American Public Education, Inc. Shares of Common Stock1 Underwriting Agreement
Exhibit 1.1
American Public Education, Inc.
Shares of Common Stock1
, 2007
Xxxxxxx Xxxxx & Company, L.L.C.
As Representative of the Several
Underwriters Named in Schedule A
c/o Xxxxxxx Xxxxx & Company, L.L.C.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
As Representative of the Several
Underwriters Named in Schedule A
c/o Xxxxxxx Xxxxx & Company, L.L.C.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Section 1. Introductory. American Public Education, Inc. (the “Company”), a Delaware
corporation, will have, upon the filing of an Amended and Restated Certificate of Incorporation
(the “Amended and Restated Charter”), an authorized
capital stock consisting of shares,
$0.01 par value, of Preferred Stock, of which no shares will be outstanding as of the First Closing
Date hereinafter defined, and
shares, $0.01 par value, of Common Stock (“Common Stock”),
of which
shares will be outstanding as of the First Closing Date hereinafter defined,
excluding shares of Common Stock issued upon the exercise after the date of this Agreement of stock
options outstanding as of the date of this Agreement. The Company proposes to issue and sell
shares of its authorized but unissued Common Stock (“Firm Shares”) to the several
underwriters named in Schedule A as it may be amended by the Pricing Agreement hereinafter defined
(“Underwriters”), who are acting severally and not jointly. In addition, the Company proposes to
grant to the Underwriters an option to purchase up to additional shares of Common Stock
(“Option Shares”) as provided in Section 4 hereof. The Firm Shares and, to the extent such option
is exercised, the Option Shares, are hereinafter collectively referred to as the “Shares.”
You have advised the Company that the Underwriters propose to make a public offering of their
respective portions of the Shares as soon as you deem advisable after the registration statement
hereinafter referred to becomes effective, if it has not yet become effective, and the Pricing
Agreement hereinafter defined has been executed and delivered.
The Company and the Underwriters agree that up to
of the Shares to be purchased by
the Underwriters (the “Reserved Shares”) shall be reserved for sale by the Underwriters to certain
eligible employees of the Company and certain other individuals identified by the officers and
directors of the Company (the “Invitees”), as part of the distribution of the Shares by the
Underwriters, subject to the terms of this Agreement, the applicable rules, regulations and
interpretations of the National Association of Securities Dealers, Inc. (“NASD”) and all other
applicable laws, rules and regulations. To the extent that any such Reserved Shares are not orally
confirmed for purchase by Invitees by the end of
| 1 | Plus an option to acquire up to additional shares to cover overallotments. |
the first business day after the date of this Agreement, such Reserved Shares may be offered
to the public by the Underwriters as part of the public offering contemplated hereby.
Prior to the purchase and public offering of the Shares by the several Underwriters, the
Company and the Representative, acting on behalf of the several Underwriters, shall enter into an
agreement substantially in the form of Exhibit A hereto (the “Pricing Agreement”). The Pricing
Agreement may take the form of an exchange of any standard form of written telecommunication
between the Company and the Representative and shall specify such applicable information as is
indicated in Exhibit A hereto. The offering of the Shares will be governed by this Agreement, as
supplemented by the Pricing Agreement. From and after the date of the execution and delivery of
the Pricing Agreement, this Agreement shall be deemed to incorporate the Pricing Agreement.
The Company hereby confirms its agreement with the Underwriters as follows:
Section 2. Representations and Warranties of the Company. The Company represents and
warrants to the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-145185) and a related
preliminary prospectus with respect to the Shares have been prepared and filed with the
Securities and Exchange Commission (“Commission”) by the Company in conformity with the
requirements of the Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the “1933 Act;” unless otherwise indicated all
references herein to specific rules are rules promulgated under the 0000 Xxx); and the
Company has so prepared and has filed such amendments thereto, if any, and such amended
preliminary prospectuses as may have been required to the date hereof and will file such
additional amendments thereto and such amended prospectuses as may hereafter be required.
The Company will prepare and file a prospectus pursuant to Rule 424(b) that discloses the
information previously omitted from the preliminary prospectus in reliance upon Rule 430A.
To the extent that the Representative requests, there have been or will promptly be
delivered to you one signed copy of such registration statement and amendments, one copy of
each exhibit filed therewith, and conformed copies of such registration statement and
amendments (but without exhibits) and of the related preliminary prospectus or prospectuses
and final forms of prospectus for each of the Underwriters.
