{"id":41106,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/loan-agreement-edison-schools-inc-and-wsi-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"loan-agreement-edison-schools-inc-and-wsi-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/finance\/loan-agreement-edison-schools-inc-and-wsi-inc.html","title":{"rendered":"Loan Agreement &#8211; Edison Schools Inc. and WSI Inc."},"content":{"rendered":"<pre>                                 LOAN AGREEMENT\n\n         THIS LOAN AGREEMENT (the 'Agreement') is entered into as of this ____\nday of October, 1999 between Edison Schools Inc., a Delaware corporation (the\n'Company'), and WSI Inc., a Delaware corporation ('WSI').\n\n         WHEREAS, upon the terms and subject to the conditions set forth in this\nAgreement, the Company proposes to loan to WSI the amount required to permit WSI\nto exercise the option to purchase 600,000 shares of Series A Common Stock, $.01\npar value per share, of the Company ('Series A Common Stock') pursuant to the\noption agreement attached hereto as Exhibit A and the option to purchase 850,000\nshares of Series A Common Stock pursuant to the option agreement attached hereto\nas Exhibit B (the shares of Series A Common Stock acquired upon the exercise of\nsuch options shall be referred to herein as the 'Shares'), and to pay related\ntaxes; and\n\n         WHEREAS, upon the terms and subject to the conditions set forth in this\nAgreement, WSI desires to issue a secured promissory note to the Company to\nevidence such loan.\n\n         NOW, THEREFORE, in consideration of the mutual covenants and agreements\nset forth herein and for good and valuable consideration, the receipt and\nadequacy of which is hereby acknowledged, the parties hereby agree as follows:\n\n         1. Loan. The Company agrees to make the following loans to WSI:\n\n                  (a) The Company shall loan an aggregate of $____________ to\nWSI (the 'Loan'), which loan amount shall include the amount of any applicable\ntax withholding obligation of the Company, in exchange for the secured\npromissory note of WSI, in the principal amount of the Loan, in the form\nattached hereto as Exhibit C (the 'Note'). The Loan shall be used by WSI solely\nto purchase the Shares and to pay federal, state and local taxes incurred by WSI\nor H. Christopher Whittle ('Whittle') in connection with the purchase of the\nShares.\n\n                  (b) On or about April 13, 2000, the Company shall loan to WSI\n(the 'Tax Loan') such amount, to be mutually agreed upon by WSI and the Company,\nas is necessary for WSI or Whittle to pay any additional federal, state and\nlocal taxes incurred by WSI or Whittle in connection with the purchase of the\nShares, which loan amount shall include the amount of any applicable tax\nwithholding obligation of the Company, in exchange for the secured promissory\nnote of WSI, in the principal amount of the Tax Loan, substantially in the form\nattached hereto as Exhibit D (the 'Second Note').\n\n                  (c) At any time and from time to time prior to the payment in\nfull of the Note, the Company shall loan to WSI (the 'Second Tax Loan') such\namount, to be mutually agreed upon by WSI and the Company, as is necessary for\nWSI or Whittle to pay any additional federal, state and local taxes or any tax\npenalties incurred by WSI or Whittle in connection with the purchase of the\nShares, which loan amount shall include the amount of any applicable tax\nwithholding obligation of the Company, in exchange for the secured promissory\nnote of WSI, in the principal amount of the Second Tax Loan, substantially in\nthe form attached hereto as Exhibit D (the 'Third Note'); provided (i) that such\nadditional federal, state and local taxes or tax penalties shall be assessed by\nthe Internal Revenue Service or the tax collection authority of any state or\nlocal jurisdiction as the result of an audit, or shall be determined by any\nfederal, state or local court, and (ii) that WSI or Whittle shall have a legal\nobligation to pay such additional federal, state and local taxes or tax\npenalties.\n\n                  (d) WSI's obligations under the Note, the Second Note, the\nThird Note and this Agreement shall be recourse solely to WSI's interest in the\nCollateral (as defined in the Pledge Agreement).\n\n         2. Security Interest. As set forth in the Pledge Agreement attached\nhereto as Exhibit E (the 'Pledge Agreement'), WSI hereby grants to the Company a\nsecurity interest in the Shares to secure the payment and performance of the\nNote and, if and when issued by WSI, the Second Note and the Third Note.\n\n         3. Investment Representations. WSI represents, warrants and covenants\nas follows:\n\n                  (a) WSI is purchasing the Shares for its own account for\ninvestment only, and not with a view to, or for sale in connection with, any\ndistribution of the Shares in violation of the Securities Act of 1933, as\namended (the 'Securities Act'), or any rule or regulation under the Securities\nAct.\n\n                  (b) WSI has had such opportunity as it has deemed adequate to\nobtain from representatives of the Company such information as is necessary to\npermit it to evaluate the merits and risks of its investment in the Company.