Exhibit 99.2
THIS NOTE HAS BEEN ISSUED AND SOLD WITHOUT REGISTRATION UNDER THE FEDERAL
SECURITIES ACT OF 1933 (THE "FEDERAL ACT") OR THE SECURITIES LAWS OF ANY STATE,
IN RELIANCE UPON CERTAIN EXEMPTIVE PROVISIONS OF SAID ACTS, INCLUDING PARAGRAPH
(13) OF THE CODE SECTION 10-5-9 OF THE GEORGIA SECURITIES ACT OF 1973 (THE
"GEORGIA ACT"). THIS NOTE CANNOT BE SOLD OR TRANSFERRED EXCEPT IF, IN THE
OPINION OF COUNSEL TO THE ISSUER, SUCH SALE OR TRANSFER WOULD BE (1) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE FEDERAL ACT OR PURSUANT TO AN
EXEMPTION FROM SUCH REGISTRATION; AND (2) IN A TRANSACTION WHICH IS EXEMPT UNDER
APPLICABLE STATE SECURITIES LAWS, INCLUDING THE GEORGIA ACT, OR PURSUANT TO
EFFECTIVE REGISTRATION STATEMENTS UNDER SUCH LAWS, OR IN A TRANSACTION WHICH IS
OTHERWISE IN COMPLIANCE WITH SUCH LAWS.
AMENDED AND RESTATED PROMISSORY NOTE
$5,000,000.00
November 30, 2000
Atlanta, Georgia
FOR VALUE RECEIVED, the undersigned, EDUTREK INTERNATIONAL, INC., a
corporation organized and existing under the laws of the State of Georgia (the
"Company"), hereby promises to pay to the order of CAREER EDUCATION CORPORATION,
a corporation organized and existing under the laws of the State of Delaware
(the "Holder"), at the Holder's address at 0000 Xxxxxxxxxxx Xxxxxxx, Xxxxx 000,
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000, or at such other place as the Holder may
designate, a principal sum equal to FIVE MILLION AND NO/100 DOLLARS
($5,000,000.00), together with interest at the rate set forth below and
calculated and paid as described below on the unpaid balance of such principal
amount from the date hereof until the unpaid principal balance shall have been
paid in full.
ARTICLE I. PAYMENT PROVISIONS
Section 1.01. Interest and Maturity. This Note shall bear simple interest on
the outstanding principal amount at a floating rate per annum equal to the then
current prime rate of interest, which rate, as of the date hereof, is nine and
one-half percent (9.50%), as published from time to time in the "Money Rates"
section of the Midwest Edition of The Wall Street Journal (or, if the prime rate
of interest is no longer published in such publication, the Holder may, in its
reasonable discretion, designate an alternative reference rate for calculation
of interest under this Note, which rate shall be the substantial equivalent of
the prime rate), computed on the basis of a year of 365 days against actual days
elapsed and changing when and as changes in the prime rate occur. All accrued
but unpaid interest at the aforesaid rate shall be due and payable quarterly,
commencing on February 28, 2001, and continuing on the last day of each and
every May, August, November and February thereafter, until the entire principal
balance hereof, together with all accrued but unpaid interest thereon, has been
paid in full. The entire principal amount of this Note, together with any
accrued but unpaid interest thereon, shall be due and payable on the earliest to
occur of (a) April 30, 2001, or (b) the Business Day (as hereinafter defined)
upon which the Holder shall have acquired all of the issued and outstanding
common shares or other equity securities or ownership interests of the Company
pursuant to the Merger Agreement (as
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hereinafter defined), or (c) the date upon which the entire indebtedness of the
Company under the Credit Agreement (as hereinafter defined) is declared to be
due and payable (the "Maturity Date").
Section 1.02. Payments. All payments under this Note shall be made in lawful
money of the United States of America. Payments shall be credited, first, to
unpaid interest accrued through the date of such payment and, then, to
principal.
Section 1.03. Limitation on Interest Rate and Payments. Notwithstanding any
other provision of this Note or of any other agreement or instrument to which
the Company and the Holder are parties, nothing herein contained or therein
contained shall require the payment of any interest, expense or other charge by
the Company which, when aggregated with all other interest, expenses and charges
directly or indirectly paid by the Company or imposed by the Holder as a
condition to extension of the loan evidenced by this Note, shall exceed the
highest lawful rate permissible under any law applicable thereto. If, but for
this provision, this Note or any other such agreement or instrument would
require any such payment in excess of any such highest lawful rate, this Note
and such other agreement or instrument shall automatically be deemed amended so
that all interest, charges, expenses and other payments required hereunder or
thereunder or so imposed, individually and in the aggregate, shall be equal to,
but no greater than, the highest lawful rate therefor. If from any
circumstances the Holder should ever receive an amount which, but for this
provision, would constitute an unlawful payment hereunder or thereunder, then,
ipso facto, such amount shall be applied to the reduction of the outstanding
principal balance of this Note and not to the payment of interest, expenses and
charges.
