FOURTH AMENDMENT
TO THE
RESTRUCTURING, SECURITY AND GUARANTY AGREEMENT
----------------------------------------------
THIS AGREEMENT, made and entered into as of the 30th day of December,
1996, (the "FOURTH AMENDMENT") by and among CENCOR, INC., a Delaware corporation
("CENCOR"); CONCORDE CAREER COLLEGES, INC., a Delaware corporation ("CONCORDE");
UNITED HEALTH CAREERS INSTITUTE, INC., a California corporation ("UNITED");
SOUTHERN CALIFORNIA COLLEGE OF MEDICAL AND DENTAL ASSISTANTS, INC., a California
corporation ("SOUTHERN CALIFORNIA"); CONCORDE CAREERS - FLORIDA, INC., a Florida
corporation ("FLORIDA"); COLLEGES OF DENTAL AND MEDICAL ASSISTANTS, INC., a
California corporation ("DENTAL"); COMPUTER CAREER INSTITUTE, INC., an Oregon
corporation ("COMPUTER"); and CAREER ASSISTANCE, INC., a Delaware corporation
("CAREER") (United, Southern California, Florida, Dental, Computer, Career,
Minnesota Institute of Medical and Dental Assistants, Inc., a Minnesota
corporation ("MINNESOTA"), and Texas College of Medical and Dental Assistants,
Inc., a Texas corporation ("TEXAS"), being hereinafter referred to collectively
as "GUARANTORS" and each individually as a "GUARANTOR") amends that certain
Restructuring, Security and Guaranty Agreement between the parties dated as of
October 30, 1992, as previously amended by written agreements dated as of
December 30, 1993, November 15, 1994 and July 30, 1996 (collectively, the
"AGREEMENT").
RECITALS
--------
(i) Pursuant to the Agreement entered into by CenCor, Concorde
and the Guarantors, Concorde issued a debenture to CenCor in the principal
amount of $5,422,307, dated October 30, 1992 (the "DEBENTURE").
(ii) Pursuant to the terms of the November 15, 1994 amendment
(the "SECOND AMENDMENT"), Concorde exchanged 300,000 shares of its Class A
Redeemable Preferred Stock, $.10 par value (the "CLASS A PREFERRED STOCK")
for $3,000,000 of the principal amount of the Debenture; reduced the
outstanding principal amount of the Debenture to $2,442,307, and amended
the Debenture to reflect such.
(iii) The Xxxx Xxxxx liabilities have been paid in full by
Concorde and are no longer outstanding.
(iv) Concorde is the successor-in-interest by merger of two of
the Guarantors, Minnesota and Texas.
(v) Pursuant to the terms of the Agreement, Concorde has made
quarterly payments of principal and accrued interest on the Debenture on
June 30, 1996, of $69,554.05 and $72,683.95, respectively, and on September
30, 1996, of $69,554.01 and $66,119.79, respectively, thereby reducing the
current outstanding
principal amount of the Debenture to $2,643,052.56, and is scheduled to
make a quarterly payment of principal and accrued interest ($69,554.01 and
$64,424.40, respectively) on the Debenture on December 31, 1996 (the "12/96
DEBENTURE PAYMENT").
(vi) Pursuant to the terms of the Agreement, Concorde has
redeemed a total of 39,615 shares of Class A Preferred Stock, and the
accrued dividends thereon, thereby reducing the number of shares of Class A
Preferred Stock currently outstanding to 260,385 shares.
(vii) Due to modifications of the terms of the San Xxxx sale
made prior to its closing on August 31, 1996, the amount and payment date
of the second installment of the San Xxxx Sale purchase price was modified
to be $300,000 on February 28, 1997, of which 50% is scheduled to be paid
by Concorde to CenCor.
(viii) Career is a newly formed subsidiary of Concorde and,
pursuant to the provisions of Section 7.4 of the Agreement, (A) Concorde
has pledged its shares of stock of Career to CenCor and (B) by execution of
this Fourth Amendment, Career hereby agrees to become a Guarantor subject
to all the provisions of the Agreement applicable to Guarantors and to
pledge its assets as security to CenCor.
(ix) Concorde is currently seeking to raise additional capital
and to obtain a new bank credit facility (collectively, the "REFINANCING")
which will enable it to (a) redeem all outstanding shares of Class A
Preferred Stock and pay all accrued but unpaid dividends thereon; (b)
retire the Debenture by the repayment in full of the outstanding principal
thereof and all accrued but unpaid interest thereon and the Additional
Payment; and (c) repay in full the Unsecured Debt, with all accrued but
unpaid interest thereon (collectively, the "REPAYMENT").
(x) In order to facilitate the Refinancing and in consideration
of Concorde's agreement that it will use the proceeds from the Refinancing
to make the Repayment, the parties hereto have agreed to the terms of the
Repayment and related matters, all as set forth herein.
(xi) Concorde and CenCor wish to amend the Agreement to provide
for the Repayment.
(xii) The Guarantors wish to eliminate their guaranteed
obligations through the Repayment and thus consent to the amendment of the
Agreement to provide for such.
AGREEMENT
---------
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In consideration of the premises and the mutual covenants and
agreements herein contained, CenCor, Concorde and Guarantors agree as follows:
ARTICLE I
DEFINITIONS
-----------
1.1 CERTAIN DEFINED TERMS. The following terms used herein shall
have the meanings set forth in this Article and in the other parts of this
Agreement referred to in this Article, and such meanings shall apply to both the
singular and plural forms of such terms.
(a) "CLASS A PREFERRED STOCK" means the Class A Redeemable Preferred
Stock, $.10 par value, of Concorde, as currently existing pursuant to the
Certificate of Designations filed with the Secretary of State of Delaware
on November 16, 1994.
(b) "CLASS B PREFERRED STOCK" means the Class B Preferred Stock, that
may be authorized by Concorde's Board of Directors pursuant to a
Certificate of Designations to be filed with the Secretary of State of
Delaware and issued solely pursuant to the Refinancing in connection with a
new equity investment in Concorde.
(c) "CLASS A-1 PREFERRED STOCK" means the Class A-1 Preferred Stock,
that shall be authorized by Concorde's Board of Directors pursuant to a
Certificate of Designations, substantially in the form of Exhibit A hereto
(the "CLASS A-1 CERTIFICATE OF DESIGNATION"), to be filed with the
Secretary of State of Delaware and issued to CenCor in exchange for the
outstanding Class A Preferred Stock pursuant to Section 5.3, hereof in the
event the Repayment does not occur by February 28, 1997.
(d) "CLOSING" means the closing of the Repayment, as set forth in
Section 2.2 and as scheduled in Section 2.3, herein.
(e) "FOURTH AMENDMENT" means this Fourth Amendment, dated December 30,
1996, to the Restructuring, Security and Guaranty Agreement, dated October
30, 1992, as previously amended by written agreements dated as of December
30, 1993, November 15, 1994, and July 30, 1996.
(f) "MICHIGAN ALLOCATED PROCEEDS" means that portion of proceeds from
the sale of Concorde's Michigan real property identified in Section 3.5
hereof, actually received by Concorde that shall be applied to the
redemption of outstanding Class A Preferred Stock.
(g) "OBLIGATIONS" means the aggregate of (i) the Redemption Price of
the Class A Preferred Stock (including accrued dividends) outstanding on
the Closing Date, and (ii) the principal and accrued interest on the
Debenture and the Unsecured Debt
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outstanding on the Closing Date and all amounts owing with respect to the
Additional Payment pursuant to the Agreement, all of which shall be paid in
full at Closing.
