EX-10.11
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
In consideration of the premises and the mutual covenants
and agreements herein contained, CenCor, Concorde and Guarantors
agree as follows:
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 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
fall 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.
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 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.
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 them 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).
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 continence
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 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.
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 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.
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 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 piggyback 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 piggyback 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 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 piggyback 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 53(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
Registerable Shares are freely tradeable in the
public market, pursuant to Rule 144 under the
Securities Act, or otherwise. (To be "freely
tradeable" the Registerable Shares must be
immediately saleable without regard to any trickle
out limitations under Rule 144.)
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,
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 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 offi-
cers 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 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
famished 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;
(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).
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.
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 piggyback 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.
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
nonexclusive 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.
CENCOR, INC.
ATTEST:
/s/ :Xxxx X. Xxxxx By: /s/ Xxxxx Xxxxx
Secretary Xxxxx Xxxxx
Vice President
ACKNOWLEDGMENT
STATE OF MISSOURI )
) ss.
COUNTY OF XXXXXXX )
BE IT REMEMBERED, that on this 30th 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.
/s/ Xxxx X. Xxxxx
Notary Public in and for
said County and State
My commission expires:
9/7/2000
CONCORDE CAREER COLLEGES, INC.
ATTEST:
/s/ Xxxx X. Xxxxx By: /s/ Xxxxx Xxxxxx
Secretary M. Xxxxx Xxxxxx
Vice President
ACKNOWLEDGMENT
STATE OF MISSOURI )
) ss.
COUNTY OF XXXXXXX )
BE IT REMEMBERED, that on this 30th 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.
/s/ Xxxx X. Xxxxx
Notary Public in and for
said County and State
My commission expires:
9/7/2000
MINNESOTA INSTITUTE OF MEDICAL
AND DENTAL ASSISTANTS, INC.
ATTEST:
/s/ Xxxx X. Xxxxx By: /s/ A. Xxxxxx Xxxxxxx
Secretary A. Xxxxxx Xxxxxxx
President
ACKNOWLEDGMENT
STATE OF MISSOURI )
) ss.
COUNTY OF XXXXXXX )
BE IT REMEMBERED, that on this 30th day of December, 1996,
before me, the undersigned, a notary public in and for said
state, came A. Xxxxxx Xxxxxxx, President of Minnesota Institute
of Medical and Dental Assistants, Inc., a Minnesota 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.
/s/ Xxxx X. Xxxxx
Notary Public in and for
said County and State
My commission expires:
9/7/2000
TEXAS COLLEGE OF MEDICAL AND DENTAL
ASSISTANTS, INC.
ATTEST:
/s/ Xxxx X. Xxxxx By: /s/ A. Xxxxxx Xxxxxxx
Secretary A. Xxxxxx Xxxxxxx
President
ACKNOWLEDGMENT
STATE OF MISSOURI )
) ss.
COUNTY OF XXXXXXX )
BE IT REMEMBERED, that on this 30th day of December, 1996,
before me, the undersigned, a notary public in and for said
state, came A. Xxxxxx Xxxxxxx, President of Texas College of
Medical and Dental Assistants, Inc., a Texas 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.
/s/ Xxxx X. Xxxxx
Notary Public in and for
said County and State
My commission expires:
9/7/2000
UNITED HEALTH CAREERS
INSTITUTE, INC.
ATTEST:
/s/ Xxxx X. Xxxxx By: /s/ A. Xxxxxx Xxxxxxx
Secretary A. Xxxxxx Xxxxxxx
President
ACKNOWLEDGMENT
STATE OF MISSOURI )
) ss.
COUNTY OF XXXXXXX )
BE IT REMEMBERED, that on this 30th 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.
/s/ Xxxx X. Xxxxx
Notary Public in and for
said County and State
My commission expires:
9/7/2000
SOUTHERN CALIFORNIA COLLEGE OF
MEDICAL AND DENTAL ASSISTANTS,
INC.
ATTEST:
/s/ Xxxx X. Xxxxx By: /s/ A. Xxxxxx Xxxxxxx
Secretary A. Xxxxxx Xxxxxxx
President
ACKNOWLEDGMENT
STATE OF MISSOURI )
) ss.
COUNTY OF XXXXXXX )
BE IT REMEMBERED, that on this 30th 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 Medial 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.
/s/ Xxxx X. Xxxxx
Notary Public in and for said
County and State
My commission expires:
9/7/2000
CONCORDE CAREERS-FLORIDA, INC.
ATTEST:
/s/ Xxxx X. Xxxxx By: /s/ A. Xxxxxx Xxxxxxx
Secretary A. Xxxxxx Xxxxxxx
President
ACKNOWLEDGMENT
STATE OF MISSOURI )
) ss.
COUNTY OF XXXXXXX )
BE IT REMEMBERED, that on this 30th 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.
/s/ Xxxx X. Xxxxx
Notary Public in and for said
County and State
My commission expires:
9/7/2000
COLLEGES OF DENTAL AND
MEDICAL ASSISTANTS, INC.
ATTEST:
/s/ Xxxx X. Xxxxx By: /s/ A. Xxxxxx Xxxxxxx
Secretary A. Xxxxxx Xxxxxxx
President
ACKNOWLEDGMENT
STATE OF MISSOURI )
) ss.
COUNTY OF XXXXXXX )
BE IT REMEMBERED, that on this 30th 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 Medial 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.
/s/ Xxxx X. Xxxxx
Notary Public in and for
said County and State
My commission expires:
9/7/2000
COMPUTER CAREER INSTITUTE, INC.
ATTEST:
/s/ Xxxx X. Xxxxx By: /s/ A. Xxxxxx Xxxxxxx
Secretary A. Xxxxxx Xxxxxxx
President
ACKNOWLEDGMENT
STATE OF MISSOURI )
) ss.
COUNTY OF XXXXXXX )
BE IT REMEMBERED, that on this 30th 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 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.
/s/ Xxxx X. Xxxxx
Notary Public in and for
said County and State
My commission expires:
9/7/2000
CAREER ASSISTANCE, INC.
ATTEST:
/s/ Xxxx X. Xxxxx By: /s/ A. Xxxxxx Xxxxxxx
Secretary A. Xxxxxx Xxxxxxx
President
ACKNOWLEDGMENT
STATE OF MISSOURI )
) ss.
COUNTY OF XXXXXXX )
BE IT REMEMBERED, that on this 30th 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.
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.
/s/ Xxxx X. Xxxxx
Notary Public in and for
said County and State
My commission expires:
9/7/2000
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:
I. 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:
A. 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.
B. 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 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.
(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 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 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
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
