EXHIBIT 10.7
CREDIT FACILITY AGREEMENT
This is a CREDIT FACILITY AGREEMENT dated as of June 30, 1995 ("Agreement")
by and between CORINTHIAN SCHOOLS, INC. ("Borrower"), a Delaware corporation,
and BANC ONE CAPITAL PARTNERS II, LIMITED PARTNERSHIP ("Lender"), a Delaware
limited partnership.
The Borrower and the Lender are referred to individually as a "Party" and
collectively as the "Parties."
BACKGROUND
A. BORROWER.
The Borrower is engaged in the business of owning, operating and
administering post-secondary, vocational training schools ("Schools"). Prior to
June 30, 1995, the Borrower did not own, operate or administer any Schools and
had not engaged in any other business.
B. ACQUISITION TRANSACTION.
Pursuant to an Asset Purchase Agreement dated as of June 28, 1995 ("Asset
Purchase Agreement") by and among the Borrower and National Education Centers,
Inc. ("NECI") and National Education Corporation, the Borrower (i) has acquired
all of the assets comprising certain Tier I Schools (as designated in the Asset
Purchase Agreement), and (ii) will, upon the satisfaction of certain conditions
set forth in the Asset Purchase Agreement, acquire the assets comprising the
Tier II and Tier III Schools (as designated in the Asset Purchase Agreement).
Pursuant to a Support Services Agreement dated as of June 30, 1995 and a
Management Agreement dated as of June 30, 1995 both by and between the Borrower
and NECI, Borrower will manage and provide certain support services with respect
to the Tier II and Tier III Schools pending their respective acquisitions as
provided for in the Asset Purchase Agreement.
C. SUBORDINATED SECURED NOTES.
Pursuant to a Subordinated Secured Note and Warrant Purchase Agreement
dated as of June 30, 1995 ("Note Agreement"), the Borrower has agreed to issue
and sell Subordinated Secured Notes in the aggregate principal amount of
$2,000,000 due June 30, 2000 ("Subordinated Notes") to the Lender and
Subordinated Notes in the aggregate principal amount of $500,000 to Primus
Capital Fund III Limited Partnership ("Primus"). The proceeds of the
Subordinated Notes will be applied to pay part of the purchase price provided
for in the Asset Purchase Agreement.
D. SECURITY AGREEMENT.
Payment of the Loans (as defined in this Agreement) and the Subordinated
Notes is secured pursuant to a Security Agreement dated as of June 30, 1995
("Security Agreement") by and among the Borrower, the Lender and Primus,
pursuant to which the Borrower has granted
to Primus and the Lender a security interest in all of the personal property now
or hereafter owned or acquired by the Borrower. The Security Agreement provides,
among other things for the relative priorities of payment of the Loans and the
Subordinated Notes.
E. CREDIT FACILITY.
Upon the terms and subject to the conditions set forth in this Agreement,
the Lender has agreed to loan to the Borrower on a revolving credit basis up to
$2,000,000 aggregate principal amount at any one time outstanding.
STATEMENT OF AGREEMENT
In consideration of their mutual promises set forth in this Agreement, the
Parties hereby agree as follows.
SECTION 1. DEFINED TERMS.
Except as otherwise specifically defined in this Agreement, all terms
specifically defined in the Note Agreement shall have the same definitions when
used in this Agreement. In addition, as used in this Agreement, the following
terms shall have the specified definitions.
SECTION 1.1. "Affirmative Covenants" means the Affirmative
Covenants as provided for in Section 8 of the Note Agreement and incorporated by
reference herein.
SECTION 1.2. "Agreement" means this Credit Facility Agreement.
SECTION 1.3. "Asset Purchase Agreement" shall have the meaning set
forth in Paragraph B.
SECTION 1.4. "Base Rate" means the per annum rate of interest then
most recently determined by Banc One Capital Corporation as the Weekly
Adjustable Rate Index applicable to thirty (30) day AA rated commercial paper.
SECTION 1.5. "Borrower" means Corinthian Schools, Inc., a Delaware
corporation, together with its successors and assigns.