Such registration statement (as amended, if applicable) at the time it becomes
effective and the prospectus constituting a part thereof (including the information, if any,
deemed to be part thereof pursuant to Rule 430A(b)), as from time to time amended or
supplemented, are hereinafter referred to as the “Registration Statement” and the
“Prospectus,” respectively, except that if any revised prospectus shall be provided to the
Underwriters by the Company for use in connection with the offering of the Shares which
differs from the Prospectus on file at the Commission at the time the Registration Statement
became or becomes effective (whether or not such revised prospectus is required to be filed
by the Company pursuant to Rule 424(b)), the term Prospectus shall refer to such revised
prospectus from and after the time it was provided to the Underwriters for such use. Any
registration statement (including any amendment or supplement thereto or information which
is deemed part thereof) filed by the Company under Rule 462(b) (“Rule 462(b) Registration
Statement”) shall be deemed to be part of the “Registration Statement” as defined herein,
and any prospectus (including any amendment or supplement thereto or information which is
deemed part thereof) included in such registration statement shall be deemed to be part of
the “Prospectus” as defined herein, as appropriate. The Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder are hereinafter
collectively referred to as the “Exchange Act.”
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(b) The Commission has not issued any order preventing or suspending the use of any
preliminary prospectus, and each preliminary prospectus has conformed in all material
respects with the requirements of the 1933 Act and, as of its date, has not included any
untrue statement of a material fact or omitted to state a material fact necessary to make
the statements therein, in light of the circumstances in which they were made, not
misleading; and when the Registration Statement became or becomes effective, and at all
times subsequent thereto, up to the First Closing Date or the Second Closing Date
hereinafter defined, as the case may be, the Registration Statement, including the
information deemed to be part of the Registration Statement at the time of effectiveness
pursuant to Rule 430A(b), if applicable, and the Prospectus and any amendments or
supplements thereto, in all material respects conformed or will in all material respects
conform to the requirements of the 1933 Act, and neither the Registration Statement nor the
Prospectus, nor any amendment or supplement thereto, included or will include any untrue
statement of a material fact or omitted or will omit to state a material fact, in the case
of the Registration Statement or any amendment or supplement thereto, required to be stated
therein or necessary to make the statements therein not misleading and, in the case of the
Prospectus, or any amendment or supplement thereto, necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading.
As of the Applicable Time hereinafter defined, neither (x) the Issuer General Use Free
Writing Prospectus(es) hereinafter defined issued at or prior to the Applicable Time, the
Statutory Prospectus hereinafter defined as of the Applicable Time and the information in
Schedule A to the Pricing Agreement, all being considered together (collectively, the
“Disclosure Package”) nor (y) any individual Issuer Limited Use Free Writing Prospectus
hereinafter defined issued at or prior to the Applicable Time, when considered together with
the Disclosure Package, included any untrue statement of a material fact or omitted to state
a material fact necessary to make the statements therein not misleading.
As used in this Section 2(b) and elsewhere in this Agreement:
“Applicable Time” means [___]:00 [A/P].M., Chicago Time, on [THE DATE OF THIS AGREEMENT]
or such other time as agreed by the Company and the Representative.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined
in Rule 433, relating to the Shares that (i) is required to be filed with the Commission by
the Company, (ii) is a “road show for an offering that is a written communication” within
the meaning of Rule 433(d)(8)(i) whether or not required to be filed with the Commission or
(iii) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description
of the Shares or of the offering thereof that does not reflect the final terms, in each case
in the form filed or required to be filed with the Commission or, if not required to be
filed, in the form required to be retained in the Company’s records pursuant to Rule 433(g).
“Issuer General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus
specified in Schedule B hereto.
“Issuer Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is not an Issuer General Use Free Writing Prospectus.
“Statutory Prospectus” as of any time means the prospectus relating to the Shares that
is included in the Registration Statement immediately prior to that time.
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The Company has made available a “bona fide electronic road show,” as defined in Rule
433, in compliance with Rule 433(d)(8)(ii) (the “Bona Fide Electronic Road Show”) such that
no filing of any “road show” (as defined in Rule 433(h)) is required in connection with the
offering of the Shares.
Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Shares or until any earlier date
that the Company notified or notifies the Representative as described in Section 5(d), did
not, does not and will not include any information that conflicted, conflicts or will
conflict with the information contained in the Registration Statement or the Prospectus, and
any preliminary or other prospectus deemed to be a part thereof that has not been superseded
or modified.
Notwithstanding the foregoing, the representations and warranties of the Company set
forth in this Section 2(b) shall not apply to information contained in or omitted from any
preliminary prospectus, the Registration Statement, the Prospectus, any Issuer Free Writing
Prospectus or any amendment or supplement thereto in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any Underwriter through the
Representative specifically for use in the preparation thereof.
At the time of filing the Registration Statement, any 462(b) Registration Statement and
any post-effective amendments thereto and at the date of this Agreement, the Company was not
and is not an “ineligible issuer” as defined in Rule 405.
(c) The Company and its subsidiaries have been duly incorporated and are validly
existing as corporations in good standing under the laws of their respective places of
incorporation, with corporate power and authority to own their properties and conduct their
business as described in the Prospectus; the Company and each of its subsidiaries are duly
qualified to do business as foreign corporations under the corporation law of, and are in
good standing as such in, each jurisdiction in which they own or lease substantial
properties, have an office, or in which substantial business is conducted and such
qualification is required except in any such case where the failure to so qualify or be in
good standing would not reasonably be expected to have a material adverse effect upon the
Company and its subsidiaries taken as a whole; and no proceeding of which the Company has
knowledge has been instituted in any such jurisdiction, revoking, limiting or curtailing, or
seeking to revoke, limit or curtail, such power and authority or qualification. The State
of West Virginia and the Commonwealth of Virginia are the only jurisdictions in which the
Company or any of its subsidiaries maintains an office or leases property.
(d) Except as disclosed in the Registration Statement, the Company owns directly or
indirectly 100 percent of the issued and outstanding capital stock of each of its
subsidiaries, free and clear of any claims, liens, encumbrances or security interests and
all of such capital stock has been duly authorized and validly issued and is fully paid and
nonassessable.
(e) The issued and outstanding shares of capital stock of the Company as set forth in
the Prospectus have been duly authorized and validly issued, are fully paid and
nonassessable, and will, after giving effect to the filing and effectiveness of the Amended
and Restated Charter, conform to the description thereof contained in the Prospectus.
(f) The Shares have been duly authorized and when issued, delivered and paid for
pursuant to this Agreement, will be validly issued, fully paid and nonassessable, and will
conform to the description thereof contained in the Prospectus.
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(g) The making and performance by the Company of this Agreement and the Pricing
Agreement have been duly authorized by all necessary corporate action and will not (i)
violate the Company’s charter or bylaws, after giving effect to the filing and effectiveness
of the Amended and Restated Charter pursuant to Section 5(q), (ii) result, except as would
not reasonably be expected to have a material adverse effect on the Company and its
subsidiaries taken as a whole, in a breach or violation of any of the terms and provisions
of, or constitute a default or change of control under (A) any agreement, franchise,
license, indenture, mortgage, deed of trust, or other instrument to which the Company or any
subsidiary is a party or by which the Company, any subsidiary or the property of any of them
may be bound or affected, or (B) any statute, rule, regulation or order applicable to the
Company or any of its subsidiaries of any court, regulatory body, accrediting agency,
administrative agency or other governmental body having jurisdiction over the Company or any
subsidiary or any of their respective properties, including, without limitation, the Higher
Education Act of 1965, as amended (the “HEA”), or any order of any court, regulatory body,
accrediting agency, administrative agency or other governmental body entered in any
proceeding to which the Company or any subsidiary was or is now a party or by which it is
bound. No consent, approval, authorization or other order of any court, regulatory body,
accrediting agency, administrative agency or other governmental body is required for the
execution and delivery of this Agreement or the Pricing Agreement or the consummation of the
transactions contemplated herein or therein, except for compliance with the 1933 Act and
blue sky laws applicable to the public offering of the Shares by the several Underwriters
and clearance of such offering with the Financial Industry Regulatory Authority (“FINRA”).
This Agreement has been duly executed and delivered by the Company.
(h) The accountants who have expressed their opinions with respect to certain of the
financial statements and schedules included in the Registration Statement are an independent
registered public accounting firm as required by the 1933 Act and such accountants are not
in violation of the auditor independence requirements of the Xxxxxxxx-Xxxxx Act of 2002 (the
“Xxxxxxxx-Xxxxx Act”).
