Exhibit 1.1
ARGOSY EDUCATION GROUP, INC.
______ Shares
Class A Common Stock
($0.01 par value)
Underwriting Agreement
New York, New York
_________ ___, 1999
Xxxxxxx Xxxxx Xxxxxx Inc.
ABN AMRO Incorporated
As Representatives of the several Underwriters,
c/o Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Argosy Education Group, Inc., an Illinois corporation (the "Company"),
proposes to sell to the several underwriters named in Schedule I hereto (the
"Underwriters"), for whom you (the "Representatives") are acting as
representatives, ____________ shares of Class A Common Stock, $0.01 par value,
of the Company ("Class A Common Stock and, collectively with the Class B Common
Stock, $0.01 par value, of the Company the "Common Stock") (said shares of Class
A Common Stock to be issued and sold by the Company being hereinafter called the
"Underwritten Securities"). Xxxxxxx X. Xxxxxxxxx, the Chairman of the Company,
(the "Selling Stockholder") proposes to grant to the Underwriters an option to
purchase up to ___________ additional shares of Class A Common Stock to cover
over-allotments (the "Option Securities"; the Option Securities, together with
the Underwritten Securities, being hereinafter called the "Securities"). To the
extent there are no additional Underwriters listed on Schedule I other than you,
the term Representatives as used herein shall mean you, as Underwriters, and the
terms Representatives and Underwriters shall mean either the singular or plural
as the context requires. Certain terms used herein are defined in Section 19
hereof.
1. Representations and Warranties. The Company represents and warrants
to, and agrees with, each Underwriter as set forth below in this Section 1.
(a) The Company has prepared and filed with the Commission a
registration statement (file number ___________) on Form S-1, including a
related preliminary prospectus, for the registration under the Act of the
offering and sale of the Securities.
The Company may have filed one or more amendments thereto, including a
related preliminary prospectus, each of which has previously been furnished
to the Representatives. The Company will next file with the Commission
either (1) prior to the Effective Date of such registration statement, a
further amendment to such registration statement (including the form of
final prospectus) or (2) after the Effective Date of such registration
statement, a final prospectus in accordance with Rules 430A and 424(b). In
the case of clause (2), the Company has included in such registration
statement, as amended at the Effective Date, all information (other than
Rule 430A Information) required by the Act and the rules thereunder to be
included in such registration statement and the Prospectus. As filed, such
amendment and form of final prospectus, or such final prospectus, shall
contain all Rule 430A Information, together with all other such required
information, and, except to the extent the Representatives shall agree in
writing to a modification, shall be in all substantive respects in the form
furnished to the Representatives prior to the Execution Time or, to the
extent not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that contained in
the latest Preliminary Prospectus) as the Company has advised the
Representatives, prior to the Execution Time, will be included or made
therein.
(b) On the Effective Date, the Registration Statement did or will,
and when the Prospectus is first filed (if required) in accordance with
Rule 424(b) and on the Closing Date (as defined herein) and on any date on
which Option Securities are purchased, if such date is not the Closing Date
(a "settlement date"), the Prospectus (and any supple ments thereto) will,
comply in all material respects with the applicable requirements of the Act
and the rules thereunder; on the Effective Date and at the Execution Time,
the Registration Statement did not or will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, the Prospectus, if not filed
pursuant to Rule 424(b), will not, and on the date of any filing pursuant
to Rule 424(b) and on the Closing Date and any settlement date, the
Prospectus (together with any supplement thereto) will not, include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to the
information contained in or omitted from the Registration Statement or the
Prospectus (or any supplement thereto) in reliance upon and in conformity
with information furnished herein or in writing to the Company by or on
behalf of any Underwriter through the Representatives specifically for
inclusion in the Registration Statement or the Prospectus (or any
supplement thereto).
(c) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Illinois with
full corporate power and authority to own or lease, as the case may be, and
to operate its properties and conduct its business as described in the
Prospectus, and is duly qualified to do business as a foreign corporation
and is in good standing under the laws of each jurisdiction which requires
such qualification, except in each case such as would not, individually or
in the aggregate, have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties of
the Company and the Subsidiaries, taken as
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a whole, whether or not arising from transactions in the ordinary course of
business, except as set forth or contemplated in the Prospectus (exclusive
of any supplement thereto) (a "Material Adverse Effect").
(d) All of the Company's subsidiaries (as defined in the Act) are
listed in an exhibit to the Registration Statement and are referred to
herein individually as a "Subsidiary" and collectively as the
"Subsidiaries". Each Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized with full corporate
power and authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Prospectus, and is
duly qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification, except, in each case, such as would not, individually or in
the aggregate, have a Material Adverse Effect.
(e) All the outstanding shares of capital stock of each Subsidiary
have been duly and validly authorized and issued and are fully paid and
nonassessable; except as otherwise set forth in the Prospectus, all
outstanding shares of capital stock of the Subsidiaries other than
PrimeTech are owned by the Company, either directly or through wholly owned
subsidiaries, free and clear of any perfected security interest or any
other security interests, claims, liens or encumbrances.
(f) The Company's authorized equity capitalization is as set forth in
the Prospectus under the heading "Capitalization;" the capital stock of the
Company conforms in all material respects to the description thereof
contained in the Prospectus under the heading "Description of Capital
Stock;" the outstanding shares of Common Stock have been duly and validly
authorized and issued and are fully paid and nonassessable; the Securities
have been duly and validly authorized, and, when issued and delivered to
and paid for by the Underwriters pursuant to this Agreement, will be fully
paid and nonassessable; the Securities are duly listed, and admitted and
authorized for trading, subject to official notice of issuance, on the
Nasdaq National Market; the certificates for the Securities are in valid
and sufficient form; the holders of outstanding shares of capital stock of
the Company are not entitled to preemptive or other rights to subscribe for
the Securities; and, except as set forth in the Prospectus, no options,
warrants or other rights to purchase, agreements or other obligations to
issue, or rights to convert any obligations into or exchange any securities
for, shares of capital stock of or ownership interests in the Company are
outstanding.
(g) There is no franchise, contract or other document of a character
required to be described in the Registration Statement or Prospectus, or to
be filed as an exhibit thereto, which is not described or filed as
required.
(h) This Agreement and the agreements, documents or instruments
entered into by the Company in connection with the transactions described
in the Prospectus under the caption "The Company" have been duly
authorized, executed and delivered by the Company and constitute valid and
binding obligations of the Company enforceable in accordance with their
terms, except to the extent that (i) enforceability may be limited
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by bankruptcy, insolvency, reorganization, receivership, moratorium or
other similar laws relating to creditors' rights generally and by general
principles of equity, whether applied by a court of law or equity, and (ii)
rights to indemnity and contribution may be limited by federal or state
securities laws or policies underlying such laws.
(i) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as defined
in the Investment Company Act of 1940, as amended.
(j) Except as described in the Prospectus, no consent, approval,
authorization, filing with or order of any court, regulatory body,
administrative agency, accrediting agency or other governmental agency or
body is required in connection with the transactions contemplated herein or
the transactions described in the Prospectus under the caption "The
Company," except such as have been obtained under the Act and such as may
be required under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the Underwriters in the
manner contemplated herein and in the Prospectus.
(k) Neither the issue and sale of the Securities nor the consummation
of any other of the transactions herein contemplated or described in the
Prospectus under the caption "The Company" nor the fulfillment of the terms
hereof or the transactions described in the Prospectus under the caption
"The Company" will conflict with, result in a breach or violation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company or any of the Subsidiaries pursuant to (i) the charter or
by-laws of the Company or any of the Subsidiaries, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument
to which the Company or any of the Subsidiaries is a party or bound or to
which its or their property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or any of
the Subsidiaries of any court, regulatory body, administrative agency,
accrediting agency, governmental agency or body, arbitrator or other
authority having jurisdiction over the Company or any of the Subsidiaries
or any of its or their properties, including, without limitation, The
Higher Education Act of 1965, as amended, and the regulations promulgated
thereunder (the "HEA"), except to the extent that (i) enforceability may
be limited by bankruptcy, insolvency, reorganization, receivership,
moratorium or other similar laws relating to creditors' rights generally
and by general principles of equity, whether applied by a court of law or
equity, and (ii) rights to indemnity and contribution may be limited by
federal or state securities laws or policies underlying such laws.