(h) "POST 9/30/96 PAYMENTS" means the cumulative amount of any (i)
Redemption Price paid by Concorde with respect to the retirement of Class
A Preferred Stock; (ii) payment of principal on the Debenture made by
Concorde and (iii) repayments of principal on the Unsecured Debt made by
Concorde, that were paid on or after September 30, 1996 but prior to the
Closing Date.
(i) "REFINANCING" means the infusion by investors of a minimum of
$5,000,000 in capital into Concorde and Concorde's securing of new bank
credit facilities in the minimum amount of $3,000,000.
(j) "REPAYMENT" means Concorde's repayment of all its then existing
financial obligations owed to CenCor, including (i) the redemption of all
its outstanding shares of Class A Preferred Stock and the payment of all
accrued but unpaid dividends thereon; (ii) the retirement of the Debenture,
with the repayment in full of the outstanding principal thereof and all
accrued but unpaid interest thereon; (iii) the retirement of the Unsecured
Debt, with the repayment in full of the outstanding principal thereof and
all accrued but unpaid interest thereon; and (iv) the payment of the
Additional Payment.
(k) "REPAYMENT PRICE" means the total amount of consideration, as
adjusted, to be paid by Concorde to CenCor in connection with the
Repayment, as set forth in Section 2.4 herein.
(l) "UNSECURED DEBT" means the unsecured debt of Concorde owed to
CenCor represented by Concorde's promissory note dated February 26, 1993,
which as of December 16, 1996 totals $189,285.24 in principal, and
$55,499.45 in accrued but unpaid interest.
1.2 OTHER TERMS. All capitalized terms used herein, not defined in
Section 1.1 or elsewhere in this Fourth Amendment, shall have the meanings and
be as defined in the Third Amendment, and if not therein defined, as defined in
the Second Amendment, and if not therein defined, as defined in the First
Amendment, and if not therein defined, as defined in the original provisions of
the Agreement.
ARTICLE II
THE REPAYMENT
-------------
2.1 AGREEMENT TO REPAY. Subject to the terms and conditions
herein, Concorde hereby agrees that, contingent upon it obtaining the
Refinancing, it will pay the Repayment Price to CenCor in repayment in full of
the Obligations. Subject to the terms and conditions herein, CenCor hereby
agrees to accept the Repayment Price from Concorde as
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redemption, in full, of its Class A Preferred Stock and as payment in full of
all of Concorde's debt obligations owed to CenCor pursuant to the Debenture and
the Unsecured Debt. The parties hereto agree that the closing of the Refinancing
and Concorde's receipt of the proceeds thereof is a condition precedent to the
Repayment. Concorde undertakes that it will use the proceeds of the Refinancing
for the Repayment.
2.2 CLOSING OF THE REPAYMENT. At the Closing of the Repayment (the
"CLOSING"), Concorde shall deliver to CenCor, by wire transfer pursuant to
CenCor's instructions, cash in an amount equal to the Repayment Price in
exchange for CenCor's delivery to Concorde of:
(a) certificates representing all of the then outstanding shares
of Class A Preferred Stock, duly endorsed for transfer to
Concorde and cancellation;
(b) the Debenture, marked "paid in full";
(c) the promissory note, representing the Unsecured Debt, marked
"paid in full";
(d) properly executed releases and/or cancellations of all
mortgages, and other Liens, including releases of all UCC
filings, held by CenCor with respect to the assets of
Concorde or any of the Restricted Subsidiaries, all in such
form as may be required for filing and recordation with the
appropriate governmental agencies or offices;
(e) fully executed cancellations of the guaranties issued by the
Guarantors pursuant to original terms of the Agreement; and
(f) such other documents and/or certificates deemed necessary or
advisable by Concorde's counsel in order to effectuate the
full release of Concorde, the Restricted Subsidiaries and
the Guarantors from all liabilities or other obligations
owed to CenCor, other than those regarding substitution of
receivables specifically set forth in Section 4.1, herein.
2.3 CLOSING DATE. The Closing shall occur at 10:00 a.m., on
December 31, 1996, at the office of Xxxxx Xxxx LLP, 3500 One Kansas City Place,
0000 Xxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000, unless extended at Concorde's
option to such later date as may be required to completed the Refinancing (as
may be so extended, the "CLOSING DATE"), provided however, the date of Closing
may not be extended beyond February 28, 1997, without the written consent of
CenCor. In any event, the Closing Date shall not be extended to a date beyond
the closing date of the Refinancing.
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2.4 REPAYMENT PRICE. Subject to adjustment as set forth herein,
the Repayment Price to be paid by Concorde to CenCor at Closing shall be an
amount equal to $4,868,006, minus the cumulative amount of any Post 9/30/96
Payments. Notwithstanding the foregoing, the amount of the Repayment Price
shall be increased by an amount equal to the product of (a) the number of days
the actual Closing Date extends beyond December 20, 1996 multiplied by (b) a per
diem adjustment of $1,333.
2.5 ALLOCATION OF REPAYMENT PRICE. The Repayment Price shall be
allocated among the Obligations as follows:
(a) first, to the principal of the Debenture;
(b) second, to the accrued interest on the Debenture;
(c) third, to the principal of the Unsecured Debt;
(d) fourth, to the accrued interest on the Unsecured Debt;
(e) fifth, to the Additional Payment; and
(f) sixth, to the Redemption Price.
2.6 WAIVER OF BREACHES RESULTING FROM REFINANCING. In addition to
any waivers heretofore granted by CenCor to Concorde in writing, CenCor hereby
waives any and all breaches of the Agreement that have occurred or may occur as
a result of the implementation of the Refinancing, including the issuance of
Class B Preferred Stock and/or the grant of security interests in the assets of
Concorde and/or the Restricted Subsidiaries (which, prior to Closing, shall
continue to be subordinate to the security interest of CenCor).
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ARTICLE III
OBLIGATIONS PENDING CLOSING
---------------------------
3.1 CONTINUING DUTIES OF PAYMENT. Concorde shall continue to be
obligated to make quarterly payments of principal and interest pursuant to
Section 2.3(a) of the Agreement and Section 2.3(a) of the Agreement shall be
amended to provide that the obligation to make such quarterly payments shall
continue through maturity of the Debenture on January 1, 1998. Additionally,
Concorde shall continue to be obligated to make scheduled redemptions of the
Class A Preferred Stock, pursuant to the provisions of the Third Amendment to
the Agreement.
3.2 EXTENSION OF MATURITY DATES.
(a) Sections 2.3(a) and 2.3(c) of the Agreement shall be amended
to provide that the Debenture shall bear a maturity date of
January 1, 1998.
(b) Section 2.3(b) of the Agreement shall be amended to provide
that required annual prepayments made with respect to Excess
Cash Flow shall commence on March 30, 1998, with respect to
Concorde's fiscal year ending December 31, 1997.
(c) The promissory note representing the Unsecured Debt shall be
amended to provide that the principal and interest thereon
shall not become due and payable until January 1, 1998.
3.3 ADDITIONAL PAYMENT. Section 2.5 of the Agreement shall be
amended to provide that the Additional Payment due at Closing shall be $10.00,
however if Closing does not occur as scheduled, the Additional Payment shall be
calculated as currently provided.
3.4 WAIVER OF BREACHES. In addition to any waivers heretofore
granted by CenCor to Concorde in writing, CenCor hereby waives any and all
breaches of the Agreement that have occurred or may occur as a result of the
execution of that certain lease dated July 31, 1996, with respect to Concorde's
North Hollywood, California School and the implementation of the leasehold
improvements of $900,000 related thereto.
