
such instruction given to the Collateral Agent.
"Note Agreement" has the meaning ascribed to the term in recitals
hereto.
"Noteholder Documents" means the Note Agreement, the Senior Notes and
any Guaranty of a Grantor of the obligations thereunder.
"Noteholders" has the meaning ascribed to the term in recitals hereto.
"Obligors" has the meaning ascribed to such term in the introductory
paragraph of this Agreement.
"Obligations Secured by Offshore Grantors" has the meaning assigned
thereto in Section 2.2(b).
"Obligations Secured by U.S. Grantors" has the meaning assigned thereto
in Section 2.1(c).
"Offshore Grantor" means GEI, and any of its Offshore Subsidiaries and
any Person organized under the laws of a jurisdiction outside the United
States who grants any Collateral to the Collateral Agent hereunder or any
other security document securing the Offshore Secured Obligations.
"Offshore Pledged Stock" has the meaning assigned thereto in
Section 2.2(a).
"Offshore Subsidiary" means a Subsidiary of GEI organized under the laws
of a jurisdiction located outside the United States.
"Opinion of Counsel" means a written opinion of an attorney or firm of
attorneys which in the case of any Person may be an employee thereof, a copy
of which opinion is furnished to each Secured Party.
"Party" means a Bank, the Issuing Bank, the Bank Agent, a Noteholder or
any Additional Noteholder.
"Permitted Investments" means interest bearing demand deposits invested
by the Collateral Agent in a federally insured account with the Collateral
Agent or any other instrument consented to by the Required Secured Parties.
"Permitted Liens" means (i) judgment Liens, unless the judgment it
secures shall not, within 60 days after the entry thereof, have been
discharged or execution thereof stayed pending appeal, or shall not have been
discharged within 60 days after the expiration of any such stay (or such
lesser period to time as applicable law allows a judgment creditor to levy on
such judgment), or (ii) statutory Liens on property or assets of any Person in
which the amount, applicability or validity thereof is contested by such
Person on a timely basis in good faith and in appropriate proceedings, and
such Person has established reserves therefore in accordance with generally
accepted accounting principles applicable in the United States of America,
reasonably deemed by it to be adequate, on the books of such Person with
respect thereto
"Person" means any individual, corporation, partnership, limited
liability company, trust or other entity.
"Pledged Stock" means the Offshore Pledged Stock and the U.S. Pledged
Stock.
"Preferential Payment" means any payments (including any payment
received pursuant to any Guaranty) or Proceeds from any Grantor or any other
source with respect to the Secured Obligations (including from the exercise of
any set-off) which are:
(i) received by a Secured Party within 90 days prior to the
commencement of a Bankruptcy Proceeding with respect to any Grantor, or
the acceleration of the Senior Notes, any Additional Senior Notes or
any Bank Outstandings, and which payment reduces the amount of the
Secured Obligations owed to such Secured Party below the amount owed to
such Secured Party as of the 90th day prior to such occurrence, or
(ii) received by a Secured Party (A) within 90 days prior to the
occurrence of any Event of Default (other than an Event of Default
arising as a result of the commencement of a Bankruptcy Proceeding)
which has not been waived or cured within 45 days after the occurrence
thereof and which payment reduces the amount of the Secured Obligations
owed to such Secured Party below the amount owed to such Secured Party
as of the 90th day prior to the occurrence of such Event of Default or
(B) within 45 days after the occurrence of such Event of Default, or
(iii) received by a Secured Party after the occurrence of a
Special Event of Default except as provided in Sections 10.1(b) and
10.2(b).
"Proceeds" has the meaning assigned to it under the Code and, in any
event, includes, but is not limited to, (a) any and all proceeds of any
collection, sale or other disposition of the Collateral, (b) any and all
amounts from time to time paid or payable under or in connection with any of
the Collateral and (c) amounts collected by the Collateral Agent or any
Secured Party by way of set-off, deduction or counterclaim.
"Related Equity Rights" means, with respect to any Pledged Stock of a
Subsidiary, all rights, authority, powers and privileges of the owner of such
Pledged Stock, and all moneys and property and claims for moneys and property
due and to become due to such owner under all dividends, distributions,
declarations, profits, accounts, contract rights, voting rights, general
intangibles, proceeds and any and all other interests and property rights
relating to and/or due from such Subsidiary
"Required Additional Noteholders" means, with respect to each series of
Additional Senior Notes outstanding, the Additional Noteholders holding more
than 50% of the aggregate principal amount of the outstanding Additional
Senior Notes of such series.
"Required Banks" means, for purposes of the Bank Credit Agreement, the
Required Lenders as defined therein, and, for purposes of any Additional Bank
Credit Agreement, means those Banks having aggregate percentages of the
commitments under such Additional Bank Credit Agreement entitled to act or
refrain from acting thereunder in the applicable situation.
"Required Noteholders" means, the Noteholders holding at least 51% of
the aggregate principal amount of the outstanding Senior Notes.
"Required GEI Secured Parties" means: (a) more than 50% of the
aggregate amount of the commitments to GEI under the Bank Credit Agreement and
any Additional Bank Credit Agreement (taken as a whole), or, if any such
commitments have terminated or expired, more than 50% of the aggregate
principal amount of the Bank Outstandings owed by GEI, and (b) more than 50%
of the aggregate principal amount of the GEI Notes and Additional Senior Notes
issued by GEI outstanding, each voting as a separate class, provided that, if
either (A) at any time the aggregate principal amount of the Bank Outstandings
owed by GEI, or (B) the aggregate outstanding principal amount of the GEI
Notes and any Additional Senior Notes issued by GEI outstanding, represents
more than 90% of the sum of the aggregate principal amount of the Bank
Outstandings owed by GEI, the GEI Notes and the Additional Senior Notes issued
by GEI outstanding, then "Required GEI Secured Parties" shall mean GEI Secured
Parties, considered as a single class, holding more than 66-2/3% of the sum of
(i) the aggregate principal amount of the Bank Outstandings owed by GEI,
(ii) the aggregate principal amount of the GEI Notes outstanding, plus
(iii) the aggregate principal amount of the Additional Senior Notes issued by
GEI outstanding.
"Required Secured Parties" means: (a) more than 50% of the aggregate
amount of the commitments under the Bank Credit Agreement and any Additional
Bank Credit Agreement (taken as a whole), or, if any such commitments have
terminated or expired, more than 50% of the aggregate principal amount of the
Bank Outstandings, and (b) more than 50% of the aggregate principal amount of
the Senior Notes and Additional Senior Notes outstanding, each voting as a
separate class, provided that, if either (A) at any time the aggregate
principal amount of the Bank Outstandings, or (B) the aggregate outstanding
principal amount of the Senior Notes and any Additional Senior Notes
outstanding, represents more than 90% of the sum of the aggregate principal
amount of the Bank Outstandings, the Senior Notes and the Additional Senior
Notes outstanding, then "Required Secured Parties" shall mean Secured Parties,
considered as a single class, holding more than 66-2/3% of the sum of (i) the
aggregate principal amount of the Bank Outstandings, (ii) the aggregate
principal amount of the Senior Notes outstanding, plus (iii) the aggregate
principal amount of the Additional Senior Notes outstanding.
"Secured Obligations" means the Obligations Secured by Offshore Grantors
and the Obligations Secured by U.S. Grantors.
"Secured Parties" means the holders, from time to time, of the Secured
Obligations.
"Senior Note Obligations" means all outstanding and unpaid obligations
of every nature of all Grantors from time to time to the Noteholders under the
Noteholder Documents, and to Additional Noteholders under the Additional
Noteholder Documents, including, without limitation, the Acceleration Premium
Obligations, LIBOR breakage costs and all Fees and Charges otherwise accruing
under the Noteholder Documents and the Additional Noteholder Documents.
"Senior Notes" has the meaning ascribed to that term in the recitals
hereto.
"Special Event of Default" means: (i) the commencement of a Bankruptcy
Proceeding with respect to any Grantor, (ii) any other Event of Default which
has not been waived or cured within 45 days after the occurrence thereof, or
(iii) the acceleration of the Senior Notes, any Additional Senior Notes or any
Bank Outstandings.
"Special Trust Account" means that certain interest bearing trust
account maintained by or on behalf of the Collateral Agent for the purpose of
receiving and holding Preferential Payments.
"Specified Swap Contract" shall have the meaning assigned thereto in the
Bank Credit Agreement.
"Specified Swap Obligations" shall have the meaning assigned thereto in
the Bank Credit Agreement.
"Subsidiary" means any corporation, partnership, joint venture, limited
liability company or other business entity of which a majority of the shares
of securities or other interests having ordinary voting power for the election
of directors or other governing body (other than securities or interests
having such power only by reason of the happening of a contingency) are at the
time beneficially owned, or the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries, or both, by DeVry
or GEI.
"U.S. Grantor" means DeVry, and any of its U.S. Subsidiaries and any
other Person organized under the laws of a jurisdiction located within the
United States who grants any Collateral to the Collateral Agent hereunder or
any other security document securing any Secured Obligations.
"U.S. Pledged Stock" has the meaning assigned thereto in Section 2.1(a).
"U.S. Subsidiary" means a Subsidiary of DeVry organized under the laws
of one of the states of the United States of America provided however that any
Subsidiary organized under the laws of any political subdivision of the U.S.
which is owned by GEI or any of its Subsidiaries shall be deemed to be an
Offshore Subsidiary.
SECTION 2. COLLATERAL; SECURED OBLIGATIONS.
Section 2.1. U.S. Pledged Stock. (a) Subject to the limitations contained
in Section 2.1(b), each U.S. Grantor hereby pledges, charges, assigns,
transfers and sets over to the Collateral Agent, for the ratable benefit of
the Secured Parties, and hereby pledges, charges, assigns, transfers and
grants to the Collateral Agent, for the ratable benefit of the Secured
Parties, a continuing security interest in all of such U.S. Grantor's interest
and property rights, whether now existing or hereafter acquired or arising, in
and to, all of its Equity Interests in each of its Subsidiaries described in
Exhibit A hereto and any U.S. Subsidiary formed or acquired after the date
hereof, together with all Related Equity Rights other than the GEI Restricted
Stock (all such interests and property rights being collectively referred to
as the "U.S. Pledged Stock").
(b) Limited Pledge. Notwithstanding anything to the contrary
contained elsewhere in this Agreement, International Holdings and DeVry shall
pledge, charge, assign, transfer and set over to the Collateral Agent only for
the ratable benefit of the GEI Secured Parties, Stock Certificate No. 3
representing 35 shares of common stock of GEI (the "GEI Restricted Stock")
constituting 35% of its Equity Interests of GEI together with the Related
Stock Rights of such Equity Interests to secure International Holdings'
obligations under the Guaranties of International Holdings in favor of the
Banks, the Noteholders and any Additional Noteholders pursuant to which
International Holdings guaranteed or will guaranty the GEI Obligations, and
such GEI Restricted Stock shall not under any circumstances be pledged or
charged to the Collateral Agent to secure the DeVry Obligations or any
Guaranty thereof.
(c) Obligations Secured by U.S. Pledged Stock. The lien, charge and
security interest granted by a Grantor pursuant to Section 2.1(a) to the
Collateral Agent for the ratable benefit of the Secured Parties is made and
given to secure, and shall secure, subject to the limitations contained in
Section 2.1(b), the prompt payment and performance in full when due (whether
by lapse of time, acceleration or otherwise) of (i) any and all indebtedness,
obligations and liabilities of such Grantor to the Bank Agent, the Issuing
Bank or the Banks under or in connection with or evidenced by the Bank
Documents (including, without limitation, all "Obligations" as such term is
defined under the Bank Credit Agreement) or this Agreement, in each case
whether now existing or hereafter arising (and whether arising before or after
the filing of a petition in bankruptcy, including fees and interest which
accrued after such filing of bankruptcy or other similar proceeding regardless
of whether such fees and interest are allowed claims in such proceeding), due
or to become due, direct or indirect, absolute or contingent, and howsoever
evidenced, held or acquired, (ii) all indebtedness, obligations and
liabilities of such Grantor to the Noteholders under or in connection with or
evidenced by the Noteholder Documents or this Agreement, in each case whether
now existing or hereafter arising (and whether arising before or after the
filing of a petition in bankruptcy, including fees and interest which accrued
after such filing of bankruptcy or other similar proceeding regardless of
whether such fees and interest are allowed claims in such proceeding), due or
to become due, direct or indirect, absolute or contingent, and howsoever
evidenced, held or acquired, (iii) all indebtedness, obligations and
liabilities of such Grantor to any Additional Noteholders under or in
connection with or evidenced by each Additional Note Documents or this
Agreement, in each case whether now existing or hereafter arising (and whether
arising before or after the filing of a petition in bankruptcy, including fees
and interest which accrued after such filing of bankruptcy or other similar
proceeding regardless of whether such fees and interest are allowed claims in
such proceeding), due or to become due, direct or indirect, absolute or
contingent, and however evidenced, held or acquired, (iv) all indebtedness,
obligations and liabilities of such Grantor to the Collateral Agent under or
in connection with or evidenced by this Agreement, in each case whether now
existing or hereafter arising (and whether arising before or after the filing
of a petition in bankruptcy, including fees and interest which accrued after
such filing of bankruptcy or other similar proceeding regardless of whether
such fees and interest are allowed claims in such proceeding), due or to
become due, direct or indirect, absolute or contingent, and howsoever
evidenced, held or acquired, (v) all Hedging Exposure and other obligations of
such Grantor under or arising in connection with any Interest Rate
Protection/Currency Swap Agreement, and (vi) any and all expenses and charges,
legal or otherwise, suffered or incurred by any Secured Party in collecting or
enforcing any of such indebtedness, obligations and liabilities or in
realizing on or protecting or preserving any security therefor, including,
without limitation, the lien and security interest granted hereby (all of the
indebtedness, obligations, liabilities, expenses and charges described in
clauses (i) through (vi), inclusive, above being referred to herein as the
"Obligations Secured by U.S. Grantors").
