EXHIBIT 2.2
EXECUTION COPY
TO: EACH OF THE PERSONS NAMED ON SCHEDULE A TO THIS LETTER
(each such person a "Seller" and, collectively, the "Sellers")
In consideration of Corinthian Colleges, Inc. ("Parent") and Corinthian
Canada Acquisition Inc. (the "Offeror") entering into a support agreement (the
"Support Agreement") dated the date hereof with CDI Education Corporation (the
"Company"), and agreeing to make a public offer for all the Common Shares (the
"Common Shares") of the Company (the "Offer") on the terms and conditions
outlined in the Support Agreement, each Seller agrees to: (i) support the Offer
and (ii) irrevocably deposit under the Offer such Common Shares listed on
Schedule A beside such Seller's name and any Common Shares which may be issued
on the exercise of all options (the "Options") listed on Schedule A beside such
Seller's name, other than Options that the Seller has agreed to tender for
cancellation, or the shares (the "Holdco Shares") of 2020584 Ontario Limited
holding such Common Shares under the Holdco Alternative (defined below) (Common
Shares listed on Schedule A and Common Shares issuable on the exercise of the
Options listed on Schedule A, other than Options that the Seller has agreed to
tender for cancellation, hereinafter collectively referred to as the "Subject
Shares"), all on the terms and conditions of this letter agreement.
The terms of the Offer are set out in the Support Agreement, and
capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Support Agreement.
1. OFFER FOR SECURITIES OF THE COMPANY
The Offeror will make, on the terms and conditions outlined in the
Support Agreement, the Offer. The Offer will be made to the holders of all the
issued and outstanding Common Shares on the basis of Cdn $4.33 in cash per
Common Share. The Offer shall not be subject to any conditions except the
conditions set out on Schedule B.
The Offer will be made in accordance with applicable Canadian
securities legislation in all Canadian jurisdictions where registered
shareholders ("Shareholders") of the Company are located and will be open for
acceptance until a time that is not earlier than 12:01 a.m. (local time) on the
36th day after the day that the Offer is mailed to Shareholders (the "Mailing
Date"), subject to the right of the Offeror to extend the period during which
Common Shares may be deposited under the Offer (as it may be amended, the
"Expiry Time"). Subject to subsections 1.1(g), 1.2(b) and 1.2(d) of the Support
Agreement, the Offeror will mail the Offer and accompanying take-over bid
circular, related letter(s) of transmittal and notice(s) of guaranteed delivery
(such documents, together with the Offer, being referred to herein as the "Bid
Circular") as soon as reasonably practicable and in any event no later than
11:59 p.m. (Toronto time) on July 13, 2003 ("Latest Mailing Date"); provided,
however, that if the mailing of the Bid Circular is delayed by reason of (i) an
injunction or order made by a court or regulatory authority of competent
jurisdiction or (ii) the Offeror not having obtained any regulatory waiver,
consent or approval which is necessary to permit the Offeror to mail the Offer
then, provided that such injunction or order is being contested or appealed or
such regulatory waiver, consent or approval is being actively sought, as
applicable, then the Latest Mailing Date shall be extended for a period ending
on the earlier of: (i) 11:59 p.m. (Toronto time) on August 12, 2003 and (ii) the
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tenth business day following the date on which such injunction or order ceases
to be in effect or such waiver, consent or approval is obtained, as applicable
If the Offeror increases the value of the consideration for the Common
Shares under the Offer, the Offeror shall pay such increased consideration to
each holder whose Common Shares are taken up by the Offeror under the Offer,
including the Sellers.
2. AGREEMENT TO TENDER
(a) This Agreement when signed and delivered by each Seller to
Parent and the Offeror will constitute the agreement of each
Seller, among other things, to irrevocably accept the Offer
and validly to tender and cause to be tendered and to cause
all acts and things to be done to tender the Subject Shares
owned by such Seller (or Holdco Shares) under the Offer on the
terms and conditions set out herein.
(b) Each Seller agrees that if the Offeror makes the Offer
containing no conditions other than the conditions set out in
Schedule B, such Seller shall, unless such Seller is a
corporation and has elected the Holdco Alternative and has
delivered to the Offeror an executed Share Purchase Agreement
(as defined below), within 5 days of the mailing of the Bid
Circular, (i) deposit or cause to be deposited with the
depositary under the Offer (the "Depositary") all of the
Subject Shares (other than the Subject Shares issuable upon
the exercise of Options which shall be deposited as described
in clause (ii) hereof) and (ii) deposit or cause to be
deposited any Common Shares issuable upon exercise of all
Options, other than Options that the Seller has agreed to
tender for cancellation, by providing the Depositary/Transfer
Agent and the Offeror with an irrevocable direction and
authority to exercise all such Options and tender the Subject
Shares issuable upon the exercise thereof to the Offer, and
arrange with the Company for payment of such exercise price,
upon receipt by the Depositary/Transfer Agent of notice from
the Offeror that it is taking up the Common Shares tendered to
the Offer in accordance with the terms of the Offer and
thereafter, except as may be expressly permitted by this
Agreement, such Seller shall not withdraw or permit the
Subject Shares or any Holdco Shares deposited under the Offer,
to be withdrawn from the Offer. A Seller may effect the
deposit of the Subject Shares under the Offer by depositing
the Holdco Shares in accordance with the Holdco Alternative
(defined below). Except as provided otherwise in the Holdco
Alternative (defined below), provided that all conditions of
the Offer have been satisfied or waived, the Offeror will take
up and pay for the Subject Shares deposited under the Offer as
soon as reasonably possible and in any event not later than
three business days following the time at which it becomes
entitled to take up such Common Shares under the Offer
pursuant to applicable Laws.
