EXHIBIT 10.46
LIMITED GUARANTY AND INDEMNITY AGREEMENT
----------------------------------------
THIS LIMITED GUARANTY AND INDEMNITY AGREEMENT (this "Agreement"), made as
---------
of the 30th day of April, 1997, by and between CORINTHIAN COLLEGES, INC., a
Delaware corporation ("Guarantor"), having an address of 0 Xxxxxx Xxxxxx, Xxxxx
000, Xxxxx Xxx, Xxxxxxxxxx 00000-0000 to and for the benefit of BANC ONE CAPITAL
PARTNERS VI, LTD. having an office at 000 Xxxx Xxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx,
Xxxx 00000 ("Lender").
RECITALS:
A. Lender and Corinthian Property Group, Inc., a Florida corporation
("Borrower"), entered into a Loan Agreement of even date herewith (as the same
--------
may be amended from time to time, the "Loan Agreement") pursuant to which
--------------
Lender agreed to make a loan to Borrower in the amount of $3,760,000 (the
"Loan") which Loan is evidenced by that certain Promissory Note of even date
----
herewith in the principal amount of $3,760,000 (as the same may be amended from
time to time, the "Note"). The Loan is secured by, inter alia, an aggregate of
---- ----------
five mortgages or deeds of trust, of even date herewith, with respect to
vocational schools located in Florida and Colorado (as the same may be amended
from time to time, the "Mortgages"), (the Note, the Loan Agreement, the
Mortgages and every other document, instrument and agreement evidencing or
securing the Loan are hereinafter sometimes collectively referred to as the
"Loan Documents");
--------------
B. Guarantor is the sole shareholder of Borrower;
C. Guarantor will directly benefit from the making of the Loan to
Borrower; and
D. Lender is unwilling to make the Loan without the execution and delivery
of this Agreement by Guarantor;
NOW, THEREFORE, to induce Lender to make the loan and in consideration of
One Dollar ($1.00) and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Guarantor, intending to be legally
bound hereby agrees as follows:
l. Liabilities.
-----------
(a) Notwithstanding any provision contained in the Note, the Loan
Agreement, the Mortgages or any other Loan Document to the contrary, Guarantor
hereby absolutely, primarily, unconditionally, irrevocably and jointly and
severally guarantees to Lender, its successors and assigns, the full, prompt and
absolute payment, performance, observance and discharge by Borrower of
Borrower's obligations and liabilities arising under (i) Section 12 of the Note,
----------
(ii) Section 9.19 of the Loan Agreement, and (iii) Section 2.10 of each of
------------ ------------
the Mortgages
1
(all of which matters are collectively hereinafter referred to as the
"Liabilities"). All terms used and not otherwise defined herein shall have the
-----------
meanings given therefor in the Mortgages.
(b) The validity of this Agreement and the obligations of Guarantor
hereunder shall in no way be terminated, abated, affected or impaired by the
happening from time to time of any event or condition, including, without
limitation, any of the following: (i) the assertion or non-assertion by Lender
of any of the rights or remedies available to Lender pursuant to the provisions
of the Loan Documents or pursuant to any applicable statutes; (ii) the waiver by
Lender of, or the failure of Lender to enforce, or the lack of diligence by
Lender in connection with, the enforcement of any of its rights or remedies
under the Loan Documents; (iii) the granting by Lender of any indulgence or
extension of time; (iv) the exercise by Lender of any so-called self-help
remedies; (v) any other act, omission or conditions which might in any manner or
to any extent vary the risk to Guarantor or might otherwise operate as a
discharge or release of Guarantor under applicable law; (vi) the invalidity or
unenforceability of all or any portion or provision of the Note; (vii) any
release or discharge of or accord and satisfaction with Borrower or any other
person or entity, by variation of the terms of the Note or otherwise; (viii) the
impairment, modification, change, release, discharge or limitation of the
liability of Borrower or Guarantor or any of their estates in bankruptcy,
resulting from or pursuant to the application of the bankruptcy or insolvency
laws of or any decision of any court of the United States or any state thereof;
(ix) any present or future law or order of any government (dejure or defacto) or
------ -------
of any agency thereof purporting to reduce, amend or otherwise affect the
Liabilities or to vary any terms of payment, satisfaction or discharge thereof;
(x) the waiver, compromise, settlement, release, extension, amendment, change,
modification or termination of the terms of the Liabilities or any or all of the
obligations, covenants or agreements of Borrower under the Loan Documents
(except by satisfaction in full of all Liabilities) or of Guarantor under this
Agreement; (xi) the extension of the time for satisfaction, discharge or payment
of the Liabilities or any part thereof owing or payable by Borrower under the
Loan Documents or of the time for performance of any other obligations,
covenants or agreements under or arising out of this Agreement or the extension
or renewal of any thereof; (xii) the existence of any other guaranty of the
Liabilities in favor of Lender, or the enforcement or attempted enforcement of
such other guaranty; and (xiii) any event or action that would in the absence
of this paragraph result in the release or discharge of guarantor from the
performance or observance of any obligation, covenant or Agreement contained
in this Agreement or any other Agreement.
