EXHIBIT 10.38
ESCROW AGREEMENT
This Escrow Agreement (this "Agreement") is entered into as of October
17, 1996, among Xxxxxxxx Colleges, Inc., a Mississippi corporation ("Xxxxxxxx"),
for itself and/or as agent for certain subsidiaries of Xxxxxxxx as identified on
Exhibit A or any other parties as designated by Xxxxxxxx (in such capacities the
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"Xxxxxxxx Payee"), Corinthian Colleges, Inc., a Delaware corporation ("Buyer"),
and Xxxxx Fargo Bank, N.A., as escrow agent ("Escrow Agent").
R E C I T A L S
WHEREAS, pursuant to the Master Asset Purchase Agreement, dated as of
October 15, 1996 (the "Acquisition Agreement"), by and among Buyer, Xxxxxxxx and
certain of Phillip's wholly-owned subsidiaries (together with Xxxxxxxx, the
"Selling Parties"), Buyer has agreed to purchase from the Selling Parties, and
the Selling Parties have agreed to sell, convey, assign, transfer and deliver to
Buyer, certain assets of the Selling Parties on the terms described in the
Acquisition Agreement; and
WHEREAS, Xxxxxxxx has made or given certain agreements, covenants,
representations and warranties and indemnities in the Acquisition Agreement and
has agreed that a portion of the purchase price shall be placed and maintained
in an escrow account to be administered pursuant to this Agreement and the
Acquisition Agreement; and
WHEREAS, the parties desire to arrange for such escrow and appoint
Escrow Agent as escrow agent in accordance with the terms hereof.
A G R E E M E N T
In consideration of the mutual promises contained herein and for other
good and valuable consideration, receipt of which is hereby acknowledged, and
intending to be legally bound, the parties agree as follows:
1. INTERPRETATION AND DEFINITIONS. This Agreement is being executed
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and delivered pursuant to Section 3.3 of the Acquisition Agreement and is the
Tier I Escrow Agreement referred to therein. The terms and conditions of the
Acquisition Agreement are hereby incorporated by reference into this Agreement,
but only for such purposes as the context of this Agreement may require. The
provisions of this Agreement shall not in any event be construed so as to
enlarge or diminish the rights of the Selling Parties or Buyer under the
Acquisition Agreement. The basis for any claim for indemnification, and any
limitations thereon, shall
be governed by the Acquisition Agreement, which shall be controlling between
Buyer and the Xxxxxxxx Payee for all purposes of this Agreement and shall be
applicable between the Xxxxxxxx Payee and Buyer to the extent inconsistent with
the provisions hereof. Capitalized terms used and not defined herein have the
meanings given to them in the Acquisition Agreement.
2. APPOINTMENT OF ESCROW AGENT. Escrow Agent is hereby appointed to
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act as escrow agent in accordance with the terms hereof, and Escrow Agent hereby
accepts such appointment. Escrow Agent shall have all the rights, powers,
duties and obligations provided herein.
3. DEPOSIT OF THE FUNDS. Buyer shall deliver to the Escrow Agent all
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payments required to be so delivered under the Escrow Funding Note in accordance
with the terms of the Escrow Funding Note and the Acquisition Agreement (the
"Tier I Funds"). Escrow Agent shall hold the Tier I Funds, and any accrued
interest or earnings thereon, in a form of interest-bearing escrow account (the
"Escrow Account"). The amount in the Escrow Account at any time, including
accrued interest and earnings on such amount, are referred to herein as the
"Escrow Amount."