3.5 CONSENT TO SALE. Subject to the terms and conditions herein,
CenCor hereby (a) consents to the sale (the "MICHIGAN SALE") of the real
property located in Warren, Michigan (the "MICHIGAN PROPERTY"), owned by
Concorde Career Colleges, Inc.; (b) waives any restrictions set forth in Section
7.1 or elsewhere in the Agreement with respect thereto; and (c) agrees to
release its mortgage with respect to the Michigan Property and any other Liens
it has related thereto in connection with the closing of the Michigan Sale. In
the event the Michigan Property is sold prior to Closing, fifty percent (50%) of
the proceeds, net of brokerage commissions, costs of sale, and taxes (the
"MICHIGAN ALLOCATED PROCEEDS"), shall
7
be applied to the retirement of Class A Preferred Stock or the Class A-1
Preferred Stock, whichever is then outstanding. Promptly upon the receipt of the
Michigan Allocated Proceeds, Concorde shall redeem that number of whole shares
of Class A Preferred Stock, or Class A-1 Preferred Stock, held by CenCor (or its
assigns) equal to the amount of such Michigan Allocated Proceeds divided by the
Redemption Price. Any Allocated Proceeds remaining that would have been applied
but for the requirement that only whole shares be redeemed, shall be retained by
Concorde and aggregated with subsequently received Allocated Proceeds for future
Redemptions/Retirements.
(a) Following the Redemption of all outstanding shares of Class
A Preferred Stock or Class A-1 Preferred Stock, Concorde
shall pay any remaining Michigan Allocated Proceeds to
CenCor with respect to the Debenture, pursuant to the terms
of the Agreement, first to be applied to the payment of any
then accrued but unpaid interest on the Debenture and next
to the principal amount of the Debenture.
(b) Except as otherwise provided for in this Section 3.5, the
date of Redemption or Retirement with respect to any
Michigan Allocated Proceeds shall not occur prior to three
(3) business days from the date of the receipt of good funds
with respect to the Michigan Allocated Proceeds received by
Concorde. Notwithstanding anything herein to the contrary,
Concorde shall have no obligation to effect a Redemption or
Retirement unless and until its receipt of Michigan
Allocated Proceeds.
(c) The procedures for Redemption or Retirement under this
Section 3.5 shall be in accordance with Section 2.5 of the
Third Amendment. Upon the Redemption of all outstanding
shares of Class A Preferred Stock owned by CenCor (or its
assigns) and the Retirement of the entire Debenture
(including accrued interest thereon), Concorde shall be
entitled to retain any remaining Michigan Allocated Proceeds
and CenCor has no further rights or interest in such
Michigan Allocated Proceeds.
ARTICLE IV
POST-CLOSING OBLIGATIONS
------------------------
4.1 CONTINUATION OF RIGHT OF SUBSTITUTION. Following the Closing,
and not withstanding the cancellation of all of the Obligations upon receipt of
the Repayment Price, CenCor's Right of Substitution, set forth in Article V of
The Second Amendment to the Agreement, shall continue in full force and effect
with respect to the 1994 Receivables. All uncollected 1994 Receivables will be
reassigned to Concorde at such time as the amount of the
8
interest payments, for which the 1994 Receivables were assigned to CenCor, has
been fully funded.
4.2 INDEMNIFICATION WITH RESPECT TO ASSUMED SUBORDINATED
INDEBTEDNESS. In lieu of the protections previously provided Concorde by
Section 2.6 of the Agreement, in the event Concorde, as a result of an action
before a court of competent jurisdiction, to which Concorde has presented a
reasonable defense, makes any future payments, to CenCor or any other Person, on
account of the Assumed Subordinated Indebtedness, from which it has been
released pursuant to the terms of the Agreement, Concorde shall be entitled to
indemnification from CenCor in the amount of such payments.
4.3 FURTHER ASSURANCES. The parties hereto agree to undertake such
further actions and execute such further documents as necessary, pre-Closing or
post-Closing, to effectuate the purposes of this Fourth Amendment, including but
not limited to the Repayment and the cancellation of the Obligations.
4.4 TERMINATION. Following the Closing, all other provisions of
the Agreement, other than as set forth in this Article IV or as necessary to
effectuate the intent and provisions hereof, shall be terminated and of no
further force and effect.
ARTICLE V
OBLIGATIONS IN THE EVENT CLOSING FAILS TO OCCUR
-----------------------------------------------
5.1 FAILURE TO CLOSE. In the event Concorde fails to timely obtain
the Refinancing and therefore the Closing does not occur by February 28, 1997,
or by such later date as mutually agreed to in writing by CenCor and Concorde,
the provisions of the Agreement, as amended by this Fourth Amendment, shall
continue in full force and effect, except that the terms and provisions of
Article II, above, shall be and become null and void. In addition to the
provisions set forth above, in the event Closing fails to occur, the Agreement
shall be further amended to provide as set forth in this Article V. The
provisions of this Article V shall be of no force and effect unless and until
the Closing fails to occur by February 28, 1997, or by such later date as
mutually agreed to in writing by CenCor and Concorde.
5.2 INCREASE IN QUARTERLY PAYMENTS OF PRINCIPAL. Section 2.3(a) of
the Agreement shall be amended to provide that the scheduled quarterly payments
of principal on the Debenture shall be increased from $69,554 to $100,000,
commencing with the payment due March 31, 1997. Quarterly payments of accrued
interest shall continue to be payable as currently provided.
5.3 EXCHANGE OF CLASS A PREFERRED STOCK. In the event the Closing
has not occurred, promptly after February 28, 1997, or such later Closing Date
subsequently agreed to by CenCor and Concorde, the Board of Directors shall
adopt the Class A-1 Certificate of Designation, substantially in the form of
Exhibit A attached hereto, and shall file such Class
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A-1 Certificate of Designation with the Secretary of State of Delaware to
authorize the Class A-1 Preferred Stock. Thereafter, upon the written request of
CenCor, Concorde and Cencor shall promptly effect a one-for-one exchange of all
outstanding shares of Class A Preferred Stock for a like number of shares of
Class A-1 Preferred Stock, as a result of which CenCor shall become the holder
of all of the issued and outstanding shares of Class A-1 Preferred Stock, and
all of the previously outstanding shares of Class A Preferred Stock shall be
redeemed by Concorde and no longer be outstanding.
(a) As set forth in the Class A-1 Certificate of Designation,
the Class A-1 Preferred Stock shall have all of the rights
and preferences of the Class A Preferred Stock, and
additionally, the Class A-1 Preferred Stock (i) shall have
all the contractual rights afforded to Class A Preferred
Stock under the Agreement; (ii) shall have voting rights on
all matters submitted to a vote of the holders of Concorde's
common stock, with each share of Class A-1 Preferred Stock
having eight (8) votes for each vote accorded to a share of
Concorde's common stock, and (iii) shall be convertible, at
the holder's option, into Concorde common stock, on a one-
for-eight basis.
