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Exhibit 1.1
Draft of June 25, 1998
2,500,000 SHARES
EDUCATIONAL MEDICAL, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
________, 1998
XXXXX XXXXXX INC.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
As Representatives of the Several Underwriters
c/o XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Educational Medical, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell an aggregate of 626,001 shares of its
common stock, par value $0.01 per share (the "Common Stock"), to the several
Underwriters named in Schedule II hereto (the "Underwriters"), and the persons
named in Schedule I hereto as selling stockholders (the "Selling Stockholders")
propose to sell to the several Underwriters an aggregate of 1,873,999 shares of
Common Stock. The 626,001 shares of Common Stock to be issued and sold to the
Underwriters by the Company and the 1,873,999 shares of Common Stock to be sold
to the Underwriters by the Selling Stockholders are hereinafter referred to as
the "Firm Shares." In addition, solely for the purpose of covering
over-allotments, the Company propose to sell to the Underwriters, upon the terms
and conditions set forth in Section 2 hereof, up to an additional 375,000 shares
(the "Additional Shares") of Common Stock. The Firm Shares and the Additional
Shares are hereinafter collectively referred to as the "Shares." The Company and
the Selling Stockholders are hereinafter sometimes referred to as the "Sellers."
The Company and the Selling Stockholders wish to confirm as
follows their agreement with you (the "Representatives") and the other several
Underwriters on whose behalf you are acting, in connection with the several
purchases of the Shares by the Underwriters.
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-1 under the Act
(the "registration statement"), including a prospectus subject to completion,
relating to the
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Shares. The term "Registration Statement" as used in this Agreement means the
registration statement (including all financial schedules and exhibits) as
amended at the time it becomes effective or, if the registration statement
became effective prior to the execution of this Agreement, as supplemented or
amended prior to the execution of this Agreement. If it is contemplated, at the
time this Agreement is executed, that a post-effective amendment to the
registration statement will be filed and must be declared effective before the
offering of the Shares may commence, the term "Registration Statement" as used
in this Agreement means the registration statement as amended by said
post-effective amendment. If an abbreviated registration statement is prepared
and filed with the Commission in accordance with Rule 462(b) under the Act (an
"Abbreviated Registration Statement"), the term "Registration Statement" as used
in this Agreement includes the Abbreviated Registration Statement. The term
"Prospectus" as used in this Agreement means the prospectus in the form included
in the Registration Statement, or, if the prospectus included in the
Registration Statement omits information in reliance on Rule 430A under the Act
and such information is included in a prospectus filed with the Commission
pursuant to Rule 424(b) under the Act, the term "Prospectus" as used in this
Agreement means the prospectus in the form included in the Registration
Statement as supplemented by the addition of the Rule 430A information contained
in the prospectus filed with the Commission pursuant to Rule 424(b). The term
"Prepricing Prospectus" as used in this Agreement means the prospectus subject
to completion in the form included in the registration statement at the time of
the initial filing of the registration statement with the Commission and as such
prospectus shall have been amended from time to time prior to the date of the
Prospectus.
2. AGREEMENTS TO SELL AND PURCHASE. Subject to any adjustments as you
may determine to avoid fractional shares, the Company hereby agrees, subject to
all the terms and conditions set forth herein, to issue and sell to each
Underwriter and, upon the basis of the representations, warranties and
agreements of the Company and the Selling Stockholders herein contained and
subject to all the terms and conditions set forth herein, each Underwriter
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of $___ per share (the "purchase price per share"), that number of Firm
Shares which bears the same proportion to the aggregate number of Firm Shares to
be issued and sold by the Company as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule II hereto (or such number of
Firm Shares increased as set forth in Section 12 hereof) bears to the aggregate
number of shares to be sold by the Company and the Selling Stockholders.
Subject to any adjustments as you may determine to avoid fractional
shares, each Selling Stockholder hereby agrees, subject to all the terms and
conditions set forth herein, to issue and sell to each Underwriter and, upon the
basis of the representations, warranties and agreements of the Company and the
Selling Stockholders herein contained and subject to all the terms and
conditions set forth herein, each Underwriter agrees, severally and not jointly,
to purchase from each Selling Stockholder, at the purchase price per share, that
number of Firm Shares which bears the same proportion to the aggregate number of
Firm Shares to be sold by the Selling Stockholders as the number of Firm Shares
set forth opposite the name of such Underwriter in Schedule II hereto (or such
number of Firm Shares increased as set forth in Section 12 hereof) bears to the
aggregate number of shares to be sold by the Company and the Selling
Stockholders.
The Company also agree, subject to all the terms and conditions set
forth herein, to sell to the Underwriters, and, upon the basis of the
representations, warranties and agreements of the Company and the Selling
Stockholders herein contained and subject to all the terms and conditions set
forth herein, the Underwriters shall have the right to purchase from the
Company, at the purchase price per share, pursuant to an option (the
"over-allotment option") which may be
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exercised at any time and from time to time prior to 9:00 p.m., New York City
time, on the 30th day after the date of the Prospectus (or, if such 30th day
shall be a Saturday or Sunday or a holiday, on the next business day thereafter
when the New York Stock Exchange is open for trading), up to an aggregate of
375,000 Additional Shares. Upon any exercise of the over-allotment option, each
Underwriter, severally and not jointly, agrees to purchase from the Company the
number of Additional Shares (subject to such adjustments as you may determine in
order to avoid fractional shares) which bears the same proportion to the number
of Additional Shares to be sold by the Company as the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule II hereto (or such
number of Firm Shares increased as set forth in Section 12 hereof) bears to the
aggregate number of Firm Shares to be sold by the Sellers.
Certificates in transferable form for the Shares (including any
Additional Shares) which each of the Selling Stockholders agree to sell pursuant
to this Agreement have been placed in custody with Xxxxx Xxxxxx (the
"Custodian") for delivery under this Agreement pursuant to a Custody Agreement
and Power of Attorney (the "Custody Agreement") executed by the Selling
Stockholders appointing [______________] and [____________________] as agents
and attorneys-in-fact (the "Attorneys-in-Fact"), except in the case of the
Delaware State Employee's Retirement Fund, the Trust for Defined Benefit Plans
of ICI American Holding Inc., and Trust for Defined Benefit Plans of Zeneca
Holding Inc. (collectively such three entities are referred to as the "Pecks
Managed Entities") who have executed the Custody Agreement solely for the
purpose of transferring the relevant Additional Shares to the Underwriters
pursuant to the terms of this Agreement). The Selling Stockholders agree that
(i) the Shares represented by the certificates held in custody pursuant to the
Custody Agreement are subject to the interests of the Underwriters and the
Company, (ii) the arrangements made by the Selling Stockholders for such custody
are, except as specifically provided in the Custody Agreement, irrevocable and
(iii) the obligations of the Selling Stockholders hereunder and under the
Custody Agreement shall not be terminated by any act of any Selling Stockholder
or by operation of law, whether by the death or incapacity of any Selling
Stockholder or the occurrence of any other event. If any Selling Stockholder
shall die or be incapacitated or if any other event shall occur before the
delivery of the Shares hereunder, certificates for the Shares to be sold by such
Selling Stockholder shall be delivered to the Underwriters by the
Attorneys-in-Fact in accordance with the terms and conditions of this Agreement
and the Custody Agreement as if such death or incapacity or other event had not
occurred, regardless of whether or not the Attorneys-in-Fact or any Underwriter
shall have received notice of such death, incapacity or other event. Each
Attorney-in-Fact represents that he is authorized, on behalf of the Selling
Stockholders to (i) execute this Agreement and any other documents necessary or
desirable in connection with the Custody Agreement and the sale of the Shares to
be sold hereunder by the Selling Stockholders, (ii) make delivery of the
certificates for such Shares, (iii) receive the proceeds of the sale of such
Shares, (iv) give receipts for such proceeds, (v) pay therefrom any expenses to
be borne by the Selling Stockholders in connection with the sale and public
offering of such Shares, (vi) distribute the balance thereof among the Selling
Stockholders and (vii) take such other actions as may be necessary or desirable
in connection with the transactions contemplated by this Agreement, except no
representation is made by either Attorney-in-Fact with respect to clauses (i)
and (vii) regarding the Pecks Managed Entities. Each Attorney-in-Fact agrees to
perform his duties under the Custody Agreement.
3. TERMS OF PUBLIC OFFERING. The Company and the Selling Stockholders
have been advised by you that the Underwriters propose to make a public offering
of their respective portions of the Shares as soon after the Registration
Statement and this Agreement have become effective as in your judgment is
advisable and initially to offer the Shares upon the terms set forth in the
Prospectus.