Escrow Agent shall, pending the disbursement of any Tier I Funds
pursuant to this Agreement, invest and reinvest the Escrow Amount from time to
time in the name of Escrow Agent or its nominee as jointly instructed in writing
by Buyer and the Xxxxxxxx Payee. If Buyer and the Xxxxxxxx Payee fail to
instruct Escrow Agent to invest or reinvest the Escrow Amount or any portion
thereof, the Escrow Agent shall invest the Escrow Amount or portion thereof in
(a) direct obligations of, or obligations fully guaranteed by, the United States
of America or any agency thereof, (b) certificates of deposit issued by
commercial banks having a combined capital, surplus and undivided profits of not
less than one hundred million dollars ($100,000,000), (c) repurchase agreements
collateralized by securities issued by the United States of America or any
agency thereof, or by any private corporation the obligations of which are
guaranteed by the full faith and credit of the United States of America, (d)
prime bankers' acceptances, (e) commercial paper issued by the parent
corporation of any commercial bank of recognized standing having capital and
surplus in excess of $500,000,000 and commercial paper issued by any person
rated at least AA or the equivalent thereof by Standard & Poor's Ratings
Services or at least Aa3 or the equivalent thereof by Xxxxx'x Investors Service,
Inc. and in each case maturing not more than six months after the date of
acquisition by such person, (f) money market funds investing in any of the
above, or (g) other investments of equal or greater security and liquidity.
4. FEES AND EXPENSES. In consideration of the acceptance of this
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Agreement by Escrow Agent (as evidenced by its
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signature below), the Xxxxxxxx Payee and Buyer agree, for themselves and their
successors and assigns, to pay Escrow Agent its charges, fees, and expenses as
contemplated by this Agreement and set forth on Exhibit B to this Agreement.
The Xxxxxxxx Payee and Buyer shall each pay one-half of all such charges, fees
and expenses. Such amount is intended as compensation for Escrow Agent's
ordinary services as contemplated by this Agreement and shall be paid as
described above. In the event Escrow Agent renders services not provided for in
this Agreement, Escrow Agent shall be entitled to receive from the Xxxxxxxx
Payee and Buyer reasonable compensation and reasonable costs, if any, for such
extraordinary services, and such compensation and costs shall be borne equally
by the Xxxxxxxx Payee and Buyer. If any amounts due to Escrow Agent under this
Agreement shall remain unpaid for more than 30 days after receipt by Xxxxxxxx
and Buyer of a notice from Escrow Agent requesting payment of such amounts,
Escrow Agent may withhold such unpaid amounts from the Escrow Amount.
5. APPLICATION OF ESCROW ACCOUNT. The purposes of the Escrow Account
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shall be, and the Escrow Amount shall be applied:
(a) to pay any loss, liability, claim, obligation, damage or
deficiency for which the Selling Parties have agreed to indemnify Buyer
pursuant to Section 9.12 of the Acquisition Agreement, subject to the
provisions of Section 2.2.3(b) and the limitations provided in Sections
9.14.4, 9.14.6 and 9.16 of the Acquisition Agreement; and
(b) to pay to Buyer up to a maximum aggregate amount of $1,000,000 in
connection with a reduction of the Purchase Price as provided in Section
2.2.3(b)(iv) of the Acquisition Agreement.
6. ESCROW AMOUNT NOT EXCLUSIVE REMEDY. Subject to the limitations
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contained in the Acquisition Agreement, the availability of the Escrow Amount
in the Escrow Account for the payment of losses under Section 5 of this
Agreement shall not limit in any way or restrict any other remedies available to
Buyer under the Acquisition Agreement for payment in respect of such losses.
7. ASSERTION OF CLAIMS BY BUYER. From time to time during the term
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of this Agreement, Buyer may assert any claim (each, a "Claim") for payment to
the extent of the Escrow Amount and may demand satisfaction thereof from the
Escrow Account. To assert a Claim, Buyer shall deliver a written notice to each
of Escrow Agent and Xxxxxxxx stating the amount of the Claim in dollars if such
amount is ascertainable (a "Liquidated Claim"), the basis of such Claim in
general terms and the date such notice is being sent (such notice, a
"Certificate of Claim"). If Buyer cannot ascertain the dollar amount of any
such Claim (an "Unliquidated Claim"), then to assert such Claim, Buyer shall
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deliver to each of Escrow Agent and Xxxxxxxx a written notice stating Buyer's
estimate of the anticipated maximum amount of such Claim, the basis of such
Claim in general terms and the date such notice is being sent (such notice, a
"Notice of Expected Claim"). The date appearing on a Certificate of Claim or
Notice of Expected Claim as the date such notice was sent is referred to herein
as the "Notice Date".