2. Waivers. Guarantor hereby waives all notice of any default in the
-------
payment of or non-performance of any Liabilities, all protest, demands, notices
or presentments of any kind, notice of any acceptance of this Agreement and all
matters and rights which may be raised in avoidance of, or in defense against,
any action to enforce the obligations of Guarantor hereunder; provided, however,
that nothing herein shall waive Guarantor's right to assert payment or
performance of any Liabilities as a defense to a claim relating to such
Liabilities under this Agreement, to the extent of such payment or performance.
Guarantor hereby waives any and all suretyship defenses or defenses in the
nature thereof without in any manner limiting any other
2
provisions of this Agreement. Notwithstanding anything to the contrary contained
herein, Guarantor hereby irrevocably waives all rights Guarantor may have at law
or in equity, including, without limitation, any law subrogating Guarantor to
the rights of Lender, to seek contribution, indemnification or any other form of
reimbursement from Borrower and any other person now or hereafter primarily or
secondarily liable for any obligations of Borrower to Lender, including without
limitation, the Liabilities, for any payment or performance made by Guarantor
under or in connection with this Agreement, unless and until payment in full of
the Note has been received by Lender.
3. Primary Liability
-----------------
(a) Guarantor's liability under this Agreement shall be primary, and
with respect to any right of action which shall accrue to Lender relating to any
Liabilities, Lender may at its sole option and without notice or demand, proceed
directly against Guarantor without having proceeded against Borrower or any
other person or entity liable to any extent for any of the Liabilities or
against the collateral under the Loan Documents. Guarantor's liability hereunder
shall continue without regard to whether or not Lender may have instituted or
prosecuted or obtained or realized any judgment in any suit, action or
proceeding or shall have exhausted any of its remedies or taken any steps to
enforce any of its rights under or pursuant to the Loan Documents or at law or
in equity, or otherwise, and without regard to any other condition or
contingency, so long as any of the Liabilities remains unsatisfied to any
extent. This Agreement is an agreement of payment and performance and not merely
of collection.
(b) Each default on any of the Liabilities shall give rise to a
separate cause of action and separate suits may be brought hereunder as each
cause of action arises or, at Lender's option, any or all causes of action which
arise prior to or after any suit is commenced hereunder may be included in such
suit.
4. Representations. Guarantor further represents to Lender, as an
---------------
inducement to making the Loan, that there is not pending or threatened any
litigation, arbitration, administrative or governmental proceeding against
Guarantor which would in any way prohibit or impede the adoption, execution, or
performance of this Agreement by Guarantor or which would affect any of the
undertakings herein; that compliance by Guarantor with Guarantor's obligations
under this Agreement has not resulted and will not result in the violation of
this Agreement or any agreement or other instrument to which Guarantor is a
party or by which Guarantor or any of Guarantor's assets are bound; that this
Agreement and all actions contemplated to be taken by Guarantor hereunder have
been duly authorized; and that this Agreement and such actions and undertakings
are valid and binding upon Guarantor and enforceable against Guarantor in
accordance with their terms.
3
5. Borrower's Actions. No encumbrance, assignment, leasing, subletting,
------------------
sale or other transfer by Borrower of any of Borrower"s assets shall operate to
extinguish or diminish the liability of Guarantor under this Agreement.
6. Bankruptcy. If Borrower files a petition for reorganization,
----------
arrangement, composition or similar relief under any present or future provision
of the Federal Bankruptcy Code, or if such a petition is filed against Borrower
by Guarantor or by any person or entity affiliated with, related to or in which
a beneficial interest is owned by Guarantor (each, a "Bankruptcy Event"),
------------------
Guarantor shall, from and after the date of such filing, absolutely, primarily,
unconditionally, irrevocably and jointly and severally guarantee to Lender, its
successors and assigns, the full, prompt and absolute payment, performance,
observance and discharge of all of Borrower's obligations and liabilities
arising under the Loan Documents, including the repayment of all principal and
interest under the Note and the payment of all other sums payable by Borrower
under the Loan Documents.
7. No Reliance. Guarantor assumes the responsibility for being and keeping
-----------
itself informed of the financial condition of Borrower and of all other
circumstances bearing upon the risk of failure to pay, perform or discharge any
of the obligations and liabilities of Borrower which diligent inquiry would
reveal, and Lender shall have no duty to advise Guarantor of information known
to Lender regarding such condition or any such circumstance.