Section 2.2. Offshore Pledged Stock. (a) Each Offshore Grantor hereby
pledges, charges, assigns, transfers and sets over unto the Collateral Agent,
for the ratable benefit of the GEI Secured Parties, and hereby pledges,
charges, assigns, transfers and grants to the Collateral Agent, for the
ratable benefit of the GEI Secured Parties, a continuing security interest in
all of such Offshore Grantor's interest and property rights, whether now
existing or hereafter acquired or arising, in and to, all of its Equity
Interests in each of its Subsidiaries described in Exhibit B hereto, and, to
the extent permitted by applicable law, any Offshore Subsidiary of GEI formed
or acquired after the date hereof, together with all Related Equity Rights and
the GEI Restricted Stock (all such interests and property rights being
collectively referred to as the "Offshore Pledged Stock").
(b) Obligations Secured Offshore Pledged Stock. The lien, charge and
security interest granted by such Offshore Guarantor pursuant to
Section 2.2(a) to the Collateral Agent for the ratable benefit of the GEI
Secured Parties is made and given to secure, and shall secure, the prompt
payment and performance in full when due (whether by lapse of time,
acceleration or otherwise) of (i) any and all indebtedness, obligations and
liabilities of such Offshore Grantor to the Bank Agent, the Issuing Bank or
the Banks under or in connection with or evidenced by the Bank Documents
(including, without limitation, all "Obligations" as such term is defined
under the Bank Credit Agreement of GEI thereunder) or this Agreement, in each
case whether now existing or hereafter arising (and whether arising before or
after the filing of a petition in bankruptcy, including fees and interest
which accrued after such filing of bankruptcy or other similar proceeding
regardless of whether such fees and interest are allowed claims in such
proceeding), due or to become due, direct or indirect, absolute or contingent,
and howsoever evidenced, held or acquired, (ii) all indebtedness, obligations
and liabilities of such Offshore Grantor to the Noteholders under or in
connection with or evidenced by the Noteholder Documents or this Agreement, in
each case whether now existing or hereafter arising (and whether arising
before or after the filing of a petition in bankruptcy, including fees and
interest which accrued after such filing of bankruptcy or other similar
proceeding regardless of whether such fees and interest are allowed claims in
such proceeding), due or to become due, direct or indirect, absolute or
contingent, and howsoever evidenced, held or acquired, (iii) all indebtedness,
obligations and liabilities of such Offshore Grantors to any Additional
Noteholders under or in connection with or evidenced by each Additional Note
Documents or this Agreement, in each case whether now existing or hereafter
arising (and whether arising before or after the filing of a petition in
bankruptcy, including fees and interest which accrued after such filing of
bankruptcy or other similar proceeding regardless of whether such fees and
interest are allowed claims in such proceeding), due or to become due, direct
or indirect, absolute or contingent, and however evidenced, held or acquired,
(iv) all indebtedness, obligations and liabilities of such Offshore Grantor to
the Collateral Agent under or in connection with or evidenced by this
Agreement, in each case whether now existing or hereafter arising (and whether
arising before or after the filing of a petition in bankruptcy), due or to
become due, direct or indirect, absolute or contingent, and howsoever
evidenced, held or acquired, (v) all Hedging Exposure and other obligations of
such Offshore Grantor under or arising in connection with any Interest Rate
Protection/Currency Swap Agreement, and (vi) any and all expenses and charges,
legal or otherwise, suffered or incurred by any Secured Party in collecting or
enforcing any of such indebtedness, obligations and liabilities or in
realizing on or protecting or preserving any security therefor, including,
without limitation, the lien and security interest granted hereby (all of the
indebtedness, obligations, liabilities, expenses and charges described in
clauses (i) through (vi), inclusive, above being referred to herein as the
"Obligations Secured by Offshore Grantors").
(c) Notwithstanding any provision of this Section 2.2 or any other
provision of this Agreement to the contrary, it is understood that as of the
date hereof, the Equity Interest in Ross University School of Medicine School
of Veterinary Medicine (St. Kitts) Limited shall not be pledged pursuant to
this Agreement unless and until such pledge is required under the Bank
Agreement.
Section 2.3. Letter of Credit Cash Collateral. Each Bank hereby agrees to
promptly remit any Letter of Credit Cash Collateral to the Collateral Agent to
be held and distributed pursuant to Section 10.1. Each Obligor agrees to
furnish to the Collateral Agent any and all Letter of Credit Cash Collateral
required to be furnished pursuant to Section 8.2 of the Bank Credit Agreement.
Section 2.4. Each Secured Party agrees to promptly deliver to the
Collateral Agent any other Collateral that it receives or holds, accompanied
by documentation acceptable to the Collateral Agent, to be held as security
for the Secured Obligations in accordance with the terms of this Agreement.
Section 3. Representations and Warranties. Each Grantor represents and
warrants with respect to itself and and the Collateral pledged and charged by
such Grantor to, the Secured Parties that:
(a) It is (or, in the case of the stock in GEI being pledged by
International Holdings, upon recordation and adjudication of the stock
transfer in the appropriate recording office in Barbados will be) the
owner of the Pledged Stock pledged and charged pursuant to this
Agreement, and all rights incident thereto free and clear of any Lien
other than the pledge and charge made hereunder and Permitted Liens.
(b) It has deposited with the Collateral Agent the Pledged
Stock pledged by such Grantor, together with a stock power duly
endorsed in blank or accompanied by an assignment or assignments
sufficient to transfer title thereto except to the extent that
applicable law requires the same, such forms must be executed by the
purchaser and/or notarized in order for such stock power or transfer to
be recorded.
(c) This Agreement creates a valid security interest in the
Collateral pledged by such Grantor securing payment and performance of
the Secured Obligations and all filings and other action necessary to
perfect such security interest under all applicable jurisdictions have
been or will be taken contemporaneously with the initial funding under
the Notes and the Bank Credit Agreement.
(d) Each share of Pledged Stock is adequately described in and
is subject to the lien of this Agreement. The Collateral Agent has a
valid first lien upon and (upon filing of certain documents in foreign
jurisdictions) prior perfected security interest in the Pledged Stock
subject to no equal or prior lien on the Pledged Stock. No effective
financing statement or other instrument similar in effect covering all
or any part of the Pledge Stock is on file in any recording office,
except such as may have been filed in favor of the Collateral Agent
with respect to this Agreement.
(e) Each Grantor represents and warrants that the
representations and warranties made with respect to such Grantor set
forth in the Financing Agreements are true and correct and such
representations and warranties are incorporated herein by reference
with the same force and effect as though set forth herein in full.
Section 4. Covenants. Each Grantor, with respect to itself and the
Collateral pledged and charged by it hereunder, covenants and agrees with the
Secured Parties that:
(a) Such Grantor will pay promptly when due all taxes,
assessments, and governmental charges and levies upon or against the
Collateral in each case before the same become delinquent and before
penalties accrue thereon, unless (1) the validity, applicability or
amount thereof is being contested in good faith by appropriate actions
or proceedings which will prevent the forfeiture or sale of such
Collateral or any material interference with the use thereof by such
Grantor and (2) such Grantor shall have set aside on its books, reserves
deemed by it to be adequate with respect thereto in accordance with and
as required by GAAP.
(b) It will not, without the Collateral Agent's prior written
consent, sell, assign, mortgage, lease or otherwise dispose of or
otherwise permit a Lien (other than Permitted Liens) to exist on the
Collateral or any interest therein, provided that such Grantor may
sell, assign or otherwise dispose of any Collateral or interest therein
if such sale, assignment or other disposition is permitted by all of
the Financing Agreements.
(c) It will not will change its name, or except as aforesaid,
transact business under any trade name, in each case without first
giving the Collateral Agent 30 days' prior written notice of its intent
to do so, provided that in the case of any acquisition by such Grantor
of any business entity or operation giving rise to the requirement to
give notice to the Collateral Agent of the use of a new trade name
pursuant to the foregoing, such notice shall be given to the Collateral
Agent within 30 days following the date such acquisition is finalized.
(d) The Collateral Agent agrees to prepare, and such Grantor
agrees to cooperate with the Collateral Agent to execute and deliver to
the Collateral Agent, such further agreements and assignments or other
instruments and to do all such other things necessary or reasonably
appropriate to assure the Collateral Agent its security interest
hereunder, including such financing statement or statements,
continuation statements or amendments thereof or supplements thereto or
other instruments as may from time to time be required in order to
comply with the Code.
(e) In the event for any reason the law of any jurisdiction
other than the State of New York becomes or is applicable to the
Collateral or any part thereof, or to any of the Secured Obligations,
each Grantor agrees to execute and deliver all such instruments and to
do all such other things as the Collateral Agent in its sole discretion
reasonably deems necessary or appropriate to preserve, protect and
enforce the security interest of the Collateral Agent as set forth
herein under the law of such other jurisdiction to at least the same
extent as such security interest would be protected under the Code. If
any Collateral is in the possession or control of any of such Grantor's
agents or processors and the Collateral Agent so requests, such Grantor
agrees to notify such agents or processors in writing of the Collateral
Agent's security interest therein and, upon the occurrence and
continuance of an Event of Default hereunder and at the Collateral
Agent's request, instruct all agents and processors in possession of
Collateral to hold all such Collateral for the Collateral Agent's
account and subject to the Collateral Agent's instructions.
(f) It shall respond promptly to all reasonable requests of the
Collateral Agent for information concerning the conduct of all lawsuits
brought by such Grantor (or in which such Grantor participates) against
any other Person. Each Grantor will warrant and defend the Collateral
pledged by it hereunder against any claims and demands of all persons
at any time claiming the same or any interest in such Collateral
adverse to the Collateral Agent.
(g) Each Grantor shall remain liable to the Secured Parties
under the Financing Agreements to which it is a party for any
deficiency resulting after the sale of its Collateral. Any surplus
remaining after the full payment and satisfaction of the Secured
Obligations shall be returned to the applicable Grantor or to
whomsoever the Collateral Agent reasonably determines is lawfully
entitled thereto.
(h) The Collateral and every part thereof will be free and
clear of all security interests, liens (including without limitation
mechanics', laborers' and statutory liens), attachments, levies and
encumbrances of every kind, nature and description, whether voluntary
or involuntary, other than the security interest granted hereunder and
Permitted Liens.
Section 5. Collateral Agent May Perform. On failure of any Grantor to
perform any of the covenants and agreements herein contained, the Collateral
Agent may, at its option, perform the same and in so doing may expend such
sums as the Collateral Agent may reasonably deem advisable in the performance
thereof, including without limitation the payment of any insurance premiums,
the payment of any taxes, liens and encumbrances, expenditures made in
defending against any adverse claim and all other expenditures which the
Collateral Agent may be compelled to make by operation of law or which the
Collateral Agent may make by agreement or otherwise for the protection of the
security hereof. All such sums and amounts so expended shall be repayable by
the applicable Grantor immediately without notice or demand, shall constitute
so much additional Secured Obligations and shall bear interest from the date
said amounts are expended at the rate per annum (computed on the basis of a
360-day year for the actual number of days elapsed) determined by adding 2% to
the rate per annum from time to time announced by Bank of America, N.A. in New
York, New York, as its prime commercial rate with any change in such rate per
annum as so determined by reason of a change in such prime commercial rate to
be effective on the date of such change in said prime commercial rate (such
rate per annum as so determined being hereinafter referred to as the "Default
Rate"). No such performance of any covenant or agreement by the Collateral
Agent on behalf of the Grantors, and no such advancement or expenditure
therefor, shall relieve the Grantors of any default under the terms of this
Agreement. The Collateral Agent, in making any payment hereby authorized may
do so according to any bill, statement or estimate procured from the
appropriate public office or holder of the claim to be discharged without
inquiry into the accuracy of such bill, statement or estimate or into the
validity of any tax assessment, sale, forfeiture, tax lien or title or claim.
