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EXHIBIT 10.23
CONTRIBUTION AGREEMENT
This Contribution Agreement, dated as of December 19, 2000, is by and
between Beacon Education Management, Inc., a Delaware corporation ("Beacon"),
and Xxxxxxx X. Xxxxxxxxx, as Trustee (the "Trustee") of the Xxxxxxxxx 1980
Revocable Trust formed under that certain Trust Agreement originally dated
September 4, 1980, as amended and restated by agreement dated and executed on
November 23, 1999 (the "Trust").
WHEREAS, People's Capital and Leasing Corp., a Connecticut corporation
(the "Lender") has agreed to simultaneously make five (5) separate term loans
(collectively, the "Term Loans" and individually, a "Term Loan") that are in the
aggregate principal amount of up to $1,347,000.00 to five (5) different charter
schools, which Term Loans are more particularly described as follows: (1) a Term
Loan in the original principal amount of $196,037.67 to Xxxxxx Community Charter
School, a body politic and corporate created and existing under Mass. Gen. Laws,
Chapter 71, Section 89 ("LCCS"); (2) a Term Loan in the original principal
amount of $198,316.88 to South Buffalo Charter School, an education corporation
incorporated by the Board of Regents of the State of New York ("SBCS"); (3) a
Term Loan in the original principal amount of $148,090.57 to Community Charter
School Group, d/b/a Southwest Charter School, a Missouri non-profit corporation
incorporated pursuant to Chapter 355, RSMo ("SWCS"); (4) a Term Loan in the
original principal amount of $326,831.38 to St. Louis Charter School, a Missouri
non-profit corporation incorporated pursuant to Chapter 355, RSMo ("SLCS"); and
(5) a Term Loan in the original principal amount of $477,604.45 to Xxxxxxxx
Xxxxxxxx Academy, a Missouri non-profit corporation incorporated pursuant to
Chapter 355, RSMo ("TMA") (LCCS, SBCS, SWCS, SLCS, and TMA are sometimes
hereinafter referred to collectively and individually as the "Borrowers"), each
said Term Loan to be evidenced by a Loan and Security Agreement of even date
herewith in the applicable principal amount (collectively and individually, the
"Loan and Security Agreements");
WHEREAS, in connection with the Term Loans, Trustee has executed five
(5) Limited Guaranty Agreements by the Trust in favor of Lender all of even date
herewith in the aggregate maximum principal amount of Six Hundred Thousand and
00/100 Dollars ($600,000.00) (collectively, "Limited Guaranty");
WHEREAS, Beacon has requested that Trustee provide the Limited Guaranty
to support the obligations of the Borrowers under the Term Loans, and Beacon, as
manager of the Borrowers, will receive direct financial benefits as a result of
the Term Loans; and
WHEREAS, Trustee has requested that Beacon acknowledge in writing its
agreement to indemnify Trustee from all claims and losses that may be asserted
against Trustee by Lender under the Limited Guaranty.
NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants contained herein, and in order to induce Trustee to execute the
Limited Guaranty, the parties agree as follows:
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1. Reimbursement by Beacon. If at any time, and from time to
time, Lender shall have made a demand on Trustee for payment under the Limited
Guaranty or Trustee shall have otherwise made any payment to Lender on account
of Borrowers' obligations under the Term Loan and Security Agreements, then
Beacon shall, on demand by Trustee, reimburse Trustee within ten (10) days for
all amounts Trustee has paid to Lender. No forbearance or failure by Trustee to
demand reimbursement from Beacon on any occasion or with respect to any payment
shall be deemed a waiver of the right to seek reimbursement of any other or
subsequent payment on one or more other occasions.
2. Notice of Default by Borrowers. If an Event of Default (as
defined in the Loan and Security Agreements) shall occur, then within five (5)
days after Beacon has knowledge of such Event of Default Beacon shall furnish or
cause to be furnished to Trustee a written statement describing such Event of
Default.