(l) The issuance and sale of the Securities or the consummation of
the other transactions contemplated herein or described in the Prospectus
under the caption "The Company" will not require a review of the
accreditation of any of the Company's schools or institutions by any
accrediting agency (including, without limitation, the American
Psychological Association), reauthorization, relicensure or recertification
of any of the Company's schools by any state regulatory agency or
recertification of the Company or any of its schools by the U.S. Department
of Education. The issuance and sale of the
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Securities or the consummation of the other transactions contemplated by
this Agreement or described in the Prospectus under the caption "The
Company" will not constitute a "change of control" of the Company as
defined in the HEA.
(m) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
(n) The consolidated historical financial statements of the Company
and its consolidated subsidiaries included in the Prospectus present fairly
in all material respects the financial condition, results of operations and
cash flows of the entities covered as of the dates and for the periods
indicated, comply as to form with the applicable accounting requirements of
the Act and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved (except as otherwise noted therein). The selected financial data
set forth under the caption "Selected Historical Financial and Other Data"
in the Prospectus present fairly, on the basis stated in the Prospectus,
the information included therein. The pro forma financial statements
included in the Prospectus present fairly the information shown therein,
have been prepared in accordance with the Commission's rules and guidelines
with respect to pro forma financial information (including Article 11 of
Regulation S-X) and have been properly computed on the basis described
therein; in the opinion of the Company, the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein, and all adjustments necessary for a fair presentation of results
for such periods have been made.
(o) No action, suit or proceeding by or before any court or
governmental agency, authority or body (including, without limitation, the
U.S. Department of Education) or any arbitrator involving the Company or
any of the Subsidiaries or its or their property is pending or, to the best
knowledge of the Company, threatened that (i) could reasonably be expected
to have a material adverse effect on the performance of this Agreement or
the consummation of any of the transactions contemplated hereby or
described in the Prospectus under the caption "The Company" or (ii) could
reasonably be expected to have a Material Adverse Effect.
(p) Each of the Company and each of the Subsidiaries owns or leases
all such properties as are necessary to the conduct of its operations as
presently conducted.
(q) Neither the Company nor any Subsidiary is in violation or default
of (i) any provision of its charter or bylaws, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument
to which it is a party or bound or to which its property is subject, or
(iii) any statute, law, rule, regulation, judgment, order or decree of any
court, regulatory body, administrative agency, accrediting agency or body,
governmental body (including, without limitation, the U.S. Department of
Education), arbitrator or other authority having jurisdiction over the
Company or such Subsidiary or any of its properties, as applicable which
could reasonably be expected to have a Material Adverse Effect.
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(r) Xxxxxx Xxxxxxxx LLP, who has certified certain financial
statements of the Company and its consolidated subsidiaries and delivered
their report with respect to the audited consolidated financial statements
and schedules included in the Prospectus, are independent public
accountants with respect to the Company within the meaning of the Act and
the applicable published rules and regulations thereunder.
(s) There are no transfer taxes or other similar fees or charges
under federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and delivery
of this Agreement or the issuance by the Company or sale by the Company of
the Securities.
(t) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not reasonably be
expected to have a Material Adverse Effect) and has paid all taxes required
to be paid by it and any other assessment, fine or penalty levied against
it, to the extent that any of the foregoing is due and payable, except for
any such assessment, fine or penalty that is currently being contested in
good faith or as would not have a Material Adverse Effect.
(u) No labor problem or dispute with the employees of the Company or
any of the Subsidiaries exist or is threatened or imminent, and the Company
is not aware of any existing or imminent labor disturbance by the employees
of any of its or its Subsidiaries' principal suppliers, contractors or
customers, except such as would not reasonably be expected to have a
Material Adverse Effect.
(v) The Company and its Subsidiaries carry or are entitled to the
benefits of insurance in such amounts and covering such risks as the
Company believes are generally maintained by companies of established
repute engaged in the same or similar business, and all such insurance is
in full force and effect.
(w) No Subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such Subsidiary's capital stock, from repaying to the
Company any loans or advances to such Subsidiary from the Company or from
transferring any of such Subsidiary's property or assets to the Company or
any other subsidiary of the Company, except as described in or contemplated
by the Prospectus.
(x) Except as disclosed in the Prospectus, the Company and the
Subsidiaries possess all accreditations, approvals, licenses, certificates,
permits and other authorizations issued by the appropriate accrediting
bodies and federal, state and foreign regulatory authorities, including,
without limitations, all authorizations required for participation in
federal aid programs under Title IV of the HEA ("Title IV Programs"),
necessary to conduct their respective businesses (collectively,
"Licenses"), and neither the Company nor any such Subsidiary has received
any notice of proceedings, investigations or inquiries (or has knowledge of
any facts that the Company believes would form a reasonable basis for any
proceedings, investigations or inquiries) relating to the revocation or
modification of any License which, singly or in the aggregate, if the
subject of an unfavorable decision,
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ruling or finding, could reasonably be expected to have a Material Adverse
Effect. Except as described in the Prospectus, the Company and the
Subsidiaries are duly qualified under and in full compliance with all laws
and regulations applicable to student financial aid programs in each
jurisdiction in which such entity participates in student financial aid
programs, with such exceptions as would not have a Material Adverse Effect;
and no proceedings for the suspension, limitation or termination of any
such entity's participation in any financial aid programs have been
initiated or, to the Company's knowledge, threatened by any federal, state
or foreign regulatory agency. Except as described in the Prospectus, each
of the Company and the Subsidiaries (including any individual institution
within any such entity) meets all applicable fiscal tests and/or bonding
requirements imposed by state regulatory authorities. The Company and the
Subsidiaries possess the accreditations set forth in the Prospectus and are
licensed by each state in which they conduct business to operate schools
and to grant degrees, diplomas and certificates to students in the
respective jurisdiction of each such licensing agency; and to the best of
the Company's knowledge after due inquiry, there is no threatened review,
suspension, revocation or termination of such accreditations or licenses.
(y) The Company and its Subsidiaries maintain a system of internal
accounting controls sufficient in all material respects for purposes of the
prevention or detection of errors or irregularities in amounts that could
be expected to be material to the Company's consolidated financial
statements and the recording of transactions so as to permit the
preparation of such consolidated financial statements in conformity with
generally accepted accounting principles.
(z) The Company has not taken, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(aa) The Company and the Subsidiaries are (i) in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received and are in compliance with all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) have
not received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants, except where such
non-compliance with Environmental Laws, failure to receive required
permits, licenses or other approvals, or liability would not, individually
or in the aggregate, have a Material Adverse Effect. Neither the Company
nor any of the Subsidiaries has been named as a "potentially responsible
party" under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended.
(bb) Each of the Company and each of the Subsidiaries has fulfilled
its obligations, if any, under the minimum funding standards of Xxxxxxx
000 xx xxx Xxxxxx Xxxxxx Employee Retirement Income Security Act of 1974
("ERISA") and the regulations and published interpretations thereunder with
respect to each "plan" (as defined in
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Section 3(3) of ERISA and such regulations and published interpretations)
in which employees of the Company and the Subsidiaries are eligible to
participate, and each such plan is in compliance in all material respects
with the presently applicable provisions of ERISA and such regulations and
published interpretations, except in each case such as would not,
individually or in the aggregate, have a Material Adverse Effect. The
Company and the Subsidiaries have not incurred any unpaid liability to the
Pension Benefit Guaranty Corporation (other than for the payment of
premiums in the ordinary course) or to any such plan under Title IV of
ERISA, except in each case such as would not, individually or in the
aggregate, have a Material Adverse Effect.
