EXHIBIT 4.5
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF SUCH ACT AND SUCH LAWS.
THIS NOTE IS SUBJECT TO A SUBORDINATION AND STANDSTILL AGREEMENT DATED
OCTOBER 17, 1996, BY AND AMONG OTHERS, THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA, BOCP II, LIMITED LIABILITY COMPANY, BANC ONE CAPITAL
PARTNERS II, LTD., PRIMUS CAPITAL FUND III LIMITED PARTNERSHIP.
Subordinated Note
Due October 17, 2004
$1,000,000 Columbus, Ohio
October 17, 1996
This Subordinated Note (the "Note") is executed and delivered under
and pursuant to the terms of that certain Subordinated Note and Warrant Purchase
Agreement dated October 17, 1996, (the "Agreement") by and among Corinthian
Colleges, Inc. ("Company"), a Delaware corporation, as seller and Primus Capital
Fund III Limited Partnership ("Primus"), an Ohio limited partnership and Banc
One Capital Partners II, Ltd. ("BOCP II"), an Ohio limited liability company, as
purchasers.
The Company, together with its successors and assigns is referred to
as the "Maker." Primus, together with its successors and assigns, is referred to
as the "Payee."
All defined terms not otherwise defined in this Note will have the
meanings ascribed to them in the Agreement.
FOR VALUE RECEIVED, the Maker promises to pay to the order of the
Payee, at the Payee's office at 0000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx,
Xxxx 00000, the principal amount of One Million Dollars ($1,000,000) on or
before October 17, 2004.
Interest shall be calculated at a fixed rate of interest per annum
equal to twelve percent (12%) ("Interest Rate"). Interest shall be calculated on
the basis of the actual number of days elapsed over a year consisting of four
quarters each consisting of 90 days.
Interest on the unpaid principal balance hereof shall be due and
payable in arrears on December 31, 1996, and continuing on the last Business Day
of each quarter thereafter until payment in full of this Note; provided,
however, that whenever the last day of any such quarter would otherwise occur on
a day other than a Business Day (as defined in the Agreement), the last day of
such quarter shall be deemed to occur on the following Business Day.
Principal shall be payable in quarterly installments of $56,250
beginning October 17, 2000 with the remaining unpaid balance due October
17,2004.
This Note may be prepaid in whole or in part in amounts of not less
than $100,000.
This Note will be subordinated to the Senior Indebtedness (as defined
in the Agreement) as provided for in the Subordination Agreement (as defined in
the Agreement).
All payments and prepayments to be made by the Maker in respect of
principal or interest on this Note shall be due at 1:30 p.m. Columbus, Ohio time
on the day when due and shall be made to the Payee in federal funds or other
immediately available lawful money of the United States of America. Whenever
any payment to be made hereunder shall be due other than on a Business Day, such
payment shall be made on the Business Day following the due date.
Any assignee of this Note shall take the same free and clear of all
offsets, counterclaims or defenses which are unrelated to this Note which the
Maker may otherwise have against the assignor of this Note and no such unrelated
counterclaim or defense shall be interposed or asserted by the Maker in any
action or proceeding brought by any such assignee under this Note and any such
right to interpose or assert any such unrelated offset, counterclaim or defense
in any such action or proceeding is hereby expressly waived by the Maker.
Time shall be of the essence in the performance of all obligations of
the Maker under this Note.
This Note is one of the Notes referred to in the Agreement. Reference
is made to the Agreement and Subordination Agreement for provisions for the
subordination of this Note with respect to the to indebtedness of the Maker to
the Senior Lender (as that term is defined in the Agreement) and the
acceleration of the maturity hereof, but neither this reference to the Agreement
and Subordination Agreement nor any provision thereof shall affect or impair the
absolute and unconditional obligation of the Maker to pay the principal of or
interest on this Note when due. All of the terms, conditions, covenants,
representations and warranties of the Agreement and the Subordination Agreement
are incorporated herein by reference as if the same were more fully set forth
herein.
Upon the occurrence of an Event of Default as specified in the
Agreement or Subordination Agreement, the principal hereof and accrued interest
hereon may be declared to be and shall thereupon become forthwith due and
payable, all as provided in the Agreement and the Subordination Agreement.
To the extent permitted by law, the Maker waives presentment; protest
and demand; notice of protest, demand, dishonor and nonpayment; diligence in
collection.
If at any time the indebtedness evidenced by this Note is collected
through legal proceedings or this Note is placed in the hands of attorneys for
collection, the Maker hereby agrees to pay all reasonable costs and expenses
(including reasonable attorneys' fees) incurred by the holder of this Note in
collecting or attempting to collect such indebtedness.
This Note is made under and governed by the laws of the State of Ohio.
The Payee and the Maker, 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 Note or any related instrument or agreement,
or any of the transactions contemplated by this Note, or any course of conduct,
dealing, statements (whether oral or written) or actions of either of them.
Neither the Payee nor the Maker 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 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 Payee or the Maker except by a written instrument
executed by both of them.
WITNESS the due execution hereof with intent to be legally bound
hereby.
CORINTHIAN COLLEGES, INC.
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx, President