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4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR. Delivery to the
Underwriters of and payment for the Firm Shares shall be made at the office of
Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00
A.M., New York City time, on _________, 1998 (the "Closing Date"). The place of
closing for the Firm Shares and the Closing Date may be varied by agreement
among you, the Company and the Attorneys-in-Fact.
Delivery to the Underwriters of and payment for any Additional
Shares to be purchased by the Underwriters shall be made at the aforementioned
office of Xxxxx Xxxxxx Inc. at such time on such date (the "Option Closing
Date"), which may be the same as the Closing Date but shall in no event be
earlier than the Closing Date nor earlier than two nor later than ten business
days after the giving of the notice hereinafter referred to, as shall be
specified in a written notice from you on behalf of the Underwriters to the
Company of the Underwriters' determination to purchase a number, specified in
such notice, of Additional Shares. The place of closing for any Additional
Shares and the Option Closing Date for such Shares may be varied by agreement
among you and the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request by written notice, it being understood that a facsimile
transmission shall be deemed written notice, prior to 9:30 A.M., New York City
time, on the second business day preceding the Closing Date or any Option
Closing Date, as the case may be. Such certificates shall be made available to
you in New York City for inspection and packaging not later than 9:30 A.M., New
York City time, on the business day next preceding the Closing Date or the
Option Closing Date, as the case may be. The certificates evidencing the Firm
Shares and any Additional Shares to be purchased hereunder shall be delivered to
you on the Closing Date or the Option Closing Date, as the case may be, against
payment of the purchase price therefor in immediately available funds.
5. AGREEMENTS OF THE COMPANY. The Company agrees with the several
Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the registration statement or a post-effective amendment thereto
or any Abbreviated Registration Statement to be declared effective before the
offering of the Shares may commence, the Company will endeavor to cause the
Registration Statement or such post-effective amendment to become effective as
soon as possible and will advise you promptly and, if requested by you, will
confirm such advice in writing, when the Registration Statement or such
post-effective amendment has become effective.
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(b) The Company will advise you promptly and, if requested by
you, will confirm such advice in writing: (i) of any request by the Commission
for amendment of or a supplement to the Registration Statement, any Prepricing
Prospectus or the Prospectus or for additional information; (ii) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction or the initiation of any proceeding for
such purpose; and (iii) within the period of time referred to in paragraph (f)
below, of any change in the Company's condition (financial or other), business,
prospects, properties, net worth or results of operations, or of the happening
of any event, which makes any statement of a material fact made in the
Registration Statement or the Prospectus (as then amended or supplemented)
untrue or which requires the making of any additions to or changes in the
Registration Statement or the Prospectus (as then amended or supplemented) in
order to state a material fact required by the Act or the regulations thereunder
to be stated therein or necessary in order to make the statements therein not
misleading, or of the necessity to amend or supplement the Prospectus (as then
amended or supplemented) to comply with the Act or any other law. If at any time
the Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible time.
(c) The Company will furnish to you, without charge, three
signed copies of the registration statement as originally filed with the
Commission and of each amendment thereto, including financial statements and all
exhibits to the registration statement and will also furnish to you, without
charge, such number of conformed copies of the registration statement as
originally filed and of each amendment thereto, but without exhibits, as you may
request.
(d) The Company will not (i) file any amendment to the
Registration Statement or make any amendment or supplement to the Prospectus of
which you shall not previously have been advised or to which you shall object
after being so advised or (ii) so long as, in the opinion of counsel for the
Underwriters, a prospectus is required to be delivered in connection with sales
by any Underwriter or dealer, file any information, documents or reports
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), without delivering a copy of such information, documents or reports to
you, as Representatives of the several Underwriters, prior to or concurrently
with such filing.
(e) Prior to the execution and delivery of this Agreement, the
Company has delivered or will deliver to you, without charge, in such quantities
as you have requested or may hereafter request, copies of each form of the
Prepricing Prospectus. The Company consents to the use, in accordance with the
provisions of the Act and with the securities or Blue Sky laws of the
jurisdictions in which the Shares are offered by the several Underwriters and by
dealers, prior to the date of the Prospectus, of each Prepricing Prospectus so
furnished by the Company.
(f) As soon after the execution and delivery of this Agreement
as possible and thereafter from time to time for such period as in the opinion
of counsel for the Underwriters a prospectus is required by the Act to be
delivered in connection with sales by any Underwriter or dealer, the Company
will expeditiously deliver to each Underwriter and each dealer, without charge,
as many copies of the Prospectus (and of any amendment or supplement thereto) as
you may request. The Company consents to the use of the Prospectus (and of any
amendment or supplement thereto) in accordance with the provisions of the Act
and with the securities or Blue Sky laws of the jurisdictions in which the
Shares are offered by the several Underwriters and by all dealers to whom Shares
may be sold, both in connection with the offering and sale of the Shares
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and for such period of time thereafter as the Prospectus is required by the Act
to be delivered in connection with sales by any Underwriter or dealer. If during
such period of time any event shall occur that in the judgment of the Company or
in the opinion of counsel for the Underwriters is required to be set forth in
the Prospectus (as then amended or supplemented) or should be set forth therein
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary to supplement or
amend the Prospectus to comply with the Act or any other law, the Company will
forthwith prepare and, subject to the provisions of paragraph (d) above, file
with the Commission an appropriate supplement or amendment thereto and will
expeditiously furnish copies thereof to the Underwriters and dealers in such
quantities as you shall request. In the event that the Company and you, as
Representatives of the several Underwriters, agree that the Prospectus should be
amended or supplemented, the Company, if requested by you, will promptly issue a
press release announcing or disclosing the matters to be covered by the proposed
amendment or supplement.
(g) The Company will cooperate with you and with counsel for
the Underwriters in connection with the registration or qualification of the
Shares for offering and sale by the several Underwriters and by dealers under
the securities or Blue Sky laws of such jurisdictions as you may designate and
will file such consents to service of process or other documents necessary or
appropriate in order to effect such registration or qualification; 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 Shares, in any jurisdiction where it is not now so
subject.
(h) The Company will make generally available to its security
holders a consolidated earnings statement, which need not be audited, covering a
twelve-month period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, as soon as practicable
after the end of such period, which consolidated earnings statement shall
satisfy the provisions of Section 11(a) of the Act.
(i) During the period of five years hereafter, the Company
will furnish to you (i) as soon as available, a copy of each report of the
Company mailed to stockholders or filed with the Commission, and (ii) from time
to time such other information concerning the Company as you may reasonably
request.
(j) If this Agreement shall terminate or shall be terminated
after execution pursuant to any provisions hereof (otherwise than pursuant to
the second paragraph of Section 12 hereof or by notice given by you terminating
this Agreement pursuant to Section 12 or Section 13 hereof) or if this Agreement
shall be terminated by the Underwriters because of any failure or refusal on the
part of the Company to comply with the terms or fulfill any of the conditions of
this Agreement, the Company agrees to reimburse the Representatives for all
out-of-pocket expenses (including fees and expenses of counsel for the
Underwriters) incurred by you in connection herewith.
(k) The Company will apply the net proceeds from the sale of
the Shares substantially in accordance with the description set forth in the
Prospectus.
(l) If Rule 430A of the Act is employed, the Company will
timely file the Prospectus pursuant to Rule 424(b) under the Act and will advise
you of the time and manner of such filing.
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(m) The Company will not offer to sell, contract to sell, sell
or otherwise transfer or dispose of, or grant any option or warrant to purchase,
any shares of Common Stock (or any securities convertible into or exercisable or
exchangeable for Common Stock) for a period of 90 days after the date of the
Prospectus (the "Lock-up Period") without the prior written consent of Xxxxx
Xxxxxx Inc., other than options granted at no less than fair market value
pursuant to its 1996 Stock Incentive Plan or its Non-employee Director Stock
Option Plan, each as in effect on the date hereof.
(n) The Company has furnished or will furnish to you "lock-up"
letters, in form and substance satisfactory to you, signed by each of its
current officers and directors and each of its stockholders designated by you.
(o) Except as stated in this Agreement and in the Prepricing
Prospectus and Prospectus, the Company has not taken, nor will it take, directly
or indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares.
(p) The Company will use its best efforts to have the Shares
listed on the Nasdaq National Market prior to or concurrently with the
effectiveness of the registration statement.
6. AGREEMENTS OF THE SELLING STOCKHOLDERS. Each of the Selling
Stockholders agrees with the several Underwriters as follows:
(a) Such Selling Stockholder will cooperate to the extent
necessary to cause the registration statement or any post-effective amendment
thereto to become effective at the earliest possible time.