(cc) The Company and the Subsidiaries own, possess, license or have
other rights to use, on reasonable terms, all patents, patent applications,
trade and service marks, trade and service xxxx registrations, trade names,
copyrights, licenses, inventions, trade secrets, technology, know-how and
other intellectual property (collectively, the "Intellectual Property")
necessary for the conduct of the Company's business as now conducted or as
proposed in the Prospectus to be conducted. Except as set forth in the
Prospectus (a) to the Company's best knowledge, there are no rights of
third parties to any such Intellectual Property; (b) to the Company's best
knowledge, there is no material infringement by third parties of any such
Intellectual Property; (c) there is no pending or, to the Company's best
knowledge, threatened action, suit, proceeding or claim by others
challenging the Company's rights in or to any such Intellectual Property,
and the Company is unaware of any facts which would form a reasonable basis
for any such claim; (d) there is no pending or, to the Company's best
knowledge, threatened action, suit, proceeding or claim by others
challenging the validity or scope of any such Intellectual Property, and
the Company is unaware of any facts which would form a reasonable basis for
any such claim; and (e) to the Company's best knowledge, there is no
pending or, to the Company's knowledge, threatened action, suit, proceeding
or claim by others that the Company infringes or otherwise violates any
patent, trademark, copyright, trade secret or other proprietary rights of
others, and the Company is unaware of any other fact which would form a
reasonable basis for any such claim, except in each case such as would not,
individually or in the aggregate, have a Material Adverse Effect.
(dd) The Registration Statement includes the disclosure related to
the Commission's Interpretive Release No. 33-7558 dated July 29, 1998
related to Year 2000 compliance.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
2. Representations and Warranties of the Selling Stockholder. The
Selling Stockholder represents and warrants to each Underwriter that:
(a) The Selling Stockholder now has valid and unencumbered title to
all of the outstanding shares of capital stock of the Company, and on the
Closing Date and any settlement date pursuant to Section 4 hereof will
have, valid and unencumbered title to
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the Option Securities, in each case, free and clear of any perfected
security interest or any other security interests, claims, liens or
encumbrances, including, without limitation, any restriction on transfer.
(b) The Selling Stockholder now has, and on the Closing Date and any
settlement date pursuant to Section 4 hereof will have, full legal right,
power and authorization, and any approval required by law, to sell, assign,
transfer and deliver the Option Securities in the manner provided in this
Agreement, and upon delivery of and payment for the Option Securities
hereunder, the several Underwriters will acquire valid and unencumbered
title to the Option Securities free and clear of any perfected security
interest or any other security interests, claims, liens or encumbrances.
(c) This Agreement has been duly authorized, executed and delivered
by or on behalf of the Selling Stockholder and constitutes valid and
binding obligations of the Selling Stockholder enforceable against the
Selling Stockholder in accordance with its terms, except to the extent that
(i) enforceability may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws relating to
creditors' rights generally and by general principles of equity, whether
applied by a court of law or equity, and (ii) rights to indemnity and
contribution may be limited by federal or state securities laws or policies
underlying such laws.
(d) Neither the execution and delivery of this Agreement by the
Selling Stockholder nor the consummation of the transactions herein
contemplated by the Selling Stockholder requires any consent, approval,
authorization, filing with or order of any court, regulatory body,
administrative agency, accrediting agency or other governmental agency or
body except such as have been obtained under the Act and such as may be
required under the blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the Underwriters in the
manner contemplated hereby and in the Prospectus or conflicts or will
conflict with or constitutes or will constitute a breach of, or default
under, or violates or will violate, any agreement, indenture or other
instrument to which the Selling Stockholder is a party or by which the
Selling Stockholder is or may be bound or to which any of the Selling
Stockholder's property or assets is subject, or any statute, law, rule,
regulation, ruling, judgment, injunction, order or decree applicable to the
Selling Stockholder or to any property or assets of the Selling
Stockholder.
(e) The Selling Stockholder has not taken, directly or indirectly,
any action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities.
(f) On the Effective Date and at the Execution Time, the Registration
Statement did not or will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and on
the Effective Date, the Prospectus, if not filed pursuant to Rule 424(b),
will not, and on the date of any filing pursuant to Rule 424(b) and on the
Closing Date and any settlement date, the Prospectus (together with any
9
supplement thereto) will not, include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under with they were
made, not misleading; provided, however, that the Selling Stockholder makes
no representation or warranty as to the information contained in or omitted
from the Registration Statement or the Prospectus (or any supplement
thereto, in reliance upon and in conformity with information furnished
herein or in writing to the Company by or on behalf of any Underwriter
through the Representatives specifically for inclusion in the Registration
Statement or the Prospectus (or any supplement thereto).
3. Purchase and Sale. (a) Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
$_________ per share, the amount of the Underwritten Securities set forth
opposite such Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Selling Stockholder
hereby grants an option to the several Underwriters to purchase, severally
and not jointly, up to _________ Option Securities at the same purchase
price per share as the Underwriters shall pay for the Underwritten
Securities. Said option may be exercised only to cover over-allotments in
the sale of the Underwritten Securities by the Underwriters. Said option
may be exercised in whole or in part at any time (but not more than once)
on or before the 30th day after the date of the Prospectus upon written or
telegraphic notice by the Representatives to the Company and the Selling
Stockholder setting forth the number of shares of the Option Securities as
to which the several Underwriters are exercising the option and the
settlement date. Delivery of certificates for the shares of Option
Securities by the Selling Stockholder, and payment therefor to the Selling
Stockholder, shall be made as provided in Section 4 hereof. The number of
Option Securities to be purchased by each Underwriter shall be the same
percentage of the total number of shares of the Option Securities to be
purchased by the several Underwriters as such Underwriter is purchasing of
the Underwritten Securities, subject to such adjustments as the
Representatives in their absolute discretion shall make to eliminate any
fractional shares.
4. Delivery and Payment. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 3(b) hereof shall have been exercised on or before the third Business
Day prior to the Closing Date) shall be made at 10:00 AM, New York City time, on
_______, 1998, or at such time on such later date not more than three Business
Days after the foregoing date as the Representatives shall designate, which date
and time may be postponed by agreement between the Representatives and the
Company or as provided in Section 11 hereof (such date and time of delivery and
payment for the Securities being herein called the "Closing Date"). Delivery of
the Securities shall be made to the Representatives for the respective accounts
of the several Underwriters against payment by the several Underwriters through
the Representatives of the purchase price thereof to or upon the order of the
Company and, with respect to any Option Securities, the Selling Stockholder by
wire transfer payable in same-day funds to an account specified by the Company
and, with respect to any Option Securities, the Selling Stockholder.
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If the option provided for in Section 3(b) hereof is exercised after
the third Business Day prior to the Closing Date, the Selling Stockholder will
deliver the Option Securities (at the expense of the Selling Stockholder) to the
Representatives on the date specified by the Representatives (which shall be not
less than three nor more than seven Business Days after notice of exercise of
said option) for the respective accounts of the several Underwriters, against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Selling Stockholder by wire transfer
payable in same-day funds to an account specified by the Selling Stockholder.
If settlement for the Option Securities occurs after the Closing Date, the
Selling Stockholder will deliver to the Representatives on the settlement date
for the Option Securities, and the obligation of the Underwriters to purchase
the Option Securities shall be conditioned upon receipt of, supplemental
opinions, certificates and letters confirming as of such date the opinions,
certificates and letters delivered on the Closing Date pursuant to Section 8
hereof as the Representatives shall reasonably request.
5. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
6. Agreements. The Company agrees with the several Underwriters
that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering of
the Securities, the Company will not file any amendment of the Registration
Statement or supplement to the Prospectus or any Rule 462(b) Registration
Statement unless the Company has furnished the Representatives a copy for
the review of the Representatives prior to filing and will not file any
such proposed amendment or supplement to which the Representatives
reasonably object. Subject to the foregoing sentence, if the Registration
Statement has become or becomes effective pursuant to Rule 430A, or filing
of the Prospectus is otherwise required under Rule 424(b), the Company will
cause the Prospectus, properly completed, and any supplement thereto to be
filed with the Commission pursuant to the applicable paragraph of Rule
424(b) within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely filing. The Company
will promptly advise the Representatives (1) when the Registration
Statement, if not effective at the Execution Time, shall have become
effective, (2) when the Prospectus, and any supplement thereto, shall have
been filed (if required) with the Commission pursuant to Rule 424(b) or
when any Rule 462(b) Registration Statement shall have been filed with the
Commission, (3) when, prior to termination of the offering of the
Securities, any amendment to the Registration Statement shall have been
filed or become effective, (4) of any request by the Commission or its
staff for any amendment of the Registration Statement, or any Rule 462(b)
Registration Statement, or for any supplement to the Prospectus or for any
additional information, (5) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (6) of
the receipt by the Company of any notifica tion with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of
any such stop order or the
11
suspension of any such qualification and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Prospectus to comply with the
Act or the rules thereunder, the Company promptly will (1) notify the
Representatives of any such event; (2) prepare and file with the
Commission, subject to the second sentence of paragraph (a) of this Section
6, an amendment or supplement which will correct such statement or omis
sion or effect such compliance; and (3) supply any supplemented Prospectus
to the Representatives in such quantities as the Representatives may
reasonably request.
(c) As soon as practicable, but not later than the Availability Date
(as defined below), the Company will make generally available to its
security holders and to the Representatives an earnings statement or
statements of the Company and the Subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act. For the
purposes of the preceding sentence, "Availability Date" means the 45th day
after the end of the fourth fiscal quarter following the fiscal quarter
that includes the Effective Date, except that, if such fourth fiscal
quarter is the last quarter of the Company's fiscal year, "Availability
Date" means the 90th day after the end of such fourth fiscal quarter.
(d) The Company will furnish to the Representatives and counsel for
the Underwriters signed copies of the Registration Statement (including
exhibits thereto) and to each other Underwriter a copy of the Registration
Statement (without exhibits thereto) and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Act, as many
copies of each Preliminary Prospectus and the Prospectus and any supplement
thereto as the Representatives may reasonably request.
(e) The Company will arrange, if necessary, for the qualification of
the Securities for sale under the laws of such jurisdictions as the
Representatives may designate and will maintain such qualifications in
effect so long as required for the distribution of the Securities; provided
that in no event shall the Company be obligated to qualify to do business
in any jurisdiction where it is not now so qualified or to take any action
that would subject it to service of process in suits, other than those
arising out of the offering or sale of the Securities, in any jurisdiction
where it is not now so subject.
(f) The Company will not, without the prior written consent of
Xxxxxxx Xxxxx Xxxxxx, for a period 180 days following the Execution Time,
offer, sell or contract to sell, or otherwise dispose of (or enter into any
transaction which is designed to, or might reasonably be expected to,
result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by the Company or
any affiliate of the Company or any person in privity with the Company or
any affiliate of the Company) directly or indirectly, or announce the
offering of, any other shares of Common Stock or any securities convertible
into, or exchangeable for, shares of Common
12
Stock; provided, however, that the Company may issue and sell Class A
Common Stock pursuant to any employee stock option plan or stock ownership
plan of the Company in effect at the Execution Time and the Company may
issue Class A Common Stock issuable upon the conversion of securities or
the exercise of warrants outstanding at the Execution Time.
(g) The Company will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale of resale of the Securities.
(h) The Company agrees to pay the costs and expenses relating to the
following matters: (i) the preparation, printing or reproduction and
filing with the Commission of the Registration Statement (including
financial statements and exhibits thereto), each Preliminary Prospectus,
the Prospectus, and each amendment or supplement to any of them; (ii) the
printing (or reproduction) and delivery (including postage, air freight
charges and charges for counting and packaging) of such copies of the
Registration Statement, each Preliminary Prospectus, the Prospectus, and
all amendments or supplements to any of them, as may, in each case, be
reasonably requested for use in connection with the offering and sale of
Securities; (iii) the preparation, printing, authentication, issuance and
delivery of certificates for the Securities, including any stamp or
transfer taxes in connection with the original issuance and sale of the
Securities; (iv) the printing (or reproduction) and delivery of this
Agreement, any blue sky memorandum and all other agreements or documents
printed (or reproduced) and delivered in connection with the offering of
the Securities; (v) the registration of the Securities under the Exchange
Act and the listing of the Securities on the Nasdaq National Market; (vi)
any registration or qualification of the Securities for offer and sale
under the securities or blue sky laws of the several states (including
filing fees and the reasonable fees and expenses of counsel for the
Underwriters relating to such registration and qualification; (vii) any
filings required to be made with the National Association of Securities
Dealers, Inc. (including filing fees and the reasonable fees and expenses
of the counsel for the Underwriters relating to such filings); (viii)
transportation and other expenses incurred by Company representatives in
connection with presentations to prospective purchasers of the Securities;
(ix) the fees and expenses of the Company's accountants and fees and
expenses of counsel (including local and special counsel) for the Company
and the Selling Stockholder; and (x) all other costs and expenses incident
to the performance by the Company of its obligations hereunder.
Notwithstanding the foregoing, the amounts payable by the Company pursuant
to clauses (vi) and (vii) above, other than in respect of filing fees,
shall not exceed $10,000.
7. Agreements of the Selling Stockholder. The Selling Stockholder agrees
with the several Underwriters as follows:
(a) The Selling Stockholder will pay all federal and other taxes, if
any, on the transfer or sale of the Option Securities to the Underwriters.
13
(b) The Selling Stockholder will do or perform all things required to
be done or performed by the Selling Stockholder prior to the Closing Date
or any settlement date pursuant to Section 4 hereof, as the case may be, to
satisfy all conditions precedent to the delivery of the Option Securities
pursuant to this Agreement.
(c) The Selling Stockholder will not, without the prior written
consent of Xxxxxxx Xxxxx Barney, for a period of 180 days following the
Execution Time, offer, sell contract to sell, pledge or otherwise dispose
of (or enter into any transaction which is designed to, or might reasonably
be expected to, result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise)), or
file (or participate in the filing of) a registration statement with the
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act with respect to, any shares of
capital stock of the Company or any securities convertible into or
exercisable or exchangeable for such capital stock, or publicly announce
an intention to effect any such transaction, except for the sale of the
Option Securities to the Underwriters pursuant to this Agreement.
(d) The Selling Stockholder will not take, directly or indirectly,
any action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Option Securities.
(e) The Selling Stockholder will advise the Representatives promptly,
and if requested by the Representatives, will confirm such advice in
writing if, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Prospectus to comply with the
Act or the rules thereunder.
8. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholder contained herein as of the Execution Time, the Closing Date and any
settlement date pursuant to Section 4 hereof, to the accuracy of the statements
of the Company and the Selling Stockholder made in any certificates pursuant to
the provisions hereof, to the performance by the Company and the Selling
Stockholder of their respective obligations hereunder and to the following
additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement shall have become effective not later than
(i) 6:00 PM New York City time on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 9:30 AM on the Business Day following
the day on which the public offering price was determined, if
14
such determination occurred after 3:00 PM New York City time on such date;
if filing of the Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Prospectus, and any such supplement, shall
have been filed in the manner and within the time period required by Rule
424(b); and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been instituted or threatened.