The Collateral Agent, in performing any act hereunder, shall be the sole judge
in reasonably determining whether the Grantors are required to perform the
same under the terms of this Agreement.
Section 6.1. Administration of Pledged Stock. (a) Until an Event of
Default has occurred and is continuing and the Collateral Agent instructs the
Grantors otherwise, the Grantors shall be entitled:
(a) To vote all or any part of the Pledged Stock at any and all
meetings of shareholders relating to such Pledged Stock and to execute
consents in respect thereof, and to consent to ratify or waive notice
of any or all meetings of the shareholders relating to such Pledged
Stock with the same force and effect as if this Agreement had not been
made, and, if necessary, upon the receipt of the written request from
the applicable Grantor, the Collateral Agent shall from time to time
execute and deliver to the applicable Grantor appropriate proxies for
that purpose; and
(b) To receive,collect or have paid over all dividends declared
or paid on the Pledged Stock, except (i) dividends or distributions
constituting stock dividends, (ii) dividends or distributions in kind,
or (iii) liquidating dividends (either partial or complete), any and
all such excepted dividends and distributions to constitute and be
additional security for the purposes aforesaid and to be paid over
and/or pledged and deposited with the Collateral Agent, and the
Collateral Agent shall have in respect thereof all of the powers and
rights as are herein provided in respect of the initial Pledged Stock.
Section 6.2. Each Grantor agrees that it shall pay over to the Collateral
Agent, immediately upon receipt, any money or other distribution upon or in
respect of the Pledged Stock or any part thereof, other than dividends which
such Grantor is entitled to receive or retain under Section 6.1 above.
Section 6.3. (a) Each U.S. Grantor agrees that it shall deliver to the
Collateral Agent, for the ratable benefit of the Secured Parties, immediately
upon receipt, all shares of capital stock issued to such U.S. Grantor by any
of its Subsidiaries (other than dormant Subsidiaries) pledged hereunder,
together with stock powers endorsed in blank or accompanied by an assignment
or assignments sufficient to transfer title thereto, and such further
documentation as the Collateral Agent may request pursuant to Section 4(e)
hereof; provided, however, that in no event shall more than 65% of the capital
stock of GEI be pledged to the Collateral Agent to secured the DeVry
Obligations
(b) Each Offshore Grantor agrees that it shall deliver to the
Collateral Agent, for the ratable benefit of the GEI Secured Parties,
immediately upon receipt, all shares of capital stock issued to such Offshore
Grantor by any of its Subsidiaries pledged hereunder, together with stock
powers endorsed in blank or accompanied by an assignment or assignments
sufficient to transfer title thereto, and such further documentation as the
Collateral Agent may request pursuant to Section 4(e) hereof.
Section 6.4. All payments or other distributions received by such Grantor
upon or in respect of the Pledged Stock other than which such Grantor is
entitled to receive and retain under Section 6.1 or Section 6.3 shall be held
in trust for the Collateral Agent and forthwith delivered by such Grantor in
the form received, with such Grantor's endorsement in blank for transfer or
accompanied by an assignment or assignments sufficient to transfer title
thereto, and shall constitute part of the Pledged Stock.
Section 7. Power of Attorney. Each Grantor hereby appoints the
Collateral Agent the attorney-in-fact of such Grantor for the purpose of
carrying out the provisions of this Agreement and taking any action and
executing or completing any instruments which the Collateral Agent may deem
reasonably necessary or advisable to accomplish the purpose hereof, which
appointment as attorney-in-fact is irrevocable and coupled with an interest;
provided, however, that the Collateral Agent shall have no duty or obligation
to any Grantor to collect or enforce payment of any of the Pledged Stock
whether by way of presentment, demand, protest, notice of dishonor or
otherwise. Without limiting the generality of the foregoing, after the
happening, but only during the continuance, of any Event of Default, the
Collateral Agent shall have the right and power to receive, endorse and
collect all checks made payable to the order of any Grantor representing
payments of dividends or any other distribution or payment in respect of the
Pledged Stock or any part thereof and to give full discharge for the same.
Section 8. Grantors Indemnification. Whether or not the transactions
contemplated hereby are consummated, the U.S. Grantors and the Offshore
Grantors, shall indemnify, defend and hold each Secured Party and each GEI
Secured Party, and any Collateral Agent-Related Person, and each of their
respective officers, directors, employees, counsel, agents and
attorneys-in-fact (each, an "Indemnified Person") harmless from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses and disbursements (including
attorney costs) of any kind or nature whatsoever which may at any time be
imposed on, incurred by or asserted against any such Person in any way
relating to or arising out of this Agreement or any document contemplated by
or referred to herein, or the transactions contemplated hereby, or any action
taken or omitted by any such Person under or in connection with any of the
foregoing, including with respect to any investigation, litigation or
proceeding (including any insolvency proceeding or appellate proceeding)
related to or arising out of this Agreement or the Secured Obligations or the
use of the proceeds thereof, whether or not any Indemnified Person is a party
thereto (all the foregoing, collectively, the "Indemnified Liabilities");
provided, that the Grantors shall have no obligation hereunder to any
Indemnified Person with respect to Indemnified Liabilities resulting solely
from the gross negligence or willful misconduct of such Indemnified Person.
The agreements in this Section shall survive payment of all other Obligations.
Section 9. Defaults and Remedies. (a) The occurrence of any of the
following events, or the existence of any of the following conditions, shall
constitute an "Event of Default" hereunder:
(1) the occurrence of any event or the existence of any
condition which is specified as an Event of Default under the Bank
Credit Agreement, any Additional Bank Credit Agreement, the Note
Agreement or any Additional Note Agreement; or
(2) any representation or warranty made by any Grantor herein,
or in any written statement or certificate furnished by it pursuant
hereto, or in connection with this Agreement shall be untrue in any
material respect as of the date of the issuance or making thereof; or
(3) default in the observance or performance by any Grantor of
any provision of this Agreement, and such default continues for five
days.
(b) With respect to all of the Collateral other than cash, upon the
occurrence and during the continuation of any Event of Default hereunder, the
Collateral Agent shall have, in addition to all other rights provided herein
or by law, the rights and remedies of a secured party under the Code
(regardless of whether the Code is the law of the jurisdiction where the
rights or remedies are asserted and regardless of whether the Code applies to
the affected Collateral), and further the Collateral Agent may, without demand
and without advertisement, except with respect to a public sale, hearing or
process of law, all of which each Grantor hereby waives, at any time or times,
sell and deliver any or all Collateral (other than cash) held by or for it at
public or private sale, for cash, upon credit or otherwise, at such prices and
upon such terms as the Collateral Agent deems advisable, in its sole
discretion, provided that said disposition complies with any and all mandatory
legal requirements. In addition to all other sums due any Secured Party, the
Grantors shall pay the Collateral Agent all costs and expenses incurred by it,
including a reasonable allowance for attorneys' fees and court costs, in
obtaining, liquidating or enforcing payment of Collateral or Secured
Obligations or in the prosecution or defense of any action or proceeding by or
against the Collateral Agent concerning any matter arising out of or connected
with this Agreement, the Collateral or Secured Obligations, including without
limitation any of the foregoing arising in, arising under or related to a case
under the United States Bankruptcy Code (or any successor statute). Any
requirement of reasonable notice shall be met if such notice is personally
served on or mailed, postage prepaid, to the Grantors in accordance with
Section 19(b) at least 10 days before the time of sale or other event giving
rise to the requirement of such notice; however, no notification need be given
to the Grantors if the Grantors have signed, after an Event of Default
hereunder has occurred, a statement renouncing any right to notification of
sale or other intended disposition, provided that the Grantors are not hereby
agreeing to sign such a statement. The Collateral Agent shall not be
obligated to make any sale or other disposition of the Collateral regardless
of notice having been given. To the extent permitted by law, the Collateral
Agent, any Bank, any Noteholder or any Additional Noteholders may be the
purchaser at any such sale. To the extent permitted by applicable law, the
Grantors hereby waive all of their rights of redemption from any such sale.
Subject to the provisions of applicable law, the Collateral Agent may postpone
or cause the postponement of the sale of all or any portion of the Collateral
by announcement at the time and place of such sale, and such sale may, without
further notice, be made at the time and place to which the sale was postponed
or the Collateral Agent may further postpone such sale by announcement made at
such time and place.
(c) With respect to cash, upon the occurrence and during the
continuation of any Event of Default hereunder, the Collateral Agent shall
have, in addition to all other rights provided herein or by law, the rights
and remedies of a secured party under the Code (regardless of whether the Code
is the law of the jurisdiction where the rights or remedies are asserted and
regardless of whether the Code applies to the affected Collateral), the right
to exercise exclusive control over any proceeds of Collateral in its
possession or held at any bank or in any lockbox, including cash, including
without limitation the right to collect, withdraw and receive all amounts due
or to become due or payable under each such deposit account, and shall have
the right to apply such amounts in reduction of the Secured Obligations as
contemplated by Section 10.
(d) Failure by the Collateral Agent to exercise any right, remedy or
option under this Agreement or any other agreement among the Grantors and the
Collateral Agent or provided by law, or delay by the Collateral Agent in
exercising the same, shall not operate as a waiver; no waiver hereunder shall
be effective unless it is in writing, signed by the party against whom such
waiver is sought to be enforced and then only to the extent specifically
stated. Neither the Collateral Agent nor any party acting as attorney for the
Collateral Agent shall be liable hereunder for any acts or omissions or for
any error of judgment or mistake of fact or law other than their gross
negligence or willful misconduct. The rights and remedies of the Secured
Parties under this Agreement shall be cumulative and not exclusive of any
other right or remedy which the Secured Parties may have.
Section 10.1. Application of Proceeds of U.S. Pledged Stock. (a) Any
and all Proceeds received by the Collateral Agent in connection with an
Enforcement relating to any U.S. Pledged Stock and any Preferential Payments
received from any U.S. Grantor which are required to be paid to all Secured
Parties in accordance with the provisions of Section 11, together with any
Letter of Credit Cash Collateral, shall be applied promptly by the Collateral
Agent, as follows:
FIRST: To the payment of the reasonable costs and expenses of
such sale, collection or other realization, including, without
duplication, fees and expenses of counsel (including the allocated cost
of in-house counsel) to the Collateral Agent evidenced by reasonable
and customary computer back-up detail, unpaid collateral agency fees,
and all reasonable expenses, liabilities and advances made or incurred
by the Collateral Agent in connection therewith;
SECOND: To the ratable payment of the Secured Obligations to
Secured Parties, calculated in accordance with the provisions of
Section 10.1(b);
THIRD: To the ratable payment of the Fees and Charges to
Secured Parties and any other Secured Obligations, if any; and
FOURTH: After payment in full of all Secured Obligations, to
the payment to or upon the order of the Grantors, or to whosoever may
be lawfully entitled to receive the same or as a court of competent
jurisdiction may direct, of any surplus then remaining from such
Proceeds.
Until such Proceeds, Preferential Payments and Letter of Credit Cash
Collateral are so applied, the Collateral Agent shall hold such Proceeds,
Preferential Payments and Letter of Credit Cash Collateral in its custody in
accordance with its regular procedures for handling deposited funds, and the
Collateral Agent shall invest such Proceeds and Preferential Payments in
Permitted Investments pending distribution pursuant to Section 10.1.
(b) Any Proceeds received by the Collateral Agent in respect of the
U.S. Pledged Stock (net of any amounts applied in accordance with
Section 10.1(a) FIRST), shall be applied in accordance with the priority set
forth in Section 10.1(a) SECOND so that each Secured Party shall receive
payment of its proportionate amount of all such Proceeds, as the case may be.
Payment shall be based upon the proportion which the amount of such Secured
Obligations of such Secured Party bears to the total amount of all Secured
Obligations of all such Secured Parties. For purposes of determining the
proportionate amounts of all Secured Obligations sharing in any such
distribution: (i) the amount of the outstanding Bank Credit Obligations shall
be deemed to be the sum of the principal amount of the Bank Outstandings
(including, subject to Section 10.3, the Maximum Available Amount) and all
accrued interest, letter of credit fees and commitment fees and LIBOR breakage
costs with respect thereto and including Hedging Exposure but excluding Fees
and Charges other than letter of credit fees and commitment fees, and (ii) the
amount of the outstanding Senior Note Obligations shall be deemed to be the
principal amount of the Senior Notes and all Additional Senior Notes plus all
accrued interest and LIBOR breakage costs with respect thereto, and including
the Acceleration Premium Obligations but excluding Fees and Charges. In the
event the Proceeds received by the Collateral Agent shall be insufficient to
pay in full the whole amount so due and owing upon the Secured Obligations to
all Secured Parties, then such Proceeds shall be shared ratably according to
the aggregate of such principal and the accrued interest and fees with respect
thereto including the Maximum Available Amount subject to Section 10.3, any
Acceleration Premium Obligation and all Hedging Exposure but excluding Fees
and Charges, with the application of such Proceeds to be made by each Secured
Party as directed in the applicable Bank Documents, Note Agreement or
Additional Note Agreement, or if not so directed, as determined by each
Secured Party in its sole discretion. In the event any Secured Party receives
more than its proportionate share of any Proceeds or Preferential Payments,
such Secured Party shall immediately return such excess amount to the
Collateral Agent to be distributed in accordance with Section 10.1(b).