3. Representations and Warranties of Beacon. Beacon is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Beacon has all requisite power and authority, rights
and franchises to own and operate its properties, to carry on its business as
now conducted and as proposed to be conducted, and to enter into and perform
this Agreement. The execution, delivery and performance of this Agreement by
Beacon are within Beacon's power and have been duly authorized. This Agreement
has been duly executed by Beacon and is a legally valid and binding obligation
of Beacon, enforceable against Beacon in accordance with its terms, except as
enforceability thereof may be affected by (i) bankruptcy, insolvency or similar
laws affecting the enforcement of creditors rights generally and (ii)
availability of certain equitable remedies may be limited by certain equitable
principles of general applicability.
4. Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be personally delivered or
sent by registered or certified mail, postage prepaid, return receipt requested,
delivered or sent by telecopy or via a nationally-recognized overnight courier
service with charges prepaid, and shall be deemed received upon the earlier of:
(a) if delivered personally or via overnight courier, the date of delivery to
the address of the person to receive such notice, (b) if mailed, upon the date
of receipt as disclosed on the return receipt, (c) if telecopied, the date of
receipt as disclosed by the transmission record.
To Trustee: The Xxxxxxxxx 1980 Revocable Trust
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Trustee
To Beacon: Beacon Education Management, Inc.
00 Xxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Chairman
Notice of change of address shall be given by written notice in the manner
detailed in this Section. Rejection or other refusal to accept or the inability
to deliver because of changed
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address of which no notice was given shall be deemed to constitute receipt of
the notice, demand, request or communication sent.
5. Survival of Warranties. All agreements, representations and
warranties made in this Agreement and in any related certificates and agreements
shall survive the execution and delivery of this Agreement and the expiration of
the Limited Guaranty, and shall continue until any and all sums payable under
this Agreement shall have been paid and performed in full.
6. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an original,
and all of which counterparts, taken together, shall constitute but one and the
same Agreement.
7. Headings. Sections and other headings in this Agreement are
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
8. No Waiver. Any delay or omission of Trustee in exercising any
right or power arising from any default by Beacon shall not be construed as a
waiver of such default nor shall any single or partial exercise thereof preclude
any further exercise thereof. Trustee may, at its option, waive any of the
conditions herein, and any such waiver shall not be deemed a waiver of Trustee's
rights hereunder but shall be deemed to have been made in pursuance of this
Agreement and not in modification thereof.
9. No Third Party Benefits. This Agreement is made for the sole
benefit of Beacon and Trustee and their successors and permitted assigns. No
other person or persons shall have any rights or remedies under or by reason of
this Agreement or to exercise any right or power of Trustee hereunder. Subject
to the foregoing restrictions, this Agreement shall inure to the benefit of
Trustee and its successors and assigns and binds Beacon and its successors and
assigns.
10. Entire Agreement. This Agreement constitutes the entire
understanding between the parties and may not be modified, amended or terminated
except by a written agreement signed by each of the parties hereto.
11. California Law. This Agreement shall be construed in
accordance with the internal laws of the State of California, without regard to
its conflicts of laws principles.
12. Waiver of Jury Trial, Set-Off and Counterclaim. Beacon and
Trustee waive the right of trial by jury and the Beacon waives the right to
interpose any set-off or counterclaim of any kind or description in any such
litigation.
13. Severability. In the event that any provision of this
Agreement is found to be illegal or unenforceable, the remainder of this
Agreement shall remain in full force and effect.
[THIS SPACE INTENTIONALLY LEFT BLANK.]
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14. Alternative Dispute Resolution. All claims, including any and
all questions of law or fact relating thereto, shall, at the written request of
any party, be determined by reference to a single neutral referee to be selected
by the parties, who shall be a retired state or federal judge with at least five
years of judicial experience in civil matters. In the event that the parties
cannot agree upon a referee, the referee shall be appointed by the court. The
parties shall equally bear the fees and expenses of the referee unless the
referee otherwise provides in the statement of decision. Except as provided in
this Agreement, the reference shall be conducted pursuant to California law.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
"Trustee": /s/ Xxxxxxx X. Xxxxxxxxx
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XXXXXXX X. XXXXXXXXX, as Trustee of
The Xxxxxxxxx 1980 Revocable Trust
"Beacon": BEACON EDUCATION MANAGEMENT,
INC.
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx,
President and Chief Operating Officer
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