8. SETTLEMENT OF CLAIMS. Claims asserted by Buyer in the manner set
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forth in Section 7 hereof shall be settled in whole or in part, and in one or
more installments, in accordance with the provisions of this Section 8.
(a) Liquidated Claims. Escrow Agent, without concerning itself with
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Buyer's explanation as to the basis for any Liquidated Claim, may disburse
the Escrow Amount or any portion thereof to Buyer to settle any such
Liquidated Claim asserted by Buyer as follows:
(i) Upon receipt by Escrow Agent of a written instruction
executed by Xxxxxxxx and Buyer; or
(ii) Forty-five (45) days after the Notice Date of a Liquidated
Claim delivered by Buyer pursuant to Section 7, provided that the
following conditions have been satisfied:
(A) Buyer shall have delivered to Escrow Agent a
Certificate of Claim;
(B) Buyer shall have delivered to Escrow Agent an affidavit
of mailing or certification stating that Buyer has delivered to
Xxxxxxxx a Certificate of Claim with respect to such Liquidated
Claim;
(C) Escrow Agent shall have delivered a written notice to
Xxxxxxxx of Escrow Agent's intention to disburse the Escrow
Amount or portion thereof pursuant to such Certificate of Claim
at least ten (10) days in advance of the disbursement; and
(D) Escrow Agent shall not have received from Xxxxxxxx a
written objection to the disbursement (an "Objection").
Any Objection by Xxxxxxxx shall include a statement in reasonable detail of
Xxxxxxxx' basis for the Objection, and Xxxxxxxx shall deliver a copy of any
Objection to Buyer. If Xxxxxxxx delivers to Escrow Agent an Objection
prior to the
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satisfaction of such Liquidated Claim from the Escrow Amount, such
Liquidated Claim (a "Disputed Liquidated Claim") shall remain pending until
resolved as provided herein, and Escrow Agent, without concerning itself as
to the grounds for such Objection, shall not disburse the Escrow Amount or
any portion thereof to satisfy such Disputed Liquidated Claim. If after
receiving an Objection from Xxxxxxxx, Escrow Agent receives (1) the written
consent of Xxxxxxxx to the disbursement by Escrow Agent of the amount of
such Disputed Liquidated Claim, (2) a written agreement executed by Buyer
and Xxxxxxxx revising the amount of such Disputed Liquidated Claim and
instructing Escrow Agent to disburse to Buyer such revised amount, (3) a
judgment, order or award of a court of competent jurisdiction or arbitrator
or administrative judge deciding such Claim has been rendered, as evidenced
by a certified copy of such judgment, order or award ("Original Judgment"),
or (4) a written notice from an arbitrator selected pursuant to the
provisions of Section 9.18.2 of the Acquisition Agreement ("Arbitrator")
stating that the Disputed Liquidated Claim has been resolved and stating
the resolution of such Disputed Liquidated Claim, then Escrow Agent shall
be authorized to and shall promptly disburse the Escrow Amount or portion
thereof in accordance with such documents. Notwithstanding the foregoing,
in connection with clause (3) of the previous sentence, if the Original
Judgment is reversed or modified on appeal, the Buyer shall repay the
Escrow Agent, or, in the event this Agreement is terminated in accordance
with Section 11, the Xxxxxxxx Payee, any amounts received by the Buyer from
the Escrow Agent as a result of the Original Judgment.
(b) Unliquidated Claims. Upon receipt by Escrow Agent of a written
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instruction of settlement executed by both Buyer and Xxxxxxxx which sets
forth an agreement or settlement of an Unliquidated Claim, then Escrow
Agent shall be authorized to and shall promptly disburse the Escrow Amount
in accordance with such written instruction.
Any Unliquidated Claim which is not settled by a joint instruction of
Buyer and Xxxxxxxx shall remain pending until resolved pursuant to Section
8(c), or, if earlier, at such time as the amount of the Unliquidated Claim
becomes fully liquidated and known. At such time as any Unliquidated Claim
becomes fully liquidated and known, it shall be settled in accordance with
the procedures for the settlement of Liquidated Claims set forth in Section
8(a).