8. Payment of Expenses. Guarantor shall be responsible to Lender for all
-------------------
expenses (including reasonable attorneys' fees), incurred by Lender in enforcing
any obligations of Guarantor under this Agreement.
9. Successors and Assigns. All references to Lender and Guarantor shall be
----------------------
deemed to include references to the successors and assigns of Lender and
Guarantor.
10. Governing Law. This Agreement was negotiated in the State of Ohio,
-------------
accepted by Lender in the State of Ohio, and the proceeds of the Loan secured
hereby were or are to be disbursed by Lender from the State of Ohio. Guarantor
agrees that the State of Ohio has a substantial relationship to the transaction
evidenced hereby and agrees that this Agreement and the rights and obligations
of the parties hereunder shall be governed by and construed in accordance with
the laws of the State of Ohio (without giving effect to principles of conflicts
of law). Interpretation and construction of this Agreement shall be according to
the contents hereof and without presumption or standard of construction in favor
of or against Guarantor or Lender.
11. Severability. If any term or provision of this Agreement or the
------------
application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Agreement shall be valid and enforced to the fullest
extent permitted
4
by law; provided, however, all rights, powers and remedies provided herein may
be exercised only to the extent that the exercise thereof does not violate any
applicable law, and are intended to be limited to the extent necessary so that
they will not render this Agreement invalid or unenforceable under any
applicable law.
12. No Waiver. The waiver of any provision of this Agreement by Lender
---------
shall constitute a waiver of that provision on that occasion only, and shall not
constitute a waiver of any other provision of this Agreement, or that provision
with respect to any other occasion.
13. Commercial Transaction.
----------------------
(a) TO INDUCE LENDER TO ENTER INTO THE COMMERCIAL LOAN TRANSACTION
EVIDENCED BY AND SECURED BY THE LOAN DOCUMENTS, GUARANTOR AGREES THAT THE SAID
TRANSACTION IS COMMERCIAL AND NOT A CONSUMER TRANSACTION.
(b) Each of the waivers set forth in this Agreement is made with
knowledge of its significance and consequences, and under the circumstances the
waivers are reasonable. If any of said waivers is determined to be contrary to
any applicable law or public policy, such waiver shall be effective only to the
maximum extent permitted by law.
14. Jury Trial. GUARANTOR HEREBY WAIVES THE RIGHT TO A TRIAL BY
----------
JURY IN ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER
OF THIS AGREEMENT. THIS WAIVER IS KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY
MADE BY GUARANTOR, AND GUARANTOR ACKNOWLEDGES THAT LENDER HAS NOT MADE ANY
REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY
TO MODIFY OR NULLIFY ITS EFFECT. GUARANTOR FURTHER ACKNOWLEDGES THAT GUARANTOR
HAS BEEN REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE
SIGNING OF THIS AGREEMENT AND IN THE MAKING OF ALL WAIVERS CONTAINED HEREIN BY
INDEPENDENT LEGAL COUNSEL, SELECTED BY GUARANTOR, AND THAT GUARANTOR HAS HAD
THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
15. Consent to Jurisdiction. Guarantor hereby consents to the
-----------------------
jurisdiction of and agrees that any action, suit or proceeding to enforce this
Agreement may be brought in any state or federal court in the State of Ohio.
Guarantor hereby irrevocably waives any objection which it may have to the
laying of the venue of any such action, suit, or proceeding in any such court
and hereby further irrevocably waive any claim that any such action, suit or
proceeding brought in such a court has been brought in an inconvenient forum.
Guarantor hereby appoints the Secretary of the State of Ohio as its agent for
service of process. Guarantor hereby consents that service of process in any
action, suit or proceeding may be made by service upon the aforesaid agent for
5
service of process, by personal service upon the party being served, or by
delivery in accordance with the notice requirements of Section 9.8 of the Loan
-----------
Agreement.
16. Miscellaneous.
-------------
(a) This Agreement may not be modified, altered or amended nor may any
provision hereof or rights hereunder be waived, except by an instrument in
writing signed by the person or entity against which such modification,
alteration, amendment or waiver is sought to be enforced.
(b) Except as provided in Section 6 above, this Agreement shall
---------
terminate upon the payment by Borrower to Lender of all amounts evidenced by the
Note.
(c) This Agreement may be executed in any number of counterparts each
of which shall be a valid and binding original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have caused this instrument to be duly
executed and delivered under seal as of the date first written above.
GUARANTOR:
CORINTHIAN COLLEGES, INC.,
a Delaware corporation
By: /s/ Xxxxx X. XxXxxx
------------------------------------
Name: Xxxxx X. XxXxxx
--------------------------------
TITLE: VP & Treasurer
---------------------------------
6