(i) The consolidated financial statements of the Company included in the Registration
Statement, the Disclosure Package and the Prospectus present fairly in all material respects
the consolidated financial position of the Company as of the respective dates of such
financial statements, and the consolidated statements of operations and cash flows of the
Company for the respective periods covered thereby, all in conformity with generally
accepted accounting principles consistently applied throughout the periods involved, except
as disclosed therein.
The financial information set forth in the Prospectus under “Summary Consolidated
Financial and Operating Data” and “Selected Consolidated Financial and Operating Data”
presents fairly in all material respects on the basis stated in the Prospectus, the
information set forth therein.
The pro forma financial statements and other pro forma information included in the
Registration Statement, the Disclosure Package and the Prospectus present fairly the
information shown therein, have been prepared in accordance with generally accepted
accounting principles and the Commission’s rules and guidelines with respect to pro forma
financial statements and other pro forma information, have been properly compiled on the pro
forma basis described therein, and, in the opinion of the Company, the assumptions used in
the preparation thereof are reasonable and the adjustments used therein are appropriate
under the circumstances.
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All disclosures contained in the Registration Statement, the Disclosure Package and the
Prospectus regarding “non-GAAP financial measures” (as such term is defined by the
Commission’s rules and regulations) comply with Regulation G of the Exchange Act and Item 10
of Regulation S-K under the 1933 Act, to the extent applicable.
(j) Neither the Company nor any subsidiary is in violation of its charter or in default
under any consent decree, or in default with respect to any material provision of any lease,
loan agreement, franchise, license, permit or other contract obligation to which it is a
party; and, to the Company’s knowledge, there does not exist any state of facts which
constitutes an event of default as defined in such documents or which, with notice or lapse
of time or both, would constitute such an event of default, in each case, except for
defaults that neither singly nor in the aggregate are material to the Company and its
subsidiaries taken as a whole.
(k) There are no material legal, governmental or accrediting agency proceedings
pending, or to the Company’s knowledge, threatened to which the Company or any subsidiary is
or may be a party or of which material property owned or leased by the Company or any
subsidiary is or may be the subject, or related to environmental or discrimination matters
that are not disclosed in the Prospectus, or that question the validity of this Agreement or
the Pricing Agreement or any action taken or to be taken pursuant hereto or thereto.
(l) There are no holders of securities of the Company having rights to registration
thereof or preemptive rights to purchase Common Stock except as disclosed in the Prospectus.
All holders of registration rights have waived such rights with respect to the offering
being made by the Prospectus.
(m) The Company and each of its subsidiaries have good and marketable title to all the
properties and assets reflected as owned in the financial statements hereinabove described
(or elsewhere in the Prospectus), except to the extent that such properties and assets were
disposed of in the ordinary course of business after the date of such financial statements,
subject to no lien, mortgage, pledge, charge or encumbrance of any kind except those, if
any, reflected in such financial statements (or elsewhere in the Prospectus) or that are not
material to the Company and its subsidiaries taken as a whole. The Company and each of its
subsidiaries hold their respective leased properties that are material to the Company and
its subsidiaries taken as a whole under valid and binding leases.
(n) The Company has not taken and will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the Shares.
(o) Subsequent to the respective dates as of which information is given in the
Registration Statement, the Disclosure Package and the Prospectus, and except as
contemplated by the Prospectus, the Company and its subsidiaries, taken as a whole, have not
incurred any material liabilities or obligations, direct or contingent, or entered into any
material transactions not in the ordinary course of business and there has not been any
material adverse change in their condition (financial or otherwise) or results of operations
nor any material change in their capital stock, short-term debt or long-term debt.
(p) There is no material document of a character required to be described in the
Registration Statement, the Disclosure Package or the Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as required.
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(q) Except as disclosed in the Prospectus, the Company together with its subsidiaries
owns and possesses all right, title and interest in and to, or has duly licensed from third
parties, all patents, patent rights, trade secrets, inventions, know-how, trademarks, trade
names, copyrights, service marks and other proprietary rights (“Trade Rights”) material to
the business of the Company and each of its subsidiaries taken as a whole. Neither the
Company nor any of its subsidiaries has received any notice of infringement,
misappropriation or conflict from any third party as to such material Trade Rights which has
not been resolved or disposed of and neither the Company nor any of its subsidiaries has
infringed, misappropriated or otherwise conflicted with material Trade Rights of any third
parties, which infringement, misappropriation or conflict would reasonably be expected to
have a material adverse effect upon the condition (financial or otherwise) or results of
operations of the Company and its subsidiaries taken as a whole.