(c) The Offeror will offer to allow holding companies to deposit
Common Shares under the Offer in accordance with the terms set
out on Schedule C (the "Holdco Alternative"). The Offeror
agrees to make the Holdco Alternative available to the Sellers
in respect of all of the Common Shares held by 2020584 Ontario
Limited subject to the execution by Xxxxx XxXxxxxx, Golconda
Inc., Xxxxxxx Xxxx and Xxxx Xxxxxx (collectively, the "Holdco
Sellers") of a share purchase agreement
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(the "Share Purchase Agreement"), substantially in the form
attached hereto as Schedule D. The Offeror will take up and
pay for the Holdco Shares deposited under the Offer pursuant
to the Holdco Alternative for identical consideration as if
the Common Shares held by such Holdco were deposited directly
to the Offer. If Subject Shares are sold pursuant to the
Holdco Alternative, the definition of "Subject Shares" and
"Seller" shall, unless the context otherwise requires, include
the Holdco Shares and the Holdco Sellers, respectively. If the
conditions to the Offer are satisfied or waived, the Holdco
Sellers shall pay $25,000 in reimbursement of out-of-pocket
costs and expenses incurred by the Offeror and Parent in
connection with the purchase of 2020584 Ontario Limited For
greater certainty, in the event that the Holdco Alternative is
not completed, the Subject Shares held by 2020584 Ontario
Limited shall be tendered to the Offer directly and the
parties hereto shall execute and deliver an amended and
restated Indemnity Agreement pursuant to which 2020584 Ontario
Limited shall replace Golconda Inc. as a party and an
indemnitor thereunder and the parties shall make all such
consequential amendments as are necessary to give effect to
this change. The parties agree that the shares of 1234512
Ontario Inc. will not be eligible for the Holdco Alternative.
(d) For greater certainty, for the purposes of this Agreement, the
term "Subject Shares" shall refer to all the Common Shares
which the Sellers are required to tender under the Offer
pursuant to the terms of this Agreement and shall include all
shares or other securities which the Subject Shares may be
converted into, exchanged for or otherwise changed into
pursuant to any merger, reorganization, amalgamation or other
business combination involving the Company prior to the
acquisition of the Subject Shares by the Offeror, and shall
also include any and all distributions of cash, securities or
other property made on such Common Shares on or after the date
hereof.
(e) In furtherance of the transactions contemplated by this
Agreement, each Seller hereby agrees to instruct the Company
to direct its transfer agent to place a stop transfer order on
the Subject Shares other than in connection with the Offer and
not to amend, terminate or waive any of the terms of such stop
transfer order (other than to permit the transfer of the
Subject Shares to the Offeror) during the term of this
Agreement. Each Seller also agrees that any Options held by
such Seller that are not exercised in accordance with Section
2(b) will be cancelled upon the Offeror taking up and paying
for at least 66 2/3% of the outstanding Shares (directly or
indirectly) on a fully-diluted basis.
3. COVENANTS OF THE SELLERS
3.1 Each Seller agrees that during the period commencing on the date hereof
and continuing until the earlier of (i) the expiry or termination of
the Offer (as extended, if applicable) and (ii) the withdrawal of the
Subject Shares (or the Holdco Shares) held by such Seller from the
Offer as permitted by this Agreement:
(a) (i) it or he will not take and shall not authorize or
permit any investment banker, financial advisor,
attorney, accountant or any other representative
retained by it or him to take any action of any kind
which may in any way
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adversely affect the success of the Offer or the
purchase of any Common Shares under the Offer or the
completion of the Offer;
(ii) it or he will immediately cease and cause to be
terminated any existing discussions with any parties
(other than the Offeror) with respect to any
Acquisition Proposal (as defined below); and
(iii) it or he will not, directly or indirectly, through
any officer, director, employee, advisor,
representative, agent or otherwise make, solicit,
initiate or encourage inquiries from or submission of
proposals or offers from any other person,
corporation, partnership or other business
organization whatsoever (including any of its
officers or employees) relating to any liquidation,
dissolution, recapitalization, merger, amalgamation
or acquisition or purchase of any equity interest
(including the Common Shares) or of all or a material
portion, on a consolidated basis, of the assets of
the Company or any person, company, partnership,
joint venture or other business organization in which
the Company has an interest (the "Subsidiaries") or
other similar transaction or business combination
involving the Company or any of its Subsidiaries (any
such foregoing inquiries or proposals, an
"Acquisition Proposal"), or participate in any
discussions or negotiations regarding, or furnish to
any other person any information with respect to, or
otherwise cooperate in any way with, or assist or
participate in, facilitate or encourage, any effort
or attempt by any other person to do or seek to do
any of the foregoing;
provided, however, that the foregoing shall not prevent a
Seller who is a director, officer or employee of the Company
or any of its Subsidiaries from doing any act or thing that he
properly is obliged to do in such capacity including, without
limitation, responding in his capacity as a director to any
unsolicited bona fide written Acquisition Proposal (i) that is
not subject to a financing contingency and in respect of which
adequate arrangements have been made to ensure that the
required funds will be available to effect payment in full for
all Common Shares; (ii) that does not otherwise result from a
breach of this subsection 3(a) or a breach of the Support
Agreement; and (iii) that the Board of Directors has
determined in good faith (after consultation with its
financial advisors and with outside counsel) is reasonably
capable of being completed, taking into account all legal,
financial, regulatory and other aspects of such proposal and
the party making the proposal and, would, if consummated in
accordance with its terms as proposed, result in a transaction
which is more favorable to Shareholders from a financial point
of view than the Offer (a "Superior Proposal").
For greater certainty, each such Seller acknowledges that the
proviso to this subsection 3(a) shall not affect such Seller's
obligation to tender (and, except as permitted by this
Agreement, not withdraw) the Subject Shares (or the Holdco
Shares) to the Offer pursuant to the terms and conditions of
this Agreement.