Section 10.2. Application of Proceeds of Offshore Pledged Stock and GEI
Restricted Stock. (a) Any and all Proceeds received by the Collateral Agent
in connection with an Enforcement relating to any Offshore Pledged Stock
(including any GEI Restricted Stock), and any Preferential Payments received
from any Offshore Grantor or any Preferential Payments relating to any GEI
Restricted Stock which are required to be paid to all GEI Secured Parties in
accordance with the provisions of Section 11, shall be applied promptly by the
Collateral Agent, as follows:
FIRST: To the payment of the reasonable costs and expenses of
such sale, collection or other realization, including, without
duplication, fees and expenses of counsel (including the allocated cost
of in-house counsel) to the Collateral Agent evidenced by reasonable
and customary computer back-up detail, unpaid collateral agency fees,
and all reasonable expenses, liabilities and advances made or incurred
by the Collateral Agent in connection therewith;
SECOND: To the ratable payment of the Obligations Secured by
Offshore Grantors to GEI Secured Parties, calculated in accordance with
the provisions of Section 10.2(b);
THIRD: To the ratable payment of the Fees and Charges and any
other Secured Obligations, if any, which are owed by GEI or any
Offshore Grantor to the GEI Secured Parties; and
FOURTH: After payment in full of all Obligations Secured by
Offshore Grantors, to the payment to or upon the order of the
applicable Grantor, or to whosoever may be lawfully entitled to receive
the same or as a court of competent jurisdiction may direct, of any
surplus then remaining from such Proceeds.
Until such Proceeds and such Preferential Payments are so applied, the
Collateral Agent shall hold such Proceeds and such Preferential Payments in
its custody in accordance with its regular procedures for handling deposited
funds and the Collateral Agent shall invest such Proceeds and Preferential
Payments in Permitted Investments pending distribution pursuant to
Section 10.2.
(b) Any Proceeds received by the Collateral Agent in respect of any
Offshore Pledged Stock (net of any amounts applied in accordance with
Section 10.2(a) FIRST) and Proceeds relating to any GEI Restricted Stock shall
be applied in accordance with the priority set forth in Section 10.2(a) SECOND
so that each GEI Secured Party shall receive payment of its proportionate
amount of all such Proceeds, as the case may be. Payment shall be based upon
the proportion which the amount of such Obligations Secured by Offshore
Grantors of such Secured Party bears to the total amount of all Obligations
Secured by Offshore Grantors of all such GEI Secured Parties. For purposes of
determining the proportionate amounts of all Obligations Secured by Offshore
Grantors sharing in any such distribution: (i) the amount of the outstanding
Bank Credit Obligations owed by GEI shall be deemed to be the sum of the
principal amount of the Bank Outstandings (including, subject to Section 10.3,
the Maximum Available Amount) and all accrued interest, LIBOR breakage costs
and letter of credit fees and commitment fees with respect thereto, and
including Hedging Exposure but excluding Fees and Charges other than letter of
credit fees and commitment fees, and (ii) the amount of the outstanding Senior
Note Obligations owed by GEI shall be deemed to be the principal amount of the
GEI Notes and all Additional Senior Notes issued by GEI plus all accrued
interest and LIBOR breakage costs with respect thereto and including the
Acceleration Premium Obligations but excluding Fees and Charges. In the event
the Proceeds received by the Collateral Agent shall be insufficient to pay in
full the whole amount so due and owing upon the Obligations Secured by
Offshore Grantors to all GEI Secured Parties, then such Proceeds shall be
shared ratably according to the aggregate of such principal and the accrued
interest and fees with respect thereto including the Maximum Available Amount
subject to Section 10.3, any Acceleration Premium Obligation and all Hedging
Exposure but excluding Fees and Charges, with the application of such Proceeds
to be made by each GEI Secured Party as directed in the applicable Bank
Documents, Note Agreement or Additional Note Agreement, or if not so directed,
as determined by each GEI Secured Party in its sole discretion. In the event
any Secured Party receives more than its proportionate share of any Proceeds
or Preferential Payments, such Secured Party shall immediately return such
excess amount to the Collateral Agent to be distributed in accordance with
Section 10.2(b).
Section 10.3. Letters of Credit. Notwithstanding anything herein to the
contrary, any amounts distributed for application to any Grantor's liabilities
with respect to any such undrawn Letters of Credit shall be held by the
BankAgent and the Banks as collateral security for such liabilities until a
drawing thereon, at which time such collateral shall be applied to such
liabilities. If Letters of Credit constituting part of the Bank Credit
Obligations expire without having been drawn upon in full, the undrawn portion
shall be excluded from the Bank Credit Obligations for purposes of
Sections 10.1 and 10.2, all as though such undrawn portion had never existed.
If distributions have previously been made under Sections 10.1 and 10.2 with
respect to Letters of Credit constituting part of the Bank Credit Obligations
which expire without having been drawn upon in full, the amounts due each
Secured Party out of such distribution shall be redetermined by excluding the
undrawn amount of such expired Letters of Credit from the calculations under
such Sections and if a redetermination reveals that there has been an
overpayment to any Secured Party, each Secured Party which received such an
overpayment shall pay to those other Secured Parties who were underpaid in
respect of such distribution the amount of the underpayment.
Section 10.4. Payments. Payments by the Collateral Agent in respect of
(i) the Bank Credit Obligations shall be made to the Banks in accordance with
the Bank Credit Agreement or any Additional Bank Credit Agreement, as
applicable; (ii) the Senior Note Obligations shall be made as directed in
writing by the Noteholder or the Additional Noteholder, as the case may be, to
whom such Senior Note Obligations are owed; and (iii) Hedging Exposure shall
be made as directed by the Bank to which such is owed.
Section 11. Preferential Payments and Special Trust Account. (a) The
Collateral Agent shall give each Secured Party a written notice (a "Notice of
Special Default") promptly after being notified in writing by a Secured Party
that a Special Event of Default has occurred. After the receipt of such
Notice of Special Default, all Preferential Payments other than those payments
received pursuant to Section 11(b) shall be deposited into the Special Trust
Account. The Collateral Agent shall establish separate sub-accounts within the
Special Trust Account and shall credit Preferential Payments received with
respect to the DeVry Obligations into a sub-account entitled "DeVry
Preferential Payments" and shall credit Preferential Payments received with
respect to the GEI Obligations into a sub-account entitled "GEI Preferential
Payments." Each Secured Party agrees that no Event of Default shall occur as a
result of payments so made on a timely basis to the Collateral Agent.
(b) If (i) such Special Event of Default is waived by the Required
Banks under the Bank Credit Agreement or any Additional Bank Credit Agreement
or the Required Noteholders or the Required Additional Noteholders, if any, or
both, as the case may be, and if no other Event of Default has occurred and is
continuing, (ii) such Special Event of Default is cured by the Grantors or by
any amendment of the Bank Credit Agreement, any Additional Bank Credit
Agreement, the Note Agreement or any Additional Note Agreement, as the case
may be, and if no other Event of Default has occurred and is continuing, or
(iii) none of the Secured Obligations has been accelerated and neither the
Required Secured Parties nor the Required GEI Secured Parties have instructed
the Collateral Agent to seek the appointment of a receiver, commence
litigation against any Grantor, liquidate the Collateral, commence a
Bankruptcy Proceeding against any Grantor, seize Collateral, or exercise other
remedies of similar character prior to the 90th day following such Special
Event of Default, the Collateral Agent thereupon shall return all amounts,
together with their pro rata share of interest earned thereon, held in the
Special Trust Account representing payment of any Secured Obligations to the
Secured Party initially entitled thereto, and no payments thereafter received
by a Secured Party shall constitute a Preferential Payment by reason of such
cured or waived Special Event of Default. No payment returned to a Secured
Party for which such Secured Party has been obligated to make a deposit into
the Special Trust Account shall thereafter ever be characterized as a
Preferential Payment.
(c) Each Secured Party agrees that, upon the occurrence of a Special
Event of Default, it shall (i) promptly notify the Collateral Agent of the
receipt of any Preferential Payments, (ii) hold such amounts in trust for the
Secured Parties and act as agent of the Secured Parties during the time any
such amounts are held by it, and (iii) deliver to the Collateral Agent such
amounts for deposit into the Special Trust Account.
(d) If (i) an Event of Default has occurred and has not been waived or
cured within 90 days after the occurrence thereof, (ii) the Secured
Obligations have been accelerated or (iii) the Required Secured Parties or the
Required GEI Secured Parties have instructed the Collateral Agent to seek the
appointment of a receiver, commence litigation against any Grantor, liquidate
any Collateral, commence a Bankruptcy Proceeding against any Grantor, seize
Collateral, or exercise other remedies of similar character, then all funds,
together with interest earned thereon, held in the DeVry Preferential Payment
sub-account in the Special Trust Account and all subsequent Preferential
Payments with respect to the DeVry Obligations shall be applied in accordance
with the provisions of Section 10.1 above and all funds, together with
interest earned thereon, held in the GEI Preferential Payment sub account in
the Special Trust Account and all subsequent Preferential Payments with
respect to the GEI Obligations shall be applied in accordance with the
provisions of Section 10.2 above. Any Secured Party which is aware of the
same, shall give the Collateral Agent written notice of any Event of Default
which has occurred and which has not been waived or cured within 90 days after
the occurrence thereof, provided that failure to give any such notice shall
not modify, amend or otherwise prejudice or affect the rights of any Secured
Party hereunder.
Section 12. Invalidated Payments. If any amount distributed by the
Collateral Agent to a Secured Party in accordance with the provisions of this
Agreement is subsequently required to be returned or repaid by the Collateral
Agent or such Secured Party to any Grantor or any Affiliate thereof or their
respective representatives or successors in interest, whether by court order,
settlement or otherwise (a "Repayment Event"), the Collateral Agent shall
thereafter apply Proceeds received in a manner consistent with the terms of
this Agreement such that all Secured Parties receive such proportion of the
Proceeds as would have been received had the original payment which gave rise
to such Repayment Event not occurred. If a Repayment Event occurs which
results in the Collateral Agent being required to return or repay any amount
distributed by it under this Agreement, the Secured Party to which such amount
was distributed shall, promptly upon its receipt of a notice thereof from the
Collateral Agent, pay the Collateral Agent such amount; provided that, if any
Secured Party shall fail to promptly pay such amount to the Collateral Agent,
the Collateral Agent may deduct such amount from any amounts payable
thereafter to such Secured Party under this Agreement.
Section 13. Appointment of Collateral Agent. Each Secured Party hereby
(subject to Section 17(g)) appoints, designates and authorizes the Collateral
Agent to take such action on its behalf under the provisions of this Agreement
and to exercise such powers and perform such duties as are expressly delegated
to it by the terms of this Agreement, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement, the Collateral Agent shall not have any
duties or responsibilities except those expressly set forth herein, nor shall
the Collateral Agent have or be deemed to have any fiduciary relationship with
any Bank, any Noteholder or Additional Noteholders, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or otherwise exist against the Collateral Agent.
Section 14. Decisions Relating to Administration and Exercise of Remedies
Vested in the Required GEI Secured Parties and the Required Secured Parties.
(a) The Collateral Agent agrees that it will not release Liens or Collateral
or commence Enforcement without the direction of the Required Secured Parties;
provided, however, that the Collateral Agent shall release the Lien granted to
the Collateral Agent on any Collateral held by it if no Event of Default has
occurred and is continuing and such Collateral is sold or otherwise disposed
by the Grantor who owns such Collateral in accordance with the terms of the
Financing Agreements. The Collateral Agent agrees to administer this
Agreement and the Collateral and to make such demands and give such notices
under this Agreement as the Required Secured Parties, or the Required GEI
Secured Parties in the case of the Offshore Pledged Stock, may request, and to
take such action to enforce this Agreement and to realize upon, collect and
dispose of the Collateral or any portion thereof as may be directed by the
Required Secured Parties or as may be directed by the Required GEI Secured
Parties in the case of the Offshore Pledged Stock. The Collateral Agent shall
not be required to take any action that is in the Opinion of Counsel contrary
to law or to the terms of this Agreement, or that would in the Opinion of
Counsel subject it or any of its officers, employees, agents or directors to
liability, and the Collateral Agent shall not be required to take any action
under this Agreement, unless and until the Collateral Agent shall be
indemnified to its reasonable satisfaction by one or more of the Secured
Parties against any and all loss, cost, expense or liability in connection
therewith.