(b) Additionally, Concorde hereby agrees that CenCor, or its
assigns, shall have piggy-back registration rights with
respect to any shares of Concorde common stock issued or
issuable as a result of the exercise of the conversion right
associated with the Class A-1 Preferred Stock (the
"REGISTERABLE SHARES"), provided such Registerable Shares of
Concorde common stock are not then immediately saleable
pursuant to Rule 144 (or other successor exemption from the
registration requirements) under the Securities Act of 1933,
as amended (the "SECURITIES ACT"). Such piggy-back rights:
(i) shall attach to any registration of equity securities
under the Securities Act made by Concorde on Forms
X-0, X-0, X-0, or similar registration form (but shall
not attach to registrations on Forms X-0, X-0, or
similar purpose registrations forms);
(ii) may be exercised by CenCor, or its assigns, with
respect to some or all of the Registerable Shares;
(iii) shall be subject to the holder of such Registerable
Shares agreeing: to be bound by the terms of the
underwriting agreement entered into in connection with
the registration, including any indemnification,
standstill or lock-up
10
provisions required of Concorde or other selling
stockholders; to accept the pricing of the offering as
agreed to by Concorde with respect to the shares of
common stock being sold by Concorde pursuant to the
registration; and to pay its pro rata share of
registration fees and underwriting commissions and
discounts;
(iv) shall be subject to standard discretionary
curtailment, pro rata amongst all selling
stockholders, by the underwriter, if in its opinion
the market cannot support the total number of shares
requested to be registered so that inclusion of all
such shares would be detrimental to the offering taken
as a whole; and
(v) may be waived by CenCor as to any underwriting if
CenCor does not agree with the terms of such
underwriting, without forfeiture of piggy-back rights
as to any subsequent underwritings by Concorde.
(c) Concorde hereby agrees that CenCor, or its assigns, shall
have one cumulative demand registration right with respect
to all Registerable Shares collectively held by CenCor and
its assigns. Upon receipt of a written request for such
registration (of all or part of such Registerable Shares),
Concorde will: as soon as practicable, use its diligent best
efforts to effect all such registrations, qualifications and
compliances (including, without limitation, the execution of
an undertaking to file post-effective amendments,
appropriate qualifications under the applicable blue sky or
other state securities laws and appropriate compliance with
exemptive regulations issued under the Securities Act and
any other governmental requirements or regulations) as may
be so requested and as would permit or facilitate the sale
and distribution of all or such portion of Registerable
Shares as are specified in such request; provided that
Concorde shall not be obligated to take any action to effect
such registration, qualification or compliance pursuant to
this Section 5.3(c), after Concorde has effected one such
registration pursuant to this Section 5.3(c) and such
registration has been declared or ordered effective.
Notwithstanding anything herein, this demand right shall
terminate at such time as all Registrable Shares are freely
tradeable in the public market, pursuant to Rule 144 under
the Securities Act, or otherwise. (To be "freely tradeable"
the Registrable Shares must be immediately saleable without
regard to any trickle out limitations under Rule 144.)
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Subject to the foregoing, Concorde shall file a registration
statement covering the Registerable Shares so requested to
be registered as soon as practical, but in any event within
ninety days, after receipt of the request or requests of
CenCor; provided, however, that if Concorde shall furnish to
CenCor a certificate signed by the President of Concorde
stating that in the good faith judgment of the Board of
Directors it would be seriously detrimental to Concorde and
its stockholders for such registration statement to be filed
at the date filing would be required and it is therefore
essential to defer the filing of such registration
statement, Concorde shall have an additional period of not
more than ninety (90) days from the expiration of the
foregoing ninety (90) day period within which to file such
registration statement.
(i) If CenCor intends to distribute the Registerable Shares
covered by its request by means of an underwriting, it
shall so advise Concorde as a part of its request made
pursuant to Section 5.3(c). In such event, if so
requested in writing by Concorde, CenCor shall
negotiate with an underwriter selected by Concorde with
regard to the underwriting of such requested
registration; provided, however, that if CenCor has not
agreed with such underwriter as to the terms and
conditions of such underwriting within twenty days (20)
following commencement of such negotiations, CenCor may
select an underwriter of its own choice. Concorde shall
enter into an underwriting agreement in customary form
with the underwriter or underwriters selected for such
underwriting by CenCor.
(ii) All out-of-pocket expenses incurred in connection with
any registration pursuant to this Section 5.3(c) shall
be borne by CenCor.
(d) In the case of registration pursuant to either Sections
5.3(b) or (c), Concorde will keep CenCor advised in writing
as to the initiation of each registration, qualification and
compliance and as to the completion thereof. Concorde will:
(i) keep such registration, qualification or compliance
pursuant to Sections 5.3(b) or (c) effective for a
period of 120 days or until a distribution contemplated
in the registration statement has been completed;
provided,
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however that (i) such 120-day period shall be extended
for a period of time equal to the period CenCor
refrains from selling securities included in such
registration at the request of an underwriter of common
stock (or other securities) of Concorde; and (ii) in
the case of any registration of Registerable Shares on
Form S-3 which are intended to be offered on a
continuous or delayed basis, such 120-day period shall
be extended, if necessary, to keep the registration
effective until all such Registerable Shares are sold,
provided that Rule 145, or any successor rule under the
Securities Act, permits an offering on a continuous or
delayed basis, and provided further that applicable
rules under the Securities Act governing the obligation
to file a post-effective amendment permit, in lieu of
filing a post-effective amendment which (i) includes
any prospectus required by Section 10(a)(3) of the
Securities Act or (ii) reflects facts or events
representing a material or fundamental change in the
information set forth in the registration statement,
the incorporation by reference of information required
to be included in (i) and (ii) above to be contained in
periodic reports filed pursuant to section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended
("1934 ACT") and registration statement; and
(ii) furnish such number of prospectuses and other documents
incident thereto as CenCor from time to time may
reasonably request.
(e) Concorde will indemnify CenCor, each of CenCor's officers
and directors, and each person controlling CenCor within the
meaning of the Securities Act, with respect to such
registration, qualification, or compliance effected pursuant
to Sections 5.3(b) or (c), and each underwriter, if any, and
each person who controls any underwriter of the Registerable
Shares against all claims, losses, damages, and liabilities
(or actions in respect thereto) arising out of or based on
any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular
or other document (including any related registration
statement, notification or the like) incident to any such
registration, qualification, or compliance, or based on 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, or any violation by
Concorde of any rule
13
or regulation promulgated under the Securities Act
applicable to Concorde and relating to action or inaction
required of Concorde in connection with any such
registration, qualification or compliance, and will
reimburse CenCor, each of CenCor's officers and directors,
and each person controlling CenCor, each such underwriter
and each person who controls any such underwriter, for any
legal and any other expenses reasonably incurred in
connection with investigating or defending any such claim,
loss, damage, liability or action, provided that Concorde
will not be liable in any such case to the extent that any
such claim, loss, damage or liability arises out of or is
(i) based on any untrue statement or omission based upon
written information furnished to Concorde by an instrument
duly executed by CenCor or underwriter specifically for use
therein or (ii) relating to action or inaction required of
CenCor or any such underwriter under any rule or regulation
promulgated under the Securities Act.
CenCor will, if Registerable Shares held by or issuable to
Cencor are included in the securities as to which such
registration, qualification, or compliance is being
effected, indemnify Concorde, each of Concorde's officers
and directors, and each person controlling Concorde within
the meaning of the Securities Act, with respect to such
registration, qualification, or compliance effected pursuant
to Sections 5.3(b) or (c), and each underwriter, if any, and
each person who controls any underwriter of the Registerable
Shares against all claims, losses, damages, and liabilities
(or actions in respect thereto) arising out of or based on
any untrue statement (or alleged untrue statement) of a
material fact contained in any such prospectus, offering
circular, or other document (including any related
registration statement, notification or the like) incident
to any such registration, qualification, or compliance, or
based on 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, or any
violation by CenCor of any rule or regulation promulgated
under the Securities Act applicable to CenCor and relating
to action or inaction required of CenCor in connection with
any such registration, qualification or compliance, and will
reimburse Concorde, each of Concorde's officers and
directors, and each person controlling Concorde, each such
underwriter and each person who controls any such
underwriter, for any legal or any other expenses reasonably
incurred in connection with investigating or defending any
such claim, loss, damage, liability, or action, in each case
to the
14
extent, but only to the extent, (x) that such untrue
statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement,
prospectus, offering circular, or other document in reliance
upon and in conformity with written information furnished to
Concorde by an instrument duly executed by CenCor
specifically for use therein or (y) that such violation was
due to an action or inaction required of CenCor.