If any Seller receives any Acquisition Proposal (including an
offer or invitation to enter into discussions), except where
the Company has already done so, such Seller will immediately
notify the Offeror in writing and provide to the Offeror all
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relevant details relating thereto, including, without
limitation, the price proposed to be paid in connection with
such Acquisition Proposal or offer, the form of consideration
to be paid and the identity of the proponent;
(b) it or he will use its or his reasonable best efforts in its or
his capacity as a shareholder of the Company to do, or cause
to be done, all things necessary, proper or advisable under
applicable Laws, to consummate the transactions contemplated
by this Agreement and the Offer, including using its or his
reasonable best efforts to (i) support the Offer; (ii) obtain
all necessary consents, approvals and authorizations as are
required to be obtained by such Seller under any applicable
Law with respect to this Agreement or the Offer; (iii) lift or
rescind any injunction or restraining order or other order
adversely affecting such Seller's ability to consummate the
transactions contemplated hereby or by the Offer; and (iv)
fulfil all conditions and satisfy all provisions of this
Agreement and the Offer applicable to such Seller; provided,
however, that the foregoing shall not prevent a Seller who is
a director, officer or employee of the Company or any of its
Subsidiaries from doing any act or thing that he properly is
obliged to do in such capacity, subject to compliance with the
Support Agreement;
(c) it or he will exercise the voting rights attaching to the
Subject Shares and otherwise use its or his best efforts in
its or his capacity as a securityholder to oppose any proposed
action by the Company, its shareholders, any of its
Subsidiaries or any other person: (i) in respect of any
amalgamation, merger, sale of the Company's or its affiliates'
or associates' assets, take-over bid, plan of arrangement,
reorganization, recapitalization, shareholder rights plan,
liquidation or winding-up of, reverse take-over or other
business combination or similar transaction involving the
Company or any of its Subsidiaries, (ii) which might
reasonably be regarded as being directed towards or likely to
prevent or delay the take up and payment of the Subject Shares
deposited under the Offer or the successful completion of the
Offer, or (iii) which could result in a Material Adverse
Effect. In connection therewith, each Seller hereby appoints
Parent as attorney in fact (which appointment is
unconditional, irrevocable and is coupled with an interest),
subject to Section 6, for and on its or his behalf to execute
a proxy appointing such person designated by Parent to attend
and act on behalf of such Seller at any meeting of the Company
in respect of any of the matters referred to in this
subsection 3(c) and to act on behalf of such Seller on every
action or approval by written consent of the shareholders of
the Company in respect of such matters, and if pursuant to
this power of attorney Parent has executed and not revoked a
proxy in respect of such a meeting, which proxy has been
accepted by the Company, then in such circumstances such
Seller shall not be responsible for voting under this
subsection 3(c). Parent shall advise such Seller upon
executing any proxies in respect of such Seller;
(d) in the event that the Board of Directors implements a
shareholders' rights plan, the Sellers shall forthwith
exercise their rights as shareholders and requisition a
meeting of shareholders of the Company to be held at the
earliest possible meeting date after such requisition, and
take such other steps as may be necessary to cause such
meeting to be held, to consider the termination of the
shareholders'
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rights plan and, subject to subsection 3(c), shall vote to
terminate such shareholders' rights plan;
(e) it or he will not grant or agree to grant any proxy or other
right to the Subject Shares, or enter into any voting trust,
vote pooling or other agreement with respect to the right to
vote, call meetings of shareholders or give consents or
approvals of any kind with respect to the Subject Shares,
other than to the Parent or the Offeror pursuant to the
provisions hereof;
(f) it or he will not sell, transfer, pledge, encumber, grant a
security interest in, hypothecate, encumber or otherwise
convey or grant an option over any Subject Shares (or any
right or interest therein (legal or equitable)) held by it or
him to any person, entity or group or agree to do any of the
foregoing;
(g) except as required by applicable Law, it or he will not, prior
to the public announcement by the Offeror of the terms of the
Offer, directly or indirectly, disclose to any person, firm or
corporation (other than the Company and the financial and
legal advisors of the Sellers and the Company) the existence
of the terms and conditions of this Agreement, or the
possibility of the Offer being made or any terms or conditions
or other information concerning any possible offer to be made
for Common Shares;
(h) it or he will promptly advise the Offeror orally and in
writing of any Material Adverse Effect or any event,
condition, change or development with respect to the Company
which could reasonably be expected to cause the conditions to
the Offer not to be satisfied, known or that becomes known to
such Seller;
(i) it or he will not purchase or obtain or enter into any
agreement or right to purchase any additional Common Shares
other than in accordance with the provisions hereof;
(j) it or he will not sell, transfer, pledge, hypothecate,
encumber, grant a security interest in or otherwise convey any
of the Convertible Debentures issued to it or him;
(k) it or he will take all such steps as are required to ensure
that at the time at which the Offeror becomes entitled to take
up and pay for Common Shares pursuant to the Offer, and at the
time at which the Offeror so takes up and pays for such Common
Shares, the Subject Shares held by such Seller will be owned
beneficially and of record by such Seller with a good and
marketable title thereto, free and clear of any and all
mortgages, liens, charges, restrictions, security interests,
adverse claims, pledges and encumbrances of any nature or kind
whatsoever, and will not be subject to any shareholders'
agreements, voting trust or similar agreements or any right or
privilege (whether by Law, pre-emptive or contractual) capable
of becoming a shareholders' agreement, voting trust or other
agreement affecting the Subject Shares or the ability of any
holder thereof to exercise all ownership rights thereto,
including the voting of any such shares (collectively,
"Encumbrances"); and
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(l) a Seller employed by the Company agrees that at the time at
which the Offeror takes up and pays for Common Shares, he
shall resign as a director if requested by the Parent and
shall forthwith thereafter resign from employment with the
Company and its Subsidiaries at the request of the Parent and
shall execute a full and final release of all and any
employment claims (including claims for vacation, severance,
change of control or termination pay) that such Seller may
have except for salary and other benefits accrued and unpaid
to the date of such request, provided that for greater
certainty, conditional upon completion of the Offer, the
Seller shall not be entitled to and hereby waives any right
that he may have to vacation, severance, change of control or
termination pay from the Company.
3.2 In the event that a Seller converts any Convertible Debentures, such
Seller agrees to forthwith irrevocably deposit under the Offer all
Common Shares issued upon the conversion of such Convertible
Debentures.
3.3 The Sellers shall deliver to the Offeror and Parent, not more that
seven hours before the Expiry Time, a certificate confirming that at
the Expiry Time (i) the representations and warranties of the Sellers
are true and correct in all material respects; and (ii) all of the
covenants and obligations of the Sellers under this Agreement have been
performed or complied with in all material respects.
