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Title: |
Preferred Stock Purchase Agreement |
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Entities: |
Legg Mason Wood Walker, Inc.; Strayer Education, Inc.; Nasdaq Stock Market Inc.; Wachtell, Lipton, Rosen & Katz |
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Date: |
2000 |
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Size: |
Preview shows 20KB of 176KB total |
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Price: |
$57 |
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ID: |
#860188 |
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PREFERRED STOCK PURCHASE AGREEMENT
by and among
STRAYER EDUCATION, INC.,
NEW MOUNTAIN PARTNERS, L.P.
and
DB CAPITAL INVESTORS, L.P.
Dated: November 28, 2000
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE 1 DEFINITIONS................................................................1
1.1 Definitions................................................................1
ARTICLE 2 PURCHASE AND SALE OF SERIES A PREFERRED STOCK..............................9
2.1 Purchase and Sale of Series A Preferred Stock..............................9
2.2 Articles Supplementary.....................................................9
2.3 Escrow Arrangements; Closing...............................................9
2.4 Use of Proceeds...........................................................11
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.............................11
3.1 Corporate Existence and Power.............................................11
3.2 Subsidiaries..............................................................12
3.3 Corporate Authorization; No Contravention.................................12
3.4 Governmental Authorization; Third Party Consents..........................13
3.5 Binding Effect............................................................13
3.6 Capitalization of the Company and its Subsidiaries........................13
3.7 SEC Filings; Financial Statements.........................................14
3.8 Absence of Certain Developments...........................................14
3.9 No Undisclosed Liabilities................................................15
3.10 Compliance with Laws......................................................15
3.11 Litigation................................................................18
3.12 Material Contracts........................................................18
3.13 Environmental.............................................................19
3.14 Taxes.....................................................................19
3.15 Title to Property and Assets; Leases......................................19
3.16 Compliance with ERISA.....................................................20
3.17 Certain Payments..........................................................21
3.18 Insurance.................................................................21
3.19 Accounting................................................................21
3.20 Intellectual Property.....................................................21
3.21 Affiliate Transactions....................................................22
3.22 Investment Company Act....................................................22
3.23 Private Offering..........................................................22
3.24 Board Approval; Stockholder Approval......................................22
3.25 Series A Preferred Stock..................................................23
3.26 No Brokers or Finders.....................................................23
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS..........................23
4.1 Existence and Power.......................................................23
</TABLE>
-ii-
<PAGE> 3
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
4.2 Authorization; No Contravention...........................................24
4.3 Governmental Authorization; Third Party Consents..........................24
4.4 Binding Effect............................................................24
4.5 Purchase for Own Account, Etc.............................................24
4.6 No Brokers or Finders.....................................................25
4.7 Sufficient Funds..........................................................25
4.8 Litigation................................................................25
ARTICLE 5 COVENANTS OF THE COMPANY..................................................25
5.1 Conduct of Business.......................................................25
5.2 No Solicitation...........................................................28
5.3 Regulatory Approval.......................................................29
5.4 Board of Directors and Management.........................................30
5.5 Access....................................................................30
5.6 Employee Benefits Matters.................................................31
5.7 Leases....................................................................31
5.8 Legends...................................................................32
5.9 Valuation.................................................................32
ARTICLE 6 STOCKHOLDERS MEETING; TENDER OFFER........................................32
6.1 Preparation of Information Statement; Stockholders Meeting................32
6.2 Tender Offer..............................................................33
ARTICLE 7 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE PURCHASERS TO FUND
AND CLOSE...............................................................34
7.1 Conditions to Funding.....................................................34
7.1.1 Representations and Covenants.............................................34
7.1.2 Opinion of Counsel to the Company.........................................34
7.1.3 No Actions................................................................34
7.1.4 Stockholder Approval......................................................34
7.1.5 No Material Adverse Effect................................................34
7.1.6 Consents..................................................................35
7.1.7 NASDAQ Listing............................................................35
7.1.8 DOE Action................................................................35
7.2 Conditions to Closing.....................................................35
7.2.1 Opinion of Counsel to the Company.........................................35
7.2.2 No Actions................................................................35
7.2.3 DOE Action................................................................35
7.2.4 NASDAQ Listing............................................................36
7.2.5 Completion of the Offer...................................................36
7.2.6 Company Agreements........................................................36
7.2.7 Consents..................................................................36
ARTICLE 8 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO FUND
AND TO CLOSE............................................................36
8.1 Conditions to Funding.....................................................36