(c) Resolution of Claims. Any Disputed Liquidated Claim or any
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disputes regarding Unliquidated Claims which cannot be resolved by Buyer
and Xxxxxxxx shall be finally resolved pursuant to Section 9.18.2 of the
Acquisition Agreement. The Arbitrator shall, upon resolving or settling
any Disputed
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Liquidated Claim or Unliquidated Claim pursuant to this Section 8(c),
deliver written notice of such resolution or settlement to Escrow Agent,
Xxxxxxxx and Buyer. If the Arbitrator's resolution or settlement concludes
that Buyer is entitled to receive any payment from the Escrow Amount, the
Arbitrator shall deliver written instructions to Escrow Agent to disburse
to Buyer the amount of such payment from the Escrow Amount. Promptly after
receiving any such notice from the Arbitrator, Escrow Agent shall disburse
such amount to Buyer.
9. ASSERTION OF EARLY RELEASE. Pursuant to Section 2.2.3(b) of the
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Acquisition Agreement, in certain instances the Escrow Agent shall disburse a
portion of the Escrow Amount (each, a "Disbursement") from the Escrow Account to
the Xxxxxxxx Payee prior to the Stated Termination Date (as defined in Section
11). To demand a Disbursement in accordance with Section 2.2.3(b), Xxxxxxxx
shall deliver written notice to each of Escrow Agent and Buyer stating the
amount of the Disbursement, the basis of such Disbursement in general terms and
the date such notice is being sent (each, a "Disbursement Notice").
10. SETTLEMENT OF EARLY RELEASE DISPUTES. Disbursements requested by
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Xxxxxxxx under Section 9 hereof shall be made in accordance with the provisions
of this Section 10 as follows:
(a) Disbursements. Escrow Agent, without concerning itself with
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Xxxxxxxx' explanation as to the basis for the Disbursement, may disburse
the requested Disbursement to Xxxxxxxx as follows:
(i) Upon receipt by Escrow Agent of a written instruction
executed by the Xxxxxxxx Payee and Buyer; or
(ii) Thirty (30) days after the Escrow Agent's receipt of a
Disbursement Notice delivered by Xxxxxxxx pursuant to Section 9,
provided that the following conditions have been satisfied:
(A) Xxxxxxxx shall have delivered to Escrow Agent an
affidavit of mailing or certification stating that Xxxxxxxx has
delivered to Buyer a Disbursement Notice with respect to such
Disbursement;
(B) Escrow Agent shall have delivered written notice to
Buyer of Escrow Agent's intention to disburse the Escrow Amount
or portion thereof pursuant to such Disbursement Notice at least
ten (10) days in advance of the Disbursement; and
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(C) Escrow Agent shall not have received from Buyer a
written opposition to the Disbursement (an "Opposition").
Any Opposition by Buyer shall include a statement in reasonable detail of
Buyer's basis for the Opposition, and Buyer shall deliver a copy of any
Opposition to Xxxxxxxx. If Buyer delivers to Escrow Agent an Opposition
prior to the Disbursement, Escrow Agent, without concerning itself as to
the grounds for such Opposition, shall not make such Disbursement (a
"Disputed Disbursement") until resolved as provided herein. If after
receiving an Opposition from Buyer, Escrow Agent receives (1) the written
consent of Buyer to the Disbursement by Escrow Agent, (2) a written
agreement executed by Xxxxxxxx and Buyer revising the amount of such
Disbursement and instructing Escrow Agent to disburse to Xxxxxxxx such
revised amount, (3) a judgment, order or award of a court of competent
jurisdiction or arbitrator or administrative judge deciding such claim has
been rendered, as evidenced by a certified copy of such judgment, order or
award ("Original Judgment"), or (4) a written notice from an arbitrator
selected pursuant to the provisions of Section 9.18.2 of the Acquisition
Agreement (the "Arbitrator") stating that the Disputed Disbursement has
been resolved and stating the resolution of such Disputed Disbursement,
then Escrow Agent shall be authorized to and shall make the Disputed
Disbursement or portion thereof to the Xxxxxxxx Payee in accordance with
such documents. Notwithstanding the foregoing, in connection with clause
(3) of the previous sentence, if the Original Judgment is reversed or
modified on appeal, Xxxxxxxx shall repay the Escrow Agent any amounts
received by Xxxxxxxx from the Escrow Agent as a result of the Original
Judgment.