SECTION 1.6. "Business Day" means any day other than a Saturday,
Sunday or day upon which banking institutions are authorized or required by law
or executive order to be closed in the City of Columbus, Ohio.
SECTION 1.7. "Closing Date" means June 30, 1995.
SECTION 1.8. "Collateral" shall have the meaning set forth in the
Security Agreement.
SECTION 1.9. "Default" means any condition or event which, with
notice or lapse of time or both, would constitute an Event of Default.
SECTION 1.10. "Event of Default" shall have the meaning set forth
in Section 5.
SECTION 1.11. "Financial Reporting" means the Financial Reporting
requirements as provided for in Section 7 of the Note Agreement and incorporated
by reference herein.
SECTION 1.12. "Financial Test(s)" means the Financial Test(s) as
provided for in Section 10 of the Note Agreement and incorporated by reference
herein.
SECTION 1.13. "Indebtedness" shall have the meaning set forth in
the Note Agreement.
SECTION 1.14. "Interest Rate" shall have the meaning set forth in
Section 2.2(a).
SECTION 1.15. "Lender" means Banc One Capital Partners II, Limited
Partnership, a Delaware limited partnership, together with its successors and
assigns.
SECTION 1.16. "Loan Documents" shall mean this Agreement, the
Revolving Note and the Security Agreement and all other documents, agreements
and instruments executed and delivered in connection therewith, whether now
existing or hereafter executed and delivered, in each case as the same may be
amended, modified, restated, supplemented, increased, renewed, extended,
substituted for or replaced from time to time.
SECTION 1.17. "Loans" means, collectively, each advance made by the
Lender to the Borrower under the Revolving Note pursuant to the terms and
subject to the conditions of this Agreement.
SECTION 1.18. "Maturity Date" means June 30, 1996.
SECTION 1.19. "NECI" shall have the meaning set forth in Paragraph
B.
SECTION 1.20. "Negative Covenants" means the Negative Covenants as
provided for in Section 9 of the Note Agreement and incorporated by reference
herein.
SECTION 1.21. "Note Agreement" means the Subordinated Secured Note
and Warrant Purchase Agreement dated as of the date hereof by and among the
Borrower, the Lender and Primus.
SECTION 1.22. "Obligations" means all Indebtedness, liabilities and
obligations of the Borrower under the Loan Documents, including, but not limited
to, (a) the obligation of the Borrower for the due and punctual payment of the
principal of and interest on the Revolving Note when due, whether at maturity,
by acceleration, by mandatory prepayment, by notice of voluntary prepayment or
otherwise, (b) all other obligations and all out-of-pocket expenses and
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indemnities now or hereafter existing of the Borrower to the Lender under this
Agreement, (c) all reasonable out-of-pocket costs and expenses, now or hereafter
existing, that may be incurred by the Lender in connection with the
administration and enforcement of the Loan Documents, or the realization on the
security provided for by the Loan Documents, and (d) the obligations of the
Borrower under the Security Agreement.
SECTION 1.23. "Parties" means the Borrower and the Lender,
collectively, and "Party" means either one of the Parties.
SECTION 1.24. "Payment Date" means the last Business Day of any
calendar month on which there is an outstanding principal balance under the
Revolving Note.
SECTION 1.25. "Primus" means Primus Capital Fund III Limited
Partnership, an Ohio limited partnership, together with its successors and
assigns.
SECTION 1.26. "Revolving Note" means that certain promissory note
in the principal amount of up to Two Million Dollars ($2,000,000) substantially
in the form of Exhibit A attached hereto, with appropriate insertion, and made
by Borrower payable to the order of the Lender, as may be amended, supplemented,
increased, or otherwise modified from time to time.
SECTION 1.27. "Schools" shall have the meaning set forth in
Paragraph A.
SECTION 1.28. "Security Agreement" means the Security Agreement,
dated as of the date hereof among the Borrower, the Lender and Primus, as
modified, amended or restated from time to time, together with any other
agreements securing the payment of the obligations evidenced by the Revolving
Note and the Subordinated Notes under the Note Agreement or this Agreement.
SECTION 1.29. "Subordinated Notes" shall have the meaning set forth
in Paragraph C.
