Exhibit 99.4
NOTE MODIFICATION AGREEMENT
This Note Modification Agreement ("Agreement"), dated as of November 30,
2000, is by and among EDUTREK INTERNATIONAL, INC. (the "Company"), CAREER
EDUCATION CORPORATION, a Delaware corporation ("Career"), EDUTREK SYSTEMS, INC.,
a Georgia corporation ("EduTrek"), AMERICAN INTERCONTINENTAL UNIVERSITY, INC., a
Georgia Corporation ("AIU") AMERICAN INTERCONTINENTAL UNIVERSITY-LONDON, LTD.
U.S., a Washington D.C. corporation ("American College"), and AMERICAN EUROPEAN
MIDDLE EAST CORPORATION, LLC, A Georgia limited liability company ("American
European"; each of EduTrek, AIU, American College and American European is
sometimes hereinafter referred to as a "Guarantor" and collectively as the
"Guarantors").
R E C I T A L S
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A. Sylvan Learning Systems, Inc. ("Sylvan") previously made a loan to the
Company in the original principal sum of Five Million Dollars ($5,000,000) (the
"Loan'), as evidenced by a promissory note dated May 30, 2000 (the "Note"),
which loan is secured by a security interest in and to certain tangible and
intangible assets of the company pursuant to the Security Documents;
B. Pursuant to an Assignment Agreement of even date herewith ("Assignment
Agreement"), Sylvan sold, assigned and transferred to Career, all of Sylvan's
rights, title and interest in and to the Loan, all collateral and security
therefor, and all documents evidencing the Loan and any collateral and security
therefor; and
C. The Note, by its terms, matures on November 30, 2000 and the parties
desire to amend and restate the Note in its entirety to extend the maturity
thereof and make certain other modifications thereto, all on the terms and
conditions contained herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
understandings and agreements of the parties contained herein, and for other
good and valued consideration the receipt of which is hereby acknowledged, the
parties hereto agree as follows:
1. The Company shall, upon execution of this Agreement, execute and
deliver to Career an amended and restated promissory note in the form of Exhibit
A attached hereto (the "New Note") and shall be in substitution for the Note.
The Loan shall be evidenced by and repayable in accordance with the terms of the
New Note.
2. In consideration of the extension of the maturity of the Loan, the
Company hereby agrees to pay to Career, upon execution of this Agreement,
accrued and unpaid interest advanced by Career on behalf of the Company to
Sylvan in connection with the Assignment Agreement in the amount of $79,383.56.
3. The Company agrees (i) not to draw upon the Facility C Commitment
under the Credit Agreement without prior written notice to Career stating the
intended use of such funds and the consent of Career, and (ii) to use all loan
proceeds under the Facility C Commitment solely for reasonable and necessary
marketing and other expenses in the ordinary course of its business.
4. The effectiveness of this Agreement is expressly subject to the
following conditions precedent or concurrent (unless specifically waived in
writing by Career):
a. All proceedings taken in connection with the transaction
contemplated by this Agreement and all documents, instruments and other legal
matters incident thereto shall be satisfactory to Career and its legal counsel;
b. No Default shall have occurred and be continuing;
c. The Company shall have provided Career with a certified copy
of the fully executed Ninth Amendment to Credit Agreement and Waiver between the
Company and First Union National Bank, in form and substance reasonably
satisfactory to Career ("Ninth Amendment");
d. The Company shall have delivered or caused to be delivered to
Career all of the following, each duly executed and dated the date hereof or
such other date as satisfactory to Career, in form and substance reasonably
satisfactory to Career::
i. a fully and duly executed counterparts of this
Agreement;
ii. a fully and duly executed original of the New Note;
iii. a copy, duly certified by the Secretary or Assistant
Secretary of the Company of (A) resolutions of the Company's Board of Directors
authorizing or ratifying the execution and delivery of this Agreement and the
transactions contemplated hereunder, (B) all documents evidencing other
necessary corporate action, if any, and (C) all required approvals or consents,
if any, with respect to this Agreement;
iv. a Certificate of the Secretary of the Company
certifying (A) the names of the Company's officers authorized to sign this
Agreement and all other documents or certificates to be delivered hereunder,
together with the true signatures of such officers, and (B) that it's
organizational and governance documents have not been amended, rescinded,
supplemented, modified or otherwise changed since the date of the Note;
v. a duly executed counterpart of an Amendment to
Intercreditor Agreement among First Union National Bank, Career and the Company
in the form of Exhibit B attached hereto;
vi. such other documents as the Company may reasonably
require in connection with the Assignment Agreement and the continued perfection
of the Company's liens in and to the assets of the Company and the Guarantors
securing the Loan.