4. REPRESENTATIONS AND WARRANTIES OF THE SELLERS
4.1 (a) Each Seller by its or his acceptance hereof jointly and
severally represents and warrants as follows and acknowledges
that Parent and the Offeror are relying upon such
representations and warranties in connection with the entering
into of this Agreement and the purchase by the Offeror of the
Subject Shares:
(i) such Seller is the beneficial owner of the Subject
Shares and is the registered owner of such Subject
Shares;
(ii) (A) such Seller has the sole right to sell and vote
(to the extent permitted by the attributes of such
shares or pursuant to applicable Law), all the
Subject Shares now held or hereafter acquired by it
or him and (B) all the Subject Shares held by such
Seller will, at the time at which the Offeror takes
up and pays for such shares, be beneficially owned by
such Seller with a good and marketable title thereto,
free and clear of any and all Encumbrances and are
and will at such time be issued and outstanding as
fully paid and non-assessable shares in the capital
of the Company;
(iii) no person, firm or corporation has any agreement or
option, or any right or privilege (whether by Law,
pre-emptive or contractual) capable of becoming an
agreement or option, for the purchase, acquisition or
transfer from such Seller of any of the Subject
Shares owned by it or him or any interest therein or
right thereto, except the Offeror pursuant hereto;
(iv) none of the execution and delivery by such Seller of
this Agreement or the completion of the transactions
contemplated hereby or the compliance by such Seller
with its or his obligations hereunder will result in
a breach of:
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(A) if such Seller is a corporation, the constating
documents of such Seller; (B) any agreement or
instrument to which such Seller is a party or by
which such Seller or any of its or his property or
assets (other than the Subject Shares) are bound; (C)
any judgment, decree, order or award of any court,
governmental body or arbitrator; or (D) any
applicable Law;
(v) each Seller covenants and agrees to take, or cause to
be taken, all action and to do, or cause to be done,
all things necessary to obtain the discharge of any
and all Encumbrances so that such Seller will be in
compliance with the provisions of subsection 3(k);
(vi) if a corporation, such Seller is a validly subsisting
corporation and has all necessary corporate power and
authority to execute and deliver the agreement
resulting from its acceptance hereof and to perform
its obligations hereunder;
(vii) this Agreement has been duly executed and delivered
by each Seller and constitutes a valid and binding
obligation of each Seller enforceable against it or
him in accordance with its terms, except as may be
limited by bankruptcy, insolvency and other laws
affecting the enforcement of creditors' rights
generally and subject to the qualification that
equitable remedies may only be granted in the
discretion of a court of competent jurisdiction;
(viii) (A) the only securities of the Company beneficially
owned, directly or indirectly, by such Seller are
those listed on Schedule A hereto beside such
Seller's name, (B) other than the Convertible
Debentures listed on Schedule A and the Options
listed on Schedule A hereto beside such Seller's
name, such Seller has no agreement or option, or
right or privilege (whether by Law, pre-emptive or
contractual) capable of becoming an agreement or
option, for the purchase or acquisition by such
Seller or transfer to such Seller of additional
securities of the Company;
(ix) other than as a holder of the Subject Shares, Options
and Convertible Debentures set out on Schedule A,
such Seller has no indebtedness, liability or
obligation to the Company or any claims against the
Company, and the Company is not indebted or otherwise
obligated to such Seller other than in connection
with the Convertible Debentures and to fulfil its
contractual obligations as an employer in accordance
with the terms of the employment contract between the
Company and such Seller disclosed to the Parent. No
past or present holder of Common Shares has any claim
outstanding against the past or present directors of
the Company or the Company in connection with the
treatment of the Company in any related party
transaction with the Sellers or their associates and
affiliated corporations and the Sellers have no
reason to believe that there are any facts which
would substantiate any such claims;
(x) such Seller has no claim against the Company or any
of its Subsidiaries at the date of this Agreement and
will not have any claim against the
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Company or any of its Subsidiaries by reason of the
entering into of this Agreement; and
(xi) such Seller has not purchased any Common Shares in
the last six months.
(b) the Sellers further represent that all of the representations
and warranties of the Company set forth in Schedule B to the
Support Agreement (and which are incorporated herein by
reference) are true and correct.
4.2 SURVIVAL
The representations and warranties of the Sellers shall survive the
purchase of the Subject Shares and shall expire on the second anniversary from
the date that the Offeror takes up and pays for the Subject Shares. For greater
certainty, the representations and warranties in section 4.1(b) shall survive
the completion of the Offer notwithstanding the termination of the Support
Agreement and the representations and warranties thereunder. Notwithstanding the
foregoing, any claim, demand, action, cause of action, damage, loss, cost,
liability or expense which is based on title to the Subject Shares, intentional
misrepresentation or fraud may be brought at any time.
4.3 INDEMNIFICATION
Contemporaneously with the entering into of this Agreement, Xxxxx
XxXxxxxx, Golconda Inc. and 1234512 Ontario Inc. shall enter into an indemnity
agreement with Parent, the Company and the Offeror.