SECTION 1.30. "Warrant Certificates" means the certificates
evidencing the warrants granted to the Lender and Primus under the Note
Agreement.
SECTION 2. LOANS.
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SECTION 2.1. FACILITY. During the period commencing on the Closing
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Date and ending on the Business Day immediately preceding the Maturity Date,
Loans under this Agreement will be advanced to Borrower not more frequently than
once every two (2) weeks up to an aggregate principal amount not to exceed Two
Million Dollars ($2,000,000) at any one time outstanding. Notwithstanding the
foregoing sentence, in no event shall Loans be made if, either immediately
before or after giving effect to such Loan, a Default or an Event of Default
shall have occurred and is continuing. Subject to the terms and provisions
hereof, the Borrower may borrow, repay and reborrow Loans under this Agreement.
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The Loans shall be evidenced by the Revolving Note. The Revolving
Note shall bear interest from the date thereof on the outstanding principal
balance thereof as set forth in Section 2.2. The Lender shall, and is hereby
authorized by the Borrower to, record in the Lender's internal records an
appropriate notation evidencing each payment of principal of the Loans, each
payment of interest on the Loans and other relevant information; provided,
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however, that the failure of the Lender to make such a notation or any error in
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such a notation shall not affect the obligation of the Borrower to repay the
Loans made by the Lender to the Borrower in accordance with the terms of the
Revolving Note and this Agreement.
SECTION 2.2. INTEREST.
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(a) The Borrower agrees to pay interest on the average daily
outstanding principal amount of the Loans at a rate per annum equal to the Base
Rate in effect from time to time plus a fixed spread determined as of the date
of the first advance to the Borrower pursuant to Section 2.4, equal to a
percentage which when added to the Base Rate will equal 12%, compounded daily
("Interest Rate"). The spread so determined shall remain fixed throughout the
term of this Agreement. The Interest Rate shall be reset weekly.
(b) Each change in the Interest Rate to be charged hereunder shall
become effective without notice to the Borrower on the effective date of each
weekly change in the Base Rate.
(c) Interest on the Loans shall accrue from and including the date
any such Loan is advanced to but excluding the date on any repayment thereof and
shall be payable (i) on each Payment Date, (ii) upon the payment, in full or in
part, of any of the principal amount of such Loan, (iii) at the maturity of such
Loan (whether at stated maturity, by acceleration or otherwise), and (iv) after
maturity (whether at stated maturity, by acceleration or otherwise), on demand.
SECTION 2.3. SCHEDULED REPAYMENT. To the extent not previously
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paid, the unpaid principal balance of the Revolving Note shall be due and
payable on the Maturity Date.
SECTION 2.4. PROCEDURE FOR ADVANCING LOANS. Subject to the terms
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and conditions of this Agreement, the Lender will, not more frequently than once
every two (2) weeks prior to the maturity of the Revolving Note, whether by
acceleration or otherwise, upon the written request of Borrower therefor,
advance Loans to the Borrower in accordance with Borrower's instructions.
Borrower shall set forth disbursement instructions in each such request for a
Loan. If the Lender receives such a request from Borrower for a Loan prior to
12:00 noon, Columbus, Ohio time, Bank will advance such Loan on that same
Business Day. Each Loan advanced hereunder shall be in the amount of Two Hundred
Thousand Dollars ($200,000) or an integral multiple thereof up to an amount not
to exceed Two Million Dollars ($2,000,000) at any one time outstanding.
Notwithstanding the foregoing, in no event shall Loans be made if, either
immediately before or after giving effect to such Loan, a Default or an Event of
Default shall have occurred and is continuing.
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SECTION 2.5. PAYMENTS, ETC.
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(a) Except as otherwise specifically provided herein, all payments
under this Agreement shall be made without defense, setoff or counterclaim to
the Lender not later than 1:00 p.m. (Columbus, Ohio time) on the date when due
and shall be made in lawful money of the United States of America by the
Borrower's company check made payable to the order of the Lender or in
immediately available funds by wire transfer to Bank One, Columbus, Ohio ABA
#000-000-000, for the account of Bank One Capital Partners II, Limited
Partnership, Account #0000000, notify Xxxxxxxx Xxxxx (000) 000-0000, or at such
other place as the Lender may direct.