(b) The Company shall have furnished to the Representatives the
opinion of Xxxxxxxx & Xxxxx, counsel for the Company and the Selling
Stockholder, dated the Closing Date and addressed to the Representatives,
as set forth below.
(i) Each of the Company and its Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation. Each of the
Company and its Subsidiaries is qualified to do business and is in
good standing in the jurisdictions set forth on Exhibit A to such
opinion. While such counsel has not been engaged to investigate
whether the Company and its Subsidiaries are required to qualify to do
business in any other jurisdiction, such counsel affirms that such
counsel does not have knowledge that has caused such counsel to
conclude that the Company or any of its subsidiaries has failed to
qualify in any jurisdiction in which it is required to do so and that
such failure is likely to have a material adverse effect on the
Company and its Subsidiaries, taken as a whole.
(ii) Each of the Company and its Subsidiaries has the corporate
power to own and lease its properties and to conduct its business as
described in the Prospectus.
(iii) All the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and all outstanding shares of capital
stock of the Subsidiaries are owned by the Company, either directly or
through wholly owned subsidiaries, free and clear of any perfected
security interest and, to the knowledge of such counsel, after due
inquiry, any other security interest, claim, lien or encumbrance.
(iv) The Company's authorized capital stock (including its
authorized common stock) is as set forth under the heading
"Capitalization" in the Prospectus and conforms in all material
respects to the description thereof contained under the heading
"Description of Capital Stock" in the Prospectus.
(v) The shares of Common Stock outstanding prior to the issuance
of the Securities have been duly authorized and are validly issued,
fully paid and nonassessable.
(vi) The issuance by the Company of the Securities has been duly
authorized and, when appropriate certificates representing the
Securities are duly countersigned by the Company's transfer
agent/registrar and delivered against payment of the agreed
consideration therefor in accordance with this Agreement,
15
the Securities will be validly issued, fully paid and nonassessable.
The Securities are duly listed, and admitted and authorized for
trading, subject to official notice of issuance, on the Nasdaq
National Market. The certificates for the Securities are in valid and
sufficient form. The issuance of the Securities is not subject to any
preemptive or other rights to subscribe for the Securities under the
terms of the statute under which the Company is incorporated, under
the Company's Articles of Incorporation or Bylaws or under any
contractual provision of which such counsel has knowledge. Except as
set forth in the Prospectus, to the knowledge of such counsel, no
options, warrants or other rights to purchase, agreements or other
obligations to issue, or rights to convert any obligations into or
exchange any securities for, shares of capital stock of or ownership
interests in the Company are outstanding.
(vii) Such counsel has no knowledge about any legal or
governmental action, suit or proceeding by or before any court or
governmental agency, authority, body or any arbitrator that is pending
or threatened against the Company that has caused such counsel to
conclude that such proceeding is required by Item 103 of Regulation S-
K to be described in the Prospectus but that is not so described.
(viii) Such counsel has no knowledge about any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreements or other document to which the Company is a party or to
which any of its property is subject that has caused such counsel to
conclude that such document is required to be described in the
Prospectus but is not so described or is required to be filed as an
exhibit to the Registration Statement but has not been so filed.
(ix) The information in the Prospectus under the heading "The
Company," "Shares Eligible for Future Sale" and "Business - Legal
Proceedings" to the extent that they summarize laws, governmental
rules or regulations are accurate in all material respects.
(x) A member of the Commission's staff has advised such counsel
by telephone that the Commission has entered an order declaring the
Registration Statement effective under the Securities Act on
____________, 1998 (the "effective date"), and such counsel has no
knowledge that any stop order suspending the effectiveness of the
Registration Statement has been issued or that any proceedings for
that purpose are pending before, or overtly threatened by, the
Commission. The Registration Statement and the Prospectus (other than
the financial statements and other financial information contained
therein, as to which such counsel need express no opinion) comply as
to form in all material respects with the applicable requirements of
the Act and the rules thereunder.
(xi) This Agreement has been duly authorized, executed and
delivered by the Company.
16
(xii) The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Prospectus, will not be an
"investment company" as such term is defined in the Investment Company
Act of 1940, as amended;
(xiii) No consent, approval, authorization, filing with or
order of any court or governmental agency or body is required on the
part of the Company or the Selling Stockholder in connection with the
transactions contemplated herein, except such as have been obtained
under the Act (it being understood that such counsel need express no
opinion as to the matters described in Section 8(c)(ii), as to which
Drinker, Xxxxxx & Xxxxx LLP is providing an opinion to the
Underwriters).
(xiv) The Company's execution and delivery of this Agreement and
the Company's sale of the Securities to the Underwriters in accordance
with this Agreement do not (i) violate the Company's Articles of
Incorporation or Bylaws or any of the Subsidiaries or (ii) constitute
a violation by the Company of any applicable provisions of statute,
law, rule, regulation, judgment, order or decree applicable to the
Company or any of the Subsidiaries or any of its or their properties
(except that such counsel expresses no opinion in this paragraph as to
compliance with any disclosure requirement or any prohibition against
fraud or misrepresentation or as to whether performance of the
indemnification or contribution provision in this Agreement would be
permitted), or (iii) breach, violate, result in the imposition of any
lien, charge or encumbrance or result in a default under, any existing
obligation of the Company under any of the agreements filed as an
exhibit to the Registration Statement or any other indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement of which such counsel has knowledge
(provided that such counsel expresses no opinion as to compliance with
any financial test or cross-default provision in any such indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement).
(xv) This Agreement and the Custody Agreement have each been
duly executed and delivered by or on behalf of the Selling
Stockholder.
(xvi) The Custody Agreement constitutes the valid and binding
obligation of the Selling Stockholder, enforceable against the Selling
Stockholder in accordance with its terms.
(xvii) To the knowledge of such counsel, the Selling Stockholder
has full legal right, power and authorization, and any approval
required by law, to sell, assign, transfer and deliver good and
marketable title to the Option Securities.
(xviii) The execution and delivery of this Agreement and the
Custody Agreement by the Selling Stockholder and the sale by him of
the Option Securities to the Underwriters in accordance with this
Agreement do not constitute a violation by the Selling Stockholder of
any applicable provision of any law, statute
17
or regulation or conflict with, violate, result in a breach of or
constitute a default under the terms or provisions of any agreement,
indenture, mortgage or other instrument known to such counsel, in each
case as applicable to the Selling Stockholder or his properties
(except that such counsel expresses no opinion in this paragraph as to
compliance with any disclosure requirement or any prohibition against
fraud or misrepresentation or as to whether performance of the
indemnification or contribution provisions in this Agreement would be
permitted).
(xix) The Selling Stockholder is the sole registered owner of
the Option Securities. Upon delivery of the Option Securities to the
Underwriters against payments therefor as contemplated by this
Agreement and registration of the Option Securities in the
Underwriters' name in the stock records of the Company, the
Underwriters will have acquired valid title to such Option Securities,
free and clear of all adverse claims. For purposes of such opinion,
such counsel has assumed that the Underwriters will have purchased the
Option Securities in good faith and without notice of any adverse
claim or defect in the validity of the Option Securities and that the
Underwriters will take possession at the closing of the certificates
representing the Option Securities and the instruments pursuant to
which the Selling Stockholder has assigned the Option Securities. The
term "adverse claim" as used in such opinion has the meaning given
such term in Article 8 of the Uniform Commercial Code as adopted in
the State of New York (the "UCC") and does not include (i) any claim
which arises through the Underwriters or any person claiming through
the Underwriters (such as any security interest the Underwriters may
have granted in the Option Securities) and (ii) any adverse interest
which would not be extinguished upon the purchase of the Option
Securities by a person who qualifies as a "bona fide purchaser" or
"protected purchase" under (S)8-303 of the UCC. Such counsel has no
actual knowledge of the existence of any interest of the kind
specified in clause (ii) of the preceding sentence. Such counsel has
also assumed that the Representatives' rights are not limited by
subsection (4) of Section 8-302 of the UCC.