(b) Each Party agrees that the Collateral Agent shall act as the
Required Secured Parties may request, or as the Required GEI Secured Parties
may request in the case of the Offshore Pledged Stock (regardless of whether
any individual Party or Secured Party agrees, disagrees or abstains with
respect to such request), that the Collateral Agent shall have no liability
for acting in accordance with such request and that no Directing Party or
Non-Directing Party shall have any liability to any Non-Directing Party or
Directing Party, respectively, for any such request. The Collateral Agent
shall give prompt notice to the Non-Directing Parties of action taken pursuant
to the instructions of the Required Secured Parties (or the Required GEI
Secured Parties in the case of the Offshore Pledged Stock) to enforce this
Agreement; provided, however, that the failure to give any such notice shall
not impair the right of the Collateral Agent to take any such action or the
validity or enforceability under this Agreement of the action so taken.
Notwithstanding anything herein to the contrary, the Required Secured Parties
(or the Required GEI Secured Parties in the case of the Offshore Pledged
Stock) shall agree to release the Collateral from the security interests
granted for the benefit of any Non-Directing Party only if the Collateral
Agent is concurrently releasing the security interest granted with respect to
such Collateral for all Secured Parties (or all GEI Secured Parties in the
case of the Offshore Pledged Stock) having a security interest in such
Collateral.
(c) Each Party agrees that the only right of a Non-Directing Party
under this Agreement is for Secured Obligations held by such Non-Directing
Party to be secured by the Collateral for the period and to the extent
provided therein and in this Agreement and to receive a share of the proceeds
of the Collateral, if any, to the extent and at the time provided in this
Agreement.
(d) The Collateral Agent may at any time request directions from the
Required Secured Parties (or the Required GEI Secured Parties in the case of
the Offshore Pledged Stock) as to any course of action or other matter
relating hereto or relating to this Agreement. Except as otherwise provided
in this Agreement, directions given by the Required Secured Parties (or the
Required GEI Secured Parties in the case of the Offshore Pledged Stock) to the
Collateral Agent hereunder shall be binding on all Secured Parties, including
all Non-Directing Parties, for all purposes.
(e) Nothing contained in this Agreement shall affect the rights of any
Party to give any other Party notice of any default, accelerate or make demand
for payment of their respective Secured Obligations under the Financing
Agreements or collect payment thereof other than through a realization on or
in respect of the Collateral or any part or portion thereof, nor shall
anything contained in this Agreement be deemed or construed to affect the
rights of any Party to administer, modify, waive or amend any term or
provision of any Financing Agreement to which it and any Grantor is a party,
other than this Agreement or any other security document securing the Secured
Obligations. If the Required Secured Parties (or the Required GEI Secured
Parties in the case of the Offshore Pledged Stock) instruct the Collateral
Agent to take any action, commence any proceedings or otherwise proceed
against the Collateral or enforce this Agreement, and such action or
proceedings are or may be defective without the joinder of other Parties as
parties, then all other Parties shall join in such actions or proceedings.
Each Party agrees not to take any action to enforce any term or provision of
this Agreement or to enforce any of its rights in respect of the Collateral
except through the Collateral Agent in accordance with this Agreement.
(f) Any Secured Party, which has actual knowledge of an Event of
Default, or facts which indicate that an Event of Default has occurred, shall
deliver to the Collateral Agent a written statement describing such Event of
Default or facts. Failure to do so, however, does not constitute a waiver of
such Event of Default by the Secured Parties.
Section 15. Information. If the Collateral Agent proceeds to enforce
this Agreement or to collect, sell, otherwise dispose of or take any other
action with respect to any of such agreements or the Collateral or any portion
thereof or proposes to take any other action pursuant to or contemplated by
this Agreement, the Parties hereto agree as follows:
(a) The Bank Agent shall (i) promptly from time to time, upon
the written request of the Collateral Agent, notify the Collateral
Agent of the outstanding Bank Credit Obligations owing to the Issuing
Bank, the Bank Agent and the Banks as at such date as the Collateral
Agent may specify; and (ii) promptly from time to time thereafter
notify the Collateral Agent of any payment received by the Banks to be
applied to satisfy Bank Credit Obligations. The Banks shall certify as
to such amounts and the Collateral Agent shall be entitled to rely
conclusively upon such certification.
(b) The Additional Lenders (or any agent acting on behalf of
such Additional Lenders) shall (i) promptly from time to time, upon the
written request of the Collateral Agent, notify the Collateral Agent of
the outstanding Bank Credit Obligations owing to such Additional
Lenders as at such date as the Collateral Agent may specify; and (ii)
promptly from time to time thereafter notify the Collateral Agent of
any payment received by such Additional Lenders to be applied to
satisfy Bank Credit Obligations. The Additional Lenders shall certify
as to such amounts and the Collateral Agent shall be entitled to rely
conclusively upon such certification.
(c) Each Noteholder shall (i) promptly from time to time, upon
the written request of the Collateral Agent, notify the Collateral
Agent of the outstanding Senior Note Obligations owed to such
Noteholder as at such date as the Collateral Agent may specify; (ii)
promptly from time to time, upon the written request of the Collateral
Agent, notify the Collateral Agent of the amount that would be payable
as a "Prepayment Premium" under the Note Agreement if necessary for a
payment relating to the sharing of Proceeds and (iii) promptly from
time to time thereafter, notify the Collateral Agent of any payment
received thereafter by such Noteholder to be applied to the principal
of or interest or "Prepayment Premium" on the Senior Note Obligations
owing to such Noteholder. Each Noteholder shall certify as to such
amounts and the Collateral Agent shall be entitled to rely conclusively
upon such certification. If any Noteholder fails to certify to the
Collateral Agent any amounts owed to such Noteholder as described above
after 10 business days prior written request from such Noteholder, the
Collateral Agent shall be entitled to conclusively rely upon a
certification of such amount from any Grantor.
(d) Each Additional Noteholder shall (i) promptly from time to
time, upon the written request of the Collateral Agent, notify the
Collateral Agent of the outstanding Senior Note Obligations owed to
such Additional Noteholder as at such date as the Collateral Agent may
specify; (ii) promptly from time to time, upon the written request of
the Collateral Agent, notify the Collateral Agent of the amount that
would be payable as a prepayment premium or make whole amount under any
Additional Note Agreement if necessary for a payment relating to the
sharing of Proceeds and (iii) promptly from time to time thereafter,
notify the Collateral Agent of any payment received thereafter by such
Additional Noteholder to be applied to the principal of or interest or
make whole amount or prepayment premium on the Senior Note Obligations
owing to such Additional Noteholder. Each Additional Noteholder shall
certify as to such amounts and the Collateral Agent shall be entitled
to rely conclusively upon such certification. If any Additional
Noteholder fails to certify to the Collateral Agent any amounts owed to
such Additional Noteholder as described above after 10 business days
prior written request from such Additional Noteholder, the Collateral
Agent shall be entitled to conclusively rely upon a certification of
such amount from any Grantor.
(e) Each Bank party to a Hedging Transaction shall (i) promptly
from time to time, upon the written request of the Collateral Agent,
notify the Collateral Agent of the notional amount under such Hedging
Transaction and the amount payable by the Obligor or Guarantor party to
such Hedging Transaction upon early termination of such Hedging
Transaction at the date of termination as fixed by such Interest Rate
Protection/Currency Swap Agreement and (ii) promptly from time to time
thereafter notify the Collateral Agent of any payment received by such
Bank to be applied to amounts due upon early termination of such
Hedging Transaction. Such Bank shall certify as to such amounts and
the Collateral Agent shall be entitled to rely conclusively upon such
certification.
(f) Each Bank party to any Letter of Credit shall (i) promptly
from time to time, upon the written request of the Collateral Agent,
notify the Collateral Agent of the Letter of Credit Usage applicable to
such Letter of Credit and (ii) promptly from time to time thereafter
notify the Collateral Agent of any payment received by such Bank to be
applied to amounts due under such Letter of Credit. Such Bank shall
certify as to such amounts and the Collateral Agent shall be entitled
to rely conclusively upon such certification.
Section 16. Additional Parties. Provided that it is permitted to do so
by the terms of the Bank Credit Agreement, any Additional Bank Credit
Agreement, the Note Agreement and any Additional Note Agreements, any Grantor
may enter into one or more Additional Bank Credit Agreements or Additional
Note Agreements and, pursuant thereto, incur additional Additional Senior
Debt. The Additional Senior Debt outstanding under such Additional Bank
Credit Agreements or Additional Note Agreements, as the case may be, shall be
secured by the Collateral as provided herein; provided that, at the time any
Grantor enters into any such Additional Bank Credit Agreements or Additional
Note Agreements, each Additional Lender party to such Additional Bank Credit
Agreement, or the agent on behalf of all such Additional Lenders to such
Additional Bank Credit Agreement, and each Additional Noteholder party to such
Additional Note Agreements, as the case may be, shall sign an acknowledgment
in the form of Exhibit C-1 or Exhibit C-2, respectively, attached to this
Agreement, by which each such Additional Lender or each such Additional
Noteholder, as the case may be, agrees to be bound by the terms of this
Agreement, and by delivering a signed acknowledgment hereof executed by any
Grantor and each Grantor to the Collateral Agent; and provided further that at
the time of the incurrence of such additional Senior Debt and after giving
effect thereto, no Default or Event of Default shall have occurred.
Section 17. Disclaimers, Indemnity, Successor Collateral Agent, Etc.
(a) The Collateral Agent may execute any of its duties under this Agreement by
or through agents, employees or attorneys-in-fact and shall be entitled to
advice of counsel (including in-house counsel) concerning all matters
pertaining to such duties. The Collateral Agent shall not be responsible for
the negligence or misconduct of any agent or attorney-in-fact that it selects
with reasonable care.
(b) Neither the Collateral Agent nor any of its employees shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or the transactions contemplated hereby (except
for its own or their gross negligence or willful misconduct), or (ii) be
responsible in any manner to any of the Secured Parties for any recital,
statement, representation or warranty made by any Grantor, or any officer
thereof, contained in this Agreement or in any certificate, report, statement
or other document referred to or provided for in, or received by the
Collateral Agent under or in connection with, this Agreement or the validity,
effectiveness, genuineness, enforceability, sufficiency of this Agreement or
for any failure of any Grantor to perform its obligations hereunder or
thereunder. Neither the Collateral Agent nor any of its employees shall be
under any obligation to any Bank, the Issuing Bank, any Noteholder or any
Additional Noteholders to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or to inspect the properties, books or records, of any Grantor.
(c) The Collateral Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex, statement or other
document believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements
of legal counsel (but not including counsel to any Grantor), independent
accountants and other experts selected by the Collateral Agent. The
Collateral Agent shall be fully justified in failing or refusing to take any
action under this Agreement unless it shall first receive such advice or
concurrence by the Required Secured Parties (or the Required GEI Secured
Parties in the case of the Offshore Pledged Stock) customarily and reasonably
acceptable to the Collateral Agent. The Collateral Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this
Agreement in accordance with a request or consent of the Required Secured
Parties (or the Required GEI Secured Parties in the case of the Offshore
Pledged Stock) and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Secured Parties.
(d) The Collateral Agent shall not be deemed to have knowledge or
notice of the occurrence of any Event of Default or Special Event of Default,
unless the Collateral Agent shall have received written notice from a Bank, a
Noteholder, any Additional Noteholders or any Grantor referring to this
Agreement, describing such Event of Default or Special Event of Default, and
stating that such notice is a "notice of default." The Collateral Agent shall
take such action with respect to such Event of Default or Special Event of
Default as may be requested by the Required Secured Parties (or the Required
GEI Secured Parties in the case of the Offshore Pledged Stock) in accordance
with Section 11; provided, however, that unless and until the Collateral Agent
has received any such request, the Collateral Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Event of Default or Special Event of Default, as it shall deem
advisable or in the best interest of the Secured Parties.
(e) Each Bank and each Noteholder acknowledges that none of the
Collateral Agent-Related Persons has not made any representation or warranty
to it, and that no act by the Collateral Agent hereinafter taken, including
any review of the affairs of any Grantor and its Subsidiaries, shall be deemed
to constitute any representation or warranty by the Collateral Agent to any
Bank or Noteholder. Each Bank and each Noteholder acknowledges that it has,
independently and without reliance upon the Collateral Agent and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, prospects, operations, property,
financial and other condition and creditworthiness of any Grantor and its
Subsidiaries, and made its own decision to enter into this Agreement and to
extend credit to any Grantor hereunder. Each Bank and Noteholder also
represents that it will, independently and without reliance upon the
Collateral Agent-Related Persons and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement and to make such investigations as it deems necessary to inform
itself as to the business, prospects, operations, property, financial and
other condition and creditworthiness of any Grantor. Except for notices,
reports and other documents expressly herein required to be furnished to the
Secured Party by the Collateral Agent, the Collateral Agent shall not have any
duty or responsibility to provide any Secured Party with any credit or other
information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of any Grantor which may
come into the possession of any of the Collateral Agent-Related Persons.