Each party entitled to indemnification under this Section
5.3(e) (the Indemnified Party) shall give notice to the
party required to provide indemnification (the Indemnifying
Party) promptly after such Indemnified Party has actual
knowledge of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting
therefrom, provided that counsel for the Indemnifying Party,
who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval
shall not be unreasonably withheld), and the Indemnified
Party may participate in such defense at such party's
expenses, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall
not relieve the Indemnifying Party of its obligations under
this Section 5.3(e). No Indemnifying Party, in the defense
of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include
as an unconditional term thereof the giving by the claimant
or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.
(f) CenCor shall furnish to Concorde such written information
regarding it and the distribution proposed by it as Concorde
may request in writing and as shall be required in
connection with any registration, qualification, or
compliance referred to in this Section 5.3.
(g) With a view to making available to CenCor the benefits of
certain rules and regulations of the Securities and Exchange
Commission ("SEC") which may permit the sale of the
securities of Concorde to the public without registration or
pursuant to a registration on Form S-3, Concorde agrees to:
(i) make and keep public information available, as those
terms are understood and defined in SEC Rule 144;
15
(ii) use its best efforts to file with the SEC in a timely
manner all reports and other documents required of
Concorde under the Securities Act and the 1934 Act;
and
(iii) so long as CenCor owns any Class A Preferred Stock,
Class A-1 Preferred Stock, or Registerable Shares, to
furnish to CenCor forthwith upon its request a written
statement by Concorde as to its compliance with the
reporting requirements of said Rule 144, and of the
Act and the 1934 Act, a copy of the most recent annual
or quarterly report of the company, and such other
reports and documents so filed by Concorde as CenCor
may reasonably request in availing itself of any rule
or regulation of the SEC allowing you to sell any such
securities without registration.
(h) The rights to cause Concorde to register the Registerable
Shares granted to CenCor by Concorde under Sections 5.3(b)
and (c) may be assigned by CenCor to a transferee or
assignee of any of the Registerable Shares, provided, that
Concorde is given written notice by CenCor at the time of or
within a reasonable time after said transfer, stating the
name and address of said transferee or assignee and
identifying the securities with respect to which such
registration rights are being assigned.
(i) CenCor shall furnish to Concorde such written information
regarding it and the distribution proposed by it as Concorde
may request in writing and as shall be required in
connection with any registration, qualification, or
compliance referred to in Section 5.3(b) or (c).
ARTICLE VI
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PARTIES
--------------------------------------------------------
6.1 CORPORATE AUTHORITY. Concorde hereby represents and warrants
to CenCor that Concorde and the Guarantors have obtained all necessary corporate
and other approvals and consents to enter into this Fourth Amendment and to take
all actions contemplated herein. The Board of Directors of Concorde has approved
this Fourth Amendment and all actions to be taken pursuant to this Fourth
Amendment, including without limitation, the filing of the Class A-1 Certificate
of Designation in the event the Repayment does not occur by February 28, 1997,
or such later date as may be mutually agreed to in writing by CenCor and
Concorde.
16
6.2 STOCK. Concorde hereby represents and warrants to CenCor that
(a) it does not own an interest in any entity other than its interest in the
Guarantors and (b) all of the stock it owns in Guarantors has been or is hereby
pledged as collateral for the Debenture Liabilities. Concorde and Guarantors
hereby jointly and severally represent and warrant that the attached Exhibit "B"
is a complete list of all stock issued by Guarantors and acknowledge that all
such stock certificates have been delivered to CenCor.
6.3 REGISTRATION RIGHTS. Concorde hereby represents and warrants
that, except in connection with the issuance of Class B Preferred Stock pursuant
to the Refinancing (the "CLASS B REGISTRATION RIGHTS") or as otherwise provided
for in this Fourth Amendment, it has not granted, or agreed to grant, any
registration rights, including piggy-back rights, to any person or entity.
Furthermore, Concorde covenants that (a) prior to Closing, it will not grant or
agree to grant any such rights to any person or entity other than CenCor, except
for the Class B Registration Rights and (b) in the event the Closing does not
occur by February 28, 1997, or by such later date as mutually agreed to in
writing by CenCor and Concorde, Concorde will not grant or agree to grant any
such rights to any person or entity other than CenCor.
6.4 CAREER. Career hereby guarantees to CenCor payment when due of
all Debenture Liabilities and shall be deemed a Guarantor as defined in the
Agreement. To secure this guaranty, Career hereby mortgages, pledges, conveys
and assigns to CenCor, and grants CenCor a continuing security interest in all
personal property of the following types which is now owned or hereafter shall
be owned or acquired by Career, and all Proceeds of such property:
All Equipment, Farm Products, Consumer Goods, Inventory, Fixtures,
Accounts, Contract Rights, General Intangibles, Instruments,
Documents, Chattel Paper and money (including money in bank accounts).
If the Repayment does not occur by February 28, 1997, or by such other later
date as may be mutually agreed to in writing by CenCor and Concorde, Career will
execute any and all documents reasonably requested by CenCor to bind Career to
all of the same obligations to CenCor as the Guarantors and all financing
statements deemed necessary by CenCor to perfect CenCor's security interest in
the above assets of Career.
6.5 CENCOR'S CORPORATE AUTHORITY. CenCor hereby represents and
warrants to Concorde that it has obtained all necessary corporate and other
approvals and consents to enter into this Fourth Amendment and to take all
actions contemplated herein. The Board of Directors of CenCor has approved this
Fourth Amendment and all actions to be taken pursuant to this Fourth Amendment,
including without limitation, the cancellation of all the Obligations pursuant
to the Repayment.
17
ARTICLE VII
MISCELLANEOUS
-------------
7.1 ATTORNEYS' FEES. Notwithstanding anything in the Agreement or
herein to the contrary, Concorde shall pay to CenCor in cash one-half of
CenCor's attorneys' fees and expenses incurred in connection with the
negotiation of this Fourth Amendment and the consummation of the transactions
contemplated thereby, within ten (10) business days after receiving an invoice
from CenCor with supporting documentation, which payment the parties agree shall
not exceed $5,000 in the aggregate.
7.2 RATIFICATION. All provisions of the Agreement not specifically
amended in this Fourth Amendment are hereby ratified and reaffirmed.
7.3 GOVERNING LAW. Except as otherwise provided by express
reference to the Uniform Commercial Code, this Fourth Amendment shall be
construed in accordance with and governed by the laws, statutes and decisions of
the State of Missouri, to the non-exclusive jurisdiction of whose courts, state
and federal, Concorde and Guarantors irrevocably agree to submit.
7.4 INCORPORATION. The recitals and exhibits hereto are hereby
incorporated herein by reference.
7.5 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
7.6 FURTHER ASSURANCES. The parties hereto agree to execute all
additional documents reasonably necessary to effectuate the transactions
contemplated herein, including without limitation those documents necessary to
release the Liens on a timely basis.