5. REPRESENTATIONS AND WARRANTIES OF PARENT AND THE OFFEROR
Parent and the Offeror jointly and severally represent and warrant as
follows and acknowledge that the Sellers are relying upon such representations
and warranties in connection with the sale to the Offeror of the Subject Shares:
(a) Parent is a company organized and existing under the laws of
the State of Delaware. The Offeror is a company organized and
existing under the OBCA and each of Parent and the Offeror has
full corporate or legal power and authority to own its assets
and conduct its business as currently owned and conducted. All
of the outstanding shares of the Offeror are owned, directly
or indirectly, by Parent;
(b) each of Parent and the Offeror has the requisite power and
authority to enter into this Agreement and to perform its
obligations hereunder. The execution and delivery of this
Agreement by each of Parent and the Offeror and the
consummation by Xxxxxx and the Offeror of the transactions
contemplated by this Agreement have been duly authorized by
the board of directors of each of Parent and the Offeror, and
no other proceedings on the part of either Parent or the
Offeror are necessary to authorize this Agreement. This
Agreement has been duly executed and delivered by Parent and
the Offeror and constitutes a valid and binding obligation of
each of Parent and the Offeror, enforceable against Parent and
the Offeror in accordance with its terms;
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(c) the execution and delivery by each of Parent and the Offeror
of this Agreement and performance by each of Parent and the
Offeror of its respective obligations hereunder and the
completion of the Offer, will not be in breach of: either of
Parents or the Offeror's constating documents; any judgment,
decree, order, or award of any court, governmental body or
arbitrator; or any applicable Law; and
(d) the Offeror has made adequate arrangements to ensure that the
required funds are available to effect payment in full for all
of the Common Shares acquired pursuant to the Offer;
6. TERMINATION DATE; EXTENSIONS
6.1 This Agreement may be terminated by notice in writing:
(a) at any time by mutual consent of Xxxxxx, the Offeror and the
Sellers;
(b) by any Seller after the 90th day after the Offer is commenced
if the Offeror has not taken up and paid for all Common Shares
deposited under the Offer unless the failure of the Offeror to
take up and pay for the Common Shares arises as a result of
the breach by a Seller or the Company of any material covenant
or obligation under this Agreement or the Support Agreement,
respectively, or as a result of any representation or warranty
of a Seller or the Company in this Agreement or the Support
Agreement, respectively, being untrue or incorrect; and
provided, for certainty, that if the take up and payment by
the Offeror for Common Shares deposited under the Offer is
delayed by (i) an injunction or order of a court or regulatory
authority of competent jurisdiction or (ii) the Offeror not
having obtained any regulatory waiver, consent or approval
which is necessary to permit the Offeror to take up and pay
for Common Shares deposited under the Offer or necessary for
the Company to continue to carry on its business as currently
conducted, then, provided that such injunction or order is
being contested or appealed or such regulatory waiver, consent
or approval is being actively sought, as applicable, this
Agreement shall not be terminated by any Seller pursuant to
this subsection 6(b) until the earlier of (i) 120 days after
the Offer is commenced, and (ii) the tenth business day
following the date on which such injunction or order ceases to
be in effect or such waiver, consent or approval is obtained,
as applicable; and provided further, that if the Board of
Directors implements a shareholders' right plan, then, this
Agreement shall not be terminated by any Seller pursuant to
this subsection 6(b) until the earlier of (iii) 180 days after
the Offer is commenced and (iv) the tenth business day
following the date on which such shareholders' rights plan is
terminated;
(c) by Parent or the Offeror if the Support Agreement is
terminated;
(d) by any Seller, Parent or the Offeror, if any representation or
warranty of the other party under this Agreement is untrue or
incorrect, or if not already qualified by a materiality
concept, untrue or incorrect in any material respect, or if
the other party breaches or is in default of any material
covenant or obligation under this Agreement; provided that a
Seller, Parent or the Offeror (as the case may be) delivers
written notice to the party in default (as the case may be) of
such breach,
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failure to perform or observe or default, and such breach,
failure to perform or observe or default shall not have been
cured by the party in default by the earlier of the Expiry
Time or the close of business on the fifth business day
following the giving of such notice;
(e) by any Seller, if the Offer having expired and all of the
conditions having been satisfied or waived, the Offeror has
not taken up and paid for the Subject Shares pursuant to the
Offer as required under the terms of the Offer or applicable
securities legislation; or
(f) by Parent or the Offeror, at any time after the 45th day after
the Offer is commenced if any condition of the Offer is not
satisfied at the Expiry Time of the Offer and the Offeror
elects not to waive such condition; provided, however, that if
the condition which is not satisfied is either (i) the
regulatory condition set forth in paragraph (b) of Schedule B
hereto or (ii) the Investment Canada condition set forth in
paragraph (c) of Schedule B hereto then this Agreement shall
not be terminated by Parent or the Offeror pursuant to this
subsection 6.1(f) until (A) the 60th day after the Offer is
commenced in the event that the unsatisfied condition is the
regulatory condition set forth in paragraph (b) of Schedule B
hereto or (B) the 45th day following a filing with the
Department of Canadian Heritage under the Investment Canada
Act (and applicable policies) in the event that the
unsatisfied condition is the Investment Canada condition set
forth in paragraph (c) of Schedule B hereto.
6.2 Any such termination of this Agreement in accordance with
Section 6.1 shall not prejudice the rights of a party as a result of
any breach by any other party of its or his obligations hereunder. Upon
termination of this Agreement, the Sellers shall be entitled to
withdraw any of their Subject Shares deposited under the Offer.
7. CHANGE IN NATURE OF TRANSACTION
(a) If the Offeror and its counsel, and the Board of Directors and
its counsel, agree that it is necessary or desirable to
proceed with another form of transaction (an "Alternative
Transaction") whereby following completion of such Alternative
Transaction the Offeror would own or control 100% of the
Common Shares or substantially all of the assets of the
Company and its Subsidiaries, which Alternative Transaction
would provide the holders of Common Shares with a net
financial result at least equivalent to or better than the
Offer, the Sellers shall support the completion of such
Alternative Transaction;
(b) If any Alternative Transaction involves a meeting or meetings
of holders of securities of the Company, each Seller shall
vote in favour of any matters necessary or ancillary to the
completion of the Alternative Transaction;
(c) Each Seller hereby appoints Parent as attorney in fact (which
appointment is unconditional, irrevocable and is coupled with
an interest), subject to Section 6, to execute a proxy
appointing such person designated by Parent to attend and act
on behalf of such Seller at any meeting or meetings held in
connection with such Alternative Transaction and to act on
behalf of such Seller on every action or
- 12 -
approval by written consent of the Company's shareholders in
respect of such Alternative Transaction, and if pursuant to
this power of attorney Xxxxxx has executed and not revoked a
proxy in respect of a meeting, which proxy has been accepted
by the Company, then in such circumstances such Seller shall
not be responsible for voting under subsection 7(b). Parent
shall advise a Seller upon executing any proxies in respect of
such Seller;
(d) In the event of any proposed Alternative Transaction, the
references in this Agreement to the Offer shall be deemed to
be changed to "Alternative Transaction" and all terms,
covenants, representations and warranties of this Agreement
shall be and shall be deemed to have been made in the context
of the Alternative Transaction; and
(e) The Sellers shall not exercise any rights of dissent provided
under the Business Corporations Act (Ontario) or otherwise in
connection with any Alternative Transaction.