(f) The Bank Agent and its affiliates may make loans to, issue letters
of credit for the account of, accept deposits from, acquire equity interests
in and generally engage in any kind of banking, trust, financial advisory,
underwriting or other business with any Grantor and its Subsidiaries and
Affiliates as though the Bank Agent were not the Collateral Agent hereunder
and without notice to or consent of the Secured Parties. The Secured Parties
acknowledge that, pursuant to such activities, the Bank Agent or its
subsidiaries may receive information regarding any Grantor or its Subsidiaries
(including information that may be subject to confidentiality obligations in
favor of any Grantor or such Subsidiary) and acknowledge that the Collateral
Agent shall be under no obligation to provide such information to them. With
respect to its loans to any Grantor, the Bank Agent shall have the same rights
and powers under this Agreement as any other Bank and may exercise the same as
though it were not the Collateral Agent, and the terms "Bank" and "Banks" and
"Issuing Bank" include Bank of America in its individual capacity.
(g) (i) The Collateral Agent may resign at any time by giving at least
30 days' notice thereof to the Parties and the Grantors (such resignation to
take effect upon the acceptance by a successor Collateral Agent of any
appointment as the Collateral Agent hereunder) and the Collateral Agent may be
removed as the Collateral Agent at any time with or without cause by any of
(1) the Required Banks, (2) the Required Noteholders or (3) the Required
Additional Noteholders, in each case with notice to the Grantors. In the
event of any such resignation or removal of the Collateral Agent, the Required
Secured Parties (with the approval of DeVry unless an Event of Default has
occurred and is continuing which approval shall not be unreasonably withheld
or delayed) shall thereupon have the right to appoint a successor Collateral
Agent which is not a Secured Party. If no successor Collateral Agent shall
have been so appointed by the Required Secured Parties and shall have accepted
such appointment within 30 days after the notice of the intent of the
Collateral Agent to resign or the removal of the Collateral Agent, then the
retiring Collateral Agent may, on behalf of the other Parties, appoint a
successor Collateral Agent. Any successor Collateral Agent appointed pursuant
to this clause shall be a commercial bank or other financial institution
organized under the laws of the United States of America or any state thereof
having (1) a combined capital and surplus of at least $250,000,000 and (2) a
rating upon its long-term senior unsecured indebtedness of "A-2" or better by
Standard & Poor's better by Moody's Investors Service, Inc. or "A" or
Corporation.
(ii) Upon the acceptance by a successor Collateral Agent of any
appointment as the Collateral Agent hereunder, such successor Collateral Agent
shall thereupon succeed to and, become vested with all the rights, powers,
privileges and duties of the retiring or removed Collateral Agent. The
retiring or removed Collateral Agent shall be discharged from its duties and
obligations hereunder upon the appointment of the successor Collateral Agent.
After any retiring or removed Collateral Agent's resignation or removal
hereunder as the Collateral Agent, the provisions of this Section 17 shall
continue in effect for its benefit in respect of any actions taken or omitted
to be taken by it while it was acting as the Collateral Agent.
Section 18. Continuing Agreement. This Agreement shall be a continuing
agreement in every respect and shall remain in full force and effect until all
of the Secured Obligations, principal, premium, if any, and interest, and all
other amounts then due and payable under any of the Financing Agreements have
been fully paid and satisfied in cash, all outstanding Letters of Credit have
either terminated or expired, and any commitments of any Secured Party to
extend any credit to any Grantor under the Bank Credit Agreement and any
Additional Bank Credit Agreement shall have terminated. Upon such termination
of this Agreement, the Collateral Agent shall, upon the request and at the
expense of the Grantors, forthwith release all its liens, charges and security
interests hereunder.
Section 19. Miscellaneous. (a) Subject to Section 21, the provisions of
this Agreement may be amended, waived or modified from time to time only
pursuant to a written agreement signed by the Collateral Agent and the
Required Secured Parties, provided, however, that no such amendment, waiver or
modification shall (i) amend, waive or modify any provision of this
Section 19, or reduce the percentages specified in the definition of Required
Secured Parties, or amend, waive or modify Sections 10, without in each case
the written consent of each Secured Party whose rights would be adversely
affected thereby, or (ii) increase the obligations of any Grantor without the
written consent of such Grantor.
(b) Pursuant to a supplement acceptable to the Collateral Agent, any
present or future Grantor may from time to time pledge additional collateral
to the Collateral Agent whereupon such additional collateral shall
automatically become Collateral hereunder. The Collateral Agent shall promptly
notify the Secured Parties of the execution an any such supplement, it being
understood that the execution thereof by the Secured Parties and/or any other
Grantors shall not be required in order for such supplement to be effective.
Pursuant to a Joinder, any Person may become a Grantor hereunder and pledge
collateral to the Collateral Agent as described in Exhibit A to the Joinder
whereupon such collateral shall automatically become Collateral hereunder. The
Collateral Agent shall promptly notify the Secured Parties of the execution an
any such Joinder, it being understood that the execution thereof by the
Secured Parties, the Collateral Agent and/or any other Grantors shall not be
required in order for such supplement to be effective.
(c) This Agreement shall create a continuing security interest in the
Collateral and shall be binding upon the Grantors, their successors and
assigns and shall inure, together with the rights and remedies of the Secured
Parties hereunder, to the benefit of the Secured Parties and their respective
successors and assigns which are permitted under the Note Agreement, the
Additional Note Agreements, the Bank Credit Agreement and any Additional Bank
Credit Agreements; provided, however, that no Grantor may assign its rights or
delegate its duties hereunder without the Collateral Agent's prior written
consent. Each Grantor hereby releases the Collateral Agent from any liability
for any act or omission relating to the Collateral or this Agreement, except
the Collateral Agent's gross negligence or willful misconduct.
(d) Except as otherwise specified herein, all notices hereunder shall
be in writing (including telecopy) and shall be given to the relevant party at
its address or telecopier number set forth below, or such other address or
telecopier number as such party may hereafter specify by notice to the other
given by United States certified or registered mail, by overnight air courier,
by telecopy or by other telecommunication device capable of creating a written
record of such notice and its receipt. Notices given by telecopy shall be
confirmed in writing within 24 hours by overnight air courier at the address
for the relevant party provided below. Notices hereunder shall be addressed:
To the Grantors at:
c/o DeVry Inc.
One Tower Lane
Oakbrook Terrace, IL 60181
Attention: Chief Financial Officer
Telephone: (630)574-1906
Telecopier: (630) 571-0317
To the Collateral Agent at:
Bank of America, N.A., as Agent
Bank of America, N.A.
231 South LaSalle Street
Mail Code: ILI-231-08-30
Chicago, IL 60697
Attention: David Johanson
Vice President
Telephone: (312) 828-7933
Telecopier: (877) 206-8410
To the Agent and the Banks at their respective
addresses and telecopy numbers set forth in the Bank
Credit Agreement.
To the holders of any Bank Credit Obligations under
any Additional Bank Credit Agreements, at their
respective addresses and telecopy numbers set forth in
such Additional Bank Credit Agreements.
To the Noteholders at their respective addresses for
notices set forth in the Note Agreement.
To the Additional Noteholders, at their respective
addresses for notices set forth in the Additional Note
Agreements.
Each such notice, request or other communication shall be effective upon
receipt.
(e) In the event that any provision hereof shall be deemed to be
invalid by reason of the operation of any law or by reason of the
interpretation placed thereon by any court, this Agreement shall be construed
as not containing such provision, but only as to such jurisdictions where such
law or interpretation is operative, and the invalidity of such provision shall
not affect the validity of any remaining provision hereof, and any and all
other provisions hereof which are otherwise lawful and valid shall remain in
full force and effect.
(f) This Agreement shall be deemed to have been made in the State of
New York and shall be governed by and construed in accordance with the laws of
the State of New York without regard to principles of conflicts of laws. All
terms which are used in this Agreement which are defined in the Code shall
have the same meanings herein as said terms do in the Code unless this
Agreement shall otherwise specifically provide. The headings in this
instrument are for convenience of reference only and shall not limit or
otherwise affect the meaning of any provision hereof.
(g) The Collateral Agent hereby disclaims any representation or
warranty to the Secured Parties concerning the perfection of the security
interest granted hereunder or in the value of any of the Collateral.
(h) Each of the Grantors and the Collateral Agent hereby, to the
fullest extent permitted by law, waives trial by jury in any action brought
under or in connection with this Agreement or any of the documents or
instruments executed in connection herewith.
(i) This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterparts, each constituting an
original, but all together one and the same instrument.
Section 20. Grantors' Waivers and Consents. (a) Each Grantor agrees
that no Secured Party shall have any responsibility to inquire into the
apportionment, allocation or disposition of any Proceeds as among the
Grantors.
(b) For the purpose of implementing the Financing Agreements, each
Grantor hereby irrevocably appoints each other Grantor as its agent and
attorney-in-fact for all purposes of the Financing Agreements, including
without limitation the giving and receiving of notices and other
communications.
(c) Each Grantor acknowledges that the handling of the Collateral on a
joint basis as set forth in this Agreement is solely an accommodation to
Grantors and is done at their request. Each Grantor agrees that no Secured
Party shall incur any liability to any Grantor as a result thereof. To induce
the Secured Parties to enter into this Agreement, and in consideration
thereof, each Grantor hereby agrees to indemnify each Secured Party and hold
each Secured Party harmless from and against any and all liabilities,
expenses, losses, damages and/or claims of damage or injury asserted against
any Secured Party by any Grantor or by any other Person arising from or
incurred by reason of the structuring of this Agreement as herein provided,
reliance by any Secured Party on any requests or instructions from any
Grantor, or any other action taken by any Secured Party hereunder, except to
the extent resulting from the gross negligence or willful misconduct of any
Secured Party. This Section shall survive termination of this Agreement.
(d) Each Grantor represents and warrants to the Secured Parties that
the request for joint handling of the Collateral hereunder was made because
the Grantors are engaged in related operations. Each Grantor expects to
derive benefit, directly or indirectly, from such availability because the
successful operation of Grantors is dependent on the continued successful
performance of the functions of the group.
(e) Each Grantor represents and warrants to the Secured Parties that
(i) it has established adequate means of obtaining from each other Grantor on
a continuing basis financial and other information pertaining to the business,
operations and condition (financial and otherwise) of each other Grantors and
their respective property, and (ii) each Grantor now is and hereafter will be
completely familiar with the business, operations and condition (financial and
otherwise) of each other Grantor, and its property. Each Grantor hereby
waives and relinquishes any duty on the part of any Secured Party to disclose
to such Grantor any matter, fact or thing relating to the business, operations
or condition (financial or otherwise) of any other Grantor, or the property of
any other Grantor, whether now or hereafter known by any Secured Party during
the life of this Agreement.
(f) Each Grantor acknowledges that its Secured Obligations may derive
from value provided directly to another Person and, in full recognition of
that fact, each Grantor consents and agrees that the any Secured Party may, at
any time and from time to time, without notice to, or demand on, or the
agreement of, such Grantor, and without affecting the enforceability or
security of the Financing Agreements: (i) with the agreement of any other
Grantor, supplement, modify, amend, extend, renew, accelerate, or otherwise
change the time for payment or the terms of the Secured Obligations or any
part thereof, including any increase or decrease of the rate(s) of interest
thereon; (ii) with the agreement of any other Grantor, supplement, modify,
amend or waive, or enter into or give any agreement, approval or consent with
respect to, the Secured Obligations or any part thereof or any of the
Financing Agreements or any additional security or guaranties, or any
condition, covenant, default, remedy, right, representation or term thereof or
thereunder; (iii) with the agreement of any other Grantor, accept new or
additional instruments, documents or agreements in exchange for or relative to
any of the Financing Agreements or the Secured Obligations or any part
thereof, (iv) accept partial payments on the Secured Obligations; (v) with the
agreement of any other Grantor, receive and hold additional security or
guaranties for the Secured Obligations or any part thereof, (vi) release,
reconvey, terminate, waive, abandon, subordinate, exchange, substitute,
transfer and enforce any security or guaranties, and apply any security and
direct the order or manner of sale thereof as the Secured Parties in their
sole and absolute discretion may determine; (vii) release any party or any
guarantor from any personal liability with respect to the Secured Obligations
or any part thereof; (viii) settle, release on terms satisfactory to the
Secured Parties and any other Grantor or by operation of applicable laws or
otherwise liquidate or enforce any Secured Obligations and any security or
guaranty in any manner, consent to the transfer of any security and bid and
purchase at any sale; and/or (ix) consent to the merger, change or any other
restructuring or termination of the corporate existence of any other Grantor
or any other Person, and correspondingly restructure the Secured Obligations,
continuing existence of any Lien under any other Financing Agreement to which
any Grantor is a party or the enforceability hereof or thereof with respect to
all or any part of the Secured Obligations.