Section 1.04. Prepayment. The Company may, at any time prior to the Maturity
Date, prepay all or any part of the outstanding principal balance of this Note.
ARTICLE II. DEFINITIONS
As used herein, the following terms shall have the respective meanings set forth
below:
Section 2.01. "ACIL" shall mean American College in London, Ltd., a United
Kingdom company and a wholly-owned subsidiary of the Company.
Section 2.02. "ACIL-US" shall mean American College in London, Ltd., U.S., a
District of Columbia corporation and a wholly-owned subsidiary of the Company.
Section 2.03. "AEMEC" shall mean American European Middle East Corporation,
LLC, a Georgia limited liability company.
Section 2.04. "AIU" shall mean American Intercontinental University, a Georgia
corporation and a wholly-owned subsidiary of the Company.
Section 2.05. "Business Day" shall mean any day that is not a Saturday, a
Sunday, or a day on which banks are required or permitted to be closed in the
State of Georgia.
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Section 2.06. "Credit Agreement" shall mean that certain Credit Agreement,
dated March 25, 1999, as amended through the date hereof, between the Company,
as Borrower, and First Union National Bank, as Lender.
Section 2.07. "Edutrek Systems" shall mean Edutrek Systems, Inc., a Georgia
corporation and a wholly-owned subsidiary of the Company.
Section 2.08. "Guaranty" shall mean that certain Guaranty, dated as of May 30,
2000, executed by ACIL-US, AEMEC, AIU and Edutrek Systems in favor of the
Holder.
Section 2.09. "Merger Agreement" shall mean that certain Agreement and Plan of
Merger among the Holder, EI Acquisition, Inc., and the Company dated as of
October 24, 2000.
Section 2.10. "Note Modification Agreement" shall mean that certain Note
Modification Agreement dated as of November 30, 2000 among the Company, the
Holder, ACIL-US, AEMEC, AIU and Edutek Systems.
Section 2.11. "Person" or "person" shall mean an individual, partnership,
corporation, trust, unincorporated organization, joint venture, government or
agency, political subdivision thereof, or any other entity of any kind.
Section 2.12. "Pledge Agreement" shall mean that certain Pledge Agreement,
dated as of May 30, 2000, executed by the Company, ACIL-US, AEMEC, AIU and
Edutrek Systems in favor of the Holder, as amended, modified, restated or
replaced.
Section 2.13. "Security Agreement" shall mean the Security Agreement dated as
of May 30, 2000 by and among the Company, Edutrek Systems, AIU, ACIL-US, AMEMEC
and the Holder, as amended, modified or replaced.
Section 2.14. "Trademark Security Agreements" shall mean those certain
Conditional Assignment and Trademark Security Agreements each dated as of May
30, 2000 executed by AIU and Edutrek Systems in favor of the Holder, as amended,
modified, restated or replaced.
ARTICLE III. SECURITY
This Note is secured by the terms of each of the Guaranty, the Pledge Agreement,
Trademark Security Agreements and the Security Agreement (collectively, the
"Security Documents").
ARTICLE IV. USE OF PROCEEDS
Monies loaned by the Holder to the Company evidenced by this Note may be used
for the purposes of financing the working capital needs of the Company and its
subsidiaries and for general corporate purposes, but not for the purposes of
repaying or prepaying principal amounts
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owed pursuant to the Credit Agreement or prepaying principal amounts owed to any
other debtor of the Company or its subsidiaries.
ARTICLE V. DEFAULT
A default shall occur under this Note upon (a) the failure of the Company to (i)
pay any monetary obligations when due under this Note, or (ii) perform any of
its binding obligations under the Merger Agreement, or (iii) adhere to the
restrictions set forth in Article IV of this Note; or (b) the failure of the
Company, ACIL-US, AEMEC, AIU, Edutrek Systems or any other subsidiary of the
Company that becomes a party to any such agreement after the date hereof to (i)
perform any of their respective obligations under any of the Security Documents
or Note Modification Agreement, or to (ii) perform any of their respective
obligations under the Credit Agreement or any other agreement executed by the
Company, ACIL-US, AEMEC, AIU, Edutrek Systems or any other subsidiary of the
Company in favor of First Union National Bank in connection therewith (a
"Default").
