DEVRY INC.
AND
GLOBAL EDUCATION INTERNATIONAL, INC.
$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.
______________
NOTE PURCHASE AGREEMENT
_____________
Dated as of May 16, 2003
TABLE OF CONTENTS
(Not a part of the Agreement)
SECTION HEADING PAGE
SECTION 1. AUTHORIZATION OF NOTES 1
Section 1.1. Description of Notes 1
Section 1.2. Series B Interest Rate 2
SECTION 2. SALE AND PURCHASE OF NOTES AND SECURITY THEREFOR 2
Section 2.1. Sale and Purchase of Notes 2
Section 2.2. DeVry Guaranty 3
Section 2.3. Subsidiary Guaranties 3
Section 2.4. Pledge and Intercreditor Agreement 3
Section 2.5. Release of Subsidiary Guarantor 3
SECTION 3. CLOSING 3
SECTION 4. CONDITIONS TO CLOSING 4
Section 4.1. Representations and Warranties 4
Section 4.2. Representations and Warranties of the Subsidiary
Guarantors 4
Section 4.3. Performance; No Default. 4
Section 4.4. Compliance Certificates 5
Section 4.5. Opinions of Counsel 5
Section 4.6. Purchase Permitted By Applicable Law, etc 5
Section 4.7. Sale of Other Notes 6
Section 4.8. Pledge and Intercreditor Agreement 6
Section 4.9. DeVry Guaranty 6
Section 4.10. DeVry Guaranties 6
Section 4.11. Consummation of Acquisition of ▇▇▇▇ University 6
Section 4.12. Payment of Special Counsel Fees. 6
Section 4.13. Private Placement Number 6
Section 4.14. Changes in Corporate Structure 6
Section 4.15. Proceedings and Documents 7
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE OBLIGORS 7
Section 5.1. Organization; Power and Authority 7
Section 5.2. Authorization, etc 7
Section 5.3. Disclosure 7
Section 5.4. Organization and Ownership of Shares of
Subsidiaries; Existing Investments; and
Affiliates 8
Section 5.5. Financial Statements 8
Section 5.6. Compliance with Laws, Other Instruments, etc 9
Section 5.7. Governmental Authorizations, etc 9
Section 5.8. Litigation; Observance of Agreements, Statutes
and Orders 9
Section 5.9. Taxes 10
Section 5.10. Title to Property; Leases 10
Section 5.11. Licenses, Permits, etc 10
Section 5.12. Compliance with ERISA 10
Section 5.13. Private Offering by the Obligors 11
Section 5.14. Use of Proceeds; Margin Regulations 11
Section 5.15. Existing Debt; Future Liens 12
Section 5.16. Foreign Assets Control Regulations, etc 12
Section 5.17. Status under Certain Statutes 12
Section 5.18. Environmental Matters 12
Section 5.19. Acquisition of Dominica Management, Inc. 13
SECTION 6. REPRESENTATIONS OF THE PURCHASER 13
Section 6.1. Purchase for Investment 13
Section 6.2. Source of Funds 13
SECTION 7. INFORMATION AS TO OBLIGORS 15
Section 7.1. Financial and Business Information 15
Section 7.2. Officer's Certificate 18
Section 7.3. Inspection 18
SECTION 8. PREPAYMENT OF THE NOTES 19
Section 8.1. Required Prepayments 19
Section 8.2. Optional Prepayments of the Notes with LIBOR
Breakage Amount 19
Section 8.3. Maturity; Surrender, etc. 20
Section 8.4. Allocation of Partial Prepayments 20
Section 8.5. Purchase of Notes 20
Section 8.6. Tax Indemnity 20
Section 8.7. Repayment 21
SECTION 9. AFFIRMATIVE COVENANTS 22
Section 9.1. Compliance with Law 22
Section 9.2. Insurance 22
Section 9.3. Maintenance of Properties 23
Section 9.4. Payment of Taxes and Claims 23
Section 9.5. Corporate Existence, etc 23
Section 9.6. Additional Guarantors 23
Section 9.7. Designation of Subsidiaries 24
SECTION 10. NEGATIVE COVENANTS 24
Section 10.1. Consolidated Debt; Priority Debt 24
Section 10.2. Consolidated Adjusted Net Worth 24
Section 10.3. Limitation on Liens 24
Section 10.4. Sales of Asset 26
Section 10.5. Merger and Consolidation 27
Section 10.6. Nature of Business 28
Section 10.7. Transactions with Affiliates 28
Section 10.8. Post Closing Items 28
SECTION 11. EVENTS OF DEFAULT 29
SECTION 12. REMEDIES ON DEFAULT, ETC 31
Section 12.1. Acceleration 31
Section 12.2. Other Remedies 32
Section 12.3. Rescission 32
Section 12.4. No Waivers or Election of Remedies,
Expenses, etc 32
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES 32
Section 13.1. Registration of Notes 32
Section 13.2. Transfer and Exchange of Notes 33
Section 13.3. Replacement of Notes 33
SECTION 14. PAYMENTS ON NOTES 34
Section 14.1. Place of Payment 34
Section 14.2. Home Office Payment 34
SECTION 15. EXPENSES, ETC 34
Section 15.2. Survival 35
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT 35
SECTION 17. AMENDMENT AND WAIVER 35
Section 17.1. Requirements 35
Section 17.2. Solicitation of Holders of Notes 36
Section 17.3. Binding Effect, etc 36
Section 17.4. Notes Held by Obligors, etc 37
SECTION 18. NOTICES 37
SECTION 19. REPRODUCTION OF DOCUMENTS 37
SECTION 20. CONFIDENTIAL INFORMATION 38
SECTION 21. SUBSTITUTION OF PURCHASER 39
SECTION 22. MISCELLANEOUS 39
Section 22.1. Successors and Assigns 39
Section 22.2. Payments Due on Non-Business Days 39
Section 22.3. Severability 39
Section 22.4. Construction 39
Section 22.5. Counterparts 40
Section 22.6. Governing Law 40
Section 22.7. Consent to Jurisdiction; Service of Process;
Judgement Currency; Waiver of Jury Trial 40
Section 22.8. Service of Process Upon Agent 41
Section 22.9. Obligations of DeVry 42
Signature 43
SCHEDULE A - INFORMATION RELATING TO PURCHASERS
SCHEDULE B - DEFINED TERMS
SCHEDULE 5.4 - Subsidiaries of the Obligors and Ownership of
Subsidiary Stock
SCHEDULE 5.5 - Financial Statements
SCHEDULE 5.11 - Patents, etc.