Such counsel shall also confirm that nothing has come to its attention that
has caused it to conclude that on the Effective Date or at the Execution Time
the Registration Statement contains or contained any untrue statement of a
material fact or omitted or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Prospectus as of its date and on the Closing Date includes any untrue
statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (in each case, other than the
financial statements and other financial information contained therein, as to
which such counsel need express no opinion);
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
Illinois or the federal laws of the United States, to the extent they deem
proper and specified in such opinion, upon the opinion of other counsel of good
standing whom they believe to be reliable and who are satisfactory to counsel
for the Underwriters and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company, the Selling
Stockholder and public officials.
18
References to the Prospectus in this paragraph (b) include any supplements
thereto at the Closing Date. The opinion of such counsel shall be rendered to
the Underwriters at the request of the Company and shall so state therein.
(c) The Company shall have furnished to the Representatives the
opinion of Drinker, Xxxxxx & Xxxxx LLP, special United States education
regulatory counsel for the Company, dated the Closing Date and addressed to
the Representatives, as set forth below.
(i) The statements in the Prospectus under the headings "Risk
Factors--Substantial Dependence on Student Financial Aid; Potential
Adverse Effects of Regulation," "--Potential Loss of Student Financial
Aid in the Event of Failure to Meet Financial Responsibility
Standards," "--Potential Loss of Student Financial Aid in the Event of
High Student Loan Default Rates," "--Potential Adverse Consequences in
the Event of a Failure to Maintain Accreditations," "--Potential
Adverse Consequences in the Event of a Failure to Maintain State
License or Authorizations," "--Potential Adverse Regulatory
Consequences in the Event of a Change of Ownership or Control" and
"Financial Aid and Regulation" and other references in the Prospectus,
insofar as such statements constitute a summary of legal matters,
documents or proceedings with respect to the operation of educational
institutions and the offering of programs of education, the
participation in financial aid programs and the awarding of
educational degrees, diplomas and certificates in the United States of
America (collectively, "U.S. Regulatory Matters"), are accurate and
fairly summarize the matters therein described in all material
respects.
(ii) Except as described in the Prospectus, no consent,
approval, authorization, order, registration or qualification of, or
filing with, any governmental or regulatory agency or body under the
HEA or any federal or state statute governing the authorization to
operate, and award degrees, diplomas and certificates at, post-
secondary educational institutions is required in connection with the
transactions contemplated herein or described in the Prospectus under
the caption "The Company."
(iii) The issuance and sale of the Securities and the
consummation of the transactions herein contemplated or described in
the prospectus under the caption "The Company" and the fulfillment of
the terms hereof or the transactions described in the Prospectus under
the caption "The Company" will not conflict with, result in a breach
or violation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the Subsidiaries pursuant
to (A) Title IV of the HEA; (B) any rule, regulation or requirement of
the U.S. Department of Education promulgated under Title IV of the
HEA; or (C) any state statute governing the authorization to operate,
and award degrees, diplomas and certificates at, post-secondary
educational institutions, except as described in the Prospectus.
(iv) The issuance and sale of the Securities and the
consummation of the other transactions contemplated herein or
described in the Prospectus under the
19
caption "The Company" will not require a review of the accreditation
of any of the Company's schools, institutions or programs by any
accrediting agency (including, without limitation, the American
Psychological Association), reauthorization, relicensure or
recertification of any of the Company's schools by any state
regulatory agency or recertification of the Company or any of its
schools by the U.S. Department of Education, except as described in
the Prospectus.
(v) The issuance and sale of the Securities and the consummation
of the transactions herein contemplated or described in the Prospectus
under the caption "The Company" and the fulfillment of the terms
hereof or the transactions described in the Prospectus under the
caption "The Company" will not constitute a change of ownership
resulting in a "change of control" as defined in the HEA.
(vi) To the best knowledge of such counsel after due inquiry,
except as disclosed in the Prospectus, (i) the Company and the
Subsidiaries have all necessary Licenses required for the Company and
such Subsidiaries to participate in the Title IV Programs as described
in the Registration Statements and the Prospectus; (2) there are no
existing or threatened restriction or termination of any such
institution's participation in the student loan programs administered
by the U.S. Department of Education; (3) the Company and the
Subsidiaries are duly qualified under and in material compliance with
all applicable laws and regulations relating to the approval,
authorization and operation of postsecondary educational institutions
in each jurisdiction in which such entity participates in student
financial aid programs, with such exceptions as would not have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and the
Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business; (4) no proceedings
for the suspension, limitation or termination of any such entity's
participation in any financial aid programs have been initiated or
threatened by any federal, state or foreign regulatory agency; (5) the
Company and the Subsidiaries possess the accreditations set forth in
the Prospectus and are licensed by each state in which they conduct
business to operate schools and to grant degrees, diplomas and
certificates to students in the respective jurisdiction of each such
licensing agency; and (6) there is no threatened review, suspension,
revocation or termination of such accreditations or licenses.
Such counsel shall also confirm that it has no reason to believe that
on the Effective Date or at the Execution Time that the information
contained in the Registration Statement related to U.S. Regulatory Matters
or the statements in the Prospectus under the headings "Risk Factors--
Dependence on Canadian Financial Aid"; "_______ Potential Adverse Effects
of Canadian Regulation" and "Financial Aid and Regulation" and other
references in the Prospectus, insofar as such statements constitute a
summary of legal matters, documents or proceedings with respect to the
operation of educational institutions and the offering of programs of
education, the participation in financial aid programs and the awarding of
educational certificates in Canada (collectively, "Canadian Regulatory
Matters") contains or contained any untrue statement of a material fact or
omitted or omits to state any material fact required to be stated therein
or necessary to make the
20
statements therein not misleading or that those portions of the Prospectus
related to U.S. Regulatory Matters and Canadian Regulatory Matters as of
its date and on the Closing Date includes any untrue statement of a
material fact or omitted or omits to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that it is acknowledged and
understood, and the opinion of such counsel may state, that such counsel
are not admitted to practice law in Canada and do not have particular
expertise in regard to Canadian Regulatory Matters.
In rendering such opinion, such counsel may rely, as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of the
Company and public officials. References to the Prospectus in this
paragraph (c) include any supplements thereto at the Closing Date. The
opinion of such counsel shall be rendered to the Underwriters at the
request of the Company and shall so state therein.
(d) The Representatives shall have received from Xxxxxx Xxxxxx &
Zavis, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date and addressed to the Representatives, with respect to the
issuance and sale of the Securities, the Registration Statement, the
Prospectus (together with any supplement thereto) and other related matters
as the Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters. The opinion or opinions of such
counsel shall be rendered to the Underwriters at the request of the Company
and shall so state therein.
(e) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the Company,
dated the Closing Date, to the effect that the signers of such certificate
have carefully examined the Registration Statement, the Prospectus, any
supplements to the Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to
the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto),
there has been no material adverse effect on the condition (financial
or otherwise), prospects, earnings, business or properties of the
Company and the Subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
21
(f) The Selling Stockholder shall have furnished to the
Representatives a certificate, signed by the Selling Stockholder, dated as
of the Closing Date, to the effect that the Selling Stockholder has
carefully examined the Registration Statement, the Prospectus, any
supplements to the Prospectus and this Agreement and that the
representations and warranties of the Selling Stockholder in this Agreement
are true and correct in all material respects on and as of the Closing Date
with the same effect as if made on the Closing Date, and the Selling
Stockholder has complied with the agreements and satisfied the conditions
on its part to be performed or satisfied at or prior to the Closing Date.