(r) The conduct of the business of the Company and each of its subsidiaries is in
compliance in all respects with applicable federal, state, local and foreign laws and
regulations and with applicable accrediting agency rules, except where the failure to be in
compliance would not reasonably be expected to have a material adverse effect upon the
condition (financial or otherwise) or results of operations of the Company and its
subsidiaries taken as a whole.
(s) The Company and its subsidiaries possess certificates, authorizations,
accreditations or permits issued by appropriate governmental agencies or bodies or
accrediting agencies necessary to conduct the business now operated by them (except where
the failure to do so, individually or in the aggregate, would not reasonably be expected to
have a material adverse effect on the Company and its subsidiaries, taken as a whole),
including, without limitation, all authorizations required to participate in federal
financial aid programs under Title IV of the HEA, and have not received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization, accreditation or permit that, if determined adversely to the Company or its
subsidiaries, would, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the Company and its subsidiaries, taken as a whole.
(t) All offers and sales of the Company’s capital stock prior to the date hereof were
at all relevant times exempt from the registration requirements of the 1933 Act and all such
offers and sales during the twelve months prior to the date hereof were duly registered with
or the subject of an available exemption from the registration requirements of the
applicable state and local securities or blue sky laws.
(u) The Company has filed all necessary federal, state and local income and franchise
tax returns that were required to be filed prior to the date hereof, after taking into
account all applicable extensions obtained, except where the failure to file would not
reasonably be expected to have a material adverse effect upon the condition (financial or
otherwise) or results of operations of the Company and its subsidiaries taken as a whole,
and has paid all taxes shown as due thereon, and there is no tax deficiency that has been,
or to the knowledge of the Company might be, asserted against the Company or any of its
properties or assets that would reasonably be expected to have a material adverse effect
upon the condition (financial or otherwise) or results of operations of the Company and its
subsidiaries taken as a whole.
(v) The Company has filed a registration statement pursuant to Section 12(b) of the
Exchange Act to register the Common Stock thereunder, has filed an application to list the
Shares on The NASDAQ Global Market, and has received notification that the listing has been
approved, subject to notice of issuance or sale of the Shares, as the case may be.
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(w) The Company has established and maintains disclosure controls and procedures (as
defined in Rules 13a-15 and 15d-15 under the Exchange Act) and such controls and procedures
are effective in ensuring that material information relating to the Company, including its
subsidiaries, is made known to the principal executive officer and the principal financial
officer.
(x) The Company maintains a system of internal accounting controls sufficient to
provide reasonable assurance that: (i) transactions are executed in accordance with
management’s general or specific authorizations; (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)
amounts reflected on the Company’s consolidated balance sheet for assets are compared with
existing assets at reasonable intervals and appropriate action is taken with respect to any
differences.
(y) The Company is not, and does not intend to conduct its business in a manner in
which it would become, an “investment company” as defined in Section 3(a) of the Investment
Company Act of 1940, as amended (“Investment Company Act”).
(z) No transaction has occurred between or among the Company and any of its officers or
directors, stockholders or any affiliate or affiliates of any such officer or director or
stockholder that is required to be described in and is not described in the Registration
Statement and the Prospectus.
(aa) The Company’s board of directors has validly appointed an audit committee whose
composition satisfies the requirements of Rule 4350(d)(2) of the Rules of NASD (the “NASD
Rules”), and the board of directors or the audit committee has adopted a charter that
satisfies the requirements of Rule 4350(d)(1) of the NASD Rules.
(bb) The Company and its subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are customary in the
businesses in which they are engaged or propose to engage after giving effect to the
transactions described in the Prospectus. To the knowledge of the Company, all policies of
insurance and fidelity or surety bonds insuring the Company, its subsidiaries and their
respective businesses, assets, employees, officers and directors are in full force and
effect; and the Company and its subsidiaries are in compliance with the terms of such
policies and instruments in all material respects.