SCHEDULE 5.15 - Existing Debt
SCHEDULE 10.3 - Existing Liens
SCHEDULE 10.7 - Existing Investments
EXHIBIT 1(A) - Form of Floating Rate Senior Note, Series A, due
April 30, 2010 of DeVry
EXHIBIT 1(B) - Form of Floating Rate Senior Note, Series B, due
April 30, 2010 of GEI
EXHIBIT 2 - Form of Pledge and Intercreditor Agreement
EXHIBIT 3 - Form of DeVry Guaranty Agreement
EXHIBIT 4(A) - Form of U.S. Subsidiary Guaranty Agreement
EXHIBIT 4(B) - Form of Offshore Subsidiary Guaranty Agreement
EXHIBIT 5(A) - Form of Opinion of Counsel for the Obligors
EXHIBIT 5(B) - Form of Opinion of Barbados Counsel for GEI
EXHIBIT 5(C) - Form of Opinion of Special Counsel for the Purchasers
DEVRY INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
AND
GLOBAL EDUCATION INTERNATIONAL, INC.
c/o DeVry Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
$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.
May 16, 2003
TO THE PURCHASERS LISTED IN THE
ATTACHED SCHEDULE A WHICH ARE
SIGNATORIES OF THIS AGREEMENT:
Ladies and Gentlemen:
DEVRY INC., a Delaware corporation ("DeVry") and GLOBAL EDUCATION
INTERNATIONAL, INC., a Barbados corporation ("GEI") (DeVry and GEI are
hereinafter referred to individually as an "Obligor" and collectively as the
"Obligors"), each agree with each Purchaser as follows:
SECTION 1. AUTHORIZATION OF NOTES.
Section 1.1. Description of Notes. (a) DeVry will authorize the issue and
sale of $75,000,000 aggregate principal amount of its Floating Rate Senior
Notes, Series A, due April 30, 2010 (the "DeVry Notes", such term to include
any such notes issued in substitution therefor pursuant to Section 13 of this
Note Purchase Agreement (this "Agreement"). The DeVry Notes shall be
substantially in the form set out in Exhibit 1(a), with such changes
therefrom, if any, as may be approved by each Purchaser and DeVry.
(b) GEI will authorize the issue and sale of $50,000,000 aggregate
principal amount of its Floating Rate Senior Notes, Series B, due April 30,
2010 (the "GEI Notes", such term to include any such notes issued in
substitution therefor pursuant to Section 13 of this Agreement. The GEI Notes
shall be substantially in the form set out in Exhibit 1(b), with such changes
therefrom, if any, as may be approved by each Purchaser and GEI.
The DeVry Notes and the GEI Notes shall be collectively referred to as
the "Notes". Certain capitalized terms used in this Agreement are defined in
Schedule B; references to a "Schedule" or an "Exhibit" are, unless otherwise
specified, to a Schedule or an Exhibit attached to this Agreement.
(c) The payment obligations of the Obligors set forth in this
Agreement and the Notes shall be made in the lawful currency of the United
States of America.
Section 1.2. Interest Rate. (i) The Notes shall bear interest (computed
on the basis of a 360-day year and actual days elapsed) on the unpaid
principal thereof from the date of issuance at a floating rate equal to the
Adjusted LIBOR Rate from time to time, payable quarterly on the last day of
January, April, July and October and at maturity, commencing on July 31, 2003,
until such principal sum shall have become due and payable (whether at
maturity, upon notice of prepayment or otherwise) (each such date being
referred to herein as an "Interest Payment Date") and interest (so computed)
on any overdue principal from the due date thereof (whether by acceleration or
otherwise) at the Default Rate until paid.
(ii) The Adjusted LIBOR Rate for the Notes shall be determined by the
Obligors, and notice thereof shall be given to the holders of the Notes,
within three Business Days after the beginning of each Interest Period,
together with a copy of the relevant screen used for the determination of
LIBOR, a calculation of Adjusted LIBOR Rate for such Interest Period, the
number of days in such Interest Period, the date on which interest for such
Interest Period will be paid and the amount of interest to be paid to each
holder of Notes on such date. In the event that the holders of more than 50%
in aggregate principal amount of the outstanding Notes do not concur with such
determination by the Obligors, within ten Business Days after receipt by such
holders of the notice delivered by the Obligors pursuant to the immediately
preceding sentence, such holders of the Notes shall provide notice to the
Obligors, together with a copy of the relevant screen used for the
determination of LIBOR, a calculation of Adjusted LIBOR Rate for such Interest
Period, the number of days in such Interest Period, the date on which interest
for such Interest Period will be paid and the amount of interest to be paid to
each holder of Notes on such date, and any such determination made in
accordance with the provisions of this Agreement, shall be presumptively
correct absent manifest error.