(g) At the Execution Time and at the Closing Date, Xxxxxx Xxxxxxxx
LLP shall have furnished to the Representatives letters, dated respectively
as of the Execution Time and as of the Closing Date, in form and substance
satisfactory to the Representatives, confirming that they are independent
accountants within the meaning of the Act and the applicable published
rules and regulations thereunder and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included in the Registration Statement
and the Prospectus and reported on by them comply as to form in all
material respects with the applicable accounting requirements of the
Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and the Subsidiaries;
carrying out certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which would not
necessarily reveal matters of signifi cance with respect to the
comments set forth in such letter; a reading of the minutes of the
meetings of the stockholders, directors and committees of the board of
directors of the Company and the Subsidiaries; and inquiries of
certain officials of the Company who have responsibility for financial
and accounting matters of the Company and the Subsidiaries as to
transactions and events subsequent to May 31, 1998, nothing came to
their attention which caused them to believe that:
(1) with respect to the period subsequent to May 31, 1998,
there were any changes, at a specified date not more than five
days prior to the date of the letter, in the long-term debt of
the Company and the Subsidiaries or capital stock of the Company
or decreases in the shareholders' equity of the Company as
compared with the amounts shown on the May 31, 1998 consolidated
balance sheet included in the Registration Statement and the
Prospectus, or for the period from June 1, 1998 to such specified
date there were any decreases, as compared with the corresponding
period in the preceding year in net revenues, income from
operations or income before provision for income taxes or in
total or per share amounts of net income of the Company and the
Subsidiaries, except in all instances for changes or decreases
set forth in such letter, in which case the letter shall be
accompanied by an explanation by the Company as to the
significance thereof unless said explanation is not deemed
necessary by the Representatives; and
22
(2) the information included in the Registration Statement
and Prospectus in response to Regulation S-K, Item 301 (Selected
Financial Data), Item 302 (Supplementary Financial Information),
Item 402 (Executive Compensation) and Item 503(d) (Ratio of
Earnings to Fixed Charges) is not in conformity with the
applicable disclosure requirements of Regulation S-K;
(iii) they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and the Subsidiaries) set
forth in the Registration Statement and the Prospectus, including the
informa tion set forth under the captions "Summary Consolidated
Financial and Other Data" and "Selected Historical Consolidated
Financial and Other Data" in the Prospectus, agrees with the
accounting records of the Company and the Subsidiaries, excluding any
questions of legal interpretation; and
(iv) on the basis of a reading of the unaudited pro forma
financial statements included in the Registration Statement and the
Prospectus (the "pro forma financial statements"); carrying out
certain specified procedures; inquiries of certain officials of the
Company and companies acquired by the Company who have responsibility
for financial and accounting matters; and proving the arithmetic
accuracy of the application of the pro forma adjustments to the
historical amounts in the pro forma financial statements, nothing came
to their attention which caused them to believe S-X that the pro forma
financial statements do not comply as to form in all material respects
with the applicable accounting requirements of Rule 11-02 of
Regulations S-X or that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of such
statements.
References to the Prospectus in this paragraph (g) include any
supplement thereto at the date of the letter.
(h) The Company shall have received from Xxxxxx Xxxxxxxx LLP (and
furnished to the Representatives) a report with respect to a review of
unaudited interim financial information of the Company for the seven
quarters ending May 31, 1998, in accordance with Statement of Auditing
Standards No. 71.
(i) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified in
the letter or letters referred to in paragraph (g) of this Section 8 or
(ii) any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), earnings, business or
properties of the Company and the Subsidiaries taken as a whole, whether or
not arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Prospectus (exclusive of any supplement
thereto) the effect of which, in any case referred to in clause (i) or (ii)
above, is, in the sole judgment of the Representatives, so material and
23
adverse as to make it impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the Registration
Statement (exclusive of any amendment thereof) and the Prospectus
(exclusive of any supplement thereto).
(j) The Securities shall have been listed and admitted and authorized
for trading on the Nasdaq National Market, and satisfactory evidence of
such actions shall have been provided to the Representatives.
(k) At the Execution Time, the Company shall have furnished to the
Representatives a letter substantially in the form of Exhibit A hereto from
each officer, director and stockholder of the Company addressed to the
Representatives.
(l) At the Execution Time, the transactions described in the
Prospectus under the caption "The Company" shall have been consummated.
(m) Prior to the Closing Date, the Company and the Selling
Stockholder shall have furnished to the Representatives such further
information, certificates and documents as the Representatives may
reasonably request.
If any of the conditions specified in this Section 8 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of
such cancellation shall be given to the Company in writing or by telephone or
facsimile confirmed in writing.
The documents required to be delivered by this Section 8 shall be
delivered at the office of Xxxxxx Xxxxxx & Zavis, counsel for the Underwriters,
at 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, on the Closing
Date.
9. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 8 hereof is not satisfied,
because of any termination pursuant to Section 12 hereof or because of any
refusal, inability or failure on the part of the Company or the Selling
Stockholder to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Underwriters, the Company and
the Selling Stockholder will reimburse the Underwriters severally through
Xxxxxxx Xxxxx Xxxxxx on demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Securities.
10. Indemnification and Contribution.
(a) The Company and the Selling Stockholder, jointly and severally,
agree to indemnify and hold harmless each Underwriter, the directors,
officers and employees of each Underwriter and each person who controls any
Underwriter within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or
24
liabilities, joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or other federal or state statutory
law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration
of the Securities as originally filed or in any amendment thereof, or in
any Preliminary Prospectus or the Prospectus, or in any amendment thereof
or supplement thereto), or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal
or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Company and the Selling Stockholder
will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through the
Representatives specifically for inclusion therein and provided, further,
that the foregoing indemnity with respect to any preliminary prospectus
shall not inure to the benefit of any Underwriter (or to the benefit of any
person controlling such Underwriter) from whom the person asserting any
such losses, claims, damages or liabilities purchased the Securities if (i)
a copy of the Prospectus was not sent or given to such person at or prior
to the written confirmation of the sale of such Securities to such person
if required by the Act, (ii) the Prospectus would have cured the defect
giving rise to such loss, claim, damage or liability and (iii) the
Underwriters were provided with sufficient quantities of the Prospectus a
reasonable amount of time prior to written confirmation of the sale. This
indemnity agreement will be in addition to any liability which the Company
or the Selling Stockholder may otherwise have. Notwithstanding the
foregoing, the aggregate liability of the Selling Stockholder pursuant to
this Section 10 shall be limited to an amount equal to the total net
proceeds (before deducting expenses) received by such Selling Stockholder
from the Underwriters for the sale of the Option Securities sold by such
Selling Shareholder under the Registration Statement.
(b) Each Underwriter, severally and not jointly, agrees to indemnify
and hold harmless the Company, each of its directors, each of its officers
who signs the Registration Statement, the Selling Stockholder and each
person who controls the Company within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity to each
Underwriter, but only with reference to written information relating to
such Underwriter furnished to the Company by or on behalf of such
Underwriter through the Representatives specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement
will be in addition to any liability which any Underwriter may otherwise
have. The Company and the Selling Stockholder acknowledge that, for
purposes of this Section 8(b) and for purposes of Section 1(a), the
statements set forth in the last paragraph of the cover page regarding
delivery of the Securities, the legend in block capital letters on page 2
related to stabilization, syndicate covering transactions and penalty bids
and, under the heading "Underwriting", (i) the sentences related to
concessions and reallowances and (ii) the
25
paragraph related to stabilization, syndicate covering transactions and
penalty bids in any Preliminary Prospectus and the Prospectus constitute
the only information furnished in writing by or on behalf of the several
Underwriters for inclusion in any Preliminary Prospectus or the Prospectus.
(c) Promptly after receipt by an indemnified party under this Section
10 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 10, notify the indemnifying party in writing of
the commencement thereof; but the failure so to notify the indemnifying
party (i) will not relieve it from liability under paragraph (a) or (b)
above unless and to the extent it did not otherwise learn of such action
and such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event, relieve
the indemnifying party from any obligations to any indemnified party other
than the indemnification obligation provided in paragraph (a) or (b) above.