(b) Whenever any payment to be made hereunder shall be stated to be
due on a day that is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day and, with respect to payments of principal,
interest thereon shall be payable at the applicable rate during such extension.
(c) All payments hereunder shall be applied first to collection fees,
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expenses and other amounts owed pursuant to the Indemnity Provisions, if any;
second to accrued but unpaid interest on the Loans; third to principal due on
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the Loan(s); and fourth to all other Obligations.
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SECTION 2.6. FEES.
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(a) Closing Fee. The Borrower shall pay the Lender a closing fee of
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Forty Thousand Dollars ($40,000), payable on the Closing Date.
SECTION 3. CONDITIONS TO BORROWING.
SECTION 3.1. INITIAL DISBURSEMENT. At the time of the making of the
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initial disbursement of proceeds of the Loans by the Lender, all obligations of
the Borrower hereunder to the Lender incurred prior to such initial disbursement
shall have been paid in full, and the following requirements shall have been
fulfilled, in each case in form and substance satisfactory to the Lender:
SECTION 3.2. PRIMARY DOCUMENTATION. The Lender shall have received
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the following documents, each duly executed and delivered by all parties thereto
other than the Lender:
(a) this Agreement;
(b) the Revolving Note; and
(c) the Security Agreement.
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SECTION 3.3. COMPLIANCE WITH WARRANTIES, ABSENCE OF LITIGATION, NO
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DEFAULT, ETC. The representations and warranties set forth in Section 4 and in
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each of the other Loan Documents shall have been true and correct in all
material respects as of the date made, and both immediately before and
immediately after giving effect to such Loan:
(a) such representations and warranties shall be true and correct
with the same effect as if then made;
(b) no litigation, arbitration, or governmental investigation or
proceeding shall be pending or, to the best knowledge of the Borrower,
threatened against Borrower or affecting the business or properties thereof
which, if adversely determined, would be likely to have a material adverse
effect on (i) the business, property, assets, operations or conditions,
financial or otherwise, of the Borrower, or (ii) the ability of the Borrower to
perform its obligations under or in connection with the Asset Purchase Agreement
to which it is a party; and
(c) no Default or Event of Default shall have then occurred and be
continuing.
SECTION 3.4. LOAN REQUEST. Each request for a Loan by the Borrower
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under Section 2.4 and the acceptance by the Borrower of the proceeds or other
benefits of such Loan shall constitute a representation and warranty by the
Borrower that on the date of such Loan and before and after giving effect to the
application of the proceeds of any Loan request thereby, all statements set
forth in Section 4 are true and correct.
SECTION 3.5. SATISFACTORY LEGAL FORM, ETC. All documents executed
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or submitted pursuant hereto by or on behalf of the Borrower, shall be
satisfactory in form and substance to the Lender and its counsel; the Lender and
counsel shall have received all information, and such counterpart originals or
such certified or other copies of such materials, as the Lender or its counsel
may reasonably request; and all legal matters incident to the transactions
contemplated by this Agreement shall be reasonably satisfactory to counsel to
the Lender.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender to enter into this Agreement and make the
Loans provided for herein, the Borrower represents, warrants and covenants that,
as of the date hereof, both immediately prior to and immediately after the
funding of the initial disbursement of the proceeds of the Loans, any date upon
which a Loan is made hereunder, and until the Obligations are fully paid,
performed and satisfied, the following representations and warranties set forth
below are and shall remain true:
SECTION 4.1. REPRESENTATIONS AND WARRANTIES OF BORROWER. The
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representations and warranties of the Borrower contained in Section 5 of the
Note Agreement are incorporated by reference herein.
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SECTION 4.2. REPRESENTATIONS AND WARRANTIES OF LENDER. The
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representations and warranties of the Lender contained in Section 6 of the Note
Agreement are incorporated by reference herein.
SECTION 4.3. FINANCIAL REPORTING. The Financial Reporting
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requirements of the Borrower provided for in Section 7 of the Note Agreement are
incorporated by reference herein.
SECTION 4.4. AFFIRMATIVE COVENANTS. The Affirmative Covenants made
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by the Borrower in Section 8 of the Note Agreement are incorporated by reference
herein.
