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Rule 10B5-1, 10B-18 Stock Repurchase Agreement

This is an actual contract by Duckwall Alco Stores.
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Sectors: Retail
Governing Law: New York, View New York State Laws
Effective Date: September 28, 2005
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THIS RULE 10B5-1 AND 10B-18 STOCK REPURCHASE AGREEMENT dated September 28, 2005 (the "Agreement") is between Duckwall-ALCO Stores, Inc. (the "Company") and Jefferies & Co., Inc. ("Broker").


WHEREAS, the Board of Directors of the Company has authorized the repurchase of up to 120,894 shares (the "Shares") of the Company's common stock, $.0001 par value ("Common Stock"); and

WHEREAS, the Company desires to repurchase the Shares in accordance with this Agreement and in conformity with the provisions of the Securities Exchange Act of 1934, as amended ("Exchange Act") and Rule 10b5-1 promulgated under the Exchange Act ("Rule 10b5-1") and Rule 10b-18 promulgated under the Exchange Act ("Rule 10b-18"); and

WHEREAS, Broker is willing to purchase the Shares for the Company in accordance with this Agreement;

NOW, THEREFORE, the Company and Broker hereby agree as follows:

1. Appointment. The Company hereby appoints Broker to purchase Shares on the terms and conditions set forth herein. Subject to such terms and conditions, Broker hereby accepts such appointment.

2. Share Purchases. Beginning on the Commencement Date (as defined in Section 3 below), Broker shall purchase Shares for the Company's account in compliance with the terms and conditions of this Agreement. The total amount of Shares that may be purchased under this Agreement shall not exceed 50,000 Shares and the Broker may not spend more than $1,250,000.00 in purchasing Shares under this Agreement. Broker shall use reasonable efforts to purchase the Shares at or below the then prevailing market price. In making such purchases, Broker shall comply with the following guidelines:

i. Orders to purchase hereunder are given on a "not held" basis.

ii. Subject to Rule 10b-18(b)(2) and the restrictions set forth in this
Agreement, Broker during the term of this Agreement shall use its best
efforts to purchase, or cause to be purchased, the Shares on each day
on or after the Commencement Date that trading takes place on the
Nasdaq Stock Market (a "Trading Day").

iii. Subject to Rule 10b-18(b)(3), Broker shall make its purchases at or
below the then prevailing market price.

3. Term of the Agreement; Termination/Suspension.

(a) Broker is authorized to commence purchasing Shares after September 28, 2005 (the "Commencement Date"), and shall cease purchasing on the earliest to occur of: (i) the close of trading on December 15, 2005; (ii) the date that the aggregate purchases under this Agreement reach a total of 50,000 shares; or (iii) the date notice of the termination of the Agreement is received as provided in Section 3(a)(iii)(A)-(B), or a public announcement is made as provided in Section 3(a)(iii)(C), as follows:

(A) The Company or Broker may terminate this Agreement by giving
written notice at least 24 hours in advance by facsimile or email of such
termination to the other party in accordance with Section 10 below;

(B) This Agreement may be suspended, or at Broker's option and upon
written notice to the Company, terminated upon the Company's failure to
forward funds in accordance with Section 10 of this Agreement. If Broker
determines to suspend or terminate this Agreement pursuant to this
subsection (B), it shall promptly notify the Company of such determination
by facsimile or a nationally recognized overnight courier service.

(C) This Agreement will terminate on the date the Company or any other
person announces a tender or exchange offer with respect to the Shares or
other securities of the Company; the date of a public announcement of a
merger, acquisition, recapitalization, reorganization, or comparable
transaction in which the Shares or other securities of the Company will be
exchanged for other securities; or the date of the announcement of the
voluntary or involuntary liquidation, bankruptcy, insolvency, or
nationalization of, or any analogous proceeding affecting, the Company.

(b) Any termination of this Agreement pursuant to subsection (a)(i), (a)(ii), or (a)(iii)(A) or (C) above would require the Company and Broker to enter into a new arrangement prior to recommencing repurchases of Shares. If Broker suspends purchases of Shares pursuant to subsection 3(a)(iii)(B) above or Section 9 below, Broker may resume purchases of Shares pursuant to this Agreement when it determines that conditions leading to the suspension no longer exist and/or will not have a material adverse impact on repurchases of Shares pursuant to this Agreement.

4. Modification of the Agreement. This Agreement, including any Addendum hereto, may be modified by the Company provided that (a) such modification is made in accordance with Section 13 hereof, in good faith and not as part of a plan or scheme to evade prohibitions of Rule 10b-5 of the Exchange Act and (b) the Company is not in possession of material non-public information about it or its securities.

5. Company Representations and Warranties. The Company represents and warrants:

(a) that the purchase of the shares of Shares pursuant to this Agreement:

(i) has been duly authorized by all necessary corporate action;

(ii) is consistent with the Company's publicly announced stock
repurchase program; and

(iii) will not contravene any provision of its certificate of
incorporation or by-laws, or to its knowledge, any law, regulation or
contractual restriction binding on it or its assets.

(b) This Agreement or any amendment thereto is established in good faith
compliance with the requirements of Rule 10b5-1 at a time when it was
not in possession of material, non-public information.

6. Covenants.

(a) The Company will request any modification to this Agreement in
accordance with this Agreement and in good faith compliance with the
requirements of Rule 10b5-1 at a time when the Company is not in
possession of material, non-public information.

(b) The Company will notify Broker at the number or address set forth in
Section 10 of this Agreement, as soon as practicable upon the
occurrence of any event that would prohibit any repurchase of Shares
under this Agreement, including, but not limited to, the commencement
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