STOCK REPURCHASE AGREEMENT
THIS
STOCK REPURCHASE AGREEMENT (this “Agreement”),
dated
as of September _9,
2005,
is entered into by and between Concorde Career Colleges, Inc., a Delaware
corporation (the “Company”)
and
the Xxxxxx X. Xxxxxxx Trust under agreement dated December 29, 1989,
as
amended by a First Amendment to Declaration of Trust dated August 3,
1990
(the “Trust”).
RECITALS
A. The
Trust
desires to sell, and the Company desires to purchase, Six Hundred Thousand
(600,000) shares of the Company’s common stock, par value $0.10 per share (the
“Shares”)
on the
terms and conditions set forth in this Agreement.
B. A
Special
Committee (the “Special
Committee”)
of the
Board of Directors of the Company (the “Board”),
comprised of all members of the Board except Xxxx X. Xxxxxxx, has
authorized and approved this Agreement and the transactions contemplated
hereby.
C. The
Special Committee has requested an opinion from Xxxx Xxxxx Xxxx Xxxxxx
Incorporated (“Xxxx
Xxxxx”),
the
financial advisor to the Special Committee as to the fairness, from a financial
point of view, of the transaction to the Company.
AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing premises and for other good
and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Trust agree as follows:
ARTICLE
I
REPURCHASE
AND SALE OF SHARES
Section
1.1 Sale
and Transfer.
Subject
to the terms and conditions of this Agreement, the Trust agrees to sell to
the
Company, and the Company agrees to repurchase from the Trust, the Shares,
free
and clear of all Liens (as defined herein).
Section
1.2 Purchase
Price.
Subject
to the terms and conditions of this Agreement, the Company shall pay to the
Trust a price per share calculated as ninety-five percent (95%) of the average
closing price of the Company’s common stock on NASDAQ stock market during the 30
day period beginning on the 15th trading day prior to the date on which this
Agreement is publicly announced and ending on the 14th trading day after
the
date on which this Agreement is publicly announced (the “Share
Purchase Price”);
provided, however, if the calculated Share Purchase Price is less than $13
per
share, then the Company will pay the Trust $13 per share for the Shares and
if
the calculated Share Purchase Price is greater than $17 per share, then the
Company will pay the Trust $17 per share for the Shares. The aggregate cash
consideration paid to the Trust for the Shares shall be referred to herein
as
the “Purchase
Price.”
In the
event of a transaction which, prior to the Closing provided in Section 2.1,
is
approved by the Board or is publicly announced and involves all or substantially
all the shares of the Company, pursuant to which the Company’s stockholders
receive consideration with a value in excess of the Share Purchase Price,
the
Company will pay the Trust, following consummation of such transaction, an
additional amount equal to 50% of the difference between such value and the
Share Purchase Price.
ARTICLE
II
CLOSING
Section
2.1 Closing.
The
consummation of the repurchase and sale of the Shares (the “Closing”)
shall
take place as soon as practicable after all the conditions of Section 2.2
have
been satisfied, but in any event not later than December 31, 2005
(the
“Closing
Date”)
at the
offices of Xxxxx Xxxx LLP, 3500 One Kansas City Place, Kansas City,
Missouri.
Section
2.2 Conditions
Precedent to Closing.
The
obligation of the Company and the Trust to effect the transaction shall be
subject to the following conditions:
(a) the
Company has received written approval of the resulting “change in ownership
resulting in a change in control” under applicable regulations of the United
States Department of Education or written acknowledgement that such approval
is
not required, and also has received any required approvals from any states
in
which it does business and from any accrediting agency by which it is
accredited; and
(b) the
Company has received a fairness opinion from Xxxx Xxxxx confirming that the
transaction contemplated by this Agreement is fair to the Company from a
financial point of view.
Section
2.3 Deliveries
by the Trust.
At the
Closing, the Trust shall deliver to the Company:
(a) a
certificate or certificates representing the Shares accompanied by a stock
power
or stock powers, as the case may be, duly executed in blank by the Trust;
and
(b) such
other documents, instruments, certificates and receipts as are reasonably
requested by the Company in order to validly convey title to the Shares to
the
Company.
Section
2.4 Deliveries
by the Company.
At the
Closing, the Company shall deliver to the Trust, by wire transfer of immediately
available funds to an account that the Trust has designated in writing, the
Purchase Price, less any withholding of tax as may be required under applicable
law. In the event a transaction described in the last sentence of
Section 1.2 occurs, then the additional payment required by that sentence
shall be paid in the same manner as the payment of the Purchase Price within
five (5) business days following consummation of such transaction.
2
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE TRUST
The
Trust
makes the following representations and warranties to the Company:
Section
3.1 Existence;
Authority.