8. NON-COMPETITION
(a) Xxxxx XxXxxxxx covenants and agrees with Parent and the
Offeror that he shall not, for a period of four (4) years from
the date that the Offeror takes up and pays for Common Shares,
either alone or in conjunction with any individual,
partnership, firm, association, syndicate, company or other
entity, whether as principal, agent, consultant, employee,
shareholder (other than a holding of shares listed on a
recognized stock exchange that does not exceed five percent
(5%) of the outstanding shares so listed), or in any other
manner, whatsoever, directly or indirectly, within Canada or
in respect of Canada, carry on or be engaged in, or be
interested in the provision of private, post-secondary and
corporate integrated learning solutions education and training
(the "Business") or advise, invest, lend money to, guarantee
the debts or obligations of any person, firm, association,
syndicate, company or corporation engaged in or concerned with
or interested in the Business;
(b) Xxxxx XxXxxxxx specifically acknowledges that the Offeror in
agreeing to make the Offer to purchase the Subject Shares has
relied on his covenants of non-competition as set forth herein
and therefore, specifically acknowledges and agrees that
breach of the terms of this provision by him would cause
Parent and the Offeror irreparable harm not compensable in
damages. Xxxxx XxXxxxxx further acknowledges and agrees that
it is essential to the effective enforcement of this provision
that Parent and the Offeror be entitled to the remedy of an
injunction without being required to show irreparable harm.
(c) If a court of competent jurisdiction would otherwise determine
all or any portion of this provision to be invalid or
unenforceable in the circumstances, the portion which would
otherwise be held invalid or unenforceable shall,
automatically and without further act on the part of the
Offeror or Parent, but only as regards those matters before
the said court, be reduced in scope or duration of time to
such an extent that the said court would hold the same to be
enforceable in the circumstances before the said court.
- 13 -
9. GENERAL
(a) The Offeror acknowledges and agrees that the covenants,
representations and warranties of the Sellers made in this
Agreement are made by the Sellers solely in their capacity as
a holder of Common Shares, and not in any other capacity
including the Sellers' or its agent's or representative's
capacity as an officer, director or employee of the Company.
(b) All notices, requests, demands and other communications
("Notice") hereunder shall be in writing and shall be
sufficiently given if delivered (whether in person, by courier
service or other personal method of delivery) or if
transmitted by facsimile or e-mail, to, in the case of the
Seller, Attention Xxxxx XxXxxxxx, Facsimile: 000-000-0000,
e-mail: xxxxx.xxxxxxxx@xxx.xx (with a copy to Stikeman Elliott
LLP, 0000 Xxxxxxxx Xxxxx Xxxx, 000 Xxx Xxxxxx, P.O. Box 85,
Toronto, Ontario, M5L 1B9 Attention: Xxx Xxxxxxx, Facsimile:
(000) 000-0000, e-mail: xxxxxxxx@xxx.xxxxxxxx.xxx, and, in the
case of the Offeror, and Parent, c/o Corinthian Colleges,
Inc., 0 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxx Xxx, XX, 00000,
Attention: Xxxx Xxxxxxxxx, SVP and General Counsel, Facsimile:
000-000-0000, e-mail: xxxxxxxx@xxx.xxx (with a copy to Osler,
Xxxxxx & Harcourt LLP, Box 00, 0 Xxxxx Xxxxxxxx Xxxxx,
Xxxxxxx, Xxxxxxx, X0X 0X0 Attention: Xxxxxxxxxxx Xxxxxx,
Facsimile: (000) 000-0000), email: xxxxxxx@xxxxx.xxx or such
other address as may be designated in writing hereafter, in
the same manner, by such person. Any Notice delivered or
transmitted to a party as provided above shall be deemed to
have been given and received on the day on which it was
delivered or transmitted (or, if such day is not a business
day, on the next following business day) unless actually
received at the point of delivery after 4:00 p.m. in which
case it shall be deemed to have been given and received on the
next business day.
(c) This Agreement and the agreements to be entered into pursuant
to this Agreement set forth the entire agreement and
understanding of the parties hereto in respect of the
transactions contemplated hereby. There are no warranties,
representations, terms, conditions or collateral agreements,
expressed, implied or statutory between the Sellers, Parent
and the Offeror other than as expressly set forth in this
Agreement. This Agreement and the rights hereunder are not
transferable or assignable by the Sellers, Parent or the
Offeror without the prior written consent of the other and
except that Parent and/or the Offeror may assign its rights
and obligations under this Agreement to any affiliate thereof,
but no such assignment shall relieve the assignor of its
obligations hereunder.
(d) If any provision of this Agreement is determined to be void or
unenforceable, in whole or in part, it shall be severable from
all other provisions hereof and shall be deemed not to affect
or impair the validity of any other provision hereof and each
such provision is deemed to be separate and distinct.
(e) This Agreement and the rights and obligations of the parties
hereto shall be governed by and construed in accordance with
the Laws of the Province of Ontario and the Laws of Canada
applicable herein.
- 14 -
(f) Time shall be of the essence of this Agreement.
(g) This Agreement may be executed by facsimile and in
counterparts, each of which shall be deemed to be an original
but all of which together shall constitute one and the same
agreement.
(h) Each party hereto shall pay the fees, costs and expenses of
their respective financial, legal, auditing and other
professional and other advisors incurred in connection with
the preparation, execution and delivery of this Agreement and
all documents and instruments executed or prepared pursuant
hereto and any other costs and expenses whatsoever and
howsoever incurred and shall indemnify the other party from
and against any and all claims against it for "finder's" or
"agency" fees relating to the transactions contemplated
hereby.
- 15 -
If the foregoing accurately reflects the terms and conditions of our
agreement, would you kindly indicate your acceptance hereof by signing, dating
and returning to Parent the enclosed duplicate original of this letter Agreement
by facsimile.
CORINTHIAN COLLEGES, INC.
By: /s/ Xxxxxx X. Xxxx
_______________________________
Name: Xxxxxx X. Xxxx
Title: Executive Vice President
CORINTHIAN CANADA ACQUISITION INC.