(b) Such Selling Stockholder will pay all Federal and other
taxes, if any, on the transfer or sale of any Shares that are sold by such
Selling Stockholder to the Underwriters.
(c) Such Selling Stockholder will do or perform all things
reasonably required to be done or performed by such Selling Stockholder prior to
the Closing Date to satisfy all conditions precedent to the delivery of the
Shares to be sold by such Selling Stockholder pursuant to this Agreement.
(d) Such Selling Stockholder will not (and will not announce
or otherwise disclose any intention to) offer to sell, contract to sell, sell or
otherwise transfer or dispose of, or grant any option to purchase, any shares of
Common Stock (or any securities convertible into or exercisable or exchangeable
for Common Stock), or exercise any registration rights with respect to the sale
of Common Stock, owned by such Selling Stockholder during the Lock-up Period
without the prior written consent of Xxxxx Xxxxxx Inc., except for the sale of
Shares to the Underwriters pursuant to this Agreement.
(e) Except as stated in this Agreement and in the Prepricing
Prospectus and the Prospectus, such Selling Stockholder will not take, directly
or indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares.
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(f) Such Selling Stockholder will advise you promptly, and if
requested by you, will confirm such advice in writing, within the period of time
referred to in Section 5(f) hereof, of any change in information relating to
such Selling Stockholder and of any change in the Company's condition (financial
or other), business, prospects, properties, net worth or results of operations
or any other information relating to the Company or relating to any matter
stated in the Prospectus or any amendment or supplement thereto that comes to
the attention of such Selling Stockholder that would make any statement of a
material fact made in the Registration Statement or the Prospectus (as then
amended or supplemented, if amended or supplemented) untrue in any material
respect or would result in the Registration Statement or Prospectus (as then
amended or supplemented, if amended or supplemented) omitting to state a
material fact or a fact necessary to be stated therein in order to make the
statements therein not misleading in any material respect.
(g) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal Responsibility
Act of 1982, as amended, with respect to the transactions herein contemplated,
such Selling Stockholder agrees to deliver to you prior to or on the Closing
Date a properly completed and executed United States Treasury Department Form
W-9 (or other applicable form or statement specified by Treasury Department
regulations in lieu thereof).
7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter that:
(a) Each Prepricing Prospectus included as part of the
registration statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Act, complied when
so filed in all material respects with the provisions of the Act. The Commission
has not issued any order preventing or suspending the use of any Prepricing
Prospectus.
(b) The registration statement in the form in which it became
or becomes effective, and also in such form as it may be when any post-effective
amendment thereto or any Abbreviated Registration Statement shall become
effective, and the Prospectus and any supplement or amendment thereto when filed
with the Commission under Rule 424(b) under the Act, complied or will comply in
all material respects with the provisions of the Act and did not or will not at
any such times contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except that this representation and warranty does not
apply to statements in or omissions from the registration statement or the
Prospectus made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by or on behalf of such
Underwriter through you expressly for use therein.
(c) All the outstanding shares of capital stock of the Company
have been duly authorized and validly issued, are fully paid and nonassessable,
are free of any preemptive or similar rights and have been issued and sold in
compliance with all Federal and state securities laws; the Shares to be issued
and sold by the Company have been duly authorized and, when issued and delivered
to the Underwriters against payment therefor in accordance with the terms
hereof, will be validly issued, fully paid and nonassessable and free of any
preemptive or similar rights; and the capital stock of the Company conforms in
all material respects to the description thereof in the Registration Statement
and the Prospectus.
(d) The Company is a corporation duly organized, validly
existing and in good
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standing under the laws of the State of Delaware with full corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Registration Statement and the Prospectus, and is duly
registered and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the failure
so to register or qualify would not have a material adverse effect on the
condition (financial or other), business, prospects, properties, net worth or
results of operations of the Company and the Subsidiaries (as defined herein)
taken as a whole (a "Material Adverse Effect").
(e) 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 is a corporation duly organized, validly existing and in good
standing in the jurisdiction of its incorporation, with full corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Registration Statement and the Prospectus and is duly
registered and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration, except where the failure so to register or
qualify would not have a Material Adverse Effect. All the outstanding shares of
capital stock of each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and nonassessable and are wholly-owned by the Company
directly or indirectly through one of the other Subsidiaries, free and clear of
any lien, adverse claim, security interest, equity or other encumbrance, except
as disclosed in the Registration Statement and the Prospectus (or any amendment
or supplement thereto).
(f) There are no legal or governmental proceedings pending or,
to the knowledge of the Company, threatened, against the Company or any of the
Subsidiaries, or to which the Company or any of the Subsidiaries or any of their
respective properties is subject, that are required to be described in the
Registration Statement or the Prospectus but are not described as required.
There are no agreements, contracts, indentures, leases or other instruments that
are required to be described in the Registration Statement or the Prospectus or
to be filed as an exhibit to the Registration Statement that are not described
or filed as required by the Act. Neither the Company nor any of the Subsidiaries
is involved in any strike, job action or labor dispute, and to the Company's
best knowledge no such action or dispute is threatened.
(g) Neither the Company nor any of the Subsidiaries is (i) in
violation of its certificate of incorporation or by-laws or other organizational
documents, (ii) in violation of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any of the
Subsidiaries, the violation of which would have a Material Adverse Effect, (iii)
in violation of any decree of any court or governmental agency or body having
jurisdiction over the Company or any of the Subsidiaries, or (iv) in default in
any material respect in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence of
indebtedness or in any material agreement, indenture, lease or other instrument
to which the Company or any of the Subsidiaries is a party or by which any of
them or any of their respective properties may be bound.
(h) Neither the issuance and sale of the Shares, the
execution, delivery or performance of this Agreement by the Company nor the
consummation by the Company of the transactions contemplated hereby (i) requires
any consent, approval, authorization or other order of, or registration or
filing with, any court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may be required for the
registration of the
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Shares under the Act and the Exchange Act, all of which have been or will be
effected in accordance with this Agreement, and compliance with the securities
or Blue Sky laws of various jurisdictions) or conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, the certificate
of incorporation or bylaws, or other organizational documents, of the Company or
any of the Subsidiaries or (ii) conflicts or will conflict with or constitutes
or will constitute a breach of, or a default under, any agreement, indenture,
lease or other instrument to which the Company or any of the Subsidiaries is a
party or by which the Company or any of the Subsidiaries or any of their
respective properties may be bound, violates or will violate any statute, law or
regulation, filing, judgment, injunction, order or decree applicable to the
Company or any of the Subsidiaries or any of their respective properties or will
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the Subsidiaries pursuant to the
terms of any agreement or instrument to which it is a party or by which it may
be bound or to which any of the property or assets of it is subject.
(i) The accountants, Ernst & Young LLP, Xxxxx & Company, Ltd.
and Coopers & Xxxxxxx L.L.P., who have certified or shall certify the financial
statements filed or to be filed as part of the Registration Statement or the
Prospectus (or any amendment or supplement thereto), are independent public
accountants as required by the Act.
(j) The financial statements, together with the related
schedules and notes forming part of the Registration Statement and the
Prospectus (and any amendment or supplement thereto), comply with the
requirements of the Act and present fairly the consolidated financial position,
results of operations and changes in stockholders' equity and cash flows of the
Company and the Subsidiaries on the basis stated in the Registration Statement
at the respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein; the pro forma financial
information included in the Registration Statement and the Prospectus (and any
amendment or supplement thereto) has been prepared in accordance with
requirements of the Act and the rules and regulations of the Commission with
respect to pro forma financial information (including Article 11 of Regulation
S-X) and have been properly computed on the basis described therein, and the
assumptions used in preparing the pro forma financial statements and other pro
forma financial information included in the Registration Statement and the
Prospectus (or any amendment or supplement thereto) are reasonable, and the
adjustments used therein are reasonably appropriate to give effect to the
transactions or circumstances referred to therein; and the other financial and
statistical information and data set forth in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) are accurately presented
and prepared on a basis consistent with such financial statements and the books
and records of the Company.
(k) The Company has all requisite power and authority to
execute, deliver and perform its obligations under this Agreement. The execution
and delivery of, and the performance by the Company of its obligations under,
this Agreement have been duly and validly authorized by the Company. This
Agreement has been duly executed and delivered by the Company and constitutes
the valid and legally binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as rights to indemnity and
contribution hereunder may be limited by federal or state securities laws or
principles of public policy and subject to the qualification that the
enforceability of the Company's obligations hereunder may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights generally and by general
equitable principles.