(cc) The Company has taken all necessary actions to ensure that, upon the effectiveness
of the Registration Statement, it will be in compliance in all material respects with all
provisions of the Xxxxxxxx-Xxxxx Act and all rules and regulations promulgated thereunder or
implementing the provisions thereof that are then in effect and which the Company is
required to comply with as of the effectiveness of the Registration Statement, and is
actively taking steps to ensure that it will be in compliance in all material respects with
other provisions of the Xxxxxxxx-Xxxxx Act not currently in effect, upon the effectiveness
of such provisions, or which will become applicable to the Company at all times after the
effectiveness of the Registration Statement.
(dd) None of the Company and its subsidiaries is involved in any labor dispute nor, to
the knowledge of the Company, is any such dispute threatened. The Company is not aware of
any threatened or pending litigation between the Company and any of its executive officers
and,
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except as disclosed in the Prospectus, has not received notice from any of its
executive officers that such officer does not intend to remain in the employment of the
Company.
(ee) No consent, approval, authorization or order of, or qualification with, any
accrediting agency or governmental body or agency, other than those obtained, is required in
connection with the offering of the Reserved Shares in any jurisdiction where the Reserved
Shares are being offered. The Company has not offered, or caused the Underwriters to offer,
any Reserved Shares with the specific intent to unlawfully influence (i) a customer or
supplier of the Company or any of its subsidiaries to alter the customer’s or supplier’s
level or type of business with the Company or any of its subsidiaries or (ii) a trade
journalist or publication to write or publish favorable information about the Company or its
products.
(ff) The
Company has taken all action necessary to declare the Special Distribution as described in the Prospectus and
has obtained elections from each of the holders of shares of its Class A Common Stock to convert all of such
shares into shares of Common Stock prior to the delivery of the Firm Shares described in Section 4.
Section 3. Representations and Warranties of the Underwriters. The Representative,
on behalf of the several Underwriters, represents and warrants to the Company that the information
set forth (a) on the cover page of the Prospectus with respect to price, underwriting discount and
terms of the offering and (b) in paragraphs 3, 5, 13 and 14 under “Underwriting” in the Prospectus
was furnished to the Company by and on behalf of the Underwriters for use in connection with the
preparation of the Registration Statement and is correct and complete in all material respects.
Section 4. Purchase, Sale and Delivery of Shares. On the basis of the
representations, warranties and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to sell to the Underwriters named in Schedule A
hereto, and the Underwriters agree, severally and not jointly, to purchase the Firm Shares from the
Company at the price per share set forth in the Pricing Agreement. The obligation of each
Underwriter to the Company shall be to purchase from the Company that number of full shares which
(as nearly as practicable, as determined by you) bears to , the same proportion as
the number of Firm Shares set forth opposite the name of such Underwriter in Schedule A hereto
bears to the total number of Firm Shares to be purchased by all Underwriters under this Agreement.
The initial public offering price and the purchase price shall be set forth in the Pricing
Agreement.
At 9:00 A.M., Chicago Time, on the fourth business day, if permitted under Rule 15c6-1 under
the Exchange Act, (or the third business day if required under Rule 15c6-1 under the Exchange Act
or unless postponed in accordance with the provisions of Section 12) following the date the
Registration Statement becomes effective (or, if the Company has elected to rely upon Rule 430A,
the fourth business day, if permitted under Rule 15c6-1 under the Exchange Act, (or the third
business day if required under Rule 15c6-1 under the Exchange Act) after execution of the Pricing
Agreement), or such other time not later than ten business days after such date as shall be agreed
upon by the Representative and the Company, the Company will deliver to you at the offices of
counsel for the Underwriters or through the facilities of The Depository Trust Company for the
accounts of the several Underwriters, certificates representing the Firm Shares to be sold by it,
against payment of the purchase price therefor by delivery of federal or other immediately
available funds, by wire transfer or otherwise, to the Company. Such time of delivery and payment
is herein referred to as the “First Closing Date.” The certificates for the Firm Shares so to be
delivered will be in such denominations and registered in such names as you request by notice to
the Company prior to 10:00 A.M., Chicago Time, on the second business day preceding the First
Closing Date, and will be made available at the Company’s expense for checking and packaging by the
Representative at 10:00 A.M., Chicago Time, on the business day preceding the First Closing Date.
Payment for the Firm Shares so to be delivered shall be made at the time and in the manner
described above at the offices of counsel for the Underwriters.