Each Grantor expressly waives any right to require any Secured Party to
marshal assets in favor of any Grantor, any other Party or any other Person or
to proceed against any other Grantor or any other Party or any Collateral
provided by any other Grantor or any other Party, and agrees that any Secured
Party may proceed against Grantors and/or the Collateral in such order as they
shall determine in their sole and absolute discretion. Any Secured Party may
file a separate action or actions against any Grantor, whether action is
brought or prosecuted with respect to any other security or against any other
Person, or whether any other Person is joined in any such action or actions.
Each Grantor agrees that any Secured Party and any other Grantor may deal with
each other in connection with the Secured Obligations or otherwise, or alter
any contracts or agreements now or hereafter existing between any of them, in
any manner whatsoever, all without in any way altering or affecting the
obligations of such Grantor under the Financing Agreements. Each Grantor
expressly waives any and all defenses now or hereafter arising or asserted by
reason of (a) any disability or other defense of any other Grantor or any
other Party with respect to any Secured Obligations, (b) the unenforceability
or invalidity as to any other Grantor or any other Party of the Secured
Obligations, (c) the unenforceability or invalidity of any security or
guaranty for the Secured Obligations or the lack of perfection or continuing
perfection or failure of priority of any security for the Secured Obligations,
(d) the cessation for any cause whatsoever of the liability of any Grantor or
any other Party (other than by reason of the full payment and performance of
all Secured Obligations), (e) to the extent permitted by law, any failure of
any Secured Party to give notice of sale or other disposition to any Grantor
or any defect in any notice that may be given in connection with any sale or
disposition, (f) to the extent permitted by law, any failure of any Secured
Party to comply with applicable laws in connection with the sale or other
disposition of any Collateral or other security for any Secured Obligation,
including without limitation any failure of any Secured Party to conduct a
commercially reasonable sale or other disposition of any Collateral or other
security for any obligation, (g) any act or omission of any Secured or others
that directly or indirectly results in or aids the discharge or release of any
Grantor or any other Person or the Secured Obligations or any other security
or guaranty therefor by operation of law or otherwise, (h) any law which
provides that the obligation of a surety or guarantor must neither be larger
in amount nor in other respects more burdensome than that of the principal or
which reduces a surety's or guarantor's obligation in proportion to the
principal obligation, (i) any failure of any Secured Party to file or enforce
a claim in any bankruptcy or other proceeding with respect to any other
Grantor, (j) the election by any Secured Party, in any bankruptcy proceeding
of any other Grantor, of the application or non-application of
Section 1111(b)(2) of the United States Bankruptcy Code, (k) any extension of
credit or the grant of any Lien under Section 364 of the United States
Bankruptcy Code in connection with the bankruptcy of any other Grantor,
(l) any use of cash collateral under Section 363 of the United States
Bankruptcy Code, or (m) any agreement or stipulation with any other Grantor
with respect to the provision of adequate protection in any bankruptcy
proceeding of any Person.
(g) In the event that all or any part of the Secured Obligations at any
time are secured by any one or more deeds of trust or mortgages creating or
granting liens on any interests in real property, each Grantor authorizes any
Secured Party, upon the occurrence of and during the continuance of any
Default or Event of Default, at their sole option, without notice or demand
and without affecting any Secured Obligations or the validity or
enforceability of any Liens of any Secured Party on any Collateral, to
foreclose any or all of such deeds of trust or mortgages by judicial or
nonjudicial sale. Each Grantor expressly waives any defenses to the
enforcement of the Financing Agreements or any Liens created or granted under
the Financing Agreements or to the recovery by any Secured Party against any
other Grantor or any guarantor or any other Person liable therefor of any
deficiency after a judicial or nonjudicial foreclosure or sale, even though
such a foreclosure or sale may impair the subrogation rights of a Grantor and
may preclude a Grantor from obtaining reimbursement or contribution from any
Grantor.
(h) To the extent that any Collateral pledged by a Grantor is sold
hereunder and applied as payment of such Grantor's obligations under its
Guaranty of the Secured Obligations, such Grantor's rights of subrogation
shall be as set forth in such Guaranty.
Section 21. Intercreditor Provisions. The Grantors are only
acknowledging, and not agreeing to, Sections 10 through 16, inclusive, of this
Agreement (the "Intercreditor Provisions"). The Secured Parties may, without
notice to, or the consent, of the Grantors amend, modify or waive such
Intercreditor Provisions from time to time. Each Grantor hereby acknowledges
the foregoing Intercreditor Provisions. Each Grantor agrees to be bound by
the provisions thereof as they relate to the relative rights of the Secured
Parties as among such Secured Parties; provided, however, that, nothing in the
Intercreditor Provisions shall amend, modify, change or supersede the
respective terms of the Financing Agreements as between the Secured Parties or
any of them and any Grantor or any other provisions of this Agreement. In the
event of any conflict or inconsistency between the Intercreditor Provisions
and the Financing Agreements, the Financing Agreements shall govern as between
the respective Secured Parties thereto and each Grantor. Each Grantor further
agrees that the Intercreditor Provisions shall not give any Grantor any
substantive rights vis a vis any Secured Party or the Collateral Agent and
that it shall not use the violation of any Intercreditor Provisions by any of
the Parties hereto as a defense to the enforcement by any Secured Party under
any Financing Agreement or any other section of this Agreement, nor assert
such violation as a counterclaim or basis for set-off or recoupment against
any of them. Each Grantor further acknowledges and agrees that the scope of
the agency granted by the Intercreditor Provisions to the Collateral Agent
hereunder is strictly limited by this Agreement. By its execution hereof,
each Grantor hereby represents to each of the Secured Parties and the
Collateral Agent that the execution, delivery and performance by such Grantor
of the Note Agreement and the other Noteholder Documents does not constitute a
violation of any of the provisions of the Bank Credit Agreement, any
Additional Bank Credit Agreements or this Agreement.
Section 22.1. Consent to Jurisdiction; Service of Process; Judgement
Currency; Waiver of Jury Trial. (a) Each Grantor irrevocably submits to the
nonexclusive in personam jurisdiction of any New York State or federal court
sitting in New York City, over any suit, action or proceeding arising out of
or relating to this Agreement. To the fullest extent it may effectively do so
under applicable law, each Grantor irrevocably waives and agrees not to
assert, by way of motion, as a defense or otherwise, any claim that it is not
subject to the in personam jurisdiction of any such court, any objection that
it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding brought in any such court and any claim that any such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.
(b) Each Grantor agrees, to the fullest extent it may effectively do so
under applicable law, that a final judgment in any suit, action or proceeding
of the nature referred to in paragraph (a) of this Section 22.1 brought in any
such court shall be conclusive and binding upon such party, subject to rights
of appeal and may be enforced in the courts of the United States of America or
the State of New York (or any other courts to the jurisdiction of which such
party is or may be subject) by a suit upon such judgment.
(c) Each Grantor consents to process being served in any suit, action
or proceeding of the nature referred to in paragraph (a) of this Section 22.1
by mailing a copy thereof by registered or certified mail, postage prepaid,
return receipt requested, to the address of such Grantor specified in
Section 19 or at such other address of which you shall then have been notified
pursuant to said Section or to any agent for service of process appointed
pursuant to the provisions of Section 22.2. Each Grantor agrees that such
service upon receipt (i) shall be deemed in every respect effective service of
process upon it in any such suit, action or proceeding and (ii) shall, to the
full extent permitted by law, be taken and held to be valid personal service
upon and personal delivery to such party. Notices hereunder shall be
conclusively presumed received as evidenced by a delivery receipt furnished by
the United States Postal Service or any reputable commercial delivery service.
(d) Nothing in this Section 22.1 shall affect the right of the
Collateral Agent to serve process in any manner permitted by law, or limit any
right that the Collateral Agent may have to bring proceedings against such
Grantor in the courts of any appropriate jurisdiction or to enforce in any
lawful manner a judgment obtained in one jurisdiction in any other
jurisdiction.
(e) Any payment on account of an amount that is payable hereunder in
United States Dollars which is made to or for the account of the Collateral
Agent in currency of any other jurisdiction, or in the lawful currency of any
other country, whether as a result of any judgment or order or the enforcement
thereof or the realization of any security or the liquidation of such party,
shall constitute a discharge of such party's obligation under this Agreement
only to the extent of the amount of United States Dollars which the Collateral
Agent could purchase in the foreign exchange markets with the amount of the
currency of such other jurisdiction, or other currency, as the case may be, in
accordance with normal banking procedures at the rate of exchange prevailing
on the business day following receipt of the payment first referred to above.
If the amount of United States Dollars that could be so purchased is less than
the amount of United States Dollars originally due to the Collateral Agent,
each Grantor agrees, to the full extent permitted by law, to indemnify and
save harmless such holder from and against all loss or damage arising out of
or as a result of such deficiency. This indemnity shall, to the fullest
extent permitted by law, constitute an obligation separate and independent
from the other obligations contained in this Agreement, shall give rise to a
separate and independent cause of action, shall apply irrespective of any
indulgence granted by the Collateral Agent from time to time and, shall
continue in full force and effect notwithstanding any judgment or order for a
liquidated sum in respect of an amount due hereunder or under any judgment or
order.
(f) Each Grantor waives trial by jury in any action brought on or with
respect to this Agreement or any other document executed in connection
herewith or therewith.
Section 22.2. Service of Process upon Agent. Each Grantor hereby
irrevocably designates, appoints and empowers DeVry, and successors as the
designee, appointee and agent of such Grantor to receive, accept and
acknowledge, for and on behalf of such Grantor and its properties, service of
any and all legal process, summons, notices and documents which may be served
in such action, suit or proceeding relating to this Agreement in any Federal
or New York State court sitting in New York City, which service may be made on
any such designee, appointee and agent in accordance with legal procedures
prescribed for such courts. Each Grantor agrees to take any and all action
necessary to continue such designation in full force and effect and should
such designee, appointee and agent become unavailable for this purpose for any
reason, such Grantor will forthwith irrevocably designate a new designee,
appointee and agent, which shall irrevocably agree to act as such, with the
powers and for purposes specified in this Section 22.2. Each Grantor further
irrevocably consents and agrees to service of any and all legal process,
summons, notices and documents out of any of the aforesaid courts in any such
action, suit or proceeding relating to this Agreement delivered to such
Grantor in accordance with this Section 22.2 or to its then designee,
appointee or agent for service. If service is made upon such designee,
appointee and agent, a copy of such process, summons, notice or document shall
also be provided to such Grantor at the address specified in Section 19 by
registered or certified mail, or overnight express air courier; provided that
failure of such holder to provide such copy to such Grantor shall not impair
or affect in any way the validity of such service or any judgment rendered in
such action or proceedings. Each Grantor agrees that service upon such
Grantor or any such designee, appointee and agent as provided for herein shall
constitute valid and effective personal service upon such Grantor with respect
to matters contemplated in this Section 22.2 and that the failure of any such
designee, appointee and agent to give any notice of such service to such
Grantor shall not impair or affect in any way the validity of such service or
any judgment rendered in any action or proceeding based thereon. Nothing
herein shall, or shall be construed so as to, limit the right of the
Collateral Agent to bring actions, suits or proceedings with respect to the
obligations and liabilities of any Grantor under, or any other matter arising
out of or in connection with, this Agreement, or for recognition or
enforcement of any judgment rendered in any such action, suit or proceeding,
in the courts of whatever jurisdiction in which the offices of the Collateral
Agent may be located or assets of any Grantor may be found or as otherwise
shall to the Collateral Agent seem appropriate, or to affect the right to
service of process in any jurisdiction in any other manner permitted by law.
IN WITNESS WHEREOF, the parties hereto have caused this Pledge and
Intercreditor Agreement to be duty executed as of the date first above
written.
[NAMES OF GRANTORS]
By:
Title:
STATE OF _____________)
) ss:
COUNTY OF ___________)
On this ____ day of ______________, 2003, before me personally appeared
______________________, who, being by me duly sworn did depose and say that
he/she resides at ______________________; that he/she is ______________ of
________________________, the corporation described in and which executed the
above instrument and that he/she executed this instrument on behalf of said
corporation and that he/she had authority to do so.
_______________________________________
NOTARY PUBLIC
Accepted and agreed to by the Collateral Agent as of the date first above
written.
BANK OF AMERICA, N.A., as Collateral
Agent
By:
STATE OF _____________)
) ss:
COUNTY OF ___________)
On this ____ day of ______________, 2003, before me personally appeared
______________________, who, being by me duly sworn did depose and say that
he/she resides at ______________________; that he/she is ______________ of
________________________, the corporation described in and which executed the
above instrument and that he/she executed this instrument on behalf of said
corporation and that he/she had authority to do so.
_______________________________________
NOTARY PUBLIC
Accepted and agreed to as of the date first above written by Bank of America,
N.A. on behalf of all Banks in accordance with Section ___ of the Bank Credit
Agreement.