SECTION 2. SALE AND PURCHASE OF NOTES AND SECURITY THEREFOR.
Section 2.1. Sale and Purchase of Notes. Subject to the terms and
conditions of this Agreement, each Obligor will issue and sell to each
Purchaser and each Purchaser will purchase from each Obligor, at the Closing
provided for in Section 3, the DeVry Notes and the GEI Notes in the principal
amount specified opposite their respective name in Schedule A at the purchase
price of 100% of the principal amount thereof. Each Purchaser's obligations
hereunder are several and not joint obligations, and no Purchaser shall have
any obligation or liability to any Person for the performance or
nonperformance by any other Purchaser hereunder.
Section 2.2. DeVry Guaranty. The payment by GEI of all amounts due with
respect to the GEI Notes and the performance by GEI of its obligations under
this Agreement will be unconditionally guaranteed by DeVry pursuant to the
DeVry Guaranty and otherwise in accordance with Section 9.6 hereof.
Section 2.3. Subsidiary Guaranties. (a) The payment by DeVry of all
amounts due with respect to the DeVry Notes and the performance by DeVry of
its obligations under this Agreement will be unconditionally guaranteed by the
U.S. Subsidiary Guarantors pursuant to the U.S. Subsidiary Guaranty and
otherwise in accordance with Section 9.6 hereof.
(b) The payment by GEI of all amounts due with respect to the GEI
Notes and the performance by GEI of its obligations under this Agreement will
be unconditionally guaranteed by the U.S. Subsidiary Guarantors pursuant to
the U.S. Subsidiary Guaranty and by the Offshore Subsidiary Guarantors
pursuant to the Offshore Subsidiary Guaranty and otherwise in accordance with
Section 9.6 hereof.
Section 2.4. Pledge and Intercreditor Agreement. (a) The payment of all
amounts due with respect to the Notes and the performance by Obligors and the
Guarantors of their respective obligations under this Agreement and the
Guaranties will be secured in accordance with the terms of the Pledge and
Intercreditor Agreement, which shall be substantially in the form of Exhibit 2
attached hereto. The enforcement of the rights and benefits in respect of the
Pledge and Intercreditor Agreement and the allocation of proceeds thereof and
of the Guaranties shall be governed by the terms of the Pledge and
Intercreditor Agreement.
(b) If at any time the Obligors or any Subsidiary Guarantor shall grant
to any one or more of the Collateral Agent, the Banks or any other holder of
Senior Lender Obligations additional security or collateral of any kind
pursuant to the requirements of the Bank Agreement, then the Obligors or such
Subsidiary Guarantor shall grant to the holders of the Notes the same security
or collateral so that the holders of the Notes shall at all times be pari
passu with the Banks or any other holder of Senior Lender Obligations and
shall be secured on an equal and ratable basis with the Banks and any other
holder of Senior Lender Obligations.
Section 2.5. Release of Subsidiary Guarantor. The parties to this
Agreement agree that, if all of the capital stock of any Subsidiary Guarantor
is sold or otherwise disposed of in accordance with the terms of this
Agreement to a Person who is not an Affiliate of DeVry or any Restricted
Subsidiary, such Subsidiary Guarantor shall be released from all of its
obligations under the related Subsidiary Guaranty; provided that, at such time
and after giving effect thereto, no Default or Event of Default shall exist
and be continuing and such Subsidiary Guarantor shall be simultaneously
released from all of its obligations under the Bank Agreement.
SECTION 3. CLOSING.
The sale and purchase of the Notes to be purchased by the Purchasers shall
occur at the offices of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 11:00 A.M. Chicago time, at a closing (the "Closing") on
May 16, 2003. At the Closing, the Obligors will deliver to each Purchaser the
Notes to be purchased by such Purchaser in the form of a single Note (or such
greater number of Notes in denominations of at least $1,000,000 as such
Purchaser may request) dated the date of the Closing and registered in such
Purchaser's name (or in the name of its nominee), against delivery by such
Purchaser to the Obligors or their order of immediately available funds in the
amount of the purchase price therefor by wire transfer of immediately
available funds, in the case of DeVry, to account number 7366701195 at Bank of
America, Chicago, IL (ABA# ▇▇▇▇▇▇▇▇▇) (SWIFT No. BOFAUS44), and, in the case
of GEI, to account number 800051 at Bank One International Corporation, ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. (ABA# ▇▇▇▇▇▇▇▇▇) (SWIFT BIC: ▇▇▇▇▇▇▇▇)
(CHIPS ABA 0979), 1058682 for further credit to The Bank of Nova Scotia,
Offshore Banking Unit, Bridgetown, Barbados, Transit No. ▇▇▇▇▇ (SWIFT Address:
NOSCBBBBBOB) for further credit to Global Education International, Inc.,
Account # 800051. If, at the Closing, the Obligors shall fail to tender such
Notes to any Purchaser as provided above in this Section 3, or any of the
conditions specified in Section 4 shall not have been fulfilled to such
Purchaser's satisfaction, such Purchaser shall, at its election, be relieved
of all further obligations under this Agreement, without thereby waiving any
rights it may have by reason of such failure or such nonfulfillment.
SECTION 4. CONDITIONS TO CLOSING.