SECTION 4.5. NEGATIVE COVENANTS. The Negative Covenants agreed to
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by the Borrower in Section 9 of the Note Agreement are incorporated by reference
herein.
SECTION 4.6. FINANCIAL TESTS. The Borrower shall meet the Financial
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Tests provided for in Section 10 of the Note Agreement and incorporated by
reference herein.
SECTION 5. EVENTS OF DEFAULT.
The occurrence of any of the following events shall, at the option of the
Lender, constitute an Event of Default ("Event of Default") hereunder and under
the Revolving Note:
SECTION 5.1. FAILURE TO PAY. The Borrower fails to pay, within two
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(2) Business Days of the date when due, any installment of interest or any other
sum due under this Agreement or the Revolving Note in accordance with the terms
hereof or thereof.
SECTION 5.2. BREACH OF REPRESENTATION OR WARRANTY. Any
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representation or warranty herein or in any agreement, instrument or certificate
executed pursuant hereto or in connection with any transaction contemplated
hereby proves to have been false or misleading in any material respect when
made.
SECTION 5.3. FALSITY OF INFORMATION. Any financial or other
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information delivered by the Borrower to the Lender proves to be false or
misleading in any material respect when delivered.
SECTION 5.4. SECURITY INTEREST. The Lender fails to have a valid
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and enforceable perfected security interest in or lien on the Collateral or such
security interest or lien fails to be prior to the rights and interest of all
others except for purchase money security interests to the extent permitted by
the Note Agreement.
SECTION 5.5. JUDGMENTS. A final nonappealable judgment or judgments
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is or are entered against the Borrower in the aggregate amount of Two Hundred
Fifty Thousand Dollars ($250,000) or more on a claim or claims not covered by
insurance.
SECTION 5.6. FAILURE TO PAY DEBTS; VOLUNTARY BANKRUPTCY. The
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Borrower fails to pay its debts generally as they come due, or files any
petition, proceeding, case or action for
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relief under any bankruptcy, reorganization, insolvency, or moratorium law, or
any other law or laws for the relief of, or relating to, debtors.
SECTION 5.7. INVOLUNTARY BANKRUPTCY. An involuntary petition is
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filed under any bankruptcy or similar statute against the Borrower, or a
receiver, trustee, liquidator, assignee, custodian, sequestrator or other
similar official is appointed to take possession of the properties of the
Borrower and such petition or appointment is not dismissed within ninety (90)
days.
SECTION 5.8. GOVERNMENTAL ACTION. Any governmental regulatory
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authority takes or institutes action which will materially adversely affect the
condition, operations or ability to pay the Borrower's obligations under this
Agreement, the Revolving Note or any instrument or agreement required under this
Agreement.
SECTION 5.9. DEFAULT OF OTHER FINANCIAL OBLIGATIONS. Any default
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occurs under the Note Agreement, any agreement, note or document related to any
such agreement or any other agreement involving the borrowing of money or the
advance of credit to which the Borrower may be a party as obligor or guarantor,
if such default consists of the failure to pay any Indebtedness in an aggregate
principal amount greater than $50,000 when due or if such default gives to the
holder of the obligation concerned the right to accelerate such Indebtedness.
SECTION 5.10. DEFAULT UNDER SECURITY AGREEMENT, WARRANT
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CERTIFICATE OR OTHER AGREEMENT. The Borrower breaches or defaults in any
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material respect under any of its obligations contained in the Security
Agreement, the Warrant Certificates, the Note Agreement, the Subordinated Notes,
the Revolving Notes or any other agreement with the Lender.
SECTION 5.11. FINANCIAL REPORTING DEFAULT. The Borrower fails for a
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period of thirty (30) days after notice thereof to comply with the requirements
of Section 7 of the Note Agreement.
SECTION 5.12. AFFIRMATIVE COVENANTS. The Borrower fails for a
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period of thirty (30) days after written notice thereof to comply in any
material respect with any Affirmative Covenant.