\n\n                  (c) WSI has sufficient experience in business, financial and\ninvestment matters to be able to evaluate the risks involved in the purchase of\nthe Shares and to make an informed investment decision with respect to such\npurchase.\n\n                  (d) WSI can afford a complete loss of the value of the Shares\nand is able to bear the economic risk of holding such Shares for an indefinite\nperiod.\n\n\n                                       2\n\n                  (e) WSI understands that (i) the Shares have not been\nregistered under the Securities Act and are 'restricted securities' within the\nmeaning of Rule 144 under the Securities Act ('Rule 144'); (ii) the Shares\ncannot be sold, transferred or otherwise disposed of unless they are\nsubsequently registered under the Securities Act or an exemption from\nregistration is then available; and (iii) in any event, the exemption from\nregistration under Rule 144 will not be available for at least one year and even\nthen will not be available unless a public market then exists for the Series A\nCommon Stock, adequate information concerning the Company is then available to\nthe public and other terms and conditions of Rule 144 are complied with.\n\n                  (f) A legend substantially in the following form will be\nplaced on the certificate(s) representing the Shares:\n\n                  'The shares represented by this certificate have not been\n                  registered under the Securities Act of 1933, as amended, and\n                  may not be sold, transferred or otherwise disposed of in the\n                  absence of an effective registration statement under such Act\n                  or an opinion of counsel satisfactory to the corporation to\n                  the effect that such registration is not required.'\n\n         4. Certain Requirements under Rule 144. WSI acknowledges that, as set\nforth in paragraph (d) of Rule 144, certain holding period requirements relating\nto the Note and, if issued by WSI, the Second Note and the Third Note must be\nsatisfied prior to the sale of the Shares by WSI pursuant to Rule 144.\n\n         5. Notices. All notices, demands and other communications provided for\nor permitted hereunder shall be made in writing and shall be by registered or\ncertified first-class mail, return receipt requested, courier service, personal\ndelivery or facsimile (provided that 'answer back' confirmation is received by\nthe sender of the facsimile):\n\n                  (a)      if to the Company:\n\n                           Edison Schools Inc.\n                           521 Fifth Avenue, 15th Floor\n                           New York, NY 10175\n                           Facsimile: (212) 419-1604\n                           Attn:  General Counsel\n\n                  with a copy to:\n\n                           Hale and Dorr LLP\n                           1455 Pennsylvania Ave., N.W.\n                           Washington, DC 20004-1008\n                           Facsimile: (202) 942-8484\n\n\n                                       3\n :  PAGE&gt;   4\n                           Attn: David Sylvester, Esq.\n\n\n                                        4\n\n                  (b)      if to WSI:\n\n                           WSI Inc.\n                           First Tennessee Plaza\n                           800 South Gay Street, Suite 1230\n                           Knoxville, TN 37929\n                           Facsimile: (423) 546-1090\n                           Attn: President\n\n                  with a copy to:\n\n                           Hale and Dorr LLP\n                           1455 Pennsylvania Ave., N.W.\n                           Washington, DC 20004-1008\n                           Facsimile: (202) 942-8484\n                           Attn: David Sylvester, Esq.\n\n         All such notices and communications shall be deemed to have been duly\ngiven (a) when delivered by hand, if personally delivered, (b) when delivered by\ncourier, if delivered by commercial overnight courier service, (c) when mailed,\nfive business days after being deposited in the mail, postage prepaid, or (d)\nwhen transmitted, if sent by facsimile. Any party may, from time to time, change\nits address by sending a notice with the new address in accordance with the\nprovisions of this Section 5.\n\n         6. Successors and Assigns. This Agreement shall inure to the benefit of\nand be binding upon the successors and permitted assigns of the parties hereto.\nWSI may not assign any of its rights under this Agreement without the written\nconsent of the Company. The Company may assign any of its rights under this\nAgreement without the written consent of WSI. No person or entity other than the\nparties hereto and their successors and permitted assigns is intended to be a\nbeneficiary of this Agreement.\n\n         7. Amendment and Waiver.\n\n                  (a) No failure or delay on the part of WSI or the Company in\nexercising any right, power or remedy hereunder shall operate as a waiver\nthereof, nor shall any single or partial exercise of any such right, power or\nremedy preclude any other or further exercise thereof or the exercise of any\nother right, power or remedy.