Each Purchaser's obligation to purchase and pay for the Notes to be sold
to such Purchaser at the Closing is subject to the fulfillment to its
satisfaction, prior to or at the Closing, of the following conditions:
Section 4.1. Representations and Warranties. The representations and
warranties of the Obligors in this Agreement shall be correct when made and at
the time of the Closing (except for such representations and warranties made
as of a specific date).
Section 4.2. Representations and Warranties of the Subsidiary Guarantors.
The representations and warranties of the Subsidiary Guarantors in the
Subsidiary Guaranties shall be correct when made and at the time of Closing
(except for such representations and warranties made as of a specific date).
Section 4.3. Performance; No Default. Each Obligor and each Guarantor
shall have performed and complied in all material respects with all agreements
and conditions contained in this Agreement and the other Operative Agreements
required to be performed or complied with by it prior to or at the Closing,
and after giving effect to the issue and sale of the Notes (and the
application of the proceeds thereof as contemplated by Section 5.14), no
Default or Event of Default shall have occurred and be continuing. Neither
Obligor nor any Restricted Subsidiary shall have entered into any transaction
since the date of the Memorandum that would have been prohibited by the
covenants contained in Section 10 hereof had such covenants applied since such
date.
Section 4.4. Compliance Certificates.
(a) Officer's Certificate of the Obligors. Each Obligor shall have
delivered to such Purchaser an Officer's Certificate, dated the date of the
Closing, certifying that the conditions specified in Sections 4.1, 4.3 and
4.13 have been fulfilled.
(b) Secretary's Certificate of the Obligors. Each Obligor shall have
delivered to such Purchaser a certificate certifying as to the resolutions
attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Notes, this Agreement and the
other Operative Agreements to which it is a party.
(c) Officer's Certificate of the Subsidiary Guarantors. Each
Subsidiary Guarantor shall have delivered to such Purchaser an Officer's
Certificate, dated the date of the Closing, certifying that the conditions
specified in Sections 4.2, 4.3 and 4.13 have been fulfilled.
(d) Secretary's Certificate of the Subsidiary Guarantors. Each
Subsidiary Guarantor shall have delivered to such Purchaser a certificate
certifying as to the resolutions attached thereto and other corporate
proceedings relating to the authorization, execution and delivery of the
applicable Subsidiary Guaranty and the other Operative Agreements to which it
is a party.
Section 4.5. Opinions of Counsel. Such Purchaser shall have received
opinions in form and substance reasonably satisfactory to such Purchaser,
dated the date of the Closing (a) from (i) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, General Counsel to
the Obligors, and (ii) Mayer, Brown, ▇▇▇▇ & Maw, special counsel for the
Obligors, covering the matters set forth in Exhibit 5(a) and covering such
other matters incident to the transactions contemplated hereby as such
Purchaser or its counsel may reasonably request (and the Obligors hereby
instruct their counsel to deliver such opinion to such Purchaser), (b) from
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Farmers, Barbados counsel for GEI, covering the matters set
forth in Exhibit 5(b) and covering such other matters incident to the
transactions contemplated hereby as such Purchaser or such Purchaser's counsel
may reasonably request (and GEI hereby instruct its counsel to deliver such
opinion to such Purchaser), and (c) from ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, special counsel
to the Purchasers in connection with such transactions, substantially in the
form set forth in Exhibit 5(c) and covering such other matters incident to
such transactions as such Purchaser may reasonably request.
Section 4.6. Purchase Permitted By Applicable Law, etc. On the date of
the Closing each Purchaser's purchase of Notes shall (a) be permitted by the
laws and regulations of each jurisdiction to which such Purchaser is subject,
without recourse to provisions (such as Section 1405(a)(8) of the New York
Insurance Law) permitting limited investments by insurance companies without
restriction as to the character of the particular investment, (b) not violate
any applicable law or regulation (including, without limitation, Regulation T,
U or X of the Board of Governors of the Federal Reserve System) and (c) not
subject any Purchaser to any tax, penalty or liability under or pursuant to
any applicable law or regulation, which law or regulation was not in effect on
the date hereof. If requested by any Purchaser, such Purchaser shall have
received an Officer's Certificate certifying as to such matters of fact as
such Purchaser may reasonably specify to enable such Purchaser to determine
whether such purchase is so permitted.
Section 4.7. Sale of Other Notes. Contemporaneously with the Closing, the
Obligors shall sell to the each Purchaser, and each Purchaser shall purchase,
the aggregate principal amount of the Notes to be purchased by it at the
Closing as specified in Schedule A.
Section 4.8. Pledge and Intercreditor Agreement. The Pledge and
Intercreditor Agreement, substantially in the form of Exhibit 2 hereto, shall
have been duly authorized, executed and delivered by the respective parties
thereto, shall be in full force and effect and such Purchaser shall have
received a true, correct and complete copy thereof.
Section 4.9. DeVry Guaranty. The DeVry Guaranty, substantially in the
form of Exhibit 3 hereto, shall have been duly authorized, executed and
delivered by DeVry, shall be in full force and effect and such Purchaser shall
have received a true, correct and complete copy thereof.
Section 4.10. Subsidiary Guaranties. The Subsidiary Guaranties,
substantially in the forms of Exhibit 4(a) and Exhibit 4(b) hereto, shall have
been duly authorized, executed and delivered by the Subsidiary Guarantors,
shall be in full force and effect and such Purchaser shall have received a
true, correct and complete copy thereof.
Section 4.11. Consummation of Acquisition of ▇▇▇▇ University.
Contemporaneously with the Closing, DeVry shall have consummated the
acquisition of Dominica Management, Inc. (the owner of all outstanding capital
stock of ▇▇▇▇ University).
