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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
DATE OF REPORT (Date of earliest event reported): December 18, 1998
ITT EDUCATIONAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-13144 36-2061311
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
5975 Castle Creek Parkway North Drive 46250-0466
P.O. Box 50466 (Zip Code)
Indianapolis, Indiana
(Address of principal executive offices)
Registrant's telephone number, including area code: (317) 594-9499
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Item 5. Other Events
We filed a registration statement on Form S-3 on December 18, 1998
with the Securities and Exchange Commission (the "Registration
Statement") for the proposed public offering by ITT Corporation
("ITT"), a Nevada corporation and wholly-owned subsidiary of Starwood
Hotels & Resorts Worldwide, Inc., of 7,950,000 shares of our common
stock held by ITT (including 950,000 shares subject to the
underwriters' over-allotment option) (the "Public Offering"). In
connection with the proposed Public Offering, on December 18, 1998, we
also entered into a Stock Repurchase Agreement with ITT, which is
incorporated herein by reference and filed with this report as Exhibit
99.1. In the Stock Repurchase Agreement, we agreed, among other
things, to repurchase from ITT 1,500,000 shares of our common stock at
a per share price equal to the lesser of (1) the Public Offering
price, less underwriting discounts and commissions, and (2) $32.84.
The stock repurchase is continent upon the closing of the Public
Offering.
Item 7. Financial Statements and Exhibits
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
The list of exhibits set forth in the Index to Exhibits on page
S-2 is incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ITT Educational Services, Inc.
Date: December 21, 1998
By: /s/ Clark D. Elwood
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Clark D. Elwood, Senior Vice President,
General Counsel & Secretary
S-1
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INDEX TO EXHIBITS
Exhibit No. Description
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99.1 Stock Repurchase Agreement, dated as of December 18,
1998, between the Company and ITT Corporation.
S-2
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EXHIBIT 99.1
STOCK REPURCHASE AGREEMENT
THIS STOCK REPURCHASE AGREEMENT ("Agreement") is made as of this 18th day
of December, 1998 by and between ITT Educational Services, Inc., a Delaware
corporation (the "Company"), and ITT Corporation, a Nevada corporation (the
"Stockholder"), with reference to the following facts:
WHEREAS, the Stockholder is currently the holder of record of 9,450,000
shares of common stock, par value $.01 per share of the Company (the "Common
Stock");
WHEREAS, the Company and the Stockholder entered into that certain
Stockholder Agreement, dated as of June 3, 1998 (the "Stockholder Agreement"),
and that certain Amended and Restated Registration Rights Agreement, dated as of
June 3, 1998 (the "Registration Rights Agreement"), and ITT Sheraton
Corporation, a Delaware corporation and an affiliate of the Stockholder ("ITT
Sheraton"), and the Company entered into that certain Trade Name and Service
Mark License Agreement, dated as of June 3, 1998 (the "License Agreement");
WHEREAS, the Stockholder wishes to sell or otherwise dispose of the shares
of the Common Stock it currently holds;
WHEREAS, the Stockholder intends to offer to the public by means of a
registration statement first filed with the Securities and Exchange Commission
on the date hereof (the "Registration Statement") 7,950,000 shares of the Common
Stock (including 950,000 shares of the Common Stock pursuant to the
underwriters' over-allotment option) (the "Public Offering").
WHEREAS, the Company wishes to purchase, and the Stockholder is willing to
sell to the Company, 1,500,000 shares of the Common Stock (the "Shares") on the
terms and subject to the conditions set forth herein;
WHEREAS, in connection with the purchase of the Shares by the Company, the
Company and the Stockholder wish to agree upon certain matters and modify
certain of the rights and obligations provided for in the Stockholder Agreement,
the Registration Rights Agreement and the License Agreement;
NOW THEREFORE, in consideration of the foregoing and intending to be
legally bound, the parties hereto hereby agree as follows:
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1. Purchase of the Common Stock.
(a) Subject to the terms and conditions of this Agreement, and in
reliance on the representations, warranties and covenants contained or
incorporated by reference herein, the Company hereby agrees to purchase and
accept from the Stockholder, and the Stockholder hereby agrees to sell and
deliver to the Company, the Shares for a per share purchase price equal to, and
payable by delivery of, cash in an amount equal to the lesser of (i) $32.84 and
(ii) the per share price to the public set forth on the cover of the final
prospectus delivered in connection with the Public Offering net of the per share
underwriting discounts and commissions set forth on the cover page of such final
prospectus (the "Repurchase").
(b) The closing of the Repurchase (the "Closing") shall take
place at the time and on the date of the closing of the Public Offering or at
such other time and date as the parties hereto shall agree in writing (the
"Closing Date"), at the location of the closing of the Public Offering or at
such other place as the parties hereto shall agree in writing.
At the Closing: (i) the Company shall deliver to the Stockholder,
against receipt of the Shares therefor, cash (by wire transfer of immediately
available funds) in an amount equal to the product of the per share purchase
price determined pursuant to Section 1(a) multiplied by 1,500,000; and (ii) the
Stockholder shall deliver to the Company, against payment of the purchase price
therefor, certificates representing the Shares.
2. Representations and Warranties of the Company. In order to
induce the Stockholder to enter into this Agreement and sell the Shares to the
Company, the Company hereby makes the following representations and warranties
to the Stockholder, which representations and warranties shall survive the
execution hereof.
2.1 Organization and Corporate Powers.
(a) The Company is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Delaware and is
duly qualified to do business as a foreign corporation in good standing in all
other jurisdictions in which its ownership, leasing or operation of property or
the conduct of its business requires such qualification, except where the
failure to be so qualified would not have a material adverse affect on the
condition (financial or other), business, prospects, results of operations or
general affairs of the Company.
(b) The Company has the right, power and authority to own
its properties and assets, and to transact the business in which it is engaged.
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2.2 Authorization.
(a) The Company has the right, power and authority to
execute, deliver and perform the terms and provisions of this Agreement. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Company and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or to consummate the transactions so
contemplated.
(b) The execution, delivery and performance by the Company
of the terms and provisions of this Agreement and the consummation of the
transactions contemplated hereby do not and will not violate any provision of
the Company's Restated Certificate of Incorporation, By-Laws or any agreement or
instrument to which the Company is a party or by which it is bound, or to which
any of its properties or assets is subject, or of any applicable law. The
Company has duly executed and delivered this Agreement and, at the Closing, will
have duly executed and delivered that certain underwriting agreement to be
entered into by and among the Company, the Stockholder and the underwriters
party thereto in connection with the Public Offering (the "Underwriting
Agreement") and the other agreements contemplated by this Agreement and the
Underwriting Agreement to which it is a party. This Agreement constitutes, and
the Underwriting Agreement and the agreements contemplated hereby and thereby
when executed and delivered by the Company, and, assuming the due execution by
the other parties hereto and thereto, will constitute the legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as enforceability may be limited: (i) by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law); or (ii) with respect to the indemnification or
contribution provisions of this Agreement and the Underwriting Agreement, to the
extent such provisions are contrary to public policy or prohibited by law.
(c) No consent, authorization or order of, or filing or
registration with, any governmental authority or other person is required to be
obtained or made by the Company for the execution, delivery and performance by
the Company of this Agreement, the Underwriting Agreement or any agreements
contemplated by this Agreement or the Underwriting Agreement to which it is a
party or the consummation of any of the transactions contemplated hereby or
thereby, except for those that will have been made or obtained on or prior to
the Closing Date.
2.3 Solvency. Immediately before and after and giving effect
to the Public Offering and the Repurchase and the other transactions
contemplated by this Agreement, the Underwriting Agreement and the other
agreements contemplated hereby and thereby, (i) the assets of the Company, at a
fair valuation, will exceed its debts, including contingent and unliquidated
debts; (ii) the present fair saleable value of the assets of the Company will
exceed the amount required to pay its liability on its debts, including
contingent
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and unliquidated debts, as those debts become absolute and matured; (iii) the
Company will have adequate capital with which to conduct its present and
anticipated businesses; and (iv) the Company does not intend to incur or believe
or reasonably believe that it will incur debts beyond its ability to pay as
those debts become due.
2.4 Representations and Warranties in the Underwriting
Agreement. The representations and warranties of the Company in the Underwriting
Agreement and any documents contemplated thereby (including, without limitation,
those made on the Closing Date both immediately before and immediately after
giving effect to the Public Offering and regardless of whether any such
representations or warranties survive beyond the Closing Date) will be true in
all material respects as of the date thereof and will be true in all material
respects on the Closing Date.
3. Representations and Warranties of the Stockholder. In order to
induce the Company to enter into this Agreement and purchase the Shares from the
Stockholder, the Stockholder hereby makes the following representations and
warranties to the Company, which representations and warranties shall survive
the execution hereof.
3.1 Organization and Corporate Powers.
(a) The Stockholder is a corporation, duly organized,
validly existing and in good standing under the laws of the State of Nevada and
is duly qualified to do business as a foreign corporation in good standing in
all other jurisdictions in which its ownership, leasing or operation of property
or the conduct of its business requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the
condition (financial or other), business, prospects, results of operations or
general affairs of the Stockholder.
(b) The Stockholder has the right, power and authority to
own its properties and assets, and to transact the business in which it is
engaged.
3.2 Authorization.
(a) The Stockholder has the right, power and authority to
execute, deliver and perform the terms and provisions of this Agreement. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Stockholder and no other proceedings on the part of the Stockholder are
necessary to authorize this Agreement or to consummate the transactions so
contemplated.
(b) The execution, delivery and performance by the
Stockholder of the terms and provisions of this Agreement and the consummation
of the transactions contemplated hereby do not and will not violate any
provision of the Stockholder's Restated Certificate of Incorporation, By-Laws or
any agreement or instrument to which the
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Stockholder is a party or by which it is bound, or to which any of its
properties or assets is subject, or of any applicable law. The Stockholder has
duly executed and delivered this Agreement and, at the Closing, will have duly
executed and delivered the Underwriting Agreement and the other agreements
contemplated by this Agreement and the Underwriting Agreement to which it is a
party. This Agreement constitutes, and the Underwriting Agreement and the
agreements contemplated hereby and thereby when executed and delivered by the
Stockholder and, assuming the due execution by the other parties hereto and
thereto, will constitute the legal, valid and binding obligations of the
Stockholder, enforceable against the Stockholder in accordance with its terms,
except as enforceability may be limited: (i) by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law); or (ii)
with respect to the indemnification or contribution provisions of this Agreement
and the Underwriting Agreement, to the extent such provisions are contrary to
public policy or prohibited by law.
(c) No consent, authorization or order of, or filing or
registration with, any governmental authority or other person is required to be
obtained or made by the Stockholder for the execution, deliver and performance
by the Stockholder of this Agreement, the Underwriting Agreement or any
agreements contemplated by this Agreement or the Underwriting Agreement to which
it is a party or the consummation of any of the transactions contemplated hereby
or thereby except for those that will have been made or obtained on or prior to
the Closing Date.
3.3 Ownership of Shares. The Stockholder has, and on the
Closing Date will have, valid and unencumbered title to the Shares and upon
delivery of and payment for the Shares pursuant to this Agreement on the Closing
Date the Company will acquire valid and unencumbered title to the Shares (other
than any encumbrances created by the Company).
4. Certain Agreements of the Company and the Stockholder.
4.1 Designated Representatives. The Stockholder hereby agrees
to use its best efforts to cause each of the four Designated Representatives (as
defined in the Stockholder Agreement) to resign or otherwise withdraw from
serving as a director on the board of directors of the Company, each such
resignation to become effective only upon the closing of the Repurchase and the
Public Offering or as soon thereafter as possible.
4.2 Continuing Ownership. If the Public Offering is consummated
but the over-allotment option is not exercised in full by the several
underwriters (all such unpurchased shares of the Common Stock being hereinafter
referred to as the "Remaining Shares"):
(a) The Company hereby agrees to (i) promptly, but in no
event more than 30 days after the expiration of the underwriters' over-allotment
option, file with the Securities and Exchange Commission (the "Commission"), at
its own expense, a post-
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effective amendment to the Registration Statement (as so amended, the "Amended
Registration Statement") to make such amendments to the Registration Statement,
including the Plan of Distribution included therein, as may be necessary to
permit the sale from time to time on a delayed or continuing basis made under
Rule 415 of the Securities Act of 1933, as amended (the "Securities Act") of the
Remaining Shares, (ii) use its best efforts to cause such post-effective
amendment to become effective promptly, and (iii) with respect to the Amended
Registration Statement and the Remaining Shares, comply with the provisions of
the Registration Rights Agreement relating to a Shelf Registration (as defined
in the Registration Rights Agreement).
(b) The Stockholder hereby agrees that it will not, without
the prior consent of the Company, sell or otherwise transfer any of the
Remaining Shares, whether pursuant to the Amended Registration Statement or
otherwise, in a manner that could reasonably be expected to cause a significant
disruption in the orderly trading of the Common Stock on the New York Stock
Exchange; provided, however, that, without limiting the foregoing, the Company
hereby acknowledges and agrees that the following types of transfers shall not
conflict with, result in a default under or require any notice to or consent of
the Company under this Section 4.2(b), paragraph 5 of the Stockholder Agreement
or Section 4.7 of the Registration Rights Agreement: (i) transfers permitted by
Rule 144 promulgated under the Securities Act or any successor rule; and (ii)
transfers to institutional investors.
(c) The Stockholder and the Company hereby agree that (i)
the filing of the Registration Statement in connection with the Public Offering
shall be deemed to be pursuant to one (1) demand under Section 2 of the
Registration Rights Agreement and that (ii) the filing of the post-effective
amendment pursuant to Section 4.2(a) after closing of the Public Offering and
the Repurchase shall be deemed to be the second and final demand under Section 2
of the Registration Rights Agreement.
4.3 Trade Name and Service Mark. The Company hereby agrees, and the
Stockholder hereby agrees to cause ITT Sheraton, to enter into an amendment to
the License Agreement, such amendment to become effective upon the closing of
the Repurchase and the Public Offering and to provide for: (i) the extension of
the term of the license granted to the Company in Section II.A. of the License
Agreement in perpetuity on a royalty-free basis; (ii) the inclusion of permitted
uses of additional trade names as agreed to by the parties; (iii) the inclusion
of a consent procedure with respect to permitted uses of additional trade names
in connection with certain future acquisitions by the Company; and (iv) the
transfer, assignment and sublicense of the Company's rights under the License
Agreement to and among the Company and its wholly-owned subsidiaries.
4.4 Expense Reimbursement. The Stockholder hereby agrees to remit to
the Company at the Closing, by wire transfer of immediately available funds,
cash in an amount up to $1 million as reimbursement in full for all direct and
indirect expenses incurred in connection with the Public Offering as follows:
(a) $500,000 upon the closing of the Repurchase and the Public Offering; and (b)
an additional $500,000 upon the closing of the
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Repurchase and the Public Offering, if (i) the Repurchase and the Public
Offering (excluding the shares of the Common Stock covered by the underwriters'
over-allotment option) are both closed on or before February 20, 1999 and (ii)
the Public Offering (excluding the shares of the Common Stock covered by the
underwriters' over-allotment option) is closed at a per share price to the
public equal to or greater than $31.50.
5. Conditions.
(a) The obligations of the Company to complete the Repurchase and
acquire the Shares at the Closing Date pursuant hereto are subject to the
satisfaction or waiver by the Company on or prior to the Closing Date of each of
the following conditions:
(i) the representations and warranties of the Stockholder
set forth in Section 3 hereof shall be true and correct in all material respects
on the Closing Date as though made on and as of such date;
(ii) the Stockholder shall have delivered the Shares to the
Company;
(iii) the Stockholder shall have performed in all material
respects all obligations required to be performed by it under this Agreement at
or prior to the Closing including, without limitation, those set forth in
Section 4;
(iv) the Public Offering shall have been closed and all of
the 7,000,000 shares of the Common Stock offered thereby shall have been sold
therein; and
(v) the Company shall have received an opinion of counsel to
the Stockholder, in form and substance reasonably satisfactory to the Company
and dated as of the Closing Date, as to the matters set forth in Sections 3.1
and 3.2.
(b) The obligations of the Stockholder to complete the Repurchase
and sell the Shares at the Closing Date pursuant hereto are subject to the
satisfaction or waiver by the Stockholder on or prior to the Closing Date, of
each of the following conditions:
(i) the representations and warranties of the Company set
forth in Section 2 hereof shall be true and correct in all material respects on
the Closing Date as though made on and as of such date;
(ii) the Company shall have paid or tendered to the
Stockholder the purchase price for the Shares;
(iii) the Company shall have performed in all material
respects all obligations required to be performed by it under this Agreement at
or prior to the Closing including, without limitation, those set forth in
Section 4;
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(iv) the Public Offering shall have been closed and all of
the 7,000,000 shares of the Common Stock offered thereby shall have been sold
therein; provided, that nothing contained in this Section 5(b) shall be deemed
to limit the Stockholder's right to terminate this Agreement pursuant to Section
7(b); and
(v) the Stockholder shall have received an opinion of
counsel to the Company, in form and substance reasonably satisfactory to the
Stockholder and dated as of the Closing Date, as to the matters set forth in
Sections 2.1 and 2.2.
6. Indemnification.
6.1 Offering Indemnification.
(a) The Stockholder hereby agrees to indemnify and hold
harmless the Company and its officers, directors, employees, agents and
representatives from and against any and all liabilities, claims, damages,
losses or expenses, including, without limitation, any special, indirect,
incidental or consequential damages (collectively, "Losses"), relating to,
arising out of or due to any (i) untrue statement or alleged untrue statement of
any material fact contained in the Registration Statement and/or the Amended
Registration Statement, any preliminary prospectus or final prospectus included
therein, or any amendment or supplement thereto, or any document incorporated by
reference therein (collectively, the "Offering Documents") or (ii) any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, but in any
such case only insofar as any such untrue statement or alleged untrue statement
or omission or alleged omission was made in reliance upon, and in conformity
with, written information furnished to the Company by or on behalf of the
Stockholder or any of its Affiliates (other than the Company and its
subsidiaries, employees, agents and representatives) specifically for use in the
Offering Documents.
(b) The Company hereby agrees to indemnify and hold harmless
the Stockholder, its officers and directors, each individual, partnership,
corporation, limited liability company, association, joint stock company, trust,
joint venture and unincorporated organization (each, a "Person") who controls
the Stockholder and each of their respective directors and officers and all
employees, agents and representatives of any of the foregoing from and against
any and all Losses relating to, arising out of or due to any of the transactions
contemplated hereby or by the Underwriting Agreement including, without
limitation, any (i) untrue statement or alleged untrue statement of any material
fact contained in the Offering Documents or (ii) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
the Company will not be liable in any such case to the extent that any such
Losses arise out of or are based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such Offering Documents in
reliance upon and in
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conformity with written information furnished to the Company by or on behalf of
the Stockholder or any of its Affiliates (other than the Company and its
subsidiaries, employees, agents and representatives) specifically for use in the
Offering Documents.
6.2 Indemnification Procedure. Promptly after receipt by an
indemnified party under this Section 6 of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under Section 6.1, notify the indemnifying party
of the commencement thereof; provided, however, that any failure to give such
notice will not waive any rights of the indemnified party except to the extent
the rights of the indemnifying party were materially prejudiced. In case any
such action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not
(except as described below) be liable to such indemnified party under this
Section 6 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
out-of-pocket costs of investigation. The indemnified party will have the right
to employ its counsel in any such action, but the fees and expenses of such
counsel will be at the expense of such indemnified party unless (a) the
employment of counsel by the indemnified party has been authorized in writing by
the indemnifying party, (b) the indemnified party has reasonably concluded that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party
(in which case the indemnifying party will not have the right to direct the
defense of such action on behalf of the indemnified party) or (c) the
indemnifying party has not in fact employed counsel to assume the defense of
such action within a reasonable time after receiving notice of the commencement
of the action, in each of which cases the reasonable fees and expenses of
counsel will be at the expense of the indemnifying party or parties. All such
fees and expenses and other fees and expenses reasonably incurred in connection
with investigating or defending such action or other claim for which
indemnification is sought under this Section 6 will be reimbursed promptly as
they are incurred. An indemnifying party will not be liable for the fees and
expenses of more than one separate counsel for all indemnified parties in
connection with any proceeding or related proceedings in the same jurisdiction.
If the indemnifying party shall elect to control the defense of any such action,
it shall not settle any such action without the consent of the indemnified
party, which consent may not be unreasonably withheld, and in all events may not
be withheld if such indemnifying party agrees fully to indemnify such other
party in connection therewith. If the indemnifying party shall not control the
defense of any such action, the indemnified party shall be entitled to take
whatever action it deems necessary or appropriate to resolve or settle such
action, but in no event shall it have any obligation to defend any such action
or to appeal any adverse finding or determination. The Stockholder and the
Company agree to cooperate with each other in the defense of any action for
which
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indemnification is sought under this Section 6, including providing access to
information, employees and records under paragraph 8 of the Stockholder
Agreement.
6.3 Effect on Underwriting Documents. Notwithstanding anything
to the contrary herein contained or set forth in the Underwriting Agreement
relating to the Public Offering:
(a) the provisions of this Section 6 shall govern and
control the indemnification arrangements, and any claims or Losses arising
thereunder, between the Company and the Stockholder with respect to liabilities
arising under the Registration Statement, the Amended Registration Statement or
the other Offering Documents; and
(b) the provisions of the Underwriting Agreement shall
govern and control the indemnification arrangements, and any claims or Losses
arising thereunder, between the Company and the underwriters.
7. Termination. Sections 1 and 4 of this Agreement may be
terminated:
(a) at any time, by mutual written consent of the Company
and the Stockholder;
(b) by the Stockholder, if at any time it is advised by the
lead underwriter(s) for the Public Offering as to the expected price per share
for the shares of the Common Stock to be sold in the Public Offering and the
Stockholder, in its sole discretion, is unwilling to sell such shares for such
price;
(c) by the Company or the Stockholder, if the Public
Offering (excluding the shares of the Common Stock covered by the underwriters'
over-allotment option) has not been closed by March 31, 1999; or
(d) by the Company or the Stockholder, if there shall have
been issued, by a court of competent jurisdiction, a permanent or final order,
decree or injunction prohibiting or restraining the closing of the Public
Offering, the Repurchase and the transactions contemplated by this Agreement,
the Underwriting Agreement or the related agreements and such order, decree or
injunction has become final and non-appealable.
Notwithstanding the foregoing, the remaining obligations of the Company and the
Stockholder pursuant to this Agreement shall survive any termination pursuant to
this Section 7 and shall remain in full force and effect.
8. Amendment; Waiver. This Agreement may not be amended or modified
in any respect except by a written agreement signed by both the Company and the
Stockholder. No term or condition of this Agreement may be waived, except by a
writing executed by the party against whom enforcement of any such waiver is
being sought. No waiver by either
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party hereto of any term or condition of this Agreement, in any one or more
instances, shall operate as a waiver of such term or condition at any other
time.
9. Survival. All representations, warranties and covenants shall
survive the Closing.
10. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
the validity, legality or enforceability of any other provision of this
Agreement in such jurisdiction or affect the validity, legality or
enforceability of any provision in any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
11. Entire Agreement. Except as otherwise expressly set forth
herein, this Agreement embodies the complete agreement and understanding among
the parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among the
parties, written or oral, that may have related to the subject matter hereof in
any way.
12. Successors and Assigns; No Third-Party Beneficiaries. Except as
otherwise provided herein, this Agreement shall bind and inure to the benefit of
and be enforceable by the parties hereto and their respective successors and
permitted assigns. Notwithstanding anything to the contrary contained in this
Agreement, neither the Stockholder nor the Company shall have the right to
freely assign, in whole or in part, this Agreement. Except as otherwise provided
herein, nothing contained in this Agreement, except as expressly set forth, is
intended to confer upon any other Person, other than the parties hereto and
their respective successors and permitted assigns, any rights or remedies.
13. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
14. Remedies. The Company and the Stockholder shall be entitled to
enforce their rights under this Agreement specifically, to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights existing in their favor. The parties hereto agree and acknowledge
that money damages would not be an adequate remedy for any breach of the
provisions of this Agreement and that the Company and the Stockholder, in their
sole discretion, may apply to any court of law or equity of competent
jurisdiction for specific performance and/or injunctive relief (without posting
a bond or other security) in order to enforce or prevent any violation of the
provisions of this Agreement.
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<PAGE>
15. Notices. All notices, requests, demands or other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given: (a) on the date of service if served personally on the party to whom
notice is to be given; (b) on the day of transmission if sent via facsimile
transmission to the facsimile number given below, and telephonic confirmation of
receipt is obtained promptly after completion of transmission; (c) on the day
after delivery to Federal Express or similar overnight courier or the Express
Mail service maintained by the United States Postal Service; or (d) on the fifth
day after mailing, if mailed to the party to whom notice is to be given, by
first class mail, registered or certified, postage prepaid and properly
addressed, to the party as follow:
If to the Company:
ITT Educational Services, Inc.
5975 Castle Creek Parkway North Drive
Indianapolis, Indiana 46250
Attention: General Counsel
Facsimile: (317) 594-4301
If to the Stockholder:
ITT Corporation
777 Westchester Avenue
White Plains, New York 10604
Attention: General Counsel
Facsimile: (914) 640-8260
Any party may change its address for the purpose of this Section
15 by giving the other party written notice of its new address in the manner set
forth above.
16. Descriptive Headings. The section headings contained herein are
for the purposes of convenience only and are not intended to define or limit the
contents of said sections.
17. Further Assurances. Each party hereto shall cooperate and shall
take such further action and shall execute and deliver such further documents as
may be reasonably requested by any other party in order to carry out the
provisions and purposes of this Agreement; provided, that nothing contained in
this Section 17 shall be deemed to limit the Stockholder's right to terminate
this Agreement pursuant to Section 7(b).
18. Governing Law. This Agreement shall be construed, performed and
enforced in accordance with, and governed by, the laws of the State of Delaware
applicable to contracts executed in and to be performed in that State.
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<PAGE>
IN WITNESS WHEREOF, the parties have set their hands hereunto as of
the day and year first above written.
ITT EDUCATIONAL SERVICES, INC.,
a Delaware corporation
By: /s/ Clark D. Elwood
------------------------------------
Name: Clark D. Elwood
Title: Senior Vice President,
General Counsel and Secretary
ITT CORPORATION,
a Nevada corporation
By: /s/ Alan M. Schnaid
------------------------------------
Name: Alan M. Schnaid
Title: Vice President
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