SECTION 5.13. NEGATIVE COVENANTS. The Borrower fails to comply in
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any material respect with any Negative Covenant (i) for a period of thirty (30)
days after written notice thereof with respect to any such breach that is
subject to cure, and (ii) with respect to any other such breach, and the Lender
gives written notice thereof.
SECTION 5.14. FINANCIAL TESTS. The Borrower fails to comply with
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any Financial Test and the Lender gives written notice thereof.
SECTION 5.15. USE OF PROCEEDS. Any use of the proceeds from the
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sale of the Revolving Note other than working capital purposes, without the
prior written consent of the Lender.
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SECTION 5.16. MATERIAL ADVERSE CHANGE. Any material adverse change
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occurs in the consolidated financial condition or results of operations of the
Borrower or in the Borrower's ability to perform its obligations under this
Agreement, the Revolving Note or under any instrument or agreement required by
this Agreement:
SECTION 5.17. OTHER BREACH UNDER AGREEMENT. The Borrower breaches,
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or defaults in any material respect under, any term, condition, provision,
representation or warranty contained in this Agreement not specifically referred
to in this Section, provided that with respect to any of the foregoing (other
than Sections 5.1, 5.7, and 5.10) that is capable of being cured, the Borrower
have failed to cure the same within thirty (30) days from the receipt of notice
thereof from the Lender.
SECTION 6. CONSEQUENCES OF EVENT OF DEFAULT.
(a) If any Event of Default specified under Section 5, other than
Sections 5.6 and 5.7 hereof, shall occur and be continuing, the Lender may, by
written notice to the Borrower, declare the principal and interest accrued on
the Revolving Note and all other obligations of the Borrower hereunder to be
forthwith due and payable, and the same shall thereupon become immediately due
and payable, without any other or further presentment, demand, protest, notice
of default, notice of intent to accelerate, notice of acceleration or other
notice of any kind, all of which are hereby expressly waived.
(b) If an Event of Default specified under Sections 5.6 and 5.7 of
Section 5 hereof shall occur, the unpaid balance of the principal and interest
accrued on the Revolving Note and all other obligations of the Borrower
hereunder shall be immediately due and payable automatically without
presentment, demand, protest, notice of default, notice of intent to accelerate,
notice of acceleration or other notice of any kind, all of which are hereby
expressly waived.
SECTION 7. MISCELLANEOUS.
SECTION 7.1. NO IMPLIED RIGHTS OR WAIVERS. No notice to or demand
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on the Borrower in any case shall entitle the Borrower to any other or further
notice or demand in the same, similar and other circumstances. Neither any
failure nor any delay on the part of the Lender in exercising any right, power
or privilege hereunder or under the Revolving Note shall operate as a waiver
thereof, nor shall a single or partial exercise thereof preclude any other or
further exercise of the same or the exercise of any other right, power or
privilege.
SECTION 7.2. MODIFICATIONS, AMENDMENTS OR WAIVERS. The Borrower and
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the Lender may from time to time enter into written agreements amending or
changing any provision of this Agreement or the rights hereunder or give waivers
or consents to a departure from the due performance of their obligations
hereunder provided that no departure from the Borrower's due performance of its
obligations hereunder shall be effective unless agreed to in writing by the
Lender and Primus.
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SECTION 7.3. EXPENSES. The Borrower shall pay or cause to be paid and
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save the Lender harmless against liability for the payment of all reasonable
out-of-pocket expenses, including counsel fees and disbursements, incurred or
paid by the Lender in connection with (i) the due diligence inquiries,
negotiation, development, preparation, execution and performance of this
Agreement, the Revolving Note, the Security Agreement, and the related
transactions; (ii) any requested amendments, waivers or consents pursuant to the
provisions hereof and thereof; and (iii) the enforcement of this Agreement, the
Revolving Note, and the Security Agreement, including such reasonable expenses
as may be incurred by the Lender in collection of the Revolving Note.
SECTION 7.4. ACCOUNTING TERMS. All accounting terms not specifically
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defined herein shall be construed in accordance with GAAP.
SECTION 7.5. ENTIRE AGREEMENT. This Agreement including the Exhibits
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or Schedules hereto, constitutes the entire agreement relating to the subject
matter hereof between the Parties hereto. Each Party acknowledges that no
representation, inducement, promise or agreement has been made, orally or
otherwise, by the other Party, or anyone acting on behalf of the other Party,
unless such representation, inducement, promise or agreement is embodied in this
Agreement expressly or by incorporation.