Bank of America, N.A., as
Administrative Agent, on behalf of
itself and all Banks
under the Bank Credit Agreement
By:
Title:
STATE OF _____________)
) ss:
COUNTY OF ___________)
On this ____ day of ______________, 2003, before me personally appeared
______________________, who, being by me duly sworn did depose and say that
he/she resides at ______________________; that he/she is ______________ of
________________________, the corporation described in and which executed the
above instrument and that he/she executed this instrument on behalf of said
corporation and that he/she had authority to do so.
_______________________________________
NOTARY PUBLIC
Accepted and agreed to by the Noteholders as of the date first above written.
[NAMES OF NOTEHOLDERS], a Noteholder
By:
Title:
STATE OF _____________)
) ss:
COUNTY OF ___________)
On this ____ day of ______________, 2003, before me personally appeared
______________________, who, being by me duly sworn did depose and say that
he/she resides at ______________________; that he/she is ______________ of
________________________, the corporation described in and which executed the
above instrument and that he/she executed this instrument on behalf of said
corporation and that he/she had authority to do so.
_______________________________________
NOTARY PUBLIC
EXHIBIT A
U.S. PLEDGED STOCK
OWNER OF PLEDGED ISSUER OF PLEDGED CERTIFICATE NO. OF
EQUITY INTEREST EQUITY INTEREST NO. SHARES
(US GUARANTOR)
- ---------------------------------------------------------------------------
DeVry Inc. DeVry University, Inc. 1 1,000
DeVry Inc. DeVry/New York Inc. 1 1,000
DeVry Inc. DeVry Educational
Products, Inc. 1 1,000
DeVry Inc. DeVry Leasing
Corporation 1 1,000
DeVry Inc. DeVry/Becker
Educational Development
Corp. 1 1,000
DeVry Inc. Becker CPA Review Corp. 1 1,000
DeVry University Inc. DeVry Educational
Development Corp. 1 1,000
Dominica Management
Inc. Ross University
Services, Inc. 1 1,000
DeVry Inc. International Education
Holdings, Inc. 1 10
Ross University
Services Inc. International Education
Holdings, Inc. 3 1,000
DeVry Inc. Dominica Management,
Inc. [ ] 1,130,225
COMMON
SHARES
[ ] 40,224,125
CLASS A
PREFERRED
SHARES
[ ] 25,000
CLASS B
PREFERRED
SHARES
DeVry Inc. / Global Education
International International, Inc. 2 65
Education
Holdings, Inc.(1)
DeVry University,Inc. DeVry Canada LLC UNCERTIFICATED 100% OF
D MEMBERSHIP
INTERESTS
DeVry University,Inc. DeVry Florida LLC UNCERTIFICATED 100% OF
D MEMBERSHIP
INTERESTS
(1) DeVry Inc. transferred ownership of Global Education International, Inc.
on the Closing Date to International Education Holdings, Inc. A filing in
Barbados with respect to such transfer is necessary in order to transfer
beneficial ownership. Once such filing has been recorded in accordance with
Barbados law, International Education Holdings, Inc. will be the sole owner.
EXHIBIT B
OFFSHORE PLEDGED STOCK
OWNER OF PLEDGED EQUITY ISSUER OF PLEDGED CERTIFICATE NO. OF
INTEREST EQUITY INTEREST NO. SHARES
(OFFSHORE GUARANTOR)
- ---------------------------------------------------------------------------
DeVry Inc. / Global Education 3 35
International Education International, Inc.
Holdings, Inc.(2)
Global Education Ross University [ ] 10,000
International, Inc. Management, Inc.
Ross University Ross University V7 65
Management, Inc. School of Medicine
of Veterinary Medicine
Limited V8 35
(2) DeVry Inc. transferred ownership of Global Education International, Inc.
on the Closing Date to International Education Holdings, Inc. A filing in
Barbados with respect to such transfer is necessary in order to transfer
beneficial ownership. Once such filing has been recorded in accordance with
Barbados law, International Education Holdings, Inc. will be the sole owner.
EXHIBIT C-1
FORM OF ACKNOWLEDGMENT TO
PLEDGE AND INTERCREDITOR
AGREEMENT FOR ADDITIONAL LENDER
UNDER AN ADDITIONAL BANK CREDIT AGREEMENT
Reference is hereby made to the Pledge and Intercreditor Agreement dated
as of May 16, 2003 (the "Agreement"), among the Lenders party to the Bank
Credit Agreement, the Issuing Bank and the Collateral Agent, and the
Noteholders and any Additional Noteholders party thereto and certain other
parties, if any, thereto. The undersigned Additional Lender or its agent has
entered into a _____________ Agreement dated as of _____________ with
_____________ and desires the Bank Credit Obligations with respect thereto to
be secured by the Agreement. The undersigned acknowledges the terms of the
Agreement and agrees to be bound thereby.
--------------------------------,
as an Additional Lender
By:
Title:
Date:
[ADD NOTARY LANGUAGE]
Notice Address:
Acknowledged and Agreed:
[NAMES OF GRANTORS]
By:
Title:
Date:
[ADD NOTARY LANGUAGE]
BANK OF AMERICA, N.A., as Collateral
Agent
By:
Title:
Date:
[ADD NOTARY LANGUAGE]
--------------------------------
(Other Grantors)
By:
Title:
Date:
[ADD NOTARY LANGUAGE]
EXHIBIT C-2
FORM OF ACKNOWLEDGEMENT TO
PLEDGE AND INTERCREDITOR
AGREEMENT FOR ADDITIONAL NOTEHOLDERS
UNDER AN ADDITIONAL NOTE AGREEMENT
Reference is hereby made to the Pledge and Intercreditor Agreement dated
as of May 16, 2003 (the "Agreement"), among the Lenders party to the Bank
Credit Agreement, the Issuing Bank and the Collateral Agent, and the
Noteholders and any Additional Noteholders party thereto and certain other
parties, if any, thereto. The undersigned Additional Noteholder has entered
into _____________ Agreement dated as of _____________ with _____________ and
desires the Senior Note Obligations with respect thereto to be secured by the
Agreement. The undersigned acknowledges the terms of the Agreement and agrees
to be bound thereby.
-------------------------------,
as an Additional Lender
By:
Title:
Date:
[ADD NOTARY LANGUAGE]
Notice Address:
Acknowledged and Agreed:
[NAMES OF GRANTORS]
By:
Title:
Date:
[ADD NOTARY LANGUAGE]
BANK OF AMERICA, N.A., as Collateral
Agent
By:
Title:
Date:
[ADD NOTARY LANGUAGE]
-------------------------------
(Other Grantors)
By:
Title:
Date:
[ADD NOTARY LANGUAGE]
EXHIBIT D
PLEDGE AND INTERCREDITOR AGREEMENT JOINDER
Re: $75,000,000 Floating Rate Senior Notes, Series A,
due April 30, 2010
of DeVry Inc.
And
$50,000,000 Floating Rate Senior Notes, Series B,
due April 30, 2010
of Global Education International, Inc.
This PLEDGE AND INTERCREDITOR AGREEMENt JOINDER dated as of _________,
_____ (the or this "Joinder") is entered into by the undersigned __________, a
____________ corporation (a "Grantor"), to amend the definition of Grantor as
set forth in Pledge and Intercreditor Agreement dated as of May 16, 2003 (the
"Pledge and Intercreditor Agreement"). Terms not otherwise defined herein
shall have the meaning set forth in the Pledge and Intercreditor Agreement.
RECITALS
A. The Grantor, is presently a Subsidiary of [DeVry Inc., a Delaware
corporation, a Delaware corporation ("DeVry") or Global Education
International, Inc., a Barbados corporation ("GEI")].
B. Pursuant to the terms of that certain Credit Agreement dated as of
May 16, 2003 (as amended, restated, superseded or otherwise modified from time
to time, the "Bank Credit Agreement") among the Obligors, Bank of America,
N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and the banks
and other lenders or institutions from time to time party thereto (together
with any Additional Lenders, the "Banks"), the Banks are extending credit to
the Obligors on the terms provided therein. The obligations of DeVry under
the Bank Credit Agreement are unconditionally guaranteed by certain
subsidiaries of DeVry which are organized under the laws of a jurisdiction
within the United States (the "U.S. Subsidiaries"), and the obligations of GEI
under the Bank Credit Agreement are unconditionally guaranteed by DeVry, by
the U.S. Subsidiaries and by certain subsidiaries of GEI which are organized
under the laws of a jurisdiction located outside the United States (the
"Offshore Subsidiaries").
B. Pursuant to the terms of that certain Note Purchase Agreement dated
as of May 16, 2003 (as amended, restated, superseded or otherwise modified
from time to time, the "Note Agreement"), among the Obligors and the several
Purchasers named in Schedule A thereto (together with any successors and
assigns, the "Noteholders"), DeVry is selling, and the Noteholders are
purchasing from DeVry, its $75,000,000 Floating Rate Senior Notes, Series A,
due April 30, 2010 (the "DeVry Notes"), and GEI is selling, and the
Noteholders are purchasing from GEI, its $50,000,000 Floating Rate Senior
Notes, Series B, Due April 30, 2010 (the "GEI Notes" and, together with the
DeVry Notes, are collectively referred to as the "Senior Notes"). The
obligations of DeVry under the DeVry Notes and the Note Agreement are
unconditionally guaranteed by the U.S. Subsidiaries, and the obligations of
GEI under the GEI Notes and the Note Agreement are unconditionally guaranteed
by DeVry, by the U.S. Subsidiaries and by the Offshore Subsidiaries.
C. As a condition to the extension of financial accommodations to be
given under the Bank Credit Agreement by the Banks, and as a condition
precedent to the purchase of the Senior Notes by the Noteholders pursuant to
the Note Agreement, the Secured Parties required that the Obligors and the
other Grantors and the Collateral Agent enter into the Pledge and
Intercreditor Agreement to secure the obligations of each Grantor in respect
of the Financing Agreements, and to appoint the Collateral Agent as collateral
agent for and on behalf of the Secured Parties, as otherwise more particularly
set forth herein.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency whereof are hereby
acknowledged, the Grantor does hereby covenant and agree, as follows:
The Grantor desires to amend the definition of Grantor (as the same may
have been heretofore amended) set forth in the Pledge and Intercreditor
Agreement attached hereto so that at all times from and after the date hereof,
the Grantor shall be liable as set forth in the Pledge and Intercreditor
Agreement for the obligations of [a U.S. Grantor or Offshore Grantor] under
the Pledge and Intercreditor Agreement to the extent and in the manner set
forth therein. The Grantor does hereby pledges, charges, assigns, transfers
and sets over to the Collateral Agent, for the ratable benefit of the [Secured
Parties or GEI Secured Parties], and hereby pledges, charges, assigns,
transfers and grants to the Collateral Agent, for the ratable benefit of the
[Secured Parties or GEI Secured Parties], a continuing security interest in
all of such Grantor's interest and property rights, whether now existing or
hereafter acquired or arising, in and to the property described on Exhibit A
to this Joinder. [Specify whether DeVry and/or GEI's obligations are to be
secured.]
The undersigned is the duly elected ____________ of the Grantor and is
duly authorized to execute and deliver this Joinder. The execution by the
undersigned of this Joinder shall evidence its consent to and acknowledgment
and approval of the terms set forth herein and in the Pledge and Intercreditor
Agreement by such execution the Grantor shall be deemed to have made the
representations and warranties set forth in Section 3 of the Pledge and
Intercreditor Agreement in favor of the Collateral Agent and Secured Parties
as of the date of this Joinder.
Upon execution of this Joinder, the Pledge and Intercreditor Agreement
shall be deemed to be amended as set forth above. Except as amended herein,
the terms and provisions of the Pledge and Intercreditor Agreement are hereby
ratified, confirmed and approved in all respects.
[At time of execution this form of Joinder shall be revised and/or
shall contain such additional terms or provisions as may be deemed acceptable
by the Collateral Agent, provided that such terms and provisions shall apply
to all Secured Obligations and all Secured Parties equally and ratably.]
Any and all notices, requests, certificates and other instruments
(including the Notes) may refer to the Pledge and Intercreditor Agreement
without making specific reference to this Joinder, but nevertheless all such
references shall be deemed to include this Joinder unless the context shall
otherwise require.
[NAME OF GRANTOR]
By
Its
STATE OF _____________)
) ss:
COUNTY OF ___________)
On this ____ day of ______________, 2003, before me personally appeared
______________________, who, being by me duly sworn did depose and say that
he/she resides at ______________________; that he/she is ______________ of
________________________, the corporation described in and which executed the
above instrument and that he/she executed this instrument on behalf of said
corporation and that he/she had authority to do so.
_______________________________________
NOTARY PUBLIC
EXHIBIT A TO PLEDGE AND INTERCREDITOR AGREEMENT JOINDER
[Description of collateral]