11. TERMINATION AND RELEASE OF ESCROW AMOUNT. Subject to earlier
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disbursement of all or a portion of the Escrow Amount as provided herein, Escrow
Agent shall hold the Escrow Amount in escrow until the later of (a) October 15,
1998 ("Stated Termination Date") or (b) the date on which all Liquidated and
Unliquidated Claims asserted on or prior to October 15, 1998 by Buyer have been
settled or resolved in accordance with the provisions of this Agreement, and the
full amount of all payments to Buyer required thereby have been disbursed to
Buyer (the "Final Settlement Time"). Immediately after the Final Settlement
Time, Escrow Agent shall disburse the remaining Escrow Amount in the Escrow
Account to the Xxxxxxxx Payee and the escrow shall terminate; provided, however,
that if at any time prior to the Final Settlement Time the Escrow Amount shall
equal zero, then the escrow shall terminate at such earlier time.
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12. RECOVERY OF ATTORNEYS' FEES AND COURT COSTS. In the event of any
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controversy arising out of the subject matter of this Agreement, the prevailing
party in such controversy shall be entitled to recover its reasonable attorneys'
fees, and other reasonable costs and expenses, including all amounts paid to or
on behalf of Escrow Agent, incurred in connection with such controversy. If
Buyer is entitled to reimbursement of such fees, costs and expenses, it may
recover them from the Escrow Amount, but its rights and remedies shall not be
limited to the Escrow Amount. To recover such amount from the Escrow Amount,
Buyer shall deliver to Escrow Agent a copy of the adjudication resulting from
such controversy in which it was the prevailing party and a self-certified
statement of its fees, costs and expenses, and Escrow Agent shall be authorized
to disburse to Buyer the total amount thereof. If the Xxxxxxxx Payee is
entitled to reimbursement of such fees, costs and expenses, Xxxxxxxx shall
deliver to Buyer a self-certified statement of its fees, costs and expenses and
Buyer shall promptly reimburse such amount to the Xxxxxxxx Payee.
13. NO DOUBLE INDEMNIFICATION. The parties hereto hereby acknowledge
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that in no event shall Buyer or its Affiliates be entitled to all or any portion
of the Escrow Amount in connection with indemnification pursuant to (a) Section
9.12 of the Acquisition Agreement based upon any matters for which Buyer or its
Affiliates received indemnification under the Secondary Agreement or (b) Section
9.12 of the Secondary Agreement based upon any matter for which Buyer or its
Affiliates received indemnification under the Acquisition Agreement.
14. LIMITATIONS ON LIABILITY OF ESCROW AGENT.
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(a) Escrow Agent may act upon any written notice, certificate,
instrument, request, waiver, consent, paper, or other document that Escrow Agent
in good faith reasonably believes to be genuine and to have been made, sent,
signed, prescribed, or presented by the proper person or persons. Escrow Agent
shall not be liable for any action taken or omitted by it in connection with the
performance of its duties and obligations hereunder, except for its own gross
negligence or willful misconduct. Escrow Agent shall be under no obligation to
institute or defend any action, suit or legal proceeding in connection with this
escrow or this Agreement unless it is indemnified to its satisfaction by the
party or parties who desire that it undertake such action.
(b) Escrow Agent shall be under no obligation or liability for
failure to inform Buyer or Xxxxxxxx regarding any transaction or facts within
Escrow Agent's knowledge, even though the same may concern the matters described
herein, provided they do not prevent or interfere with Escrow Agent's compliance
with this Agreement, nor shall Escrow Agent be liable for the sufficiency,
correctness or genuineness as to form, manner of execution or
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validity of any instrument deposited, nor as to identity, authority, or rights
of any person executing the same, except as above provided.