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(l) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), neither
the Company nor any of the Subsidiaries has incurred any liability or
obligation, direct or contingent, or entered into any transaction that is
material to the Company and the Subsidiaries taken as a whole, and there has not
been any material change in the capital stock, or material increase in the
consolidated short-term or long-term debt, of the Company and the Subsidiaries,
or any material adverse change, or any development involving or which may
reasonably be expected to involve a prospective material adverse change, in the
condition (financial or other), business, prospects, properties, net worth or
results of operations of the Company and the Subsidiaries taken as a whole.
(m) Each of the Company and the Subsidiaries has good and
marketable title to all property (real and personal) described in the Prospectus
as being owned by it, free and clear of all liens, claims, security interests or
other encumbrances, except such as are described in the Registration Statement
and the Prospectus, and all the property described in the Prospectus as being
held under lease by the Company or any of the Subsidiaries is held by it under
valid, subsisting and enforceable leases.
(n) The Company has not distributed and, prior to the later to
occur of the Closing Date and completion of the distribution of the Shares, will
not distribute any offering material in connection with the offering and sale of
the Shares other than the Registration Statement, the Prepricing Prospectus, the
Prospectus or other materials, if any, permitted by the Act and state securities
or Blue Sky laws.
(o) Each of the Company and the Subsidiaries has such permits,
licenses, franchises, authorizations and clearances ("Permits") of governmental
or regulatory authorities, including without limitation, all authorizations
required for participation in federal financial aid programs under Title IV
("Title IV Programs") of the Higher Education Act of 1965, as amended, as are
necessary to own, lease and operate its properties and to conduct its business
in the manner described in the Prospectus, subject to such qualifications as may
be set forth in the Prospectus. Subject to such qualifications as may be set
forth in the Prospectus, each of the Company and the Subsidiaries has fulfilled
and performed all its material obligations with respect to the Permits, and no
event has occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material impairment of
the rights of the holder of any Permit, subject in each case to such
qualification as may be set forth in the Prospectus. Except as described in the
Prospectus, none of the Permits contains any restriction that is materially
burdensome to the Company or any of the Subsidiaries.
(p) Neither the Company nor any of any of the Subsidiaries has
received nor is it aware of any communication (written or oral) relating to the
termination or modification or threatened termination or modification of the
agreements described or referred to in the Prospectus nor is it aware of any
communication (written or oral) relating to any determination or threatened
determination not to renew or extend any agreement described or referred to in
the Prospectus at the end of the current term of any such agreement.
(q) The property, assets and operations of the Company and the
Subsidiaries comply in all material respects with all applicable federal, state
and local laws, rules, orders, decrees, judgments, injunctions, licenses,
permits or regulations relating to environmental matters (the "Environmental
Laws"). To the Company's best knowledge, none of the Company's nor any of
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the Subsidiaries' property, assets or operations is the subject of any federal,
state or local investigation evaluating whether any remedial action is needed to
respond to a release of any substance regulated by or form the basis of
liability under any Environmental Laws (a "Hazardous Material") into the
environment or is in contravention of any federal, state, local or foreign law,
order or regulation. Neither the Company nor any of the Subsidiaries has
received any notice or claim, nor are there any pending or, to the Company's
best knowledge, threatened or reasonably anticipated lawsuits or other
proceedings against it with respect to violations of an Environmental Law or in
connection with the release of any Hazardous Material into the environment.
Neither the Company nor any of the Subsidiaries has any material contingent
liability in connection with any release of Hazardous Material into the
environment.
(r) Each of the Company and the Subsidiaries is insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as is customary in the businesses in which it is engaged;
all policies of insurance insuring the Company and each of the Subsidiaries or
their respective businesses, assets, employees, officers and directors are in
full force and effect; the Company and each of the Subsidiaries is in compliance
with the terms of such policies and instruments in all material respects; and
there are no claims by the Company or any of the Subsidiaries under any such
policy or instrument as to which any insurance company is denying liability or
defending under a reservation of rights clause.
(s) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(t) Neither the Company nor any of the Subsidiaries nor, to
the Company's best knowledge, any employee or agent of the Company or any of the
Subsidiaries has made any payment of funds of the Company or any of the
Subsidiaries or received or retained any funds in violation of any law, rule or
regulation, which payment, receipt or retention of funds is of a character
required to be disclosed in the Prospectus.
(u) Each of the Company and the Subsidiaries has filed all
federal, state, local and foreign tax returns and tax forms required to be
filed; such returns and forms are complete and correct in all material respects;
and all taxes shown by such returns or otherwise assessed that are due or
payable have been paid, except such taxes as are being contested in good faith
and as to which adequate reserves have been provided. All payroll withholdings
required to be made by the Company or any of the Subsidiaries with respect to
employees have been made. The charges, accruals and reserves on the books of the
Company and the Subsidiaries in respect of any tax liability for any year not
finally determined are adequate to meet any assessments or reassessments for
additional taxes; and there have been no tax deficiencies asserted and, to the
best knowledge of the Company, no tax deficiency might be reasonably asserted or
threatened against the Company or any of the Subsidiaries that could,
individually or in the aggregate, have a Material Adverse Effect.
(v) No holder of any security of the Company has any right
(other than rights that have been validly waived) to require registration of
shares of Common Stock or any other security of the Company because of the
filing of the registration statement or the consummation of the
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transactions contemplated by this Agreement and, except as disclosed in the
Prospectus, no person has the right to require registration under the Act of any
shares of Common Stock or other securities of the Company. No person has the
right, contractual or otherwise, to cause the Company to permit such person to
underwrite the sale of any of the Shares. Except as described in or contemplated
by the Prospectus, there are no outstanding options, warrants or other rights
calling for the issuance of, and there are no commitments, plans or arrangements
to issue, any shares of capital stock of the Company or any of the Subsidiaries
or any security convertible into or exchangeable or exercisable for capital
stock of the Company or any of the Subsidiaries.
(w) The Company and the Subsidiaries own or possess all
trademarks, trademark registrations, service marks, service xxxx registrations,
trade names, copyrights, licenses, trade secrets and rights described in the
Prospectus as being owned by any of them or necessary for the conduct of their
respective businesses, and the Company is not infringing upon the rights of any
other person with respect to the foregoing.
(x) The Company is not, and, upon the sale of the Shares to be
issued and sold by it hereunder and application of the net proceeds from such
sale as described in the Prospectus under the caption "Use of Proceeds," will
not be an "investment company" within the meaning of the Investment Company Act
of 1940, as amended.
(y) The Company and each of the Subsidiaries is in compliance
with all provisions of Florida Statutes ss.517.075 and the regulations
thereunder, relating to issuers doing business with Cuba.
(z) The Company has filed in a timely manner with the
Commission each document required to be filed by it pursuant to the Exchange
Act, each such document at the time it was filed conformed in all material
respects to the requirements of the Exchange Act and none of such documents
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading.
8. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS.
Each of the Selling Stockholders represents and warrants to each Underwriter
that:
(a) Such Selling Stockholder now has, and on the Closing Date
will have, valid and marketable title to the Shares to be sold by such Selling
Stockholder, free and clear of any lien, claim, security interest or other
encumbrance, including, without limitation, any restriction on transfer or other
defect in title.
(b) Such Selling Stockholder now has, and on the Closing Date
will have, full legal right, power and authorization, and any approval required
by law (except such as may be required under the Act or state securities or Blue
Sky laws governing the purchase and distribution of the Shares), to sell,
assign, transfer and deliver the Shares to be sold by such Selling Stockholder
in the manner provided in this Agreement, and upon delivery of and payment for
such Shares hereunder, the several Underwriters will acquire valid and
marketable title to such Shares, free and clear of any lien, claim, security
interest, or other encumbrance or restriction on transfer or other defect in
title.
(c) This Agreement and the Custody Agreement have been duly
authorized, executed and delivered by or on behalf of such Selling Stockholder
and are the valid and binding agreements of such Selling Stockholder,
enforceable against such Selling Stockholder in
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accordance with their respective terms, except as rights to indemnity and
contribution hereunder may be limited by federal or state securities laws or
principles of public policy and except as enforcement hereof and thereof may be
limited by bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors' rights generally
and by general equitable principles.
(d) Neither the execution and delivery of this Agreement or
the Custody Agreement by or on behalf of such Selling Stockholder nor the
consummation of the transactions herein or therein contemplated by or on behalf
of such Selling Stockholder requires any consent, approval, authorization or
order of, or filing or registration with, any court, regulatory body,
administrative agency or other governmental body, agency or official (except
such as may be required under the Act or state securities or Blue Sky laws
governing the purchase and distribution of the Shares) 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 such Selling Stockholder is a party or by which such Selling Stockholder
is or may be bound or to which any of such Selling Stockholder's property or
assets is subject, or any statute, law, rule, regulation, ruling, judgement,
injunction, order or decree applicable to such Selling Stockholder or to any
property or assets of such Selling Stockholder, except in each case as would not
adversely affect the ability of such Selling Stockholder to consummate the
transactions contemplated by this Agreement.