By: /s/ Xxxxx X. Xxxxx
_______________________________
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
1234512 ONTARIO INC.
By: /s/ Xxxxx XxXxxxxx
_______________________________
Name:
Title:
2020584 ONTARIO LIMITED
By: /s/ Xxxxx XxXxxxxx
_______________________________
Name:
Title:
SIGNED, SEALED & DELIVERED
In the presence of:
(illegible) /s/ Xxxxx XxXxxxxx
___________________________________ ____________________________________
Witness Xxxxx XxXxxxxx
SCHEDULE A
----------------------------------------------------------------------------------------
NAME NUMBER OF SHARES NUMBER OF OPTIONS DEBENTURES
----------------------------------------------------------------------------------------
1234512 Ontario Inc. 859,076 0 $485,000
----------------------------------------------------------------------------------------
2020584 Ontario Limited 5,101,181 0 0
----------------------------------------------------------------------------------------
Xxxxx XxXxxxxx 300 65,613 0
(none of which are
exercisable at or below
$4.33 per share)
----------------------------------------------------------------------------------------
SCHEDULE B
CONDITIONS OF THE OFFER
Subject to the provisions of the Agreement, the Offeror shall have the right to
withdraw the Offer and shall not be required to take up, purchase or pay for,
and shall have the right to extend the period of time during which the Offer is
open and postpone taking up and paying for, any Shares and Holdco Shares
deposited under the Offer unless all of the following conditions are satisfied
or waived by the Offeror at or prior to the Expiry Time:
(a) there shall have been deposited under the Offer and not
withdrawn (either directly or indirectly pursuant to the
Holdco Alternative) at least 66 2/3% of the Shares outstanding
on a fully diluted basis (the "MINIMUM TENDER CONDITION");
(b) all government or regulatory consents or approvals required by
law, policy or practice (other than as referred to in
paragraph (c) below), including, without limitation, those of
any provincial educational authorities, stock exchanges or
other securities regulatory authorities, including a ruling
which provides that subsection 97(2) of the Securities Act
(Ontario) and the equivalent provisions of the securities laws
of the other provinces and territories of Canada are not
violated by the employment arrangements proposed for Company
employees, shall have been obtained on terms satisfactory to
the Offeror, acting reasonably;
(c) either (i) the Department of Canadian Heritage under the
Investment Canada Act shall have confirmed in writing that a
filing with the Department of Canadian Heritage under the
Investment Canada Act (and applicable policies) is not
required in respect of the Offer based on the undertakings of
the Company, Parent and the Offeror to outsource the direct
sale of textbooks by the Company to students (and the
undertaking of the Company is satisfactory to Parent and the
Offeror, acting reasonably); or (ii) there shall have been a
determination by the Minister of Canadian Heritage under the
Investment Canada Act that the acquisition of the Shares by
the Offeror is of "net benefit to Canada", on terms and
conditions satisfactory to the Offeror, in its sole
discretion;
(d) the Offeror shall have determined in its sole discretion that
no act, action, suit or proceeding shall have been taken
before or by any Governmental Authority (including, without
limitation, any individual, company, firm, group or other
entity) in Canada or elsewhere, whether or not having the
force of Law, and no Law shall have been proposed, enacted,
promulgated or applied, in either case:
- to cease trade, enjoin, prohibit or impose material
limitations, damages or conditions on the purchase by or the
sale to the Offeror of the Shares and/or the Holdco Shares or
the right of the Offeror to own or exercise full rights of
ownership of the Shares and/or the Holdco Shares; or
- which, if the Offer were consummated, would reasonably be
expected to have a Material Adverse Effect; or
- 2 -
- which would prevent or materially delay the completion of the
acquisition by the Offeror of the Shares pursuant to a
Subsequent Acquisition Transaction;
(e) the Offeror shall have determined in its sole discretion that
there shall not exist any prohibition at Law against the
Offeror making the Offer or taking up and paying for any
Shares and/or Holdco Shares deposited under the Offer or
completing any Compulsory Acquisition Transaction or
Subsequent Acquisition Transaction;
(f) there shall not exist or have occurred (or, if there does
exist or shall have previously occurred, there shall not have
been disclosed, generally or to the Offeror in writing) any
change (or any condition, event or development involving a
prospective change) in the business, operations (including
results of operations), affairs, assets, prospects,
properties, condition (financial or otherwise), or liabilities
(including contingent liabilities that may arise through
outstanding, pending or threatened litigation or otherwise),
capitalization, financial condition, licences, permits, rights
or privileges, whether contractual or otherwise, or prospects
of the Company or any of its Subsidiaries considered on a
consolidated basis which, in the sole judgement of the
Offeror, individually or in the aggregate, has or may have a
material adverse effect either on the value of the Company or
any of its Subsidiaries considered on a consolidated basis or
on the value of the Shares to the Offeror;
(g) the Offeror shall not have become aware of any untrue
statement of a material fact, or an omission to state a
material fact that is required to be stated or that is
necessary to make a statement not misleading in the light of
the circumstances in which it was made and at the date it was
made (after giving effect to all subsequent filings in
relation to all matters covered in earlier filings), in any
document filed by or on behalf of the Company with any
regulatory authority in Canada or elsewhere, including,
without limitation, any annual report, financial statements,
material change report, press release or management proxy
circular or in any document so filed or released by the
Company to the public;
(h) the Board of Directors shall not have withdrawn any
recommendation made by it that Shareholders accept the Offer
or issued a recommendation in a manner that has substantially
the same effect;
(i) at the Expiry Time, all representations and warranties of the
Company in this Agreement: (A) that are qualified by a
reference to Material Adverse Effect shall be true and correct
in all respects; and (B) that are not qualified by a reference
to a Material Adverse Effect shall be true and correct in all
respects unless the failure to be true or correct has not had
or would not reasonably be expected to have a Material Adverse
Effect (and, for this purpose, any reference to "material" or
other concepts of materiality in such representations and
warranties shall be ignored);
(j) at the Expiry Time, all representations and warranties of the
Locked-up Shareholder in the Lock-up Agreement: (A) that are
qualified by a reference to materiality shall be true and
correct in all respects; and (B) that are not qualified
- 3 -
by a reference to materiality shall be true and correct in all
respects unless the failure to be true or correct has not had
or would not reasonably be expected to have a material adverse
effect;
(k) the Support Agreement shall not have been terminated;
(l) the Lock-up Agreement shall not have been terminated;