(c) Should Escrow Agent during or after the term of the escrow
receive or become aware of any conflicting demands or claims with respect to the
Escrow Amount or the rights of any of the parties hereto, or any money or
property deposited herein or affected hereby, Escrow Agent shall have the right
to discontinue any or all further acts on its part until such conflict is
resolved to its and the parties' satisfaction, and Escrow Agent shall have the
further right to commence or defend any action or proceeding for the
determination of such conflict. In the event Escrow Agent should file suit in
interpleader, it shall be fully released and discharged from all further
obligations under this Agreement.
(d) Escrow Agent may consult with legal counsel satisfactory to it in
connection with any dispute, the construction of any provision of this Agreement
or the duties and obligations of Escrow Agent under this Agreement.
(e) In the event Escrow Agent becomes involved in arbitration or
litigation in connection with this Agreement, Xxxxxxxx, Payee and Buyer, jointly
and severally, agree to indemnify and hold Escrow Agent harmless from all
losses, costs, damages, expenses, liabilities, judgments and attorneys' fees
suffered or incurred by Escrow Agent as a result thereof, except that this
indemnity obligation shall not apply to any arbitration or litigation in which
relief is obtained for the gross negligence or willful misconduct of Escrow
Agent.
(f) Escrow Agent shall not be responsible for the sufficiency of the
form, execution, validity or genuineness of notices, documents or securities now
or hereafter deposited hereunder, or of any endorsement thereon, or for any lack
of endorsement thereon, or for any description therein nor shall Escrow Agent be
responsible or liable in any respect on account of the identity, authority or
rights of the persons executing or delivering or purporting to execute or
deliver any such document, security or endorsement.
(g) The duties and responsibilities of Escrow Agent shall be limited
to those expressly set forth in this Agreement, provided, however, that with
Escrow Agent's written consent, the duties and responsibilities in this
Agreement may be amended at any time or times by an instrument in writing signed
by the Xxxxxxxx Payee and Buyer. Escrow Agent is authorized, in its sole
discretion, to disregard any and all notices or instructions given by any other
person, firm or corporation, except such notices or instructions as are
hereinabove provided for.
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(h) Except for the provisions of this Agreement, the Escrow Agent is
not required to be familiar with the provisions of any other instrument or
agreement and shall not be charged with any responsibility or liability in
connection with the observance or non-observance by anyone of the provisions of
any such other instrument or agreement.
15. RELEASE OF ESCROW AGENT. The retention and distribution of the
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Escrow Amount in accordance with the terms and provisions of this Agreement
shall fully and completely release Escrow Agent from any obligations or
liabilities assumed under this Agreement with respect to the Escrow Amount.
16. RESIGNATION AND REMOVAL OF ESCROW AGENT. Escrow Agent or any
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successor to it may resign and be discharged of its duties and obligations
hereunder by delivering written notice to Buyer and Xxxxxxxx specifying the
effective date of such resignation, which date shall not be earlier than 30 days
following the receipt by Buyer and Xxxxxxxx of the notice of resignation. Such
resignation shall take effect on the date specified in the notice of
resignation, unless a successor escrow agent has been appointed in accordance
with the provisions of Section 17 and has accepted such appointment, in which
case such resignation shall take effect immediately upon receipt by such
successor escrow agent of the Escrow Amount. Escrow Agent may be removed by the
joint action of Buyer and Xxxxxxxx, with or without cause, at any time upon 60
days' prior written notice to Escrow Agent, which notice may be waived by Escrow
Agent.
Notwithstanding any resignation or removal of Escrow Agent pursuant to
this Section 15, Escrow Agent shall continue to serve in its capacity as escrow
agent until (i) a successor escrow agent is appointed in accordance with the
provisions of Section 17 and has accepted such appointment and (ii) the Escrow
Amount has been transferred to and received by such successor escrow agent.
Buyer and Xxxxxxxx shall promptly take the necessary action to appoint a
successor escrow agent in accordance with the provisions of Section 17.