Section 4.12. Payment of Special Counsel Fees. Without limiting the
provisions of Section 15.1, the Obligors shall have paid, on or before the
Closing, the reasonable fees, charges and disbursements of the Purchasers'
special counsel referred to in Section 4.4 to the extent reflected in a
statement of such counsel rendered to the Obligors at least one Business Day
prior to the Closing.
Section 4.13. Private Placement Number. A Private Placement Number issued
by Standard & Poor's CUSIP Service Bureau (in cooperation with the Securities
Valuation Office of the National Association of Insurance Commissioners) shall
have been obtained for each of the DeVry Notes and the GEI Notes.
Section 4.14. Changes in Corporate Structure. Neither of the Obligors nor
any Subsidiary Guarantor shall have changed their jurisdiction of
incorporation or been a party to any merger or consolidation and shall not
have succeeded to all or any substantial part of the liabilities of any other
entity, at any time following the date of the most recent financial statements
referred to in Schedule 5.5 other than DeVry Canada, Inc., a Canadian
corporation which was reincorporated as DeVry Canada, LLC, a Delaware
corporation.
Section 4.15. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
reasonably satisfactory to such Purchaser and its special counsel, and such
Purchaser and its special counsel shall have received all such counterpart
originals or certified or other copies of such documents as such Purchaser or
such Purchaser's special counsel may reasonably request.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE OBLIGORS.
Each Obligor represents and warrants to each Purchaser that:
Section 5.1. Organization; Power and Authority. Such Obligor is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which
the failure to be so qualified or in good standing could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
Such Obligor has the corporate power and authority to own or hold under lease
the properties it purports to own or hold under lease, to transact the
business it transacts and proposes to transact, to execute and deliver this
Agreement, the other Operative Agreements to which it is a party and the Notes
issued by such Obligor and to perform the provisions hereof and thereof.
Section 5.2. Authorization, etc. This Agreement, the other Operative
Agreements and the Notes issued by such Obligor have been duly authorized by
all necessary corporate action on the part of such Obligor, and this Agreement
and the other Operative Agreements to which it is a party constitute, and upon
execution and delivery thereof each Note issued by such Obligor will
constitute, a legal, valid and binding obligation or contract of such Obligor
enforceable against it in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).
Section 5.3. Disclosure. The Obligors, through their agent, Banc of
America Securities, LLC, have delivered to each Purchaser a copy of a Private
Placement Memorandum, dated April, 2003 (the "Memorandum"), relating to the
transactions contemplated hereby. The Memorandum fairly describes, in all
material respects, the general nature of the business and principal properties
of the Obligors and their Subsidiaries. This Agreement, the other Operative
Agreements, the Memorandum, the documents, certificates or other writings
delivered to the Purchasers by or on behalf of the Obligors in connection with
the transactions contemplated hereby (excluding financial projections and
forecasts prepared by either of the Obligors) and the financial statements
listed in Schedule 5.5, taken as a whole, do not contain any untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein not misleading in light of the circumstances under which
they were made. Since December 31, 2002 there has been no change in the
financial condition, business, assets, regulatory or tax status, results of
operations or prospects of DeVry and its Restricted Subsidiaries taken as a
whole (after giving effect to the acquisition) except changes that
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect. There is no fact known to any Obligor that could
reasonably be expected to have a Material Adverse Effect that has not been set
forth herein or in the Memorandum or in the other documents, certificates and
other writings delivered to the Purchasers by or on behalf of the Obligors
specifically for use in connection with the transactions contemplated hereby.
Section 5.4. Organization and Ownership of Shares of Subsidiaries;
Existing Investments; and Affiliates. (a) After giving effect to the Closing
and the Reorganization in connection therewith, Schedule 5.4 contains (except
as noted therein) complete and correct lists (i) of the Obligors'
Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the
jurisdiction of its organization, and the percentage of shares of each class
of its capital stock or similar equity interests outstanding owned by the
Obligors and each other Subsidiary, and whether such Subsidiary is a
designated as a Restricted Subsidiary or an Unrestricted Subsidiary, (ii) of
the Obligors' Affiliates, other than Subsidiaries, and (iii) of the Obligors'
directors and senior officers.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Restricted Subsidiary shown in Schedule 5.4 as being owned
by the Obligors and its Subsidiaries have been validly issued, are fully paid
and nonassessable and are (or, with respect to those Subsidiaries being
acquired on the date of the Closing, will be) owned by the Obligors or another
Subsidiary free and clear of any Lien, except pursuant to the Pledge and
Intercreditor Agreement or as set forth on Schedule 5.4.
(c) Each Restricted Subsidiary identified in Schedule 5.4 is a
corporation or other legal entity duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, and is duly
qualified as a foreign corporation or other legal entity and is in good
standing in each jurisdiction in which such qualification is required by law,
other than those jurisdictions as to which the failure to be so qualified or
in good standing could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each such Subsidiary has the
corporate or other power and authority to own or hold under lease the
properties it purports to own or hold under lease and to transact the business
it transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to, any legal
restriction or any agreement (other than this Agreement, the Operative
Agreements, the Bank Agreement and customary limitations imposed by corporate
law statutes) restricting the ability of such Subsidiary to pay dividends out
of profits or make any other similar distributions of profits to the Obligors
or any of its Subsidiaries that owns outstanding shares of capital stock or
similar equity interests of such Subsidiary which will remain in effect after
the Closing.