(e) Such Selling Stockholder has reviewed the Registration
Statement and the Prospectus. The parts of the Registration Statement and the
Prospectus relating to such Selling Stockholder do not contain an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. Such Selling Stockholder does not have actual knowledge
that the Registration Statement or Prospectus contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(f) The representation and warranties of such Selling
Stockholder herein and in the Custody Agreement are, and on the Closing Date
will be, true and correct.
(g) Such Selling Stockholder has not taken, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares, except for the lock-up arrangements
described in the Prospectus.
9. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each of you and each other Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act from and against any and all losses,
claims, damages, liabilities and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any Prepricing Prospectus or in
the Registration Statement or the Prospectus or in any amendment or supplement
thereto, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission which has been
made therein or omitted therefrom in reliance upon and in conformity with the
information relating to such Underwriter furnished in writing to
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the Company by or on behalf of any Underwriter through you expressly for use in
connection therewith; provided, however, that the indemnification contained in
this paragraph (a) with respect to any Prepricing Prospectus shall not inure to
the benefit of any Underwriter (or to the benefit of any person controlling such
Underwriter) on account of any such loss, claim, damage, liability or expense
arising from the sale of Shares by such Underwriter to any person if (i) a copy
of the Prospectus shall not have been delivered or sent to such person within
the time required by the Act and the untrue statement or alleged untrue
statement or omission or alleged omission of a material fact contained in such
Prepricing Prospectus was corrected in the Prospectus and (ii) the Company has
delivered the Prospectus to the several Underwriters in requisite quantity on a
timely basis to permit such delivery or sending. The foregoing indemnity
agreement shall be in addition to any liability which the Company may otherwise
have.
(b) If any action, suit or proceeding shall be brought against
any Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Company, such Underwriter or such
controlling person shall promptly notify the Company, and the Company shall
assume the defense thereof, including the employment of counsel and payment of
all fees and expenses. Such Underwriter or any such controlling person shall
have the right to employ separate counsel in any such action, suit or proceeding
and to participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Underwriter or such controlling person
unless (i) the Company has agreed in writing to pay such fees and expenses, (ii)
the Company has failed to assume the defense and employ counsel or (iii) the
named parties to any such action, suit or proceeding (including any impleaded
parties) include both such Underwriter or such controlling person and the
Company and such Underwriter or such controlling person shall have been advised
by its counsel that representation of such indemnified party and the Company 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 (in
which case the Company shall not have the right to assume the defense of such
action, suit or proceeding on behalf of such Underwriter or such controlling
person). It is understood, however, that the Company shall, in connection with
any one such action, suit or proceeding or separate but substantially similar or
related actions, suits or proceedings in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for all such Underwriters and controlling persons not
having actual or potential differing interests with you or among themselves,
which firm shall be designated in writing by Xxxxx Xxxxxx Inc., and that all
such fees and expenses shall be reimbursed as they are incurred. The Company
shall not be liable for any settlement of any such action, suit or proceeding
effected without its written consent, but if settled with such written consent,
or if there be a final judgment for the plaintiff in any such action, suit or
proceeding, the Company agrees to indemnify and hold harmless any Underwriter
and any such controlling person, to the extent provided in the preceding
paragraph, from and against any loss, claim, damage, liability or expense by
reason of such settlement or judgment.
(c) The Selling Stockholders agree to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act to
the same extent as the indemnity from the Company to each Underwriter set forth
in paragraph (a) above, but only with respect to information relating to such
Selling Stockholder furnished in writing to the Company by or on behalf of such
Selling Stockholder expressly for use in the Registration Statement, the
Prospectus or any Prepricing Prospectus, or any amendment or supplement thereto
and subject to the provisions of paragraph (g) below. In case any action or
claim shall be brought or asserted against
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any Underwriter or any such controlling person in respect of which indemnity may
be sought against the Selling Stockholders pursuant to this paragraph (c), the
Selling Stockholders shall have the rights and duties given to the Company, and
each Underwriter and any such controlling person shall have the rights and
duties given to the Underwriters, under paragraph (b) above. The foregoing
indemnity agreement shall be in addition to any liability which the Selling
Stockholders may otherwise have.
(d) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, any person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act and each
Selling Stockholder, to the same extent as the foregoing indemnity from the
Company to each Underwriter, but only with respect to information relating to
such Underwriter furnished in writing to the Company by or on behalf of such
Underwriter through you expressly for use in the Registration Statement, the
Prospectus or any Prepricing Prospectus, or any amendment or supplement thereto.
If any action, suit or proceeding shall be brought against the Company, any of
its directors, any such officer, any such controlling person or any Selling
Stockholder based on the Registration Statement, the Prospectus or any
Prepricing Prospectus, or any amendment or supplement thereto, and in respect of
which indemnity may be sought against any Underwriter pursuant to this paragraph
(d), such Underwriter shall have the rights and duties given to the Company by
paragraph (b) above (except that if the Company shall have assumed the defense
thereof such Underwriter shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof, but the fees and
expenses of such counsel shall be at such Underwriter's expense), and the
Company, its directors, any such officer, any such controlling person and any
Selling Stockholder shall have the rights and duties given to the Underwriters
by paragraph (b) above. The foregoing indemnity agreement shall be in addition
to any liability which the Underwriters may otherwise have.
(e) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under paragraphs (a), (c) or (d) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters on the
other hand from the offering of the Shares, or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Selling Stockholders on
the one hand and the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions received by
the Underwriters, in each case as set forth in the table on the cover page of
the Prospectus; provided that, in the event that the Underwriters shall have
purchased any Additional Shares hereunder, any determination of the relative
benefits received by the Company and the Selling Stockholders and the
Underwriters from the offering of the Shares shall include the net proceeds
(before deducting expenses) received by the Company and the Selling
Stockholders, and the underwriting discounts and commissions received by the
Underwriters, from the sale of such Additional Shares, in each case computed on
the basis of the respective amounts set forth in the notes to the table on the
cover page of the Prospectus. The relative fault of the Company and
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the Selling Stockholders on the one hand and the Underwriters on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Selling Stockholders on the one hand or by the Underwriters on the other hand
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(f) The Company, the Selling Stockholders and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by a pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to in paragraph (e) above. The amount paid or payable by an indemnified party as
a result of the losses, claims, damages, liabilities and expenses referred to in
paragraph (e) above shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating any claim or defending any such action,
suit or proceeding. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price of the Shares underwritten by it and distributed to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. 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. The Underwriters' obligations to contribute pursuant to this
Section 9 are several in proportion to the respective numbers of Firm Shares set
forth opposite their names in Schedule II hereto (or such numbers of Firm Shares
increased as set forth in Section 12 hereof) and not joint.
(g) Notwithstanding any other provision of this Section 9, the
total liability of any Selling Stockholder for indemnification or contribution
under this Section 9 shall not exceed an amount equal to the number of Shares
sold by such Selling Stockholder hereunder multiplied by the purchase price per
share set forth in Section 2 hereof.
(h) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.
(i) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 9 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 9 and the
representations and warranties of the Company and the Selling Stockholders set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter or
any person controlling any Underwriter, the Company, its directors or officers
or any person controlling the Company or the Selling Stockholders, (ii)
acceptance of any Shares and payment therefor hereunder and (iii) any
termination of this Agreement. A successor to any Underwriter or any person
controlling any Underwriter, or to the Company, its directors or officers, or
any person controlling the Company or the Selling Stockholders shall be entitled
to the benefits of the indemnity, contribution and reimbursement
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agreements contained in this Section 9.
10. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters to purchase the Firm Shares hereunder are
subject to the following conditions:
(a) If, at the time this Agreement is executed and delivered,
it is necessary for the registration statement or a post-effective amendment
thereto or an Abbreviated Registration Statement to be declared effective before
the offering of the Shares may commence, the registration statement or such
post-effective amendment or Abbreviated Registration Statement shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by you, and all
filings, if any, required by Rules 424 and 430A under the Act shall have been
timely made.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, prospects, properties, net worth, or results of operations of the
Company or any of the Subsidiaries not contemplated by the Prospectus, which in
your opinion, as Representatives of the several Underwriters, would materially,
adversely affect the market for the Shares, or (ii) any event or development
relating to or involving the Company or any of the Subsidiaries, or any officer
or director of the Company or any of the Subsidiaries, which makes any statement
made in the Prospectus untrue or which, in the opinion of the Company and its
counsel or the Underwriters and their counsel, requires the making of any
addition to or change in the Prospectus in order to state a material fact
required by the Act or any other law to be stated therein or necessary in order
to make the statements therein not misleading, if amending or supplementing the
Prospectus to reflect such event or development would, in your opinion, as
Representatives of the several Underwriters, materially, adversely affect the
market for the Shares.