In addition, on the basis of the representations, warranties and agreements herein contained,
but subject to the terms and conditions herein set forth, the Company hereby grants an option
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to the several Underwriters to purchase, severally and not jointly, up to an aggregate of
Option Shares, at the same purchase price per share to be paid for the Firm Shares, for
use solely in covering any overallotments made by the Underwriters in the sale and distribution of
the Firm Shares. The option granted hereunder may be exercised at any time (but not more than
once) within 30 days after the date of the Prospectus first filed by the Company pursuant to Rule
424(b) under the 1933 Act (the “Rule 424 Prospectus”) upon notice by you to the Company setting
forth the aggregate number of Option Shares as to which the Underwriters are exercising the option,
the names and denominations in which the certificates for such shares are to be registered and the
time and place at which such certificates will be delivered. Such time of delivery (which may not
be earlier than the First Closing Date), being herein referred to as the “Second Closing Date,”
shall be determined by you, but if at any time other than the First Closing Date, shall not be
earlier than three nor later than 10 full business days after delivery of such notice of exercise.
The number of Option Shares to be purchased by each Underwriter shall be determined by multiplying
the number of Option Shares to be sold by a fraction, the numerator of which is the number of Firm
Shares to be purchased by such Underwriter as set forth opposite its name in Schedule A and the
denominator of which is the total number of Firm Shares (subject to such adjustments to eliminate
any fractional share purchases as you in your absolute discretion may make). Certificates for the
Option Shares will be made available at the Company’s expense for checking and packaging at 10:00
A.M., Chicago Time, on the first full business day preceding the Second Closing Date. The manner
of payment for and delivery of the Option Shares shall be the same as for the Firm Shares as
specified in the preceding paragraph.
You have advised the Company that each Underwriter has authorized you to accept delivery of
its Shares, to make payment and to receipt therefor. You, individually and not as the
Representative of the Underwriters, may make payment for any Shares to be purchased by any
Underwriter whose funds shall not have been received by you by the First Closing Date or the Second
Closing Date, as the case may be, for the account of such Underwriter, but any such payment shall
not relieve such Underwriter from any obligation hereunder.
Section 5. Covenants of the Company. The Company covenants and agrees that:
(a) The Company will advise you promptly of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of the institution of
any proceedings for that purpose, or of any notification of the suspension of qualification
of the Shares for sale in any jurisdiction or the initiation or threatening of any
proceedings for that purpose or of any examination pursuant to Section 8(e) of the 1933 Act
concerning the Registration Statement and if the Company becomes the subject of a proceeding
under Section 8A of the 1933 Act in connection with the offering of the Shares, and will
also advise you promptly of any request of the Commission for amendment or supplement of the
Registration Statement, of any preliminary prospectus or of the Prospectus, or for
additional information.
(b) The Company will give you notice of its intention to file or prepare any amendment
to the Registration Statement (including any post-effective amendment) or any Rule 462(b)
Registration Statement or any amendment or supplement to the Prospectus (including any
revised prospectus which the Company proposes for use by the Underwriters in connection with
the offering of the Shares which differs from the prospectus on file at the Commission at
the time the Registration Statement became or becomes effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b)) and will furnish you with copies
of any such amendment or supplement a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file any such amendment or supplement or use
any such prospectus to which you or counsel for the Underwriters shall reasonably object.
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(c) If at any time when a prospectus relating to the Shares is required to be delivered
under the 1933 Act any event occurs as a result of which the Prospectus, including any
amendments or supplements, would include an untrue statement of a material fact, or omit to
state any material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading, or if it
is necessary at any time to amend the Prospectus, including any amendments or supplements
thereto and including any revised prospectus which the Company proposes for use by the
Underwriters in connection with the offering of the Shares which differs from the prospectus
on file with the Commission at the time of effectiveness of the Registration Statement,
whether or not such revised prospectus is required to be filed pursuant to Rule 424(b) to
comply with the 1933 Act, the Company promptly will advise you thereof and will promptly
prepare and file with the Commission an amendment or supplement which will correct such
statement or omission or an amendment which will effect such compliance; and, in case any
Underwriter is required to deliver a prospectus nine months or more after the effective date
of the Registration Statement, the Company upon request, but at the expense of such
Underwriter, will prepare promptly such prospectus or prospectuses as may be necessary to
permit compliance with the requirements of Section 10(a)(3) of the 1933 Act.