SECTION 7.6. GOVERNING LAW. This Agreement shall be governed by and
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construed in accordance with the laws of the State of Ohio.
SECTION 7.7. SEVERABILITY. If any provision of this Agreement is held
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to be invalid, void or unenforceable, the remaining provisions of this Agreement
shall nevertheless continue in full force and effect.
SECTION 7.8. THIRD PARTY BENEFICIARIES. The obligations of each Party
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under this Agreement shall inure solely to the benefit of the other Party, and
no other person or entity shall be a third party beneficiary of this Agreement.
SECTION 7.9. RULES OF CONSTRUCTION. Unless otherwise specified, the
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following rules shall be applied in construing the provisions of this Agreement.
(i) Terms that imply gender shall be construed to apply to
all genders.
(ii) References to Sections, Schedules and Exhibits refer to
the numbered Sections of, the Schedules of and the
Exhibits attached to this Agreement.
(iii) Headings to the various Sections of this Agreement are
included solely for purposes of reference and shall be
ignored in construing the provisions of this Agreement.
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(iv) The Exhibits and Schedules attached to this Agreement
are incorporated herein by reference.
(v) "Herein," "hereto," "hereof" and words of similar import
refer to this Agreement.
(vi) The word "and" connotes "each and every", and the word
"or" connotes "any one or more".
(vii) The word "including" connotes "including without
limitation".
(viii) Any reference to any law or regulation refers to that law
or regulation as amended from time-to-time after the date
of this Agreement and to the corresponding provision of
any successor law or regulation.
(ix) Any reference to any agreement or other document in this
Agreement refers to that agreement or other document as
amended from time-to-time after the date of this
Agreement.
(x) The recitals included in this Agreement are the mutual
representations of the Parties and are a part of this
Agreement.
SECTION 7.10. NOTICES. Any notice or other communication required or
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permitted to be made or given under this Agreement, shall be in writing and
shall be deemed to have been received by the Party to whom it is addressed: (i)
on the date indicated on the certified mail return receipt if sent by certified
mail return receipt requested; (ii) on the date actually received if hand
delivered or if transmitted by telefax (receipt of which is confirmed to
sender); (iii) three business days after such notice was deposited in the United
States Mail postage prepaid; or (iv) one business day after such notice was
delivered to an overnight delivery service, addressed, delivered or transmitted
in each case as follows:
LENDER:
Banc One Capital Partners II, Limited Partnership
00 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telefax: (000) 000-0000
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WITH A COPY TO:
Banc One Capital Corporation
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
ATTENTION: Legal Department
Telephone: (000) 000-0000
Telefax: (000) 000-0000
BORROWER:
Corinthian Schools, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
ATTENTION: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Telefax: (000) 000-0000
WITH A COPY TO:
O'Melveny & Xxxxx
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
ATTENTION:Xxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Telefax: (000) 000-0000
A Party's Address for notice may be changed from time-to-time only by
written notice given to each of the other Parties in accordance with this
Section.
SECTION 7.11. ASSIGNMENT. Neither this Agreement nor any of the
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rights or duties hereunder may be assigned by any Party without the prior
written consent of each of the other Parties, and any assignment attempted
without such prior consent shall be null and void.
SECTION 7.12. FURTHER ACTS AND DOCUMENTS. Each of the Parties hereby
--------------------------
agrees to execute and deliver such further instruments and to do such further
acts and things as may be necessary or desirable to carry out the purposes of
this Agreement.
SECTION 7.13. COUNTERPARTS. This Agreement may be executed in multiple
------------
counterparts, each of which shall be deemed to be an original and all of which
shall constitute one in the same agreement.
13
The Parties have caused this Agreement to be executed and delivered
effective as of the date first written above.