7.7 BENEFIT AND BURDEN. This Agreement shall be binding upon and
inure to the benefit of the successors of CenCor, Concorde and the Restricted
Subsidiaries. Cencor may assign its rights hereunder, including without
limitation to a liquidating trust.
IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Amendment to the Agreement to be executed by their respective duly authorized
officers as of the day and year first above written.
Oral agreements or commitments to loan money, extend credit or to
forbear from enforcing repayment of a debt including promises to extend or renew
such debt are not enforceable. To protect the debtor and creditor from
misunderstanding or disappointment, any agreements we reach covering such
matters are contained in this writing, which is the complete and exclusive
statement of the agreement between us, except as we may later agree in writing
to modify it.
18
CENCOR, INC.
ATTEST:
By: _____________________________________
___________________________ Xxxxx Xxxxx
Secretary Vice President
ACKNOWLEDGEMENT
---------------
STATE OF MISSOURI )
) ss.
COUNTY OF XXXXXXX )
BE IT REMEMBERED, that on this ____ day of December, 1996, before me, the
undersigned, a notary public in and for said state, came Xxxxx Xxxxx, Vice
President of CenCor, Inc., a Delaware corporation, to me personally known to be
such officer and the same person who executed as such officer the foregoing
instrument on behalf of said corporation, and such person duly acknowledged the
execution of the same to be the act and deed of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal at my office in Kansas City, Missouri, the day and year last above
mentioned.
_________________________________________
Notary Public in and for said
County and State
My commission expires:
_______________, 19__
19
CONCORDE CAREER COLLEGES, INC.
ATTEST:
By: _____________________________________
___________________________ M. Xxxxx Xxxxxx
Secretary Vice President
ACKNOWLEDGEMENT
---------------
STATE OF MISSOURI )
) ss.
COUNTY OF XXXXXXX )
BE IT REMEMBERED, that on this ____ day of December, 1996, before me, the
undersigned, a notary public in and for said state, came M. Xxxxx Xxxxxx, Vice
President of Concorde Career Colleges, Inc., a Delaware corporation, to me
personally known to be such officer and the same person who executed as such
officer the foregoing instrument on behalf of said corporation, and such person
duly acknowledged the execution of the same to be the act and deed of said
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal at my office in Kansas City, Missouri, the day and year last above
mentioned.
_________________________________________
Notary Public in and for said
County and State
My commission expires:
_______________, 19__
20
UNITED HEALTH CAREERS INSTITUTE,
INC.
ATTEST:
By: _____________________________________
___________________________ A. Xxxxxx Xxxxxxx
Secretary President
ACKNOWLEDGEMENT
---------------
STATE OF )
) ss.
COUNTY OF )
BE IT REMEMBERED, that on this ______ day of December, 1996, before me, the
undersigned, a notary public in and for said state, came A. Xxxxxx Xxxxxxx,
President of United Health Careers Institute, Inc. a California corporation, to
me personally known to be such officer and the same person who executed as such
officer the foregoing instrument on behalf of said corporation, and such person
duly acknowledged the execution of the same to be the act and deed of said
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal at my office in Kansas City, Missouri the day and year last above
mentioned.
_________________________________________
Notary Public in and for said
County and State
My commission expires:
_______________, 19__
21
SOUTHERN CALIFORNIA COLLEGE OF
MEDICAL AND DENTAL ASSISTANTS,
INC.
ATTEST:
By: _____________________________________
___________________________ A. Xxxxxx Xxxxxxx
Secretary President
ACKNOWLEDGEMENT
---------------
STATE OF )
) ss.
COUNTY OF )
BE IT REMEMBERED, that on this ______ day of December, 1996, before me, the
undersigned, a notary public in and for said state, came A. Xxxxxx Xxxxxxx,
President of Southern California College of Medical and Dental Assistants, Inc.
a California corporation, to me personally known to be such officer and the same
person who executed as such officer the foregoing instrument on behalf of said
corporation, and such person duly acknowledged the execution of the same to be
the act and deed of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal at my office in Kansas City, Missouri the day and year last above
mentioned.
_________________________________________
Notary Public in and for said
County and State
My commission expires:
_______________, 19__
CONCORDE CAREERS-FLORIDA, INC.
ATTEST:
By: _____________________________________
___________________________ A. Xxxxxx Xxxxxxx
Secretary President
22
ACKNOWLEDGEMENT
---------------
STATE OF )
) ss.
COUNTY OF )
BE IT REMEMBERED, that on this ______ day of December, 1996, before me, the
undersigned, a notary public in and for said state, came A. Xxxxxx Xxxxxxx,
President of Concorde Careers-Florida, Inc. a Florida corporation, to me
personally known to be such officer and the same person who executed as such
officer the foregoing instrument on behalf of said corporation, and such person
duly acknowledged the execution of the same to be the act and deed of said
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal at my office in Kansas City, Missouri the day and year last above
mentioned.
_________________________________________
Notary Public in and for said
County and State
My commission expires:
_______________, 19__
COLLEGES OF DENTAL AND MEDICAL
ASSISTANTS, INC.
ATTEST:
By: _____________________________________
___________________________ A. Xxxxxx Xxxxxxx
Secretary President
23
ACKNOWLEDGEMENT
---------------
STATE OF )
) ss.
COUNTY OF )
BE IT REMEMBERED, that on this ______ day of December, 1996, before me, the
undersigned, a notary public in and for said state, came A. Xxxxxx Xxxxxxx,
President of Colleges of Dental and Medical Assistants, Inc. a California
corporation, to me personally known to be such officer and the same person who
executed as such officer the foregoing instrument on behalf of said corporation,
and such person duly acknowledged the execution of the same to be the act and
deed of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal at my office in Kansas City, Missouri the day and year last above
mentioned.
_________________________________________
Notary Public in and for said
County and State
My commission expires:
_______________, 19__
COMPUTER CAREER INSTITUTE, INC.
ATTEST:
By: _____________________________________
___________________________ A. Xxxxxx Xxxxxxx
Secretary President
ACKNOWLEDGEMENT
---------------
STATE OF )
) ss.
COUNTY OF )
BE IT REMEMBERED, that on this ______ day of December, 1996, before me, the
undersigned, a notary public in and for said state, came A. Xxxxxx Xxxxxxx,
President of Computer Career Institute, Inc. an Oregon corporation, to me
personally known to be such officer and the same person who executed as such
officer the foregoing instrument on behalf of
24
said corporation, and such person duly acknowledged the execution of the same to
be the act and deed of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal at my office in Kansas City, Missouri the day and year last above
mentioned.
_________________________________________
Notary Public in and for said
County and State
My commission expires:
_______________, 19__
CAREER ASSISTANCE, INC.
ATTEST:
By: _____________________________________
___________________________ A. Xxxxxx Xxxxxxx
Secretary President
ACKNOWLEDGEMENT
---------------
STATE OF )
) ss.
COUNTY OF )
BE IT REMEMBERED, that on this ______ day of December, 1996, before me, the
undersigned, a notary public in and for said state, came Xxxxxxx X. Xxxxxx,
President of Career Assistance, Inc. a Delaware corporation, to me personally
known to be such officer and the same person who executed as such officer the
foregoing instrument on behalf of said corporation, and such person duly
acknowledged the execution of the same to be the act and deed of said
corporation.
25
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal at my office in Kansas City, Missouri the day and year last above
mentioned.
_________________________________________
Notary Public in and for said
County and State
My commission expires:
_______________, 19__
26
EXHIBIT A
CONCORDE CAREER COLLEGES, INC.