Section 5.5. Financial Statements. The Obligors have delivered to each
Purchaser copies of the financial statements of DeVry and its Subsidiaries
listed on Schedule 5.5 and of Dominica Management, Inc. and its Subsidiaries
(without giving effect to the acquisition). All of said financial statements
(including in each case the related schedules and notes) fairly present in all
material respects the consolidated financial position of the Obligors and its
Subsidiaries as of the respective dates specified in such financial statements
and the consolidated results of their operations and cash flows for the
respective periods so specified and have been prepared in accordance with GAAP
consistently applied throughout the periods involved except as set forth in
the notes thereto (subject, in the case of any interim financial statements,
to normal year-end adjustments).
Section 5.6. Compliance with Laws, Other Instruments, etc. The execution,
delivery and performance by each Obligor of this Agreement, the other
Operative Agreements to which it is a party and the Notes issued by such
Obligor will not (a) contravene, result in any breach of, or constitute a
default under, or result in the creation of any Lien in respect of any
property of such Obligor or any Restricted Subsidiary under, any indenture,
mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate
charter or by-laws, or any other agreement or instrument to which any Obligor
or any Restricted Subsidiary is bound or by which any Obligor or any
Restricted Subsidiary or any of their respective properties may be bound or
affected which will remain in effect after the Closing, (b) conflict with or
result in a breach of any of the terms, conditions or provisions of any order,
judgment, decree, or ruling of any court, arbitrator or Governmental Authority
applicable to any Obligor or any Restricted Subsidiary or (c) violate any
provision of any statute or other rule or regulation of any Governmental
Authority applicable to any Obligor or any Restricted Subsidiary.
Section 5.7. Governmental Authorizations, etc. Other than filings in
connection with the Pledge and Intercreditor Agreement which filings have been
made or which filings will be made contemporaneously with the consummation of
the acquisition of Dominica Management, Inc., no consent, approval or
authorization of, or registration, filing or declaration with, any
Governmental Authority is required in connection with the execution, delivery
or performance by such Obligor of this Agreement, the other Operative
Agreements to which it is a party or any Notes issued by such Obligor.
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) There are no actions, suits or proceedings pending or, to the
knowledge of any Obligor, threatened against or affecting any Obligor or any
Restricted Subsidiary or any property of any Obligor or any Restricted
Subsidiary in any court or before any arbitrator of any kind or before or by
any Governmental Authority that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
(b) Neither of the Obligors nor any Restricted Subsidiary is in default
under any term of any agreement or instrument to which it is a party or by
which it is bound, or any order, judgment, decree or ruling of any court,
arbitrator or Governmental Authority or is in violation of any applicable law,
ordinance, rule or regulation (including without limitation Environmental
Laws) of any Governmental Authority, which default or violation, individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
Section 5.9. Taxes. The Obligors and their Subsidiaries have filed all Tax
Returns that are required to have been filed in any jurisdiction, and have
paid all Taxes shown to be due and payable on such returns and all other Taxes
levied upon them or their properties, assets, income or franchises, to the
extent such Taxes have become due and payable and before they have become
delinquent, except for any Taxes (a) the amount of which is not individually
or in the aggregate Material or (b) the amount, applicability or validity of
which is currently being contested in good faith by appropriate proceedings
and with respect to which an Obligor or a Subsidiary, as the case may be, has
established adequate reserves in accordance with GAAP. None of the Obligors
knows of any basis for any other Tax that could reasonably be expected to have
a Material Adverse Effect. The charges, accruals and reserves on the books of
the Obligors and its Restricted Subsidiaries in respect of Federal, state or
other Taxes for all fiscal periods are adequate, as calculated in accordance
with GAAP. The Federal income tax liabilities of DeVry and its U.S.
Subsidiaries have been determined by the Internal Revenue Service and paid for
all fiscal years up to and including the fiscal year ended June 30, 1999.
Section 5.10. Title to Property; Leases. The Obligors and their Restricted
Subsidiaries have good and sufficient title to their respective properties
which the Obligors and their Restricted Subsidiaries own or purport to own
that individually or in the aggregate are Material, including all such
properties reflected in the most recent audited balance sheets referred to in
Section 5.5 or purported to have been acquired by any Obligor or any
Restricted Subsidiary after said date (except as sold or otherwise disposed of
in the ordinary course of business), in each case free and clear of Liens
prohibited by this Agreement. All leases that individually or in the
aggregate are Material are valid and subsisting and are in full force and
effect in all material respects.
Section 5.11. Licenses, Permits, etc. Except as disclosed in
Schedule 5.11,
(a) the Obligors and their Restricted Subsidiaries own or
possess all licenses, permits, franchises, authorizations, patents,
copyrights, service marks, trademarks and trade names, or rights
thereto, that individually or in the aggregate are Material, without
known conflict with the rights of others, except for those conflicts
that, individually or in the aggregate, would not have a Material
Adverse Effect;
(b) to the best knowledge of each Obligor, no product of any
Obligor or any Restricted Subsidiary infringes in any Material respect
any license, permit, franchise, authorization, patent, copyright,
service ▇▇▇▇, trademark, trade name or other right owned by any other
Person; and
(c) to the best knowledge of each Obligor, there is no material
violation by any Person of any right of any Obligor or any Restricted
Subsidiary with respect to any patent, copyright, service ▇▇▇▇,
trademark, trade name or other right owned or used by any Obligor or
any Restricted Subsidiary.