BORROWER: LENDER:
CORINTHIAN SCHOOLS, INC. BANC ONE CAPITAL PARTNERS II,
LIMITED PARTNERSHIP
By: /s/ Xxxxx X. Xxxxx
-----------------------------
Xxxxx X. Xxxxx, President By: Banc One Capital Partners II
Corporation
By /s/ Xxxxx X. Xxxxxxx
-------------------------------
Its Senior Vice President
------------------------------
REVOLVING CREDIT NOTE
$2,000,000 COLUMBUS OHIO
JUNE 30, 1995
On or before June 30, 1996, for value received, the undersigned,
CORINTHIAN SCHOOLS, INC., a Delaware corporation (the "Borrower"), hereby
promises to pay to the order of BANC ONE CAPITAL PARTNERS II, LIMITED
PARTNERSHIP, a Delaware limited partnership (the "Lender"), or its
assigns, as further provided herein, the principal amount of Two Million Dollars
($2,000,000) or, if such principal is less, the aggregate unpaid principal
amount of all Loans made by the Lender to the Borrower pursuant to the
Agreement (as referred to and defined in Section 1 hereof), together with
interest on the unpaid principal balance of all Loans made hereunder until paid
in full at a fluctuating rate of interest and payable on the dates as determined
in accordance with the provisions of the Agreement. Both Principal and interest
are payable in lawful money of the United States of America by the Borrower's
company check made payable to the order of the Lender or in immediately
available funds by wire transfer to Bank One, Columbus, Ohio ABA #000-000-000,
for the account of Banc One Capital Partners II, Limited Partnership, Account
#0000000, notify Xxxxxxxx Xxxxx (000) 000-0000, or at such other place as the
Lender may direct.
SECTION 1. LOAN AGREEMENT. This Revolving Credit Note is the Revolving
--------------
Note referred to in the Credit Facility Agreement dated as of an even date
herewith (the "Agreement"), by and among the Borrower and the Lender, as the
same may be amended, modified or supplemented from time to time, which
Agreement, as amended, is incorporated by reference herein. All capitalized
terms used herein shall have the same meanings as are assigned to such terms in
the Agreement. This Revolving Credit Note is entitled to the benefits of and is
subject to the terms, conditions and provisions of the Agreement. The Agreement,
among other things, contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events, and also for repayments and
reborrowings on account of the principal hereof prior to maturity upon the
terms, conditions and provisions specified therein.
SECTION 2. ENDORSEMENTS. All Loans made by the Lender to the Borrower
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pursuant to the Agreement and all payments made on account of principal hereof
shall be recorded by the Lender in the regularly maintained data processing
records of the Lender; provided, however, that the failure of the Lender or any
holder to make such notation shall not limit or otherwise affect the obligations
of the Borrower hereunder or under the Agreement.
SECTION 3. SETOFF. Any and all moneys now or at any time hereafter owing
------
to the Borrower from the holder hereof, are hereby pledged for the security of
this and all other Indebtedness from the Borrower to the holder hereof, and may,
upon the occurrence of any Event of Default, be paid and applied thereon whether
such Indebtedness be then due or is to become due.
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SECTION 4. WAIVER OF JURY TRIAL. THE LENDER AND THE BORROWER, AFTER
--------------------
CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER OF THEM MAY HAVE TO A TRIAL
BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS REVOLVING CREDIT
NOTE OR ANY RELATED INSTRUMENT OR AGREEMENT, OR ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS REVOLVING CREDIT NOTE, OR ANY COURSE OF CONDUCT, DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF EITHER OF THEM. NEITHER THE
LENDER NOR THE BORROWER SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE,
ANY ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH
A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. IN THE EVENT OF A DISPUTE UNDER
THIS REVOLVING CREDIT NOTE, THE PARTIES HEREBY AGREE THAT EXCLUSIVE JURISDICTION
AND VENUE LIES IN A COURT OF COMPETENT JURISDICTION IN FRANKLIN COUNTY, OHIO.
THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR
RELINQUISHED BY EITHER THE LENDER OR THE BORROWER EXCEPT BY A WRITTEN INSTRUMENT
EXECUTED BY BOTH OF THEM.
BORROWER:
CORINTHIAN SCHOOLS, INC., a
Delaware corporation
By: /s/ Xxxxx X. Xxxxx
----------------------------
Xxxxx X. Xxxxx, President
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