(c) You shall have received on the Closing Date an opinion of
Greenberg, Traurig, Hoffman, Lipoff, Xxxxx & Xxxxxxx, P.A., counsel for the
Company and the Selling Stockholders, dated the Closing Date and addressed to
you, as Representatives of the several Underwriters, that:
(i) The Company is a corporation duly incorporated and
validly existing in good standing under the laws of the State of
Delaware with full corporate power and authority to conduct its
business as described in the Registration Statement and the Prospectus
(and any amendment or supplement thereto), and is duly qualified to
conduct its business and is in good standing as a foreign corporation
in each jurisdiction where the conduct of its business requires
qualification, except where the failure so to register or qualify would
not have a Material Adverse Effect;
(ii) Each Subsidiary is a corporation duly incorporated and
validly existing and in good standing under the laws of the
jurisdiction of its organization, with full corporate power and
authority to conduct its business as described in the Registration
Statement and the Prospectus (and any amendment or supplement thereto);
each Subsidiary is duly qualified to conduct its business and is in
good standing as a foreign corporation in each jurisdiction where the
conduct of its business requires such registration or qualification,
except where the failure so to register or qualify or to be in good
standing would not have a Material Adverse Effect; and all the
outstanding shares of capital stock of each of the Subsidiaries have
been duly authorized and validly issued, are fully paid and
nonassessable and are owned of record by the Company directly, or
indirectly through one of the other
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Subsidiaries, free and clear of any perfected security interest or, to
such counsel's knowledge, any other lien, adverse claim, equity or
other encumbrance, except as disclosed in the Registration Statement
and the Prospectus (or any amendment or supplement thereto);
(iii) The authorized capital stock of the Company is as set
forth under the caption "Capitalization" in the Prospectus, and the
authorized capital stock of the Company conforms in all material
respects as to legal matters to the description contained in the
Prospectus under the caption "Description of Capital Stock";
(iv) All the shares of capital stock of the Company
outstanding prior to the issuance of the Shares have been duly
authorized and validly issued and are fully paid and nonassessable;
(v) The Shares have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor in
accordance with the terms hereof, will be validly issued, fully paid
and nonassessable and free of (A) any preemptive rights arising under
the Company's certificate of incorporation or the Delaware General
Corporation Law or (B) to the knowledge of such counsel, similar rights
provided for in any agreement filed as an exhibit to the Registration
Statement that entitle or will entitle any person to acquire any shares
of capital stock of the Company upon the issuance and sale of the
Shares by the Company;
(vi) The form of certificate for the Shares conforms to the
requirements of the Delaware General Corporation Law;
(vii) Such counsel has received oral confirmation from the
staff of the Commission that the Registration Statement and all
post-effective amendments, if any, have become effective under the Act
and, to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose are pending before or contemplated by the
Commission; and any required filing of the Prospectus pursuant to Rule
424(b) has been made in accordance with Rule 424(b);
(viii) The Company has the corporate power and authority to
enter into this Agreement and to issue, sell and deliver to the
Underwriters the Shares to be issued and sold by the Company as
provided herein, and this Agreement has been duly authorized, executed
and delivered by the Company and is a valid, legal and binding
agreement of the Company, enforceable against the Company in accordance
with its terms, except as enforcement of rights to indemnity and
contribution hereunder may be limited by federal or state securities
laws or principles of public policy and subject to the qualification
that the enforceability of the Company's obligations hereunder may be
limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium and other laws relating to or affecting
creditors' rights generally and by general equitable principles;
(ix) To the knowledge of such counsel, neither the Company
nor any of the Subsidiaries is in violation of its certificate of
incorporation or bylaws or in default in the performance of any
material obligation, agreement or condition contained in any bond,
debenture, note or other evidence of indebtedness, or in any agreement,
indenture, lease or other instrument to which the Company or any
Subsidiary is a party or by which any of them or any of their
respective properties may be bound which default would have a
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Material Adverse Effect, in each case that is made an exhibit to the
Registration Statement;
(x) Neither the offer, sale or delivery of the Shares, the
execution, delivery or performance of this Agreement, compliance by the
Company with the provisions hereof nor consummation by the Company of
the transactions contemplated hereby conflicts with or constitutes a
breach of, or a default under, the certificate of incorporation or
bylaws, or other organizational documents, of the Company or any of the
Subsidiaries or any agreement, indenture, lease or other instrument to
which the Company or any of the Subsidiaries is a party or by which the
Company or any of the Subsidiaries or any of their respective
properties is bound that is made an exhibit to the Registration
Statement, or is known to such counsel after reasonable inquiry, or to
the knowledge of such counsel will result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Company or any of the Subsidiaries, nor, to our knowledge, will any
such action result in any violation of any existing law, regulation,
ruling (assuming compliance with all applicable state securities or
Blue Sky laws), judgment, injunction, order or decree applicable to the
Company or any of the Subsidiaries or any of their respective
properties;
(xi) No consent, approval, authorization or other order of,
or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency, or official
is required on the part of the Company or any of the Subsidiaries
(except as have been obtained under the Act and the Exchange Act or
such as may be required under state securities or Blue Sky laws
governing the purchase and distribution of the Shares and the clearance
of the Offering with the National Association of Securities Dealers)
for the valid issuance and sale of the Shares to the Underwriters as
contemplated by this Agreement;
(xii) The Registration Statement and the Prospectus and any
supplements or amendments thereto (except for the financial statements
and the notes thereto and the schedules and other financial and
statistical data included therein, as to which such counsel need not
express any opinion) comply as to form in all material respects with
the requirements of the Act;
(xiii) To the knowledge of such counsel, (A) there are no
legal or governmental proceedings pending or threatened against the
Company or any of the Subsidiaries, or to which the Company or any of
the Subsidiaries or any of their respective properties is subject,
which are required to be described in the Registration Statement or
Prospectus (or any amendment or supplement thereto) that are not
described as required and (B) there are no agreements, contracts,
indentures, leases or other instruments that are required to be
described in the Registration Statement or the Prospectus (or any
amendment or supplement thereto) or to be filed as an exhibit to the
Registration Statement that are not described or filed as required, as
the case may be;
(xiv) To the knowledge of such counsel, neither the Company
nor any of the Subsidiaries is in violation of any law, ordinance,
administrative or governmental rule or regulation applicable to the
Company or any such Subsidiary the violation of which would have a
Material Adverse Effect, or of any decree of any court or governmental
agency or body having jurisdiction over the Company or any of the
Subsidiaries;
(xv) To the knowledge of such counsel, each of the Company
and the Subsidiaries
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has all necessary Permits (other than those Permits specifically
required to participate in Title IV Programs or pursuant to which the
Company or any of the Subsidiaries must be authorized by applicable
states to engage in rendering educational services, as to which such
counsel need not express an opinion), to own its properties and to
conduct its business as now being conducted as described in the
Registration Statement and the Prospectus (except where the failure to
so have any such Permits, individually or in the aggregate, would not
have a Material Adverse Effect);
(xvi) The statements in the Registration Statement and
Prospectus, insofar as they refer to statements of law or legal
conclusions, are accurate in all material respects (except with respect
to Title IV Programs, as to which such counsel need not express an
opinion);
(xvii) Except as described in the Prospectus, such counsel
does not know of any holder of any securities of the Company or any of
the Subsidiaries who has the right, as a result of the filing of the
Registration Statement, to require the Company to register under the
Act any shares of Common Stock or other securities of the Company, and
any registration rights in connection with the offering contemplated
hereby have been validly waived;
(xviii) The Company is not an "investment company" or a person
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended;
(xix) This Agreement and the Custody Agreement have each
been duly executed and delivered by or on behalf the Selling
Stockholders;
(xx) To the knowledge of such counsel, each of the Selling
Stockholders 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 Shares which such Selling Stockholder has
agreed to sell pursuant to this Agreement; upon delivery of such Shares
pursuant to this Agreement and payment therefor as contemplated herein
and assuming that the several Underwriters purchased such Shares in
good faith and without notice of an adverse claim within the meaning of
the Uniform Commercial Code (the "UCC"), the Underwriters will acquire
such Shares free and clear of any adverse claim (within the meaning of
Section 8-302 of the UCC);
(xxi) To the knowledge of such counsel, the execution and
delivery of this Agreement and the Custody Agreement by or on behalf of
the Selling Stockholders and the consummation of the transactions
contemplated hereby and thereby will not conflict with, violate, result
in a breach of or constitute a default under the terms or provisions of
any agreement, indenture or other instrument to which any of the
Selling Stockholder is a party or by which any of the Selling
Stockholders or the assets or property of any of the Selling
Stockholders is bound, or any court order or decree or any law, rule,
or regulation applicable to any of the Selling Stockholders or to the
property or assets of any of the Selling Stockholders; and
In addition, such counsel shall state that although such
counsel has not undertaken, except as otherwise indicated in their opinion, to
determine independently, and does not assume any responsibility for, the
accuracy, completeness or fairness of the statements in the Registration
Statement, such counsel has participated in the preparation of the Registration
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Statement and the Prospectus, including review and discussion of the contents
thereof, and nothing has come to the attention of such counsel that has caused
it to believe that the Registration Statement, at the time the Registration
Statement became effective, contained an untrue statement of a material fact or
omitted to state a 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 as of the Closing Date or the Option Closing Date, as the case may be,
contained or contains an untrue statement of a material fact or omitted or omits
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, or
that any amendment or supplement to the Prospectus, as of its date, and as of
the Closing Date or the Option Closing Date, as the case may be, contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need express no opinion with respect to the financial
statements and the notes thereto and the schedules and other financial and
statistical data included in the Registration Statement or the Prospectus).