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5. To induce the Company to enter into this Agreement, Borrower and
each Guarantor represent and warrant to the Company that:
a. the execution, delivery and performance of this Agreement has
been duly authorized by all requisite corporate or limited liability company
action on the part of the Company and each Guarantor, and that this Agreement
has been duly executed and delivered by the Company and each Guarantor;
b. each of the representations and warranties set forth in the
Note, Security Documents and all other documents executed in connection
therewith (other than those which, by their terms, specifically are made as of a
certain date prior to the date hereof) are true and correct in all material
respects as of the date hereof.
c. the Company and the Guarantors have satisfied all of the
conditions precedent to the effectiveness of the Ninth Amendment.
d. the execution and delivery of this Agreement and the
performance by each party of its obligations hereunder and under any other
instruments, documents or agreements executed and/or delivered by or on behalf
of the Company or Guarantors to Career, each as amended from time to time, do
not and will not conflict with any provision of law or of the charter, articles
of incorporation, operating agreement or bylaws of any of them or contravene,
conflict with, violate or constitute a default under any applicable law, rule,
regulation or judgment, decree or order or any agreement, indenture, or
instrument to which the Company or any Guarantor is a party or is bound.
6. Borrower and Guarantors, as debtors, guarantors, grantors,
pledgors, assignors, or in other similar capacities in which such parties are
obligated on, guaranty the Loan, grant liens or security interests in their
properties or otherwise act as accommodation parties, as the case may be, in any
case under the Security Documents, hereby each ratifies and reaffirms all of its
payment and performance obligations, contingent or otherwise, affirmative or
negative, under each of such existing Security Documents to which it is a party
and, to the extent such party granted liens on or security interest in any of
its properties pursuant to any such Security Documents as security for the
Company's obligations under or with respect to the Loan, or any guaranty
thereof, each hereby ratifies and reaffirms such grants of liens and security
interests and confirms and agrees that such liens and security interests
hereafter secure all such obligations and indebtedness, in each case as if each
reference in such existing Security Documents to the obligations secured thereby
are construed to the hereafter mean, and refer to such obligations as hereby
amended and as evidenced by the New Note. Each of the foregoing hereby
acknowledges that each of the Security Documents remains in full force and
effect and is hereby ratified and confirmed. The execution of this Agreement
shall not operate as a novation, waiver of any right, power or remedy of Career
nor constitute a waiver of any provision of any the Security Documents, except
as expressly set forth herein and shall be limited to the particular instance
expressly set forth. Each Guarantor confirms and agrees that the Guaranty and
all other Security Documents executed and delivered by them and each and every
covenant, condition, obligation, representation (except those representations
which relate only to a specific date, which are confirmed as of such date only),
warranty and provision set forth therein are, and shall continue to be, in full
force and effect and are hereby confirmed, reaffirmed and ratified in all
respects.
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7. Any provision of this Agreement held by a court of competent
jurisdiction to be invalid or unenforceable, shall not impair or invalidate the
remainder of this Agreement and the effect thereof shall be confined to the
provision so held to be invalid or unenforceable.
8. This Agreement may be executed in one or more counterparts, each
of which shall constitute an original, but all of which taken together shall be
one in the same instrument.
9. This Agreement shall be construed in accordance with and governed
by the internal laws of the State of Georgia, without regard for its choice of
law principles.
10. The Recitals set forth above are incorporated herein by this
reference thereto as though fully set forth below. The capitalized terms used in
this Agreement, unless otherwise defined herein, shall have the meaning ascribed
to such terms in the New Note.
11. From and after the date hereof, all references in the Security
Documents to Sylvan shall be deemed to be a reference to Career and all
references to the Note shall be deemed to be a reference to the New Note, as it
may be amended, restated, modified or supplemented from time to time.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their respective duly authorized representatives on the date
first above written.
EDUTREK INTERNATIONAL, INC.
By: /s/ R. Xxxxxx Xxxxxx
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R. Xxxxxx Xxxxxx, Chief Executive Officer
AMERICAN INTERCONTINENTAL UNIVERSITY, INC.
By: /s/ R. Xxxxxx Xxxxxx
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R. Xxxxxx Xxxxxx, Chief Executive Officer
AMERICAN INTERCONTINENTAL UNIVERSITY-LONDON, LTD. U.S.
By: /s/ R. Xxxxxx Xxxxxx
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R. Xxxxxx Xxxxxx, Chief Executive Officer
AMERICAN EUROPEAN MIDDLE EAST CORPORATION, LLC
By: AMERICAN INTERCONTINENTAL UNIVERSITY-LONDON, LTD. U.S.
By: /s/ R. Xxxxxx Xxxxxx
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R. Xxxxxx Xxxxxx, Chief Executive Officer
EDUTREK SYSTEMS, INC.
By: /s/ R. Xxxxxx Xxxxxx
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R. Xxxxxx Xxxxxx, Chief Executive Officer
CAREER EDUCATION CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
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Title: Xxxxxxx X. Xxxxx, Chief Financial Officer
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