The
Trust is organized and existing under Kansas law and has all requisite power
and
authority to execute, deliver and perform the terms and provisions of this
Agreement and to consummate the transactions contemplated hereby and has
taken
all necessary action to authorize the execution, delivery and performance
of
this Agreement.
Section
3.2 Enforceability.
This
Agreement has been duly executed and delivered by the Trust, and, assuming
due
and valid authorization, execution and delivery hereof by the Company,
constitutes a legal, valid and binding agreement of the Trust, enforceable
against the Trust in accordance with its terms.
Section
3.3 Ownership.
The
Trust is the sole record owner of the Shares and, except for the trustee
and
beneficiaries thereof, there are no other beneficial owners of the Shares.
The
Trust holds the Shares free and clear of all pledges, encumbrances, liens,
security interests, charges, agreements or claims of any kind (collectively,
“Liens”).
The
Trust has the full power and authority to transfer full legal ownership of
the
Shares.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
The
Company makes the following representations and warranties to the
Trust:
Section
4.1 Existence;
Authority.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Company has all requisite corporate
power and authority to execute, deliver and perform the terms and provisions
of
this Agreement and to consummate the transactions contemplated hereby and
has
taken all necessary action to authorize the execution, delivery and performance
of this Agreement.
Section
4.2 Enforceability.
This
Agreement has been duly executed and delivered by the Company, and, assuming
due
and valid authorization, execution and delivery hereof by the Trust, constitutes
a legal, valid and binding agreement of the Company, enforceable against
it in
accordance with its terms.
ARTICLE
V
INDEMNIFICATION
Section
5.1 Survival
of Representations and Warranties.
Each of
the representations and warranties in this Agreement or pursuant hereto shall
survive the Closing. Each party shall have the right to fully rely on the
representations, warranties, covenants and agreements of the other party
contained in this Agreement or in any other documents or papers delivered
in
connection herewith.
3
Section
5.2 Indemnification
by the Trust.
The
Trust agrees to indemnify and hold the Company and its stockholders, directors,
officers, employees, attorneys, agents and affiliates (collectively, the
“Company
Indemnified Parties”)
harmless from and against the aggregate of all expenses, losses, costs,
deficiencies, liabilities and damages (including, without limitation, related
attorneys fees and expenses) incurred or suffered by the Company arising
out of,
relating to, or resulting from (a) any breach of a representation
or
warranty made by the Trust in or pursuant to this Agreement, (b) any
breach
of the covenants or agreements made by the Trust in or pursuant to this
Agreement, or (c) any inaccuracy in any certificate, instrument or
other
document delivered by the Trust as required by this Agreement (collectively,
“Company
Indemnifiable Damages”).
Section
5.3 Indemnification
by the Company.
The
Company agrees to indemnify and hold the Trust and its trustees, attorneys,
agents and affiliates (collectively, the “Trust
Indemnified Parties”)
harmless from and against, the aggregate of all expenses, losses, costs,
deficiencies, liabilities and damages (including, without limitation, related
attorneys fees and expenses) incurred or suffered by the Trust arising out
of,
relating to, or resulting from (a) any breach of a representation
or
warranty made by the Company in or pursuant to this Agreement, (b) any
breach of the covenants or agreements made by the Company in or pursuant
to this
Agreement, or (c) any inaccuracy in any certificate, instrument or
other
document delivered by the Company as required by this Agreement (collectively,
“Trust
Indemnifiable Damages”
and
together with Company Indemnifiable Damages, “Indemnifiable
Damages”).
Section
5.4 Indemnification
Claims.
(a) Any
claim
for Indemnifiable Damages or any other damages hereunder shall be made by
written notice, which notice shall set forth (i) the amount of Indemnifiable
Damages or other loss, damage, cost or expense which is claimed to have been
sustained by reason thereof, and (ii) the basis of such claim; and
(b) Payment
for any claim made under subsection (a) shall be effected on the later to
occur
of the expiration of ten (10) days from the date of such notice or, if such
claim is contested in writing within such ten (10) day period, the date the
dispute is resolved.
Section
5.5 Remedies
Cumulative; Waiver.
The
remedies provided herein shall be cumulative and shall not preclude any party
from asserting any other right, or seeking any other remedies against the
other
party, and shall survive the Closing.
ARTICLE
VI
TERMINATION
Either
party may terminate this Agreement without liability to the other if the
conditions to Closing set forth in Section 2.2 have not been satisfied or
waived
on or before December 31, 2005.
4
ARTICLE
VII
MISCELLANEOUS
Section
7.1 Expenses.
Except
as otherwise provided in this Agreement, each party to this Agreement will
bear
its respective fees and expenses incurred in connection with the preparation,
negotiation, execution and performance of this Agreement and the contemplated
transactions, including all fees and expense of its representatives.