Section 5.12. Compliance with ERISA. (a) The Obligors and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not
resulted in and could not reasonably be expected to result in a Material
Adverse Effect. None of the Obligors nor any ERISA Affiliate has incurred any
liability pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans (as defined in
Section 3 of ERISA), and no event, transaction or condition has occurred or
exists that could reasonably be expected to result in the incurrence of any
such liability by any Obligor or any ERISA Affiliate, or in the imposition of
any Lien on any of the rights, properties or assets of any Obligor or any
ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to such
penalty or excise tax provisions or to Section 401(a)(29) or 412 of the Code,
other than such liabilities or Liens as would not be individually or in the
aggregate Material.
(b) None of the Obligors nor any ERISA Affiliate is a party to,
participates in or has any liability with respect to a Plan which is subject
to Title IV of ERISA.
(c) None of the Obligors nor any of their ERISA Affiliates has incurred
withdrawal liabilities (or is subject to contingent withdrawal liabilities)
under section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The expected post-retirement benefit obligation (determined as of
the last day of each Obligor's most recently ended fiscal year in accordance
with Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of DeVry and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the other
Operative Agreements and the issuance and sale of the Notes hereunder will not
involve any transaction that is subject to the prohibitions of section 406 of
ERISA or in connection with which a tax could be imposed on the Obligors or
any of their ERISA Affiliates pursuant to section 4975(c)(1)(A)-(D) of the
Code. The representation by the Obligors in the first sentence of this
Section 5.12(e) is made in reliance upon and subject to the accuracy of the
Purchasers representations in Section 6.2 as to the sources of the funds used
to pay the purchase price of the Notes to be purchased by each Purchaser.
Section 5.13. Private Offering by the Obligors. Neither of the Obligors
nor anyone acting on their behalf has offered the Notes or any similar
securities for sale to, or solicited any offer to buy any of the same from, or
otherwise approached or negotiated in respect thereof with, any Person other
than the Purchasers and not more than 19 other Institutional Investors, each
of which has been offered the Notes at a private sale for investment. Neither
of the Obligors nor anyone acting on their behalf has taken, or will take, any
action that would subject the issuance or sale of the Notes to the
registration requirements of Section 5 of the Securities Act.
Section 5.14. Use of Proceeds; Margin Regulations. The Obligors will apply
the proceeds of the sale of the Notes to finance the acquisition of Dominica
Management, Inc., the owner of all of the outstanding capital stock of ▇▇▇▇
University, and for general corporate purposes. No part of the proceeds from
the sale of the Notes hereunder will be used, directly or indirectly, for the
purpose of buying or carrying any margin stock within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System (12 CFR
221), or for the purpose of buying or carrying or trading in any securities
under such circumstances as to involve any Obligor in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in
a violation of Regulation T of said Board (12 CFR 220). Neither of the
Obligors nor any Subsidiary beneficially owns any margin stock or has any
present intention to acquire beneficial ownership of any margin stock. As
used in this Section, the terms "margin stock" and "purpose of buying or
carrying" shall have the meanings assigned to them in said Regulation U.
Section 5.15. Existing Debt; Future Liens. (a) Schedule 5.15 sets forth a
complete and correct list of all outstanding Debt of the Obligors and their
Restricted Subsidiaries as of March 31, 2003, since which date there has been
no Material change in the amounts, interest rates, sinking funds, installment
payments or maturities of the Debt of the Obligors or their Restricted
Subsidiaries. Neither of the Obligors nor any Restricted Subsidiary is in
default and no waiver of default is currently in effect, in the payment of any
principal or interest on any Debt of any Obligor or such Restricted Subsidiary
and no event or condition exists with respect to any Debt of any Obligor or
any Restricted Subsidiary that would permit (or that with notice or the lapse
of time, or both, would permit) one or more Persons to cause such Debt to
become due and payable before its stated maturity or before its regularly
scheduled dates of payment.
(b) None of the Obligors nor any Restricted Subsidiary has agreed or
consented to cause or permit in the future (upon the happening of a
contingency or otherwise) any of its property, whether now owned or hereafter
acquired, to be subject to a Lien not permitted by Section 10.3.
Section 5.16. Foreign Assets Control Regulations,etc. Neither the sale of
the Notes by the Obligors hereunder nor the use of the proceeds thereof by the
Obligors will violate the Trading with the Enemy Act, as amended, or any of
the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto, or Executive Order
No. 13,224, 66 Fed. Reg. 49,079 (September 25, 2001) (Executive Order Blocking
Property and Prohibiting Transactions with Persons Who Commit, Threaten, or
Support Terrorism) (collectively referred to as "Foreign Asset Control Laws").
To the knowledge of the Obligors, the Sellers will not use the sale proceeds
received by the Sellers in connection with the sale of Dominica Management,
Inc. to the Obligors in violation of any Foreign Asset Control Laws.
Section 5.17. Status under Certain Statutes. Neither of the Obligors nor
any Subsidiary is an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended, or is subject
to regulation under the Public Utility Holding Company Act of 1935, as
amended, the ICC Termination Act of 1995, as amended, or the Federal Power
Act, as amended.