\n\n                  (b) Any amendment, supplement or modification of or to any\nprovision of this Agreement, any waiver of any provision of this Agreement and\nany consent to any departure by any party from the terms of any provision of\nthis Agreement shall be effective (i) only if it is made or given in writing and\nsigned by WSI and the Company and (ii) only in \n\n\n                                       5\n\nthe specific instance and for the specific purpose for which made or given.\nExcept where notice is specifically required by this Agreement, no notice to or\ndemand on any party in any case shall entitle any party hereto to any other or\nfurther notice or demand in similar or other circumstances.\n\n         8. Counterparts. This Agreement may be executed by the parties hereto\nin separate counterparts, each of which when so executed shall be deemed to be\nan original and both of which taken together shall constitute one and the same\nagreement.\n\n         9. Headings. The headings in this Agreement are for convenience of\nreference only and shall not limit or otherwise affect the meaning hereof.\n\n         10. Governing Law. This Agreement shall be governed by and construed in\naccordance with the laws of the State of New York, without regard to the\nprinciples of conflicts of law of such state.\n\n         11. Jurisdiction. Each party to this Agreement hereby irrevocably\nagrees that any legal action or proceeding arising out of or relating to this\nAgreement or any agreements or transactions contemplated hereby shall be brought\nin the courts of the State of New York or of the United States of America for\nthe Southern District of New York and hereby expressly submits to the personal\njurisdiction and venue of such courts for the purposes thereof and expressly\nwaives any claim of improper venue and any claim that such courts are an\ninconvenient forum. Each party hereby irrevocably consents to the service of\nprocess of any of the aforementioned courts in any such suit, action or\nproceeding by the mailing of copies thereof by registered or certified mail,\npostage prepaid, to the address set forth in Section 5, such service to become\neffective 10 days after such mailing.\n\n         12. Severability. If any one or more of the provisions contained\nherein, or the application thereof in any circumstance, is held invalid, illegal\nor unenforceable in any respect for any reason, the validity, legality and\nenforceability of any such provision in every other respect and of the remaining\nprovisions hereof shall not be in any way impaired.\n\n         13. Entire Agreement. This Agreement, together with the Exhibits\nhereto, is intended by the parties as a final expression of their agreement and\nis intended to be a complete and exclusive statement of the agreement and\nunderstanding of the parties hereto in respect of the subject matter contained\nherein and therein. There are no restrictions, promises, warranties or\nundertakings, other than those set forth herein or therein. This Agreement,\ntogether with the Exhibits hereto, supersedes all prior agreements and\nunderstandings between the parties with respect to such subject matter.\n\n         14. Further Assurances. Each of the parties shall execute such\ndocuments and perform such further acts (including, without limitation,\nobtaining any consents, exemptions, authorizations, or other actions by, or\ngiving any notices to, or making any filings with, any \n\n\n                                       6\n\ngovernmental authority or any other person or entity) as may be reasonably\nrequired to carry out or to perform the provisions of this Agreement.\n\n         IN WITNESS WHEREOF, the parties hereto have executed and delivered this\nAgreement or caused this Agreement to be executed and delivered by their\nauthorized representatives as of the date first above written.\n\n                                   EDISON SCHOOLS INC.\n\n\n                                   By:      ______________________________\n                                            Name:\n                                            Title:\n\n\n                                   WSI INC.\n\n\n                                   By:      ______________________________\n                                            Name:\n                                            Title:\n\n\n                                        7\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7412],"corporate_contracts_industries":[],"corporate_contracts_types":[9560,9567],"class_list":["post-41106","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-edison-schools-inc","corporate_contracts_types-finance","corporate_contracts_types-finance__loan"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41106","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41106"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41106"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41106"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41106"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}