In rendering their opinion as aforesaid, such counsel may rely
as to factual matters (i) upon certificates of the Selling Stockholders and (ii)
the representations of the Selling Stockholders contained herein and in the
Custody Agreement. In rendering their opinion as aforesaid, counsel may rely
upon an opinion or opinions, each dated the Closing Date, of other counsel
retained by them or the Company as to laws of any jurisdiction other than the
federal laws of United States or the State of New York or the corporation law of
the State of Delaware, provided that (1) each such local counsel is acceptable
to the Representatives, (2) such reliance is expressly authorized by each
opinion so relied upon and a copy of each such opinion is delivered to the
Representatives and is, in form and substance, satisfactory to them and counsel
for the Underwriters and (3) counsel shall state in their opinion that they
believe that they and the Underwriters are justified in relying thereon.
(d) You shall have received on the Closing Date an opinion of
Powers, Pyles, Xxxxxx & Xxxxxxxx, P.C., special regulatory counsel for the
Company, dated the Closing Date and addressed to you, as Representatives of the
several Underwriters, that:
(i) The statements in the Prospectus under the captions "Risk
Factors-Dependance on Title IV Funding; Regulatory Compliance as a
Condition for Continued Eligibility for Title IV Funding," "Risk
Factors-Change in Ownership Resulting in Change in Control," "Risk
Factors-Participation in Federal Direct Lending Program; Risk of
Legislative Action," "Risk Factors-Reliance on Acquisitions," "Risk
Factors--Ability to Open Additional Schools," and "Licensing,
Accreditation and Financial Aid Regulation," and other references
therein to educational regulatory matters, insofar as such statements
constitute a summary of applicable federal and state laws and
regulations or a summary of judicial or administrative proceedings, are
accurate and present fairly the information purported to be shown;
(ii) Such counsel have no actual knowledge that lead them to
believe that the information contained in the Registration Statement
and the Prospectus forming a part thereof under the captions "Risk
Factors-Dependance on Title IV Funding; Regulatory Compliance as a
Condition for Continued Eligibility for Title IV Funding," "Risk
Factors-Change in Ownership Resulting in Change in Control," "Risk
Factors-Participation in Federal Direct Lending Program; Risk of
Legislative Action," "Risk Factors-Reliance on
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Acquisitions," "Risk Factors--Ability to Open Additional Schools," and
"Licensing, Accreditation and Financial Aid Regulation," as of the time
the Registration Statement became effective and as of the date of the
Prospectus and as of the Closing Date, contained any untrue statement
of a material fact, or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading;
(iii) The Offering will not constitute a change in ownership
resulting in a change in control under the Higher Education Act of
1965, as amended, or the regulations of the Department promulgated
thereunder; and
(iv) To the best of such counsel's actual knowledge, each of
the Company and the Subsidiaries has all necessary Permits required for
each of the Company and the Subsidiaries to participate in Title IV
Programs or pursuant to which the Company or any of the Subsidiaries
must be authorized by applicable states to engage in rendering
educational services as described in the Registration Statement and the
Prospectus (except where the failure to so have any such Permits,
individually or in the aggregate, would not have a Material Adverse
Effect).
(e) You shall have received on the Closing Date an opinion of
Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriters, dated the Closing Date and
addressed to you, as Representatives of the several Underwriters, with respect
to the matters referred to in clauses (v) (other than subclause (B) thereof),
(vii), (viii), (xii) and the penultimate paragraph of Section 10(c) hereof and
such other related matters as you may request.
(f) You shall have received letters addressed to you and dated
the date hereof and the Closing Date from Ernst & Young LLP, Xxxxx & Company,
Ltd. and Coopers & Xxxxxxx L.L.P., independent certified public accountants,
substantially in the forms heretofore approved by you.
(g)(i) 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, to the knowledge of the Company,
contemplated by the Commission at or prior to the Closing Date and any request
of the Commission for additional information (to be included in the registration
statement or the prospectus or otherwise) shall have been complied with; (ii)
there shall not have been any material change in the capital stock of the
Company nor any material increase in the short-term or long-term debt of the
Company and the Subsidiaries, taken as a whole, from that set forth or
contemplated in the Registration Statement or the Prospectus (or any amendment
or supplement thereto); (iii) there shall not have been, since the respective
dates as of which information is given in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), except as may otherwise be
stated in the Registration Statement and Prospectus (or any amendment or
supplement thereto), any material adverse change in the condition (financial or
other), business, prospects, properties, net worth or results of operations of
the Company and the Subsidiaries, taken as a whole; (iv) neither the Company nor
any of the Subsidiaries shall have any liabilities or obligations, direct or
contingent (whether or not in the ordinary course of business), that are
material to the Company and the Subsidiaries, taken as a whole, other than those
reflected in or contemplated by the Registration Statement or the Prospectus (or
any amendment or supplement thereto); and (v) all the representations and
warranties of the Company contained in this Agreement shall be true and correct
in all material respects on and as of the date hereof and on and as of the
Closing Date as if made on and as of the Closing Date, and you shall have
received a certificate, dated the Closing Date and signed by the
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chief executive officer and the chief financial officer of the Company (or
such other officers as are acceptable to you), as to the matters set forth in
this Section 10(g) and in Section 10(h) hereof.
(h) The Company shall not have failed at or prior to the
Closing Date to have performed or complied with any of its agreements herein
contained and required to be performed or complied with by it hereunder at or
prior to the Closing Date.
(i) All the representations and warranties of the Selling
Stockholders contained in this Agreement shall be true and correct on and as of
the date hereof and on and as of the Closing Date as if made on and as of the
Closing Date, and you shall have received a certificate, dated the Closing Date
and signed by or on behalf of the Selling Stockholders to the effect set forth
in this Section 10(i) and in Section 10(j) hereof.
(j) The Selling Stockholders shall not have failed at or prior
to the Closing Date to have performed or complied with any of their agreements
herein contained and required to be performed or complied with by them hereunder
at or prior to the Closing Date.
(k) The Shares shall have been approved for quotation subject
to notice of issuance on the Nasdaq Stock Market's National Market.
(l) The Company shall have furnished or caused to be furnished
to you such further certificates and documents as you shall have reasonably
requested.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are satisfactory
in form and substance to you, as Representatives of the several Underwriters,
and counsel for the Underwriters.
Any certificate or document signed by any officer of the
Company and delivered to you, as Representatives of the several Underwriters, or
to counsel for the Underwriters, shall be deemed a representation or warranty by
the Company to each Underwriter as to the statements made therein.
The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the satisfaction on and as of any
Option Closing Date of the conditions set forth in this Section 10, except that,
if any Option Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in paragraphs (c) through (g) shall be dated
the Option Closing Date in question and the opinions called for by paragraphs
(c), (d) and (e) shall be revised to reflect the sale of Additional Shares.