Certificate of Designations of the
Class A-1 Convertible Redeemable
Voting Preferred Stock
Par Value 0.10 Per Share
Liquidation Value $10.00 Per Share
________________
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
The undersigned, the President of Concorde Career Colleges, Inc., a
Delaware corporation (hereinafter called the "CORPORATION"), DOES HEREBY CERTIFY
that:
1. The following resolution has been duly adopted by the Board of
Directors of the Corporation (the "BOARD OF DIRECTORS"):
RESOLVED, that pursuant to the authority expressly granted to and
vested in the Board of Directors of the Corporation by the provisions of the
Restated Certificate of Incorporation, as amended, and the Amended and Restated
Bylaws, the Board of Directors hereby authorizes the issuance of a series of the
preferred stock (the "PREFERRED STOCK") of the Corporation which shall consist
of (260,385) shares of the Corporation's Preferred Stock and hereby fixes the
designations, preferences and relative, participating, optional or other special
rights, and qualifications, limitations or restrictions thereof of the shares of
such series as follows:
(i) DESIGNATION. The designation of said series of the Preferred
Stock shall be Class A-1 Convertible Redeemable Voting Preferred Stock (the
"CLASS A-1 PREFERRED STOCK"). The number of shares of Class A-1 Preferred Stock
shall be (260,385) . The liquidation value of the Class A-1 Preferred Stock
shall be $10.00 per share. The shares of Class A-1 Preferred Stock shall be
issued as full shares.
(ii) DIVIDENDS. The shares of Class A-1 Preferred Stock shall be
entitled to receive cumulative dividends, as declared by the Board of Directors
or a duly authorized committee thereof (an "AUTHORIZED BOARD COMMITTEE"), out of
funds legally available for the payment of dividends, (the "DIVIDENDS") and at a
variable annual rate, all as set forth in this Section (ii).
(a) For so long as the Corporation's junior secured debenture,
dated October 30, 1992 and issued in the original principal amount of
$5,422,307 (the "DEBENTURE"), or any portion of the principal amount
thereof, is outstanding, the annual rate of the Dividend shall be equal to
73% of the current interest rate on the Debenture, as of the first day of
calendar quarter during which the Dividend is earned, as calculated based
on the liquidation value of the Class A-1 Preferred Stock set forth in
Section (v), below;
(b) commencing upon the retirement, in full, of the Debenture
(the "DEBENTURE REPAYMENT DATE"), the annual rate of the Dividend shall be
equal to 2% above the prime rate charged, as of the first day of the
calendar quarter during which the Dividend is earned, by Mercantile Bank of
Kansas City, N.A., as calculated based on the liquidation value of the
Class A-1 Preferred Stock set forth in Section (v), below;
(c) provided that, notwithstanding the foregoing, the annual rate
of the Dividends shall not exceed 12% of the per share liquidation value of
the Class A-1 Preferred Stock, as set forth in Section (v), below ($1.20
per share).
Dividends shall be earned from date of original issue of a share of
Class A-1 Preferred Stock, however they shall not be paid, but rather accrued
until the Debenture Repayment Date (the "INITIAL ACCRUED DIVIDENDS"). Upon the
Debenture Repayment Date, future earned Dividends shall be payable in cash,
commencing on the last day of the calendar quarter which occurs following the
Debenture Repayment Date (the "INITIAL DIVIDEND PAYMENT DATE") with respect to
the period commencing on the Debenture Repayment Date and ending the day prior
to the Initial Dividend Payment Date, and thereafter quarterly on March 31, June
30, September 30 and December 31 in each year (the "DIVIDEND PAYMENT DATES")
with respect to the quarterly period ending on the March 30, June 29, September
29 and December 30, respectively, next preceding such Dividend Payment Date, to
stockholders of record on the record date, not exceeding sixty days preceding
the Initial Dividend Payment Date or such Dividend Payment Date, respectively,
fixed for the purpose by the Board of Directors or an Authorized Board Committee
in advance of each particular dividend. The amount of dividends payable on
shares of Class A-1 Preferred Stock, for each full quarterly dividend period,
shall be computed by dividing by four the annual rate per share set forth in
this Section (ii).
The Initial Accrued Dividends shall be paid ratably over 12 calendar
quarters, commencing with the calendar quarter which ends immediately after the
Debenture Repayment Date. Payment of the Initial Accrued Dividends shall be made
on the Initial Dividend Payment Date and the following 11 Dividend Payment
Dates, to stockholders of record on the respective record dates for such
Dividend Payment Dates.
Notice of the current rate of Dividends, which shall detail the basis
for such determination, shall be given by the Corporation on a quarterly basis
to the holders of record
2
of the shares of Class A-1 Preferred Stock as of the record date for such
Dividends, at their respective addresses appearing on the books of the
Corporation. Such notice shall be given on each Dividend Payment Date (including
the Initial Dividend Payment Date), and, prior to the Debenture Repayment Date,
shall be given each December 31, March 31, June 30 and September 30.
Notice of the Debenture Repayment Date shall be given by the
Corporation, promptly upon its determination, to the holders of record of the
shares of Class A-1 Preferred Stock on such date, at their respective addresses
appearing on the books of the Corporation.
Dividends payable on the Class A-1 Preferred Stock for the initial
dividend period and for any other period which is less than a full quarterly
period shall be computed on the basis of a 360-day year of twelve 30-day months.
(iii) RIGHT OF CONVERSION. Any holder of Class A-1 Preferred Stock at
any time, and from time to time, may at its option convert all, or any number
less than all, of the shares of Class A-1 Preferred Stock into shares of the
Corporation's common stock, $.10 par value (the "COMMON STOCK") on the basis of
one (1) share of Class A-1 Preferred Stock for eight (8) shares of Common Stock.
In the event of a merger, consolidation, recapitalization or other
reorganization, including any stock splits, reverse stock splits, or stock
dividends, affecting the Common Stock (the "REORGANIZATION") the right to
convert the Class A-1 Preferred Stock shall be automatically modified to provide
that each share of Class A-1 Preferred Stock shall be convertible into such
reciprocally adjusted number of shares of Common Stock, or such other
consideration as a holder of eight (8) shares of Common Stock would be entitled
to receive as a result of any such Reorganization.
Any holder desiring to effect such a conversion shall provide notice
to the Corporation of the conversion by delivering stock certificates
representing the shares of Class A-1 Preferred Stock to be converted to the
Corporation, duly endorsed, with an instruction letter requesting conversion.
The effective date of any such conversion shall be the date the Corporation
actually receives such notice and certificate(s) duly endorsed (the "CONVERSION
DATE"). Upon such receipt, the Corporation shall promptly transmit instructions
to its transfer agent to issue to such holder certificate(s) representing the
Common Stock, as of the Conversion Date. In the event less than all the shares
of Class A-1 Preferred Stock represented by the tendered certificate are to be
converted, the Corporation will cause a new certificate, representing the
unconverted shares of Class A-1 Preferred Stock, to be issued to such holder.
All shares of Class A-1 Preferred Stock which shall at any time have
been converted shall, after such conversion, have the status of authorized but
unissued shares of Preferred Stock, without designation as to series until such
shares are once more designated as part of a particular series by the Board of
Directors or an Authorized Board Committee.