The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter be
responsible for the fees and expenses of any separate counsel retained by
the indemnified party or parties except as set forth below); provided,
however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel
(including local counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) the
named parties to any such action, suit or proceeding (including any
impleaded parties) include both such indemnified party and the indemnifying
party and such indemnified party shall have been advised by its counsel in
writing that representation of such indemnified party and any indemnifying
party by the same counsel would be inappropriate under applicable standards
of professional conduct (whether or not such representation by the same
counsel has been proposed) due to actual or potential differing interests
between them, (ii) the actual or potential defendants in, or targets of,
any such action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded that there
may be legal defenses available to it and/or other indemnified parties
which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of the institution of such
action or (iv) the indemnifying party shall authorize the indemnified party
to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or
proceeding.
26
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 10 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company, the Selling Stockholder and
the Underwriters severally agree to contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Company, the Selling Stockholder and
one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company and
the Selling Stockholder on the one hand and by the Underwriters on the
other from the offering of the Securities; provided, however, that in no
case shall any Underwriter (except as may be provided in any agreement
among underwriters relating to the offering of the Securities) be
responsible for any amount in excess of the underwriting discount or
commission applicable to the Securities purchased by such Underwriter
hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Company, the Selling
Stockholder and the Underwriters severally shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company and the Selling Stockholder on the
one hand and of the Underwriters on the other in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company and
the Selling Stockholder shall be deemed to be equal to the total net
proceeds from the offering (before deducting expenses) received by them,
and benefits received by the Underwriters shall be deemed to be equal to
the total underwriting discounts and commissions, in each case as set forth
on the cover page of the Prospectus. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Company and the
Selling Stockholder on the one hand or the Underwriters on the other, the
intent of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission.
The Company, the Selling Stockholder and the Underwriters agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 10, each person
who controls an Underwriter within the meaning of either the Act or the
Exchange Act and each director, officer and employee of an Underwriter
shall have the same rights to contribution as such Underwriter, and each
person who controls the Company within the meaning of either the Act or the
Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d). In no event shall
the liability of the Selling Stockholder under this Section 8(d) exceed the
limit set forth in Section 8(a).
11. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance
27
of its or their obligations under this Agreement, the remaining Underwriters
shall be obligated severally to take up and pay for (in the respective
proportions which the amount of Securities set forth opposite their names in
Schedule I hereto bears to the aggregate amount of Securities set forth opposite
the names of all the remaining Underwriters) the Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase; provided, however,
that in the event that the aggregate amount of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate amount of Securities set forth in Schedule I hereto, the remaining
Underwriters shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Securities, and if such nondefaulting
Underwriters do not purchase all the Securities, this Agreement will terminate
without liability to any nondefaulting Underwriter, the Selling Stockholder or
the Company. In the event of a default by any Underwriter as set forth in this
Section 11, the Closing Date shall be postponed for such period, not exceeding
five Business Days, as the Representatives shall determine in order that the
required changes in the Registration Statement and the Prospectus or in any
other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company, the Selling Stockholder and any nondefaulting Underwriter for
damages occasioned by its default hereunder.
12. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Securities, if at any time prior to
such time (i) trading in the Company's Class A Common Stock shall have been
suspended by the Commission or the Nasdaq National Market or trading in
securities generally on the New York Stock Exchange or the Nasdaq National
Market shall have been suspended or limited or minimum prices shall have been
established on such Exchange or National Market, (ii) a banking moratorium shall
have been declared either by federal or New York State authorities or (iii)
there shall have occurred any outbreak or escalation of hostilities, declaration
by the United States of a national emergency or war or other calamity or crisis
the effect of which on financial markets is, in each case, such as to make it,
in the sole judgment of the Representatives, impractical or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Prospectus (exclusive of any supplement thereto).
13. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, the Selling Stockholder and the Underwriters set forth
in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter, the
Selling Stockholder or the Company or any of the officers, directors or
controlling persons referred to in Section 10 hereof, and will survive delivery
of and payment for the Securities. The provisions of Sections 9 and 10 hereof
shall survive the termination or cancellation of this Agreement.
14. Notices. All communications hereunder will be in writing and
effective only on receipt, and, (i) if sent to the Representatives, will be
mailed, delivered or telefaxed to the Xxxxxxx Xxxxx Xxxxxx, Investment Banking
Division, General Counsel (fax no.: (000) 000-0000) and confirmed to the General
Counsel, Xxxxxxx Xxxxx Barney, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
00000; (ii) if sent to the Company, will be mailed, delivered or telefaxed to
_____________ [facsimile number] and confirmed to it at _____________________,
attention
28
of the Chairman; or (iii) if sent to the Selling Stockholder, will be mailed,
delivered or telefaxed to ______________________ [facsimile number] and
confirmed to him at _______________________.
15. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.
16. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
17. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
18. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
19. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(a) above and any preliminary prospectus included
in the Registration Statement at the Effective Date that omits Rule 430A
Information.
29
"Prospectus" shall mean the prospectus relating to the Securities that
is first filed pursuant to Rule 424(b) after the Execution Time or, if no
filing pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Securities included in the Registration
Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto or any Rule 462(b) Registration
Statement becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b) Registration
Statement, as the case may be. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as provided
by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under the
Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the initial registration statement.
"Xxxxxxx Xxxxx Xxxxxx" shall mean Xxxxx Xxxxxx Inc. or Salomon
Brothers Inc to the extent that either such party is a signatory to this
Agreement.
[remainder of page intentionally left blank]
30
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the
Company, the Selling Stockholder and the several Underwriters.
Very truly yours,
ARGOSY EDUCATION GROUP, INC.
By:_________________________________
Name:_______________________________
Its:________________________________
____________________________________
Xxxxxxx X. Xxxxxxxxx
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Xxxxxxx Xxxxx Barney Inc.
ABN AMRO Incorporated
By: XXXXXXX XXXXX XXXXXX INC.
By:_____________________
Name:___________________
Its:____________________
For itself and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
31
SCHEDULE I
----------
Number of Underwritten
Securities to be
Underwriters Purchased
------------
Xxxxxxx Xxxxx Barney Inc. ........................
ABN Amro Incorporated.............................
----------------------
Total..............................
======================
32
[Form of Lock-Up Agreement] EXHIBIT A
Argosy Education Group, Inc.
----------------------------
Public Offering of Common Stock
-------------------------------
________________, 1998
Xxxxxxx Xxxxx Xxxxxx Inc.
ABN AMRO Incorporated
As Representatives of the several Underwriters,
c/o Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), between Argosy Education
Group, Inc., an Illinois corporation (the "Company"), Xxxxxxx X. Xxxxxxxxx, the
Chairman of the Company, (the "Selling Stockholder") and each of you as
representatives of a group of Underwriters named therein, relating to an
underwritten public offering of Class A Common Stock, $0.01 par value (the
"Class A Common Stock" and, collectively with the Class B Common Stock, $0.01
par value, of the Company, the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of Xxxxxxx Xxxxx Barney Inc., offer, sell, contract to sell, pledge or
otherwise dispose of, or file (or participate in the filing of) a registration
statement with the Securities and Exchange Commission in respect of, or
establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder with respect to, any shares of
capital stock of the Company or any securities convertible into or exercisable
or exchangeable for such capital stock, or publicly announce an intention to
effect any such transaction, for a period of 180 days after the date of this
Agreement, other than shares of Class A Common Stock disposed of as bona fide
gifts approved by Xxxxxxx Xxxxx Xxxxxx Inc.
If for any reason the Underwriting Agreement shall be terminated prior
to the Closing Date (as defined in the Underwriting Agreement), the agreement
set forth above shall likewise be terminated.
Yours very truly,
______________________________________