11. EXPENSES. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the registration statement (including financial
statements and exhibits thereto), each Prepricing 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
Prepricing Prospectus, the Prospectus, and all amendments or supplements to any
of them as may be reasonably requested for use in connection with the offering
and sale of the Shares; (iii) the preparation, printing, authentication,
issuance and delivery of certificates for the Shares, including any stamp taxes
in connection with the offering of the Shares; (iv) the printing (or
reproduction) and delivery of this Agreement, the preliminary and supplemental
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Blue Sky Memoranda and all other agreements or documents printed (or reproduced)
and delivered in connection with the offering of the Shares; (v) the
registration of the Common Stock under the Exchange Act and the listing of the
Shares on the Nasdaq National Market; (vi) the registration or qualification of
the Shares for offer and sale under the securities or Blue Sky laws of the
several states as provided in Section 5(g) hereof (including the reasonable
fees, expenses and disbursements of counsel for the Underwriters relating to the
preparation, printing or reproduction, and delivery of the preliminary and
supplemental Blue Sky Memoranda and such registration and qualification); (vii)
the filing fees and the reasonable fees and expenses of counsel for the
Underwriters in connection with any filings required to be made with the
National Association of Securities Dealers, Inc. in connection with the
offering; (viii) the transportation and other expenses incurred by or on behalf
of representatives of the Company in connection with presentations to
prospective purchasers of the Shares; (ix) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local and
special counsel) for the Company; and (x) the performance by the Company of its
other obligations under this Agreement.
12. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become effective:
(i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for the
registration statement or a post-effective amendment thereto or an Abbreviated
Registration Statement to be declared or become effective before the offering of
the Shares may commence, when notification of the effectiveness of the
registration statement or such post-effective amendment has been released by the
Commission or such Abbreviated Registration Statement has, pursuant to the
provisions of Rule 462 under the Act, become effective. Until such time as this
Agreement shall have become effective, it may be terminated by the Company, by
notifying you, or by you, as Representatives of the several Underwriters, by
notifying the Company.
If any one or more of the Underwriters shall fail or refuse to
purchase Shares which it or they have agreed to purchase hereunder, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of Shares which the Underwriters are obligated to purchase on
the Closing Date, each non-defaulting Underwriter shall be obligated, severally,
in the proportion which the number of Firm Shares set forth opposite its name in
Schedule I hereto bears to the aggregate number of Firm Shares set forth
opposite the names of all non-defaulting Underwriters or in such other
proportion as you may specify in accordance with Section 20 of the Master
Agreement Among Underwriters of Xxxxx Xxxxxx, Xxxxxx Xxxxx & Co. Incorporated
(predecessor of Xxxxx Xxxxxx Inc.), to purchase the Shares which such defaulting
Underwriter or Underwriters agreed, but failed or refused, to purchase. If any
Underwriter or Underwriters shall fail or refuse to purchase Shares which it or
they are obligated to purchase on the Closing Date and the aggregate number of
Shares with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares which the Underwriters are obligated to purchase on
the Closing Date and arrangements satisfactory to you and the Company for the
purchase of such Shares by one or more non-defaulting Underwriters or other
party or parties approved by you and the Company are not made within 36 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter or the Company. In any such case which does
not result in termination of this Agreement, either you or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any such default of any such
Underwriter under this Agreement. The term "Underwriter" as used in this
Agreement includes, for all purposes of
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this Agreement, any party not listed in Schedule II hereto who, with your
approval and the approval of the Company, purchases Shares which a defaulting
Underwriter agreed, but failed or refused, to purchase.
Any notice under this Section 12 may be given by telegram,
telecopy or telephone but shall be subsequently confirmed by letter.
13. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company, by notice to the Company, the Attorneys-in-Fact and
the Pecks Managed Entities, if prior to the Closing Date or any Option Closing
Date (if different from the Closing Date and then only as to the Additional
Shares), as the case may be, (i) trading in securities generally on the New York
Stock Exchange, the American Stock Exchange or the Nasdaq National Market shall
have been suspended or materially limited, (ii) a general moratorium on
commercial banking activities in New York shall have been declared by either
federal or state authorities, or (iii) there shall have occurred any outbreak or
escalation of hostilities or other international or domestic calamity, crisis or
change in political, financial or economic conditions, the effect of which on
the financial markets of the United States is such as to make it, in your
judgment, impracticable or inadvisable to commence or continue the offering of
the Shares at the offering price to the public set forth on the cover page of
the Prospectus or to enforce contracts for the resale of the Shares by the
Underwriters. Notice of such termination may be given by telegram, telecopy or
telephone and shall be subsequently confirmed by letter.
14. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set
forth in the last paragraph on the cover page, the stabilization legend on the
inside front cover page and the statements in the first and third paragraphs
under the caption "Underwriting" in any Prepricing Prospectus and in the
Prospectus constitute the only information furnished by or on behalf of the
Underwriters through you as such information is referred to in Sections 7(b) and
9 hereof.
15. MISCELLANEOUS. Except as otherwise provided in Sections 5, 12
and 13 hereof, notice given pursuant to any provision of this Agreement shall be
in writing and shall be delivered (i) if to the Company, at the office of the
Company at 0000 Xxxxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000,
Attention: Xxxx X. Xxxxxx, Chairman of the Board, President and Chief Executive
Officer, with a copy to Greenberg, Traurig, Hoffman, Lipoff, Xxxxx & Quentel,
P.A., 000 Xxxxx Xxxxxxx Xxxxx, Xxxx Xxxx Xxxxx, Xxxxxxx 00000, Attention: Xxxxxx
X. Xxxxx, Esq.; (ii) if to the Selling Stockholders (other than the Pecks
Managed Entities), in care of the Attorney-in-Fact at the office of the Company,
at the address given in clause (i), with a copy to Greenberg, Traurig, Hoffman,
Lipoff, Xxxxx & Quentel, P.A., Attention: Xxxxxx X. Xxxxx at the address given
in clause (i); (iii) if to the Pecks Managed Entities, care of Pecks Management
Partners Ltd., Xxx Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxx X. Xxxxxx, Managing Director; or (iv) if to you, as Representatives of
the several Underwriters, care of Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Manager, Investment Banking Division, with a
copy to Xxxxx Xxxxxxxxxx, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxxxxx X. Xxxxxx, Esq.
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This Agreement has been and is made solely for the benefit of
the several Underwriters, the Company, its directors, its officers who sign the
Registration Statement and the controlling persons referred to in Section 9
hereof and, to the extent provided herein, their respective successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement. Neither the term "successor" nor the term "successors and
assigns" as used in this Agreement shall include a purchaser from any
Underwriter of any of the Shares in his status as such purchaser.
16. APPLICABLE LAW; COUNTERPARTS. This Agreement shall 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.
This Agreement may be signed in various counterparts which
together constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
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Please confirm that the foregoing correctly sets forth the
agreement among the Company, the several Selling Stockholders and the several
Underwriters.
Very truly yours,
EDUCATIONAL MEDICAL, INC.
By:
-------------------------------------
Xxxx X. Xxxxxx
President and Chief Executive
Officer
EACH OF THE SELLING
STOCKHOLDERS NAMED IN
SCHEDULE I HERETO
(other than the Pecks
Managed Entities)
By:
-------------------------------------
Attorney-in-Fact
TRUST FOR DEFINED BENEFIT PLAN OF ICI
AMERICAN HOLDINGS INC.
By: Pecks Management Partners Ltd.,
its Investment Advisor
By:
-------------------------------------
Xxxxxx X. Xxxxxx
Managing Director
TRUST FOR DEFINED BENEFIT PLAN OF ZENECA
HOLDING INC.
By: Pecks Management Partners Ltd.,
its Investment Advisor
By:
-------------------------------------
Xxxxxx X. Xxxxxx
Managing Director
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DELAWARE STATE EMPLOYEES' RETIREMENT FUND
By: Pecks Management Partners Ltd.,
its Investment Advisor
By:
-------------------------------------
Xxxxxx X. Xxxxxx
Managing Director
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Underwriters named in Schedule II
hereto.
XXXXX XXXXXX INC.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
As Representatives of the Several Underwriters
By: XXXXX XXXXXX INC.
By:
---------------------------------------------
Managing Director
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SCHEDULE I
EDUCATIONAL MEDICAL INC.
Number of
Selling Stockholder............................................................ Firm Shares
------------------- -----------
Lawrence, Tyrrell, Xxxxxx & Xxxxx.............................................. 995,307
Delaware State Employees' Retirement Fund...................................... 637,051
Declaration of Trust for Defined Benefit Plans of ICI America
Holding Inc.......................................................... 109,178
Declaration of Trust for Defined Benefit Plans of Zeneca
Holding Inc.......................................................... 132,463
-----------
1,873,999
31
SCHEDULE II
EDUCATIONAL MEDICAL INC.
Number of
Underwriter Firm Shares
----------- -----------
Xxxxx Xxxxxx Inc...............................................................
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated...........................................
..................................................................... ----------
Total.......................................
2,500,000
==========