3
(iv) OPTIONAL REDEMPTION. The Corporation at any time and from time
to time may at its option redeem all, or any number less than all, of the
outstanding shares of Class A-1 Preferred Stock. Any redemption of shares of
Class A-1 Preferred Stock shall be effected at a redemption price of $10.00 per
share plus, in each case, an amount equal to all dividends (whether or not
earned or declared) accrued and unpaid on such share of Class A-1 Preferred
Stock to the date fixed for redemption. Notice of any proposed redemption of
shares of Class A-1 Preferred Stock shall be given by the Corporation by mailing
a copy of such notice no less than 20 days nor more than 60 days prior to the
date fixed for such redemption to holders of record of the shares of Class A-1
Preferred Stock to be redeemed at their respective addresses appearing on the
books of the Corporation. Said notice shall specify the shares called for
redemption, the redemption price and the place at which and date on which the
shares called for redemption will, upon presentation and surrender of the
certificates of stock evidencing such shares, be redeemed and the redemption
price therefor paid. In the case of the redemption of less than all the
outstanding shares of Class A-1 Preferred Stock, such redemption shall be of
full shares selected by lot among all then outstanding Class A-1 Preferred Stock
in such manner as may be prescribed by the Board of Directors. From and after
the date fixed in any such notice as the date of redemption of shares of Class
A-1 Preferred Stock, unless default shall be made by the Corporation in
providing monies at the time and place specified for the payment of the
redemption price pursuant to such notice, all dividends on the Class A-1
Preferred Stock thereby called for redemption shall cease to accrue and all
rights of the holders thereof as stockholders of the Corporation, except the
right to receive the redemption price, shall cease and terminate.
All shares of Class A-1 Preferred Stock which shall at any time have
been redeemed shall, after such redemption, have the status of authorized but
unissued shares of Preferred Stock, without designation as to series until such
shares are once more designated as part of a particular series by the Board of
Directors or an Authorized Board Committee.
(v) PRIORITY OF CLASS A-1 PREFERRED STOCK. The shares of Class A-1
Preferred Stock shall be preferred as to assets over the shares of the Common
Stock or any other capital stock of the Corporation ranking junior to the Class
A-1 Preferred Stock upon liquidation, dissolution or winding up of the
Corporation so that in the event of any liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, the holders of the Class
A-1 Preferred Stock shall be entitled to receive out of the assets of the
Corporation available for distribution to its stockholders, whether from
capital, surplus or earnings, after distribution and payment in full to the
holders of any capital stock of the Corporation ranking prior to the Class A-1
Preferred Stock upon liquidation, dissolution or winding up of the Corporation
of the preferential amounts and dividends payable thereon, and before any
distribution is made to holders of shares of the Common Stock or any other
capital stock of the Corporation ranking junior to the Class A-1 Preferred Stock
upon liquidation, dissolution or winding up of the Corporation, an amount equal
to $10.00 per share plus an amount equal to all dividends (whether or not earned
or declared) accrued and unpaid on such share of Class A-1 Preferred Stock to
the date of final distribution. If, upon any liquidation, dissolution or winding
up of the Corporation, the assets of the Corporation, or proceeds
4
thereof, distributable among the holders of shares of Class A-1 Preferred Stock
or any capital stock ranking on a par with the Class A-1 Preferred Stock upon
liquidation, dissolution or winding up of the Corporation, shall be insufficient
to pay in full the preferential amounts to which such stock would be entitled,
then such assets, or the proceeds thereof, shall be distributable among such
holders ratably in accordance with the respective amounts which would be payable
on such shares if all amounts payable thereof were payable in full. For the
purposes hereof, neither a consolidation nor a merger of the Corporation with
one or more other corporations, nor a sale or a transfer of all or substantially
all of the assets of the Corporation, shall be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary, of the Corporation.
(vi) VOTING RIGHTS.
Each share of Class A-1 Preferred Stock shall be entitled to vote on
all matters presented to the stockholders of the Corporation and shall be
entitled to eight (8) votes for each vote afforded to a share of Common Stock.
In the event of a recapitalization of the Corporation that would result in the
multiplication or division of the voting power of the outstanding Common Stock
(i.e., through a stock split, reverse stock split, or otherwise), the
proportionate voting power of the Class A-1 Preferred Stock shall be
reciprocally adjusted upward or downward as the case may be.
Additionally, notwithstanding anything herein to the contrary, so long
as any shares of the Class A-1 Preferred Stock remain outstanding, the
Corporation will not, either directly or indirectly or through merger or
consolidation with any other corporation, without the affirmative unanimous vote
at a meeting, or the written consent with or without a meeting, of the holders
of the shares of Class A-1 Preferred Stock then outstanding, amend, alter or
repeal any of the provisions of the Certificate of Designations of the Class A-1
Preferred Stock or the certificate of Incorporation of the Corporation, or
authorize any reclassification of the Class A-1 Preferred Stock, so as in any
such case to affect adversely the preferences, special rights or powers of the
Class A-1 Preferred Stock, including but not limited to the super voting rights
afforded pursuant to the first paragraph of this Section (vi), or authorize or
issue any capital stock of the Corporation ranking, either as to payment of
dividends or upon liquidation, dissolution or winding up of the Corporation,
prior to or on par with the Class A-1 Preferred Stock.
Additionally, notwithstanding anything herein to the contrary, so long
as any shares of the Class A-1 Preferred Stock remain outstanding, the
Corporation will not, either directly or indirectly or through merger or
consolidation with any other corporation, without the affirmative unanimous vote
at a meeting, or the written consent with or without a meeting, of the holders
of the shares of Class A-1 Preferred Stock then outstanding, increase the
authorized number of shares of Class A-1 Preferred Stock, increase the
authorized number of shares of Preferred Stock or create, or increase the
authorized number of shares of, any other class of capital stock of the
Corporation ranking on a parity with the Class A-1 Preferred Stock
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either as to payment of dividends or upon liquidation, dissolution or winding up
of the Corporation.
No consent of holders of the Class A-1 Preferred Stock shall be
required for (a) the creation of any indebtedness of any kind of the
Corporation, or (b) the issuance of any class of capital stock of the
Corporation ranking junior to the Class A-1 Preferred Stock in payment of
dividends and upon liquidation, dissolution or winding up of the Corporation.
(vii) AMENDMENT. The Board of Directors reserves the right by
subsequent amendment of this resolution from time to time to decrease the number
of shares which constitute the Class A-1 Preferred Stock (but not below the
number of shares thereof then outstanding) and, subject to anything to the
contrary set forth in the Restated Certificate of Incorporation, as amended, of
the Corporation applicable to the Preferred Stock, to subdivide the number of
shares, the par value per share and the liquidation value per share of the Class
A-1 Preferred Stock, and in other respects to amend, within the limitations
provided by law, this resolution and the Restated Certificate of Incorporation,
as amended, of the Corporation.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
duly executed on its behalf by its undersigned President and attested to by its
Secretary this _____ day of December, 1996.
_________________________________________
Xxxx X. Xxxxxxx, President
[Corporate Seal]
ATTEST:
___________________________________
______________________, Secretary
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EXHIBIT B
CENCOR, INC.
CONCORDE CAREER COLLEGES, INC.
STOCK CERTIFICATE HOLDINGS
1. United Health Careers Institute, Inc. - California - 120 shares
2. Southern California College of Medical and Dental Assistants, Inc. -
California - 100 shares
3. Southern California College of Medical and Dental Assistants, Inc. -
California - 180 shares
4. Concorde Careers - Florida, Inc. - Florida - 1,000 shares
5. Colleges of Dental & Medical Assistants, Inc. - California - 180 shares *
6. Computer Career Institute, Inc. - Oregon - 250 shares
7. Career Assistance, Inc. - Missouri - 250,000 shares
* CERTIFICATE STILL NEEDS TO BE DELIVERED TO CENCOR