17. APPOINTMENT OF SUCCESSOR ESCROW AGENT. If at any time Escrow
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Agent shall resign, be removed or otherwise become incapable of acting as escrow
agent pursuant to this Agreement, or if at any time a vacancy shall occur in the
office of Escrow Agent for any other cause, a successor escrow agent that meets
the qualifications set forth in Section 18 shall be appointed by Buyer, with the
written consent of Xxxxxxxx, which consent may not be unreasonably withheld, by
a written instrument delivered to the successor escrow agent. If no successor
escrow agent has been appointed at the effective date of resignation or removal
of Escrow Agent or within 30 days after the time Escrow Agent became incapable
of acting or a vacancy occurred in the office of escrow
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agent, any party hereto may petition a court of competent jurisdiction for an
appointment of a successor escrow agent and Escrow Agent shall have the right to
refuse to make any payments from the Escrow Amount until a successor escrow
agent is appointed and has accepted such appointment. Upon the appointment and
acceptance of any successor escrow agent hereunder, Escrow Agent shall transfer
the Escrow Amount to its successor. Upon receipt by the successor escrow agent
of the Escrow Amount, Escrow Agent shall be discharged from any continuing
duties or obligations under this Agreement and the successor escrow agent shall
be vested with all rights, powers, duties and obligations of Escrow Agent under
this Agreement.
18. ESCROW AGENT QUALIFICATIONS. Escrow Agent shall at all times be
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a bank, savings and loan association or trust company in good standing,
organized and doing business under the laws of the United States or a state of
the United States, having combined capital and surplus of not less than One
Hundred Million Dollars ($100,000,000) and shall be authorized under the laws
governing its organization to exercise corporate trust powers and shall be
authorized under such laws and the laws of the State of California to enter into
and perform this Agreement. If Escrow Agent shall at any time cease to have the
foregoing qualifications, Escrow Agent shall give notice of resignation to Buyer
and Xxxxxxxx as provided in Section 16, and Xxxxxxxx and Buyer agree to
thereupon promptly appoint a qualified successor escrow agent in accordance with
Section 16.
19. PARTIES IN INTEREST. This Agreement shall be binding upon and
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inure to the benefit of each party, and nothing in this Agreement, express or
implied, is intended to confer upon any other person any rights or remedies of
any nature whatsoever by, under or by reason of this Agreement. Nothing in this
Agreement is intended to relieve or discharge the obligation of any third person
to, or to confer any right of subrogation or action over against, any party to
this Agreement.
20. NOTICES. All notices or other communications required or
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permitted hereunder shall be in writing and shall be given or made by personal
delivery, or by a nationally recognized courier service for overnight delivery.
IF TO XXXXXXXX OR THE XXXXXXXX PAYEE, ADDRESSED TO:
XXXXXXXX COLLEGES, INC.
XXX XXXXXXX XXXXX, XXXXX 0000
XXXXXXXX, XXXXXXXXXXX 00000
ATTENTION: XXXXXX X. XXXXX, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
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WITH A COPY TO:
XXXXXXX & MARSAL, INC.
000 XXXXX XXXXXX
XXXXX 0000
XXX XXXX, XXX XXXX 00000-0000
ATTENTION: XXXXXX X. XXXXX
WITH A COPY TO:
DOW, XXXXXX & XXXXXXXXX PLLC
0000 XXX XXXXXXXXX XXXXXX, X.X., XXXXX 000
XXXXXXXXXX, X.X. 00000-0000
ATTENTION: XXXX X. BUREAU, ESQ.
IF TO BUYER, ADDRESSED TO:
CORINTHIAN COLLEGES, INC.
0000 XXXX XXXXX, XXXXX 000
XXXXX XXX, XXXXXXXXXX 00000
ATTENTION: XXXXX XXXXX, PRESIDENT
WITH A COPY TO:
O'MELVENY & XXXXX LLP
000 XXXXXXX XXXXXX XXXXX, XXXXX 0000
XXXXXXX XXXXX, XXXXXXXXXX 00000
ATTENTION: XXXXX X. XXXXXXX, ESQ.
IF TO ESCROW AGENT, ADDRESSED TO:
XXXXX FARGO BANK, N.A.