(d) If at any time following the issuance of an Issuer Free Writing Prospectus there
occurred or occurs an event or development as a result of which such Issuer Free Writing
Prospectus conflicted or would conflict with the information contained in the Registration
Statement or included or would include an untrue statement of a material fact or omitted or
would omit to state a material fact necessary to make the statements therein, in light of
the circumstances prevailing at that subsequent time, not misleading, the Company will
promptly notify the Representative and will promptly amend or supplement, at its own
expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue
statement or omission.
(e) Neither the Company nor any of its subsidiaries will acquire any capital stock of
the Company prior to the earlier of the Second Closing Date or termination or expiration of
the related option nor will the Company declare or pay any dividend or make any other
distribution upon the Common Stock payable to stockholders of record on a date prior to the
earlier of the Second Closing Date or termination or expiration of the related option,
except in either case as contemplated by the Prospectus.
(f) Not later than [ , 2009] the Company will make generally available to its
security holders an earnings statement (which need not be audited) covering a period of at
least 12 months beginning after the effective date of the Registration Statement, which will
satisfy the provisions of the last paragraph of Section 11(a) of the 1933 Act.
(g) During such period as a prospectus is required by law to be delivered in connection
with offers and sales of the Shares by an Underwriter or dealer, upon your request, the
Company will furnish to you at its expense, subject to the provisions of subsection (d)
hereof, copies of the Registration Statement, the Prospectus, any Permitted Free Writing
Prospectus hereinafter defined, each preliminary prospectus and all amendments and
supplements to any such documents in each case as soon as available and in such quantities
as you may reasonably request, for the purposes contemplated by the 1933 Act.
(h) The Company will cooperate with the Underwriters in qualifying or registering the
Shares for sale under the blue sky laws of such jurisdictions as you designate, and will
continue such qualifications in effect so long as reasonably required for the distribution
of the Shares. The Company shall not be required to qualify as a foreign corporation or to
file a general
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consent to service of process in any such jurisdiction where it is not currently
qualified or where it would be subject to taxation as a foreign corporation.
(i) Upon the request of the Representative and to the extent not publicly available on
the Commission’s XXXXX database, during the period of five years hereafter, the Company will
furnish you and each of the other Underwriters with a copy (i) as soon as practicable after
the filing thereof, of each report filed by the Company with the Commission, any securities
exchange or FINRA; (ii) as soon as practicable after the release thereof, of each material
press release in respect of the Company that is not disseminated via the Company’s website
or a national news service; and (iii) as soon as available, of each report of the Company
mailed to stockholders.
(j) The Company will use the proceeds received by it from the sale of the Shares being
sold by it in the manner specified in the Prospectus.
(k) If, at the time of effectiveness of the Registration Statement, any information
shall have been omitted therefrom in reliance upon Rule 430A, then promptly following the
execution of the Pricing Agreement, the Company will prepare, and file or transmit for
filing with the Commission in accordance with such Rule 430A and Rule 424(b), copies of an
amended Prospectus, or, if required by such Rule 430A, a post-effective amendment to the
Registration Statement (including an amended Prospectus), containing all information so
omitted. If required, the Company will prepare and file, or transmit for filing, a Rule
462(b) Registration Statement not later than the date of the execution of the Pricing
Agreement. If a Rule 462(b) Registration Statement is filed, the Company shall make payment
of, or arrange for payment of, the additional registration fee owing to the Commission
required by Rule 111.
(l) For so long as the Company is subject to the Exchange Act, the Company will comply
with all registration, filing and reporting requirements of the Exchange Act and The NASDAQ
Global Market; and the Company will comply in all material respects with all applicable
provisions of the Xxxxxxxx-Xxxxx Act.
(m) For so long as the Company is subject to the Exchange Act, the Company will
maintain such controls and other procedures, including without limitation those required by
the Xxxxxxxx-Xxxxx Act and the applicable regulations thereunder, that are designed to
ensure that information required to be disclosed by the Company in the reports that it files
or submits under the Exchange Act is recorded, processed, summarized and reported within the
time periods specified in the Commission’s rules and forms, including without limitation,
controls and procedures designed to ensure that information required to be disclosed by the
Company in the reports that it files or submits under the Exchange Act is accumulated and
communicated to the Company’s management, including its principal executive officer and its
principal financial officer, or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure.
(n) For so long as the Company is subject to the Exchange Act, the Company will