Section 5.18. Environmental Matters. Neither of the Obligors nor any
Restricted Subsidiary has actual knowledge of any claim or has received any
written notice of any claim, and, to the knowledge of the Obligors, no
proceeding has been instituted against either Obligor or any Restricted
Subsidiary or any of their respective real properties now or formerly owned,
leased or operated by any of them or other assets, alleging any violation of
any Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect. Except as otherwise
disclosed to the Purchasers in writing:
(a) neither of the Obligors nor any Restricted Subsidiary has
actual knowledge of any facts which would give rise to any claim,
public or private, of violation of Environmental Laws or damage to the
environment emanating from, occurring on or in any way related to real
properties now or formerly owned, leased or operated by any of them or
to other assets or their use, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect;
(b) to the knowledge of the Obligors, neither of the Obligors
nor any Restricted Subsidiary has stored any Hazardous Materials on
real properties now or formerly owned, leased or operated by any of
them or has disposed of any Hazardous Materials in a manner contrary to
any Environmental Laws in each case in any manner that could reasonably
be expected to result in a Material Adverse Effect; and
(c) to the knowledge of the Obligors, all buildings on all real
properties now owned, leased or operated by any Obligor or any
Restricted Subsidiary are in compliance with applicable Environmental
Laws, except where failure to comply could not reasonably be expected
to result in a Material Adverse Effect.
Section 5.19. Acquisition of Dominica Management, Inc.. As of the end of
the Closing Date, the Obligors will have consummated the acquisition of
Dominica Management, Inc., the owner of all of the outstanding capital stock
of ▇▇▇▇ University.
SECTION 6. REPRESENTATIONS OF THE PURCHASER.
Section 6.1. Purchase for Investment. Each Purchaser represents that such
Purchaser is an Institutional Investor and that it is purchasing the Notes for
its own account or in a fiduciary capacity for one or more separate accounts
maintained by such Purchaser or for the account of one or more pension or
trust funds and not with a view to the distribution thereof, provided that the
disposition of such Purchaser's property shall at all times be within its
control. Each Purchaser understand that the Notes have not been registered
under the Securities Act and may be resold only if registered pursuant to the
provisions of the Securities Act or if an exemption from registration is
available, except under circumstances where neither such registration nor such
an exemption is required by law, and that the Obligors are not required to
register the Notes.
Section 6.2. Source of Funds. Each Purchaser represents that at least one
of the following statements is an accurate representation as to each source of
funds (a "Source") to be used by it to pay the purchase price of the Notes to
be purchased by such Purchaser hereunder:
(a) if such Purchaser is an insurance company, the Source is an
"insurance company general account" within the meaning of Department of
Labor Prohibited Transaction ("PTE") Exemption 95-60 (issued July 12,
1995) and there is no "employee benefit plan" (within the meaning of
Section 3(3) of ERISA or Section 4975(e)(1) of the Code), treating as a
single plan, all plans maintained by the same employer or employee
organization, with respect to which the amount of the general account
reserves and liabilities for all contracts held by or on behalf of such
plan, exceed ten percent (10%) of the total reserves and liabilities of
such general account (exclusive of separate account liabilities) plus
surplus, as set forth in the NAIC Annual Statement filed with such
Purchaser's state of domicile; or
(b) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of
the PTE 91-38 (issued July 12, 1991) and, except as any Purchaser has
disclosed to the Obligors in writing pursuant to this paragraph (b) at
least five Business Days prior to such Purchaser's purchase of the
Notes, no employee benefit plan or group of plans maintained by the
same employer or employee organization beneficially owns more than 10%
of all assets allocated to such pooled separate account or collective
investment fund; or
(c) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), no employee benefit plan's assets that
are included in such investment fund, when combined with the assets of
all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client
assets managed by such QPAM, the conditions of Part I (c) and (g) of
the QPAM Exemption are satisfied, neither the QPAM nor a person
controlling or controlled by the QPAM (applying the definition of
"control" in Section V(e) of the QPAM Exemption) owns a 5% or more
interest in any Obligor and (i) the identity of such QPAM and (ii) the
names of all employee benefit plans whose assets are included in such
investment fund have been disclosed to the Obligors in writing pursuant
to this paragraph (c) at least five Business Days prior to such
Purchaser's purchase of the Notes; or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Obligors in
writing pursuant to this paragraph (e) at least five Business Days
prior to such Purchaser's purchase of the Notes; or
(f) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA.
The Obligors shall deliver a certificate prior to the date of the
Closing, with respect to the Purchasers and prior to the date of any transfer
of any Notes, with respect to any subsequent prospective transferee of such
Notes, which certificate shall identify any plan disclosed by Purchaser
pursuant to Section 6.2 with respect to which (i) any of the Obligors is
either a "party in interest" (as defined in Title I, Section 3(14) of ERISA)
or a "disqualified person" (as defined in Section 4975(e)(2) of the Code), or
(ii) any of the Obligors or any "affiliate" (as defined in Section V(c) of the
QPAM Exemption) has within the one-year period ending with the date of such
certificate exercised the authority to appoint or terminate said QPAM as
manager of the assets of any plan identified in writing pursuant to paragraph
(c) above or to negotiate the terms of said QPAM's management agreement on
behalf of any such identified plans (as "Prohibited Plan"). If an Obligor
identifies a Source which includes assets of a Prohibited Plan, such Purchaser
or transferee shall not use assets of such Source to purchase Notes.
As used in this Section 6.2, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account" shall have the
respective meanings assigned to such terms in Section 3 of ERISA and the term
"QPAM Exemption" means the Prohibited Transaction Class Exemption 84-14 issued
by the United States Department of Labor.
SECTION 7. INFORMATION AS TO OBLIGORS.
Section 7.1. Financial and Business Information. DeVry shall deliver to
each holder of Notes that is an Institutional Investor:
(a) Quarterly Statements - within 60 days after the end of each
quarterly fiscal period in each fiscal year of DeVry (other than the
last quarterly fiscal period of each such fiscal year), duplicate
copies of:
(i) a consolidated balance sheet of DeVry and its
Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of DeVry and its
Subsidiaries for such quarter and (in the case of the second
and third quarters) for the portion of the fiscal year ending
with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial