Exhibit 10.1

 

Operating Agreement

 

This Operating Agreement (the “Agreement”), effective this 8th day of July, 2014
(the “Effective Date”), is by and between Corinthian Colleges, Inc. and its
wholly- and partially-owned subsidiaries, including without limitation those of
its subsidiaries listed on Exhibit 21.1 of its September 3, 2013 Annual Report
(the “2013 Form 10-k”) filed with the Securities and Exchange Commission
(hereinafter, collectively, “Corinthian”), and the United States Department of
Education (“the Department”).  For purposes of this Agreement, Corinthian and
the Department shall be referred to individually as a “Party” and collectively
as the “Parties.”

 

Recitals

 

A.            WHEREAS, the Department and Corinthian previously entered into a
Memorandum of Understanding dated June 22, 2014 (“MOU”), wherein Corinthian
agreed to present an Operating Agreement by July 1, 2014 for the Department’s
approval, and, subject to negotiation, agreement.

 

B.            WHEREAS, the Department and Corinthian agree that the Operating
Agreement will attempt to provide Corinthian students an opportunity to complete
their education without material interruption, change, or additional cost;

 

C.            WHEREAS, the Department and Corinthian agree that the Operating
Agreement will attempt to treat Corinthian’s faculty and staff in a manner that
causes minimal personal and financial disruption; and

 

D.            WHEREAS, the Parties agree that the Operating Agreement would
consider the importance of Corinthian’s responsibilities to students, employees,
and taxpayers, and respect the interests of the government and Corinthian’s
federal and state law obligations (including fiduciary duties) and contractual
obligations.

 

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Agreement

 

NOW, THEREFORE, in consideration of the mutual covenants and undertakings
contained herein, Corinthian and the Department hereby agree as follows:

 

I. Financial and Operational Information

 

A. Corinthian has provided the following to the Department for review:

 

1. Contemporaneously with the execution of this Agreement, a 13-week cash flow
projection prepared by Corinthian and reviewed and submitted by the Company’s
Chief Restructuring Officer, a Senior Managing Director of FTI Consulting, Inc.
(the “CRO”) as of June 30, 2014.

 

2. Contemporaneously with the execution of this Agreement, a detailed list of
Corinthian’s assets as reflected on Corinthian’s internal accounting records as
of May 31, 2014, attested to as being materially true and correct to the best
knowledge of the CEO or CFO of Corinthian, subject to audit adjustments, month
end closing adjustments and other adjustments to conform the statements to
Corinthian’s typical quarterly public financial presentation.   In addition,
Corinthian shall provide a list of all acquisitions and dispositions of assets,
and other non-ordinary course transactions of more than $500,000 occurring after
May 31, 2014 attested to as being materially true and correct to the best
knowledge of the CEO or CFO of Corinthian.

 

3. Before the Effective Date, Corinthian shall provide to the Department a list
of its Title IV-eligible locations, specifying the addresses of such locations
as reflected on the existing Eligibility and Certification Approval Report of
each location, as well as the approved programs of study at each such location
and a list of the full direct costs (tuition, books, equipment, and fees) of
those programs of study at those locations.

 

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4. Before the Effective Date, Corinthian shall provide to the Department a list
of all Title IV-eligible students who were enrolled in each of Corinthian’s
Title IV-eligible institutions as of June 30, 2014, indicating whether the
student is enrolled in distance education or in-person, by program of study,
specifying the student’s state of residence, enrollment date, campus, and
anticipated program completion date.

 

B. On or prior to every Thursday on a weekly basis, Corinthian shall provide an
updated 13-week cash flow projection, in substantially the same form as
delivered pursuant to Section I.A.1 or such other form as the Monitor (defined
below) may agree, for the thirteen (13) week period commencing on the following
Monday, prepared by Corinthian and reviewed by and submitted by the Company’s
CRO to the Monitor.  The projection shall show cash receipts disaggregated by
source.

 

II. Federal Student Aid Funds; Department Review of Student Rosters

 

A. The Department’s current HCM-1 disbursement method for Corinthian and the
attendant 21-day disbursement delay will remain in effect until the Department
provides further notice.

 

B. Effective July 8, 2014, the Department will allow Corinthian to draw down
Title IV student aid funds on a weekly basis, as an advance against the 21-day
disbursement delay described in Section II.A above, for student rosters that it
submitted to the Department. Weekly draws will continue as additional Title IV
student aid funds become available, as a continual weekly advance against the
21-day disbursement delay described in Section II.A above, for student rosters
that Corinthian will submit to the Department in accordance with Section II.D
and in accordance with additional review procedures as set forth in Sections
II.D and III.C.1 below.

 

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C. The Department may defer access to Title IV funds for any institution if it
determines that Corinthian has not produced the placement rate and other
materials requested that are related to that institution by the date specified. 
The deferral will continue until the Department receives the materials
requested.  Responses to subsequent requests for information shall be subject to
a mutually agreeable schedule determined by the Parties.

 

The continuation of advance drawdowns is conditioned on the post-disbursement
verification, by an independent qualified student financial aid auditor (“Title
IV Auditor”) selected by Corinthian and approved by the Monitor and the
Department, that the rosters Corinthian has submitted for drawdowns are
materially complete, accurate and appropriate.  The Title IV Auditor’s
verification, subject to review by the Monitor, will include reviewing an
appropriate sample of the students included on the rosters, and that Corinthian
has paid, or subtracted from any drawdowns, all returns owed to the Title IV
student aid programs with respect to any students.  The Title IV Auditor shall
review samples and verify the accuracy of information, including relevant
student information, program participation information and documentation
confirming financial aid eligibility, attendance and satisfactory academic
progress, and items identified in the Verification Checklist attached at Exhibit
A.  The Title IV Auditor will submit the results of the weekly review, including
any relevant error percentages and detailed findings, to the appointed Monitor
on a weekly basis.  The Monitor will report the results to the Department
consistent with the terms of this Agreement.  The Title IV Auditor’s bills will
all be paid promptly by Corinthian upon submission.

 

The Monitor will review a random sample of student rosters on a school-by-school
basis to confirm that no disbursements are being requested for locations that
have been determined ineligible or for

 

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which data and documentation have not been substantially provided by July 15,
2014, where “substantially provided” means that all data and documentation have
been provided other than a de minimus amount that does not materially limit the
Department’s ability to evaluate the data and documentation in the aggregate;
and provided further, however, that “substantial provision” does not relieve
Corinthian of its obligation to produce all responsive materials.  The Monitor
shall notify the Department of any discrepancies before Corinthian submits the
rosters to the Department for payment.

 

D. At least 24 hours prior to each requested draw of Title IV student aid funds,
Corinthian will provide to the Department a list of the students, by campus, for
which such payments are requested.   The amount of any draws of Title IV federal
student aid funds for those students will be reconciled to the date Corinthian
provides the list to the Department. This list will identify the OPEID of the
institution the students are attending, and each student’s social security
number, current address, current telephone number, program of study, requested
payment amount, date of enrollment, expected graduation date, prior disbursement
amounts by program for the current enrollment, current disbursement amounts by
program, and whether the student is still in attendance.

 

E.  During the period between the date of signing and July 8, 2014, there will
be no contractual agreements entered into between Corinthian and any new
students.

 

III. Independent Monitor

 

A. The Department shall identify an individual who shall serve as an independent
monitor of Corinthian and report solely to the Department (the “Monitor”). 
Corinthian shall enter into an agreement with the Monitor consistent with the
scope outlined below and such other terms and conditions as shall be mutually
satisfactory to the Monitor, Corinthian and the Department.

 

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Corinthian shall be solely responsible for any and all costs associated with the
Monitor and shall set aside initially Two Hundred Thousand Dollars ($200,000) to
pay the Monitor’s fees and costs promptly.

 

B. The Monitor will have full and complete access to Corinthian personnel and
budgets, including financial projections, results of operations and cash
receipts and disbursements (including, without limitation, disbursements of any
Title IV student aid funds), student records, databases (including Campus Vue)
and any and all documents Corinthian is providing to potential buyers,
accreditors, lenders, state authorizing agencies, and the Department.

 

C. The duties and responsibilities of the Monitor shall be as follows:

 

1.  The Monitor will review Corinthian’s rosters prior to submission of any
rosters for drawdowns in accordance with this section.  The Monitor’s review
will include campus eligibility based on information provided by the Department
and consistency with the teach-out plan where applicable.  The Monitor will
receive a report from the Title IV Auditor regarding the results of the
post-disbursement verification process;

 

2. Corinthian will provide the Monitor a list of the expenditures made each
week, and the Monitor shall review and report to the Department on the
allowability of the expenditures from Title IV funds, consistent with Section IV
below;

 

3. Confirm that the implementation of each teach-out is materially consistent
with the written plans prepared by Corinthian and approved by relevant
accrediting and state licensing agencies, and accepted by the Department,
subject to amendment or modification of such plans as approved by the state
licensing agencies and accrediting agencies, and disclosed to the Monitor;

 

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4. Prior to the submission of each weekly drawdown of Title IV funds by
Corinthian, confirm that Corinthian is in material compliance with the agreed
timetable for the production of documents, including any follow-up document
requests and agreed-upon timetables with respect thereto;

 

5. Monitor the status of all school sales processes and provide monthly reports
to the Department;

 

6. Receive access to, and review, the existing multiple access points for
internal and external complaints about Corinthian (including a toll free phone
number for “a hot line”) and report material relevant complaints to the
Department on a schedule agreed to by the Department and Corinthian;

 

7. Periodically report his or her findings with respect to (i) any violations of
this Agreement, (ii) new or threatened litigation against Corinthian or any of
its institutions, and (iii) any material developments in its financial situation
or in existing litigation to the Department and Corinthian in accordance with
such schedule as the Department may prescribe.

 

D. Except in the performance of his or her obligations under this Agreement
concerning reporting to the Department, the Monitor shall be subject to
confidentiality obligations with respect to any books, records, and other
private, proprietary or personally-identifiable information about Corinthian,
its students, and employees.  The Parties agree that all materials provided to
the Monitor or the Department marked as “Business Confidential” shall be
reviewed to determine if those materials are exempt from disclosure pursuant to
5 U.S.C. 552(b)(4) respecting exemption from disclosure of confidential or
privileged Business or Trade Information.

 

E. Corinthian shall promptly disclose to the Monitor any changes to teach-out
plans and agreements, filings with the U.S. Securities and Exchange Commission,
new litigation, and material court

 

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judgments and substantive orders issued on all material litigation, and in the
event such actions and activities have not promptly been disclosed to the
Department by Corinthian, the Monitor shall promptly so inform the Department.

 

F.  Subject to Section III.D, the Monitor shall provide the Department with
access to any and all documents reviewed and relied upon in discharging the
obligations specified herein.

 

G.  Notify the Department of any actual known violation of state or federal laws
or regulations, including the regulations of the Department.

 

H.  The Monitor shall have such authorities that are necessary and proper to the
performance of his or her duties herein.

 

I.  If the Monitor cannot be secured by the date this Agreement becomes
effective, the Department will assign a temporary Monitor.

 

IV. Allowable and Excluded Uses Associated with Title IV Student Aid Funds

 

A. From and after the Effective Date of this Agreement, Corinthian agrees that
it shall only use Title IV student aid funds to fund the normal daily operations
and expenses as set forth on Exhibit B attached hereto, including student
refunds, payroll expenses (including retention arrangements), accounts payable,
interest and related fees, and related professional fees. Corinthian agrees
that, from and after the Effective Date of this Agreement, it will not use Title
IV student aid funds to pay dividends, legal settlements of lawsuits or
investigations, or debt repayments.  Additionally, bonuses, severance payments,
raises and retention agreements being considered shall be discussed with the
Monitor and reported to the Department at least two weeks prior to the creation
of contractual obligations and payment and subject to the approval of the
Department.

 

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B. From and after the appointment of the Monitor, the Monitor (as defined below)
shall have full access to review all disbursements by Corinthian in order to
verify compliance with the terms of this Agreement.

 

V. Notices by Corinthian to Current and Prospective Students

 

A. Corinthian will provide notices and disclosures to current and prospective
students as to the status of the schools and the options and protections
afforded to the students.  Corinthian shall produce the notices and disclosures
to the Department for review and approval before using the notices and
disclosures to current and prospective students. The Department may, at any
time, request that such notices and disclosures be revised and Corinthian shall
produce such revised notices and disclosures to the Department for review and
approval. With respect to Teach-Out Schools, Corinthian shall be required to
obtain written acknowledgement that the student has read the notice and
disclosures. With respect to Sales Schools, Corinthian shall be required to
obtain written acknowledgment that a student who enrolls after the effective
date of this agreement has read the notice and disclosures.

 

Corinthian will endeavor to obtain written acknowledgement from each student
whose program it completes teaching that the program has been taught to
completion.

 

B.  Notwithstanding any other provision herein, nothing herein shall be read to
prohibit or constrain any additional disclosures that may be sought by any state
or federal authority or accrediting agency or ordered by any state or federal
court.

 

VI. Teach-outs or Full Refunds to Corinthian Students for Tuition, Fees, and
Other Direct Educational Charges in Certain Circumstances

 

A. Upon signing this Agreement, Corinthian will discontinue enrolling new
students in any schools designated in this Agreement

 

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to be taught out and closed thereafter (the “Teach-out Schools”).  Promptly (and
in no event more than one week) after the Effective Date of this Agreement,
Corinthian shall provide written notice to all students attending the Teach-Out
Schools of the intent to teach out those schools.

 

B. With respect to new students who enrolled in a Teach-Out School between the
date of the MOU and the Effective Date of this Agreement, Corinthian shall
promptly provide such students with disclosures regarding options to be
developed, reviewed and approved as described in Section V.A, which shall
provide for students their choice to either (i) obtain a Full Refund (as defined
below) and discontinue their education at the Teach-out School, and Corinthian
shall forgive entirely all tuition and other fees charged the student for the
program, or (ii) continue their education in the ordinary course. If a student
does not affirmatively make a choice, Corinthian shall withdraw the student from
the program and issue the student a Full Refund (as defined below).

 

C.  With respect to students enrolled at a Teach-Out School prior to the date of
the MOU, Corinthian shall give each such students one of the following plans at
the time of the announcement of the teach-out: 1) continue his or her program of
study as he or she normally would (which may mean transferring to a comparable
program of study at a comparable school at no additional cost above the amount
such student would have been charged to attend the Corinthian school); or 2)
withdraw from school and receive a Full Refund of the total direct costs of
attendance incurred by such student, and, in that case, Corinthian shall
(i) return to the Department any Federal Pell and other Federal grants and
Federal student loan funds disbursed to such student, (ii) repay to any private
student loan or other lender from whom Corinthian received direct disbursements
for such student’s cost of attendance at Corinthian the amount of such
disbursements, and shall reimburse the student any origination and other fees,
if any,

 

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incurred by the student in obtaining such private student loan, and (iii) return
any amounts received directly from such student to such student, a “Full
Refund.”  Corinthian shall provide a bona fide internal appeals process whereby
a student can appeal the decision by Corinthian to continue the student in a
teach-out rather than permit the student to receive a Full Refund.  Corinthian
shall provide the Monitor with access to all documents and personnel involved in
the appeals process.  If a student’s appeal is granted, Corinthian shall
withdraw the student from the program and issue the student a Full Refund. In
the case that Corinthian is unable or fails to pay the Full Refunds where
required, the Department will offset the appropriate amount from Corinthian’s
next Title IV aid funding disbursement and apply that amount to the accounts of
the affected students. For the avoidance of doubt, the definition of Full Refund
shall not require Corinthian to return any amounts pursuant to this Section VI
in excess of “direct costs,” or otherwise used by the student to pay indirect
expenses. For purposes of this Section VI, “direct costs” shall mean tuition and
fees, equipment, books and supplies, and any other costs incurred by the student
to the extent such amounts were paid to the school.

 

D. With respect to students who enroll in programs that Corinthian closes
without permitting the students to complete the program, and not in accordance
with a previously agreed-upon teach-out plan, Corinthian shall provide a Full
Refund to such students.

 

E. With respect to students attending schools that are found by the Department
to be ineligible for recertification or otherwise determined to be ineligible
for participation in Title IV programs, Corinthian shall provide students their
choice of one of the following options at the time such denial of
re-certification  of Title IV eligibility becomes final: 1) continue his or her
program of study at the school pursuant to 34 CFR §668.26 (“End of an
institution’s participation in the Title IV, HEA programs”); or 2) withdraw from
school and receive a Full Refund.  The Department

 

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will provide Corinthian with an informal review at least 14 days in advance of a
decision to deny recertification of a Corinthian institution.  Corinthian will
stop enrolling students immediately at an institution where it has been advised
that the Department may intend to deny the recertification for that institution,
and if the recertification denial is issued Corinthian will immediately add that
institution to the Teach-Out plan previously submitted by Corinthian to the
accreditors and the Department, and further detailed in Section VII below. 
Before making disclosures to third parties about this information, Corinthian
will consult the Department and the Parties shall agree to any such disclosure. 
The Department may issue a recertification denial less than 14 days after
providing notice to Corinthian under this Agreement if Corinthian shares
information concerning the recertification denial with any third party that was
not agreed to.

 

F. Corinthian and the Department will work together to establish a reserve fund,
that will be placed in an interest bearing escrow account, to be used
exclusively for student refunds.  The total amount of the fund will be
determined in consultation with the Monitor but will be no less than $30
million.

 

VII. Closure and Teach-Out Provisions

 

A. Attached as Exhibit C is a generalized template for Corinthian teach-out
plans. By July 22, 2014, Corinthian shall prepare teach-out plans for all of its
U.S. locations that participate in the Title IV Program, in compliance with the
requirements of their applicable accrediting agencies, and shall deliver these
teach-out plans to the Department by such date.  These plans may include
agreements with other institutions to take over the teach-out process or funding
mechanisms, as applicable. Corinthian will suspend new enrollments at the
Teach-Out Schools promptly, but no later than one (1) day after the Effective
Date of this Agreement.

 

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VIII. Corinthian Responses to Data Requests

 

A. Corinthian will fully comply with the prioritized list of data requested by
the Department before this Agreement is executed.  With respect to the 2010 data
concerning Heald, a component of the prioritized list of data referenced in the
preceding sentence, Corinthian will comply with the request by July 15, 2014. 
The Department is still reviewing and substantiating the data included in the
referenced prioritized list of data.  Any data request made by the Department on
or after the date of this Agreement shall be complied with within 30 days (or
such other reasonably agreed time frame).

 

IX. Sales Schools

 

A. Attached hereto as Exhibit D is a list of the schools attended by Title IV
eligible students that Corinthian will make a diligent, good faith effort to
sell to new owners (the “Sale Schools”).  All schools attended by Title
IV-eligible students that are not listed as a Sale School are hereby designated
a Teach Out School.

 

B. Corinthian will provide reasonable access to the Monitor of material
indications of interest, letters of intent or binding agreements with respect to
the Sale Schools.

 

C. Corinthian will endeavor to reach definitive sale agreements for any Sale
Schools within six months from the Effective Date of this Agreement.

 

D. Any sale or transfer of assets shall be subject to approval by the
Department, in accordance with its statutory and regulatory authority.

 

X. The Department Reserves All Statutory and Regulatory Authority

 

A.  The Department reserves its rights pursuant to statutory and regulatory
authority.

 

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B. Nothing in this Agreement limits the Department’s authority to conduct
compliance reviews of Corinthian’s institutions or the Department’s actions
arising from those reviews.

 

C. The Department reserves its rights pursuant to statutory and regulatory
authority to modify the funding method and documentation requirements for any or
all of the Corinthian institutions.  The Department may defer access to Title IV
funding described herein if it determines that Corinthian has materially failed
to produce requested documentation by the date specified and the Department is
unable to substantiate the veracity and accuracy of the documentation after
notification to Corinthian.   This Agreement does not exempt Corinthian from any
federal or state regulatory or statutory requirements.   Nor does it prohibit or
in any way limit the Department’s discretion or authority to take further action
under its statutory or regulatory authority with respect to Corinthian.

 

D.  Nothing in this Agreement shall be construed to preempt or conflict with any
action or authority of any state or federal governmental agency or authority,
including but not limited to any state or federal governmental agency’s efforts
to enforce its education, consumer protection, false advertising, unfair
competition or securities laws.  Nothing in this Agreement shall be construed to
limit the ability of any other entity to establish more stringent disclosure
requirements.

 

E.   The Parties reserve all rights and obligations under applicable law.  This
Agreement is not intended to create any new rights or obligations of the Parties
except for the contractual rights and obligations expressly set forth herein.

 

XI. Coordination with States and Accreditors

 

A. The Department and Corinthian agree that they will work closely with state
licensing and accreditation agencies in the course

 

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of implementation of the teach-outs and sales contemplated in this Agreement, in
accordance with the requirements of the Department and each such agency.

 

XII.  Miscellaneous

 

A.            The Parties agree that they shall review the status of this
Agreement three and six months after its Effective Date.

 

B.            Nothing in this Agreement is intended nor should be construed to
prevent Corinthian from exercising its business and managerial judgments with
respect to (i) the contractual obligations of Corinthian to its stakeholders,
including students, employees, creditors, vendors and other counterparties, or
(ii) the fiduciary duties of Corinthian’s Board imposed by judicial decisions,
statutory enactments or regulatory requirements including, without limitation,
duties with respect to approving the terms and conditions, including
consideration of the sales of any schools or other assets of Corinthian.

 

C.            This Agreement is solely between the Department and Corinthian and
does not, and is not intended to, confer any rights or remedies upon any person
other than the Parties.

 

D.            Each Party may terminate this Agreement upon written notice to the
other Party, and each Party is required to meet its respective obligations under
the Agreement for the period when the Agreement was in effect.  The effective
date of the termination will be five calendar days after the date of the written
notice.

 

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IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the day
and year first above written.

 

CORINTHIAN COLLEGES, INC.

 

 

 

 

 

By:

/s/ Jack D. Massimino

 

Name: Jack D. Massimino,

 

Title: Chairman of the Board and Chief Executive Officer

 

 

 

 

 

U.S. DEPARTMENT OF EDUCATION

 

 

 

 

 

By:

/s/ Ted Mitchell

 

Name: Ted Mitchell

 

Title: Under Secretary

 

 

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LIST OF EXHIBITS

 

Exhibit A — Verification Checklist

Exhibit B — Schedule of Allowable Expenses

Exhibit C — Generalized Template for Corinthian Teach-Out Plans

Exhibit D — List of Sale Schools

 

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Exhibit A

Verification Checklist

 

ISIR/FAFSA

1.              Check ISIRs to determine which was used for payment and check to
see if it has a valid EFC and the awards are correct based upon that EFC

2.              Review ISIR for “c” codes and provide corresponding resolution
documentation

 

Admissions

1.              Confirm that student has attested to HS completion status or
receipt of a GED which match to the FAFSA/ISIR data

 

Attendance

1.     Verify attendance and satisfactory academic progress.

 

Enrollment Agreement/Pre-Enrollment Documents

1.              Review and provide Enrollment Agreement/Contract and confirm it
is fully completed and includes the program name, cost, start date, student
signature and date

 

Verification/Conflicting Information/ Professional Judgment

1.              Review the ISIR and verification documents to ensure that
verification has been performed, if necessary

2.              Confirm any and all conflicting information if existed was
resolved

3.              Review and provide documentation on professional judgment
decision and determine if the decision is documented, was based on a valid
reason, and was properly processed

 

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SAP

1.              Review student records to determine if the student was making
SAP

2.              Review and provide SAP appeal documentation and determine if
appeal was granted for an appropriate and documented reason

 

Award Calculations

1.              Review award calculation and confirm accuracy based on EFC, need
and grade level

 

Direct Loan Recipients

1.              Review and provide entrance counseling documentation if
applicable

2.              Review and provide NSLDS enrollment history and determine if
enrollment statuses were properly reported based on required timelines

 

COD Record

1.              Review COD records and confirm disbursement dates and award
amounts match the ledger

 

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Exhibit B

 

Schedule of Allowable Uses/Expenses Associated with Title IV Student Aid Funds

 

I.                                   ALLOWABLE USES/ EXPENSES

 

In the ordinary course of business, CCi will use Title IV Funds to fund its
operations for the purposes outlined below:

 

(a)       Operating Disbursements

 

·                  Student Refunds  — Required returns of credit balances on
student accounts

 

·                  Payroll Expenses — Including but not limited to the
following:

 

·                  Wages and Salaries including 401k contributions

·                  Payroll Taxes

 

·                  Operating Expenses  — Including but not limited to following:

 

·                  Health care and other employee benefits

·                  All taxes

·                  Equipment leasing

·                  Travel and related expenses

·                  Bookstore costs

·                  Telecommunications costs

·                  Insurance

·                  Information Technology related costs

·                  Rent and related costs including taxes, insurance and common
area maintenance

·                  Advertising, media and other related costs

 

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·                  Professional Services costs including, but not limited to,
audit and compliance related fees, Education Department Monitor fees, legal fees
and other advisory fees, etc.

·                  Capital Expenditures

·                  Other operating expenses including, but not limited to, class
room supplies, consumables, postage, dues and subscriptions, employee training
and other student related costs, board of director fees and reimburseable
expenses and other miscellaneous expenses

 

(b)       Non-Operating Disbursements

 

·                  Interest and related fees/ Related Professional Fees —
Interest and related fees on the Senior Secured Revolving Credit Facility and
advisory and legal fees associated with the financing and restructuring

 

II.                              INELIGIBLE USES/EXPENSES

 

CCi will not use Title IV Funds for the purposes outlined below:

 

·                  Dividends

·                  Legal Settlements of lawsuits or investigations

·                  Debt repayments

·                  Any expenditures or recourse payments related to private
student loans

 

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Exhibit C

Generalized Template for Corinthian Teach-Out Plans

 

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CORINTHIAN COLLEGES, INC.

INSTITUTIONAL TEACH-OUT PLAN

 

Check One:

Main School

o

Branch School

o

OPEID:

 

 

 

 

 

 

 

 

Accreditor

 

 

 

 

Accreditor School Number:

 

 

 

 

 

 

 

 

Name of School:

 

 

 

 

 

 

 

 

 

 

 

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

 

 

City:

 

 

 

State:

 

Zip Code:

 

 

 

 

 

 

 

 

Telephone Number:

 

 

 

 

 

Fax Number:

 

 

 

 

 

 

 

 

 

Contact Person:

 

 

 

 

 

E-mail Address:

 

 

A student Listing by program including estimated graduation dates:

 

 

The expected final graduation date and school closure date:

 

 

The status of unearned tuition, all current refunds due and account balances:

 

 

A disposition of all student records including educational, billing, accounting
and financial aid records in an accessible location:

 

C-1

--------------------------------------------------------------------------------

 

A demonstration and description of how the delivery of training (including
appropriate faculty) and services to students will not be materially disrupted
and that obligation to students will be timely met:

 

 

A description of specific additional charges to students, if any, and the
school’s plan for providing advance notification to students of any additional
charges:

 

 

A list of all accrediting agencies (institutional and programmatic)the school is
currently accredited by:

 

 

A communication plan for students to assist them through the transition:

 

 

Description of plans for faculty and staff:

 

 

Notification plan for state and federal regulators including the Department of
Veterans Affairs:

 

 

Name:

 

 

Title:

 

 

(Chief Executive Officer)

 

 

 

 

 

 

 

 

Signature:

 

 

 

 

Date:

 

 

C-2

--------------------------------------------------------------------------------

 

Exhibit D

List of Sale Schools

 

23

--------------------------------------------------------------------------------

 

Exhibit D — Schools for Sale

 

 

 

 

 

MAR-14 Active

 

 

 

 

 

School Name

 

OPEID

 

Students

 

Brand

 

Group

 

Phoenix

 

02295000

 

 

 

ECP

 

Sale

 

Mesa

 

02295002

 

 

 

ECP

 

Sale

 

022950 Total

 

 

 

2,624

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Orlando North

 

00149900

 

 

 

Everest

 

Sale

 

Orlando South

 

00149901

 

 

 

Everest

 

Sale

 

Melbourne

 

00149902

 

 

 

Everest

 

Sale

 

Tampa

 

00149904

 

 

 

Everest

 

Sale

 

Brandon

 

00149905

 

 

 

Everest

 

Sale

 

Orange Park

 

00149906

 

 

 

Everest

 

Sale

 

Pinellas (Largo)

 

00149907

 

 

 

Everest

 

Sale

 

Lakeland

 

00149908

 

 

 

Everest

 

Sale

 

Jacksonville

 

00149909

 

 

 

Everest

 

Sale

 

Pompano Beach

 

00149910

 

 

 

Everest

 

Sale

 

Merrionette

 

00149911

 

 

 

Everest

 

Sale

 

Kansas City (MO)

 

00149912

 

 

 

Everest

 

Sale

 

001499 Total

 

 

 

26,921

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

San Bernardino

 

00449400

 

 

 

Everest

 

Sale

 

004494 Total

 

 

 

567

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Santa Ana

 

00450302

 

 

 

Everest

 

Sale

 

Colorado Springs

 

00450300

 

 

 

Everest

 

Sale

 

Ft Worth II

 

00450303

 

 

 

Everest

 

Sale

 

004503 Total

 

 

 

966

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aurora

 

00450701

 

 

 

Everest

 

Sale

 

Thornton

 

00450700

 

 

 

Everest

 

Sale

 

004507 Total

 

 

 

544

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mid Cities

 

00481102

 

 

 

Everest

 

Sale

 

Rochester

 

00481100

 

 

 

Everest

 

Sale

 

004811 Total

 

 

 

895

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pittsburgh

 

00709100

 

 

 

Everest

 

Sale

 

007091 Total

 

 

 

446

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alhambra

 

00809000

 

 

 

Everest

 

Sale

 

Bedford Park

 

00809003

 

 

 

Everest

 

Sale

 

008090 Total

 

 

 

829

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

MAR-14 Active

 

 

 

 

 

School Name

 

OPEID

 

Students

 

Brand

 

Group

 

Portland

 

00907900

 

 

 

Everest

 

Sale

 

Vancouver

 

00907901

 

 

 

Everest

 

Sale

 

Dallas

 

00907905

 

 

 

Everest

 

Sale

 

009079 Total

 

 

 

1,020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Newport News

 

00926700

 

 

 

Everest

 

Sale

 

Chesapeake

 

00926701

 

 

 

Everest

 

Sale

 

009267 Total

 

 

 

991

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

South Plainfield

 

00982804

 

 

 

Everest

 

Sale

 

Southfield

 

00982800

 

 

 

Everest

 

Sale

 

Detroit

 

00982803

 

 

 

Everest

 

Sale

 

Dearborn

 

00982801

 

 

 

Everest

 

Sale

 

Austin

 

00982802

 

 

 

Everest

 

Sale

 

009828 Total

 

 

 

2,651

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reseda

 

01110900

 

 

 

Everest

 

Sale

 

Atlanta Greenbriar

 

01110902

 

 

 

Everest

 

Sale

 

Marietta

 

01110901

 

 

 

Everest

 

Sale

 

011109 Total

 

 

 

1,216

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gardena

 

01112300

 

 

 

Everest

 

Sale

 

Norcross

 

01112301

 

 

 

Everest

 

Sale

 

011123 Total

 

 

 

703

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Melrose Park

 

01185803

 

 

 

Everest

 

Sale

 

Skokie

 

01185800

 

 

 

Everest

 

Sale

 

Burr Ridge

 

01185802

 

 

 

Everest

 

Sale

 

011858 Total

 

 

 

1,041

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Los Angeles

 

01287301

 

 

 

Everest

 

Sale

 

City of Industry

 

01287302

 

 

 

Everest

 

Sale

 

Long Beach

 

01287300

 

 

 

Everest

 

Sale

 

012873 Total

 

 

 

2,092

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Henderson

 

02237500

 

 

 

Everest

 

Sale

 

022375 Total

 

 

 

706

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Springfield

 

02250600

 

 

 

Everest

 

Sale

 

Ontario

 

02250602

 

 

 

Everest

 

Sale

 

022506 Total

 

 

 

971

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

MAR-14 Active

 

 

 

 

 

School Name

 

OPEID

 

Students

 

Brand

 

Group

 

San Antonio

 

02261300

 

 

 

Everest

 

Sale

 

Greenspoint

 

02261302

 

 

 

Everest

 

Sale

 

Houston Hobby

 

02261303

 

 

 

Everest

 

Sale

 

022613 Total

 

 

 

1,268

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Everett

 

02300103

 

 

 

Everest

 

Sale

 

Bremerton

 

02300100

 

 

 

Everest

 

Sale

 

Tacoma

 

02300104

 

 

 

Everest

 

Sale

 

023001 Total

 

 

 

1,253

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Renton

 

02606200

 

 

 

Everest

 

Sale

 

Bissonet

 

02606202

 

 

 

Everest

 

Sale

 

026062 Total

 

 

 

957

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Seattle

 

02617500

 

 

 

Everest

 

Sale

 

Portland

 

02617506

 

 

 

Everest

 

Sale

 

Woodbridge DC

 

02617508

 

 

 

Everest

 

Sale

 

026175 Total

 

 

 

786

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ontario

 

03072300

 

 

 

Everest

 

Sale

 

Columbus

 

03072303

 

 

 

Everest

 

Sale

 

Jonesboro

 

03072304

 

 

 

Everest

 

Sale

 

030723 Total

 

 

 

1,082

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Torrance

 

03195400

 

 

 

Everest

 

Sale

 

031954 Total

 

 

 

122

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

San Francisco

 

00723400

 

 

 

Heald

 

Sale

 

Concord

 

00723404

 

 

 

Heald

 

Sale

 

Hayward

 

00723406

 

 

 

Heald

 

Sale

 

San Jose

 

00723405

 

 

 

Heald

 

Sale

 

Salinas

 

00723409

 

 

 

Heald

 

Sale

 

Rancho Cordova

 

00723411

 

 

 

Heald

 

Sale

 

Fresno

 

00723412

 

 

 

Heald

 

Sale

 

Stockton

 

00723410

 

 

 

Heald

 

Sale

 

Modesto

 

00723407

 

 

 

Heald

 

Sale

 

Honolulu

 

00723401

 

 

 

Heald

 

Sale

 

Portland

 

00723402

 

 

 

Heald

 

Sale

 

Roseville

 

00723408

 

 

 

Heald

 

Sale

 

007234 Total

 

 

 

13,129

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

MAR-14 Active

 

 

 

 

 

School Name

 

OPEID

 

Students

 

Brand

 

Group

 

Anaheim

 

01110700

 

 

 

Everest

 

Sale

 

011107 Total

 

 

 

379

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fremont

 

00719000

 

 

 

WyoTech

 

Sale

 

007190 Total

 

 

 

819

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Daytona Beach

 

02346200

 

 

 

WyoTech

 

Sale

 

023462 Total

 

 

 

425

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Laramie

 

00915700

 

 

 

WyoTech

 

Sale

 

Blairsville

 

00915705

 

 

 

WyoTech

 

Sale

 

009157 Total

 

 

 

1,758

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North Miami*

 

00149913

 

 

 

Everest

 

Sale

 

Kendall*

 

00149914

 

 

 

Everest

 

Sale

 

001499 Total

 

 

 

238

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brighton**

 

01151000

 

 

 

Everest

 

Sale

 

North Aurora**

 

01151002

 

 

 

Everest

 

Sale

 

011510 Total

 

 

 

518

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Schools for Sale

 

 

 

67,917

 

 

 

 

 

 

--------------------------------------------------------------------------------

* These schools were placed for sale in September 2013 and stopped enrolling new
students as of March 2014.  The last students will complete their program no
later than October 2014.

** These schools were placed for sale in September 2013 and stopped enrolling
new students as of February 2014.  The last students will complete their program
no later than October 2014.

 

--------------------------------------------------------------------------------