Upon the occurrence of a Default, the Holder shall be entitled to, at its sole
option, declare the entire unpaid principal and interest amounts under this Note
as immediately due and payable regardless of the stipulated date of maturity,
and the Holder may proceed to collect such obligations forthwith, and enforce
its remedies under the Security Documents, plus all out-of-pocket costs of
collection, including reasonable attorneys' fees actually incurred if collected
by and through an attorney. The failure of the Holder to exercise this option
or indulgence granted from time to time shall in no event be considered a waiver
of such option or estop the Holder from exercising such option.
ARTICLE VI. NOTICES
All notices and other communications hereunder shall be in writing and shall be
deemed to have been given only (i) when personally delivered, or (ii) three (3)
business days after mailing, postage prepaid, by certified mail, or (iii) when
delivered (and receipted for) by an overnight delivery service, or (iv) when
first sent by telex, telecopier or other means of instantaneous communication,
provided such communication is promptly confirmed by personal delivery, mail or
an overnight delivery service as provided above, addressed in each case as
follows:
If to the Company, to: Edutrek International, Inc.
0000 Xxxxxxxxx-Xxxxxxxx Xxxx
000 Xxxxxxx Xxx
Xxxxxxx, Xxxxxxx 00000
Telecopier: 404/965-8001
Attention: Xxxxx X. Xxxx, Chief Financial
Officer
with a copy in like manner to: Xxxxx, Xxxxxxxx & Xxxxxxx, LLP
0000 Xxxxxxxxx Xxxx, XX
Xxxxxxxxx XX, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
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Telecopier: 404/684-6932
Attention: X. Xxx Xxxxxxxx, Esq.
If to the Holder, to: Career Education Corporation
0000 Xxxxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Telecopier: 847/585-3610
Attention: Chief Financial Officer
with a copy in like manner to: Xxxxxx Xxxxxx Xxxxx
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Telecopier: 312/577-4676
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Each party may change its address for the giving of notices and communications
to it, and/or copies thereof, by written notice to the other parties in
conformity with the foregoing.
ARTICLE VII. NEGOTIABILITY; ASSIGNMENT.
This Note may be assigned, conveyed or otherwise transferred at any time without
the consent of the Company; provided, however, that this Note may not be
assigned to any person or entity engaged in the business of providing post-
secondary education services similar to or competitive with those services
provided by the Company without the express written consent of the Company.
ARTICLE VIII. BINDING EFFECT
This Note shall be binding upon the Company and its successors and permitted
assigns and shall inure to the benefit of the Holder and its successors and
permitted assigns.
ARTICLE IX. HEADINGS
The paragraph headings contained in this Note are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Note.
ARTICLE X. TIME OF THE ESSENCE
Time is of the essence under this Note.
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ARTICLE XI. WIAVER OF PRESENTMENT
EXCEPT AS OTHERWISE PROVIDED IN THIS NOTE, THE COMPANY, ITS SUCCESSORS OR
ASSIGNS, AND ALL OTHER PERSONS LIABLE FOR THE PAYMENT OF THIS NOTE, WAIVE
PRESENTMENT FOR PAYMENT, DEMAND, PROTEST, AND NOTICE OF DEMAND, DISHONOR,
PROTEST, AND NONPAYMENT, AND CONSENT TO ANY AND ALL RENEWALS, EXTENSIONS OR
MODIFICATIONS THAT MIGHT BE MADE BY THE HOLDER AS TO THE TIME OF PAYMENT OF THIS
NOTE FROM TIME TO TIME.
ARTICLE XII. GOVERNING LAW
This Note has been delivered in Atlanta, Georgia and shall be governed by and
construed in accordance with the internal laws of the State of Georgia without
regard to its conflicts of laws principles.
ARTICLE XIII. AMENDMENT AND RESTATEMENT
This Note is an amendment and restatement of, and is in substitution and
replacement for, that certain Promissory Note dated as of May 30, 2000, by the
Company in favor of Sylvan Learning Systems, Inc. in the original principal
amount of $5,000,000.00 (the "Original Note"), which Original Note was assigned
to the Holder. Nothing contained herein shall be deemed to constitute a payment
or novation of the Original Note or a release of any guarantor or other
accommodation party or any collateral or security for the Company's obligations
to Holder under the Original Note.
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed under
seal as of the day and year above first written.
"COMPANY" EDUTREK INTERNATIONAL, INC.
By: /s/ X. Xxxxxx Xxxxxx
------------------------------------
Name: X. Xxxxxx Xxxxxx
Title: Chief Executive Officer
(corporate seal)
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