8.1.1 Representations and Covenants.............................................36
</TABLE>
-iii-
<PAGE> 4
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
8.1.2 No Actions................................................................36
8.1.3 Stockholder Approval......................................................37
8.1.4 Consents..................................................................37
8.1.5 DOE Action................................................................37
8.2 Conditions to Closing.....................................................37
8.2.1 No Actions................................................................37
8.2.2 DOE Action................................................................37
8.2.3 Completion of the Offer...................................................37
8.2.4 Consents..................................................................37
8.2.5 Participation by all Purchasers...........................................38
ARTICLE 9 REGISTRATION RIGHTS; PREEMPTIVE RIGHTS; OTHER AGREEMENTS OF THE COMPANY...38
9.1 Registration Rights.......................................................38
9.2 Other Registration Rights.................................................38
9.3 Preemptive Rights.........................................................38
9.4 Rule 144..................................................................39
9.5 Availability of Common Stock..............................................39
9.6 No Rights Plan............................................................39
9.7 Regular Quarterly Dividends...............................................39
ARTICLE 10 TERMINATION OF AGREEMENT..................................................40
10.1 Termination...............................................................40
10.2 Survival after Termination................................................41
10.3 Termination Fee...........................................................42
ARTICLE 11 INDEMNIFICATION...........................................................42
11.1 Indemnification...........................................................42
11.2 Terms of Indemnification..................................................43
ARTICLE 12 MISCELLANEOUS.............................................................43
12.1 Survival..................................................................43
12.2 Fees and Expenses.........................................................44
12.3 Notices...................................................................44
12.4 Successors and Assigns....................................................45
12.5 Amendment and Waiver......................................................46
12.6 Counterparts..............................................................46
12.7 Headings..................................................................46
12.8 Governing Law; Exclusive Jurisdiction.....................................46
12.9 Severability..............................................................46
12.10 Entire Agreement..........................................................47
12.11 Further Assurances........................................................47
12.12 Public Announcements......................................................47
12.13 Specific Performance......................................................47
12.14 Subsidiaries..............................................................47
</TABLE>
-iv-
<PAGE> 5
EXHIBIT A Allocation Notice
EXHIBIT B Form of Articles of Amendment
EXHIBIT C Form of Articles Supplementary
EXHIBIT D Form of Escrow Agreement
EXHIBIT E Form of Resolution
EXHIBIT F Composition of the Board of Directors and Management of the
Company
EXHIBIT G Conditions to the Offer
EXHIBIT H Form of Hogan & Hartson Opinion
EXHIBIT I Form of Registration Rights Agreement
-v-
<PAGE> 6
PREFERRED STOCK PURCHASE AGREEMENT
PREFERRED STOCK PURCHASE AGREEMENT, dated as of November 28, 2000 (as
the same may be amended, supplemented or modified in accordance with the terms
hereof, this "Agreement"), by and among Strayer Education, Inc., a Maryland
corporation (the "Company"), and New Mountain Partners, L.P. and DB Capital
Investors, L.P. (the "Purchasers").
WHEREAS, the Company proposes to issue and sell to the Purchasers, and
the Purchasers propose to buy, for an aggregate purchase price of $150.0
million, 5,769,231 shares of Series A Convertible Preferred Stock, par value
$.01 per share (the "Series A Preferred Stock");
WHEREAS, it is a condition to the willingness of the Purchasers to
execute and deliver this Agreement that the Company, the Purchasers and certain
stockholders of the Company execute and deliver the Support and Option Agreement
(as defined below);
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms shall have the meanings set
forth below:
"Accrediting Body" means any entity or organization, whether
governmental, government-chartered, private or quasi-private, which engages in
the granting or withholding of accreditation of private post-secondary schools
or of educational programs provided by such schools in accordance with standards
and requirements relating to the performance, operations, financial condition or
academic standards of such schools including, without limitation, Middle States.
"Acquisition Proposal" has the meaning assigned to such term in Section
5.2.
"Actions" means actions, causes of action, suits, claims, complaints,
demands, litigations or legal, administrative or arbitral proceedings.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
<PAGE> 7
"Agreement" has the meaning assigned to such term in the Preamble.
"Allocation Notice" means a notice in writing of the names in which to
register the Series A Preferred Stock to be purchased at the Closing (which
shall be the names of one or more of the Purchasers or their nominees) and the
number of shares of Series A Preferred Stock to be purchased by each Purchaser
or such nominee. The Allocation Notice as of the date hereof is attached hereto
as Exhibit A, provided that such Allocation Notice may be revised pursuant to
Section 2.3(c).
"Alternative Transaction Notice" has the meaning assigned to such term
in Section 10.1(a)(iv).
"Antitakeover Laws" has the meaning assigned to such term in Section
3.24(b).
"Application" has the meaning assigned to such term in Section 5.3(b).
"Articles of Amendment" means the Articles of Amendment to the Charter
of the Company, in the form attached hereto as Exhibit B, which shall, among
other things, increase the number of authorized shares of Preferred Stock to
8,000,000 shares, shall permit the board to increase the authorized number of
shares of Common Stock to ensure that there are a sufficient number of shares of
Common Stock outstanding to allow for the conversion of the Series A Preferred
Stock, and shall implement the preemptive rights described in Section 9.3.
"Articles Supplementary" means the Articles Supplementary classifying
and designating the Series A Preferred Stock, substantially in the form attached
hereto as Exhibit C.
"Board of Directors" means either the board of directors of the Company
or any duly authorized committee thereof.
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