Section
7.2 Notices.
All
notices permitted or required under this Agreement shall be in writing and
shall
be either (a) delivered by personal service; (b) delivered by a recognized
overnight courier service; (c) telecopied and confirmed electronically, followed
by a written copy mailed by registered or certified mail, postage prepaid,
return receipt requested; or (d) sent by certified mail, postage prepaid,
return
receipt requested, to the parties hereto at their addresses set forth below
or
at such other addresses which may be designated in writing by the
parties:
(a) If
to the
Company:
Concorde
Career Colleges, Inc.
0000
Xxxxxxxx
Xxxxx, Xxx. 000
Xxxxxxx,
XX
00000
Attn:
Xxxx
Xxxxxxx
Facsimile
No.: (000) 000-0000
With
a copy
to:
Xxxxx
Xxxx
LLP
3500
One
Kansas City Place
0000
Xxxx
Xxxxxx
Xxxxxx
Xxxx,
XX 00000
Attn:
Xxxxxx
X. Xxx Xxxx, Esq.
Facsimile
No.: (000) 000-0000
(b) If
to the
Trust:
Xxxxxx
X.
Xxxxxxx Trust
0000
Xxxxxxxx
Xxxxx, Xxx. 000
Xxxxxxx,
XX
00000
Attn:
Xxxx
Xxxxxxx
Facsimile
No.: (000) 000-0000
5
With
a copy
to:
Xxxxxxx
&
Xxxx X.X.
0000
Xxxxx
Xxxxxx
Xxxxxx
Xxxx,
Xxxxxxxx 00000
Attn:
Xxxx X.
Xxxxxx, Esq.
Facsimile
No.(000) 000-0000
Notices
shall be deemed received (a) when delivered personally, (b) one business
day
after being sent by telecopy or a recognized overnight courier, (c) three
business days after being sent by certified mail, or (d) when receipt is
confirmed if delivered by telecopy.
Section
7.3 Public
Announcements.
The
Company and the Trust will consult with each other before issuing, and provide
each other with the opportunity to review and comment upon, any press release
or
other public statements with respect to the transactions contemplated by
this
Agreement, and neither the Company nor the Trust shall issue any such press
release or make any such public statement without the prior approval of the
other party, in each case except as may be required by law, court process
or by
obligations pursuant to any listing agreement with NASDAQ.
Section
7.4 Waiver.
Neither
any failure nor any delay by any party in exercising any right, power or
privilege under this Agreement or any of the documents referred to in this
Agreement will operate as a waiver of such right, power or privilege, and
no
single or partial exercise of any such right, power or privilege will preclude
any other or further exercise of such right, power or privilege.
Section
7.5 Entire
Agreement and Modification.
This
Agreement supersedes all prior agreements, whether written or oral, between
the
parties with respect to its subject matter and constitutes a complete and
exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended, supplemented,
or otherwise modified except by a written agreement executed by the
parties.
Section
7.6 Binding
Effect; Assignments.
The
rights and obligations of this Agreement shall bind and inure to the benefit
of
the parties and their respective successors and permitted assigns. Nothing
expressed or implied herein shall be construed to give any other person any
legal or equitable rights hereunder. Except as expressly provided herein,
the
rights and obligations of this Agreement may not be assigned or delegated
by
either party without the prior written consent of the other party.
Section
7.7 Severability.
If any
provision of this Agreement is held invalid or unenforceable by any court
of
competent jurisdiction, the other provisions of this Agreement will remain
in
full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect
to the
extent not held invalid or unenforceable.
6
Section
7.8 Headings.
The
headings of Articles and Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation.
Section
7.9 Governing
Law.
This
Agreement and any dispute arising in connection therewith will be governed
by
and construed under the laws of the State of Delaware without regard to
conflicts-of-laws principles that would require the application of any other
law.
Section
7.10 Counterparts.
This
Agreement may be executed in one or more counterparts, each of which will
be
deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement. The exchange
of copies of this Agreement and of signature pages by facsimile transmission
shall constitute effective execution and delivery of this Agreement as to
the
parties and may be used in lieu of the original Agreement for all purposes.
Signatures of the parties transmitted by facsimile shall be deemed to be
their
original signatures for all purposes.
Section
7.11 Further
Assurances.
Each of
the parties hereto shall do and perform or cause to be done and performed
all
such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as any other party hereto
may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
CONCORDE
CAREER
COLLEGES, INC.,
a
Delaware
corporation
By: /s/
Xxxxx X. Xxxxxxx
Name: Xxxxx
X. Xxxxxxx
Title: Chairman
CCDC Special Committee
XXXXXX
X. XXXXXXX
TRUST UNDER AGREEMENT DATED
DECEMBER
28, 1989, as
amended
By: /s/
Xxxx X. Xxxxxxx
Name: Xxxx
X. Xxxxxxx
Title: Trustee
7