CORPORATE TRUST ADMINISTRATION
000 XXXXXXXX XXXXXXXXX, MAC 2818-111
XXX XXXXXXX, XXXXXXXXXX 00000
ATTENTION: XXXXXX XXXXXX
or to such other address or to such other person as either party shall have last
designated by such notice to the other party. Each such notice or other
communication shall be effective and received (i) on the actual receipt thereof
in the case of hand delivery, or (ii) on the next business day after deposit in
the case of notices by nationally recognized overnight courier services. As
used herein, notice to a party shall include concurrent notice to that party's
counsel as set forth herein.
21. AMENDMENTS; WAIVERS. This Agreement may be amended only by an
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agreement in writing of all parties. No waiver of any provision nor consent to
any exception to the terms of this Agreement shall be effective unless in
writing and signed by the
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party to be bound, and then only to the specific purpose, extent and instance so
provided.
22. COUNTERPARTS. This Agreement and any other agreement (or
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document) delivered pursuant hereto may be executed in one or more counterparts
and by different parties in separate counterparts. All of such counterparts
shall constitute one and the same agreement and shall become effective when one
or more counterparts of this Agreement have been signed by each party and
delivered to the other parties.
23. ASSIGNMENT; SUCCESSORS AND ASSIGNS. The rights and obligations
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of each party under this Agreement may not be assigned without the prior written
consent of all other parties. This Agreement shall be binding upon, inure to
the benefit of and be enforceable by the successors and permitted assigns of the
respective parties.
24. GOVERNING LAW. This Agreement and the legal relations among the
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parties shall be governed by and construed in accordance with the laws of the
State of California applicable to contracts made and performed in such State
without regard to conflicts of law doctrines.
25. INTEGRATION. This Agreement, the Acquisition Agreement and the
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Secondary Agreement and the other Ancillary Agreements constitute the entire
agreement and understanding of the parties with respect to the subject matter of
this Agreement and supersede all prior agreements and understandings with
respect thereto.
26. SEVERABILITY. If any provision of this Agreement is held invalid
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by any court, governmental agency or regulatory body, the other provisions shall
remain in full force and effect.
27. HEADINGS. The descriptive headings of the Sections of this
--------
Agreement are for convenience only and do not constitute a part of this
Agreement.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on the day and year first above written.
"XXXXXXXX PAYEE"
XXXXXXXX COLLEGES, INC., A MISSISSIPPI
CORPORATION, FOR ITSELF AND/OR AS
AGENT FOR CERTAIN SUBSIDIARIES OR
ANY OTHER PARTIES AS DESIGNATED BY
XXXXXXXX
By [SIGNATURE ILLEGIBLE]
-------------------------------------------
"BUYER"
CORINTHIAN COLLEGES, INC., A DELAWARE
CORPORATION
By /s/ Xxxxx X. Xxxxx
-------------------------------------------
By___________________________________________
"ESCROW AGENT"
XXXXX FARGO BANK, N.A.
By [SIGNATURE ILLEGIBLE]
--------------------------------
Its VICE PRESIDENT
-------------------------------
By [SIGNATURE ILLEGIBLE]
--------------------------------
Its ASST. VICE PRESIDENT
-------------------------------
14
EXHIBIT A
XXXXXXXX PAYEES
1. Xxxxx Business College, Inc. (a Colorado corporation)
2. Xxxxxxxx College of Denver, Inc. (a Colorado corporation)
3. TO-BA Corporation (a Nevada corporation)
4. Xxxxxxxx College of Los Angeles, Inc. (a California corporation)
5. Xxxxxxxx Educational Services of New York City, Inc. (a New York
corporation)
6. Xxxxxxxx Educational Group of Pennsylvania, Inc. (a Pennsylvania
corporation)
7. Xxxxxxxx Educational Group of Portland, Inc. (an Oregon Corporation)
8. Rochester Business Institute, Inc. (a New York corporation)
9. Xxxxxxxx Educational Group of Utah, Inc. (a Utah corporation)
10. Xxxxxxxx Educational Group of Missouri, Inc. (a Missouri corporation)
11. Xxxxxxxx Educational Group of Central Florida, Inc. (a Florida corporation)
A-1
EXHIBIT B
ESCROW AGENT FEES
$3,000.00
B-1