(m) there shall not have occurred, developed or come into effect
or existence any event, action, state, condition, terrorist
event, war or financial occurrence of national or
international consequence or any Law, action, inquiry or other
occurrence of any nature whatsoever which adversely affects,
or may adversely affect, the financial markets in Canada or
the United States generally, or which materially adversely
affects, or would reasonably be expected to materially
adversely affect, the Company and its Subsidiaries (on a
consolidated basis);
(n) all outstanding options or other rights (except for rights
pursuant to the Convertible Debentures and the Options) or
entitlements granted to purchase or otherwise acquire
authorized and unissued Shares shall have been exercised in
full, or irrevocably released, terminated, surrendered or
waived or otherwise dealt with by the holders thereof on terms
and conditions satisfactory to the Offeror, in its sole
discretion;
(o) neither the Company nor the Offeror shall have received any
notice (written or oral) from any Governmental Authority
indicating that any School's license, permit, accreditation,
approval or registration pursuant to (A) applicable vocational
and/or career training legislation or (B) the federal or
provincial Canada student loan program, will be suspended or
revoked;
(p) the Company shall have observed and performed its covenants in
the Agreement in all material respects to the extent that such
covenants were to have been observed or performed by the
Company at or prior to the Expiry Time; and
(q) the Offeror shall have received, not more than seven hours
before the Expiry Time, a certificate of the Company, signed
by two senior officers, to the effect that to the best of
their knowledge, information and belief, after due inquiry,
(i) the representations and warranties of the Company in this
Agreement are true and correct in all respects if qualified by
a reference to Material Adverse Effect and if not qualified by
a reference to Material Adverse Effect, are true and correct
in all respects unless the failure to be true and correct has
not had or would not reasonably be expected to have a Material
Adverse Effect (and, for this purpose, any reference to
"material" or other concepts of materiality in such
representations and warranties shall be ignored) as at the
Expiry Time; and (ii) all of the covenants and obligations of
the Company under the Support Agreement have been performed or
complied with in all material respects.
The foregoing conditions are for the exclusive benefit of the Offeror and may be
asserted by the Offeror regardless of the circumstances giving rise to any such
condition. The Offeror may, in the Offeror's sole discretion, waive any of the
foregoing conditions, in whole or in part, at any
- 4 -
time and from time to time, both before and after the Expiry Time, without
prejudice to any other rights which the Offeror may have. The failure by the
Offeror at any time to exercise any of the foregoing rights will not be deemed
to be a waiver of any such right and each such right shall be deemed to be an
ongoing right which may be assessed at any time and from time to time.
SCHEDULE C
The Offer shall permit a Shareholder who holds Common Shares indirectly through
a holding company ("Holdco") to accept the Offer by depositing all of the shares
of the Holdco to the Offer for a consideration equal to the consideration such
Shareholder would have been entitled to receive had the Common Shares owned by
such Holdco been deposited directly under the Offer, provided that the Holdco
Alternative will only be available if the following terms and conditions are
satisfied:
- the Holdco is resident in Canada and is a taxable Canadian
corporation for purposes of the Income Tax Act (Canada);
- the Holdco is a single purpose corporation that has no active
business, has not held and does not hold any assets other than
Shares and has no liabilities whatsoever (other than
immaterial liabilities not in excess of $5,000 for which full
cash provision has been made);
- the Holdco has been incorporated under the laws of the
Province of Ontario on or after December 30, 2002;
- the conditions to the Offer shall have been satisfied or
waived;
- the Holdco shall have been the legal and beneficial owner of
the Shares on or before April 1, 2003, or such later date as
the Offeror may determine, in its sole discretion;
- the Shareholder must advise the Depositary of its intention to
participate in the Holdco Alternative, in writing, no later
than 10 business days prior to the initial Expiry Time, and
must enter into a share purchase agreement (a "SHARE PURCHASE
AGREEMENT") no later than 5 business days prior to the initial
Expiry Time in a form satisfactory to the Offeror pursuant to
which such Shareholder shall provide the Offeror with
representations, warranties and covenants providing
comprehensive protection to the Offeror in respect of the
period prior to closing including a representation and
warranty that Holdco has no assets other than the Shares and
has no liabilities whatsoever (other than immaterial
liabilities not in excess of $5,000 for which full cash
provision has been made), and containing the requirement for
the seller of the Holdco Shares (the "Holdco Seller") to
arrange for the provision of a legal opinion satisfactory to
the Offeror, acting reasonably, in connection with the
purchase and sale of such Holdco Shares. The Share Purchase
Agreement will also include a comprehensive indemnity in
favour of the Offeror from the Holdco Seller and the ultimate
principal investor of the Holdco Seller in respect of breaches
of representations and warranties and any liabilities of
Holdco relating to any matter occurring on or before, or
relating to a time before, the Expiry Time and will require
the Holdco Seller to pay the Offeror's out-of-pocket expenses
incurred in connection with its diligence and any other costs
in relation to the election of the Holdco Alternative by the
Holdco Seller to a maximum of $25,000. Failure of a
Shareholder to properly notify the Depository of its intention
to participate in the Holdco
- 2 -
Alternative or to properly enter into a Share Purchase
Agreement within the time deadlines set forth above will
disentitle such Shareholder to participate in the Holdco
Alternative;
- access to all of the Books and Records of Holdco have been
provided on or before 8 business days prior to the initial
Expiry Time and the Offeror and its counsel shall have
completed due diligence regarding the business and affairs of
Holdco to ensure that Holdco is capable of providing the
representations and warranties and performing the covenants to
be contained in the Share Purchase Agreement above with
results satisfactory to the Offeror, acting reasonably;
- where there is more than one shareholder of Holdco, all such
shareholders shall have elected to avail themselves of the
Holdco Alternative with respect to all of their Holdco Shares;
and
- the Offeror determines, in its sole discretion, that the
purchase of the Holdco Shares would not have a material
adverse consequence (whether tax or otherwise) to the Offeror.
The purchase and sale of the Holdco Shares will be executed in escrow no more
than two business days prior to the Expiry Time and become effective at the time
at which the Offeror takes up and pays for all of the Shares deposited under the
Offer. Offeror will pay for the Holdco Shares as soon as practicable, and in any
event, no more than three business days following the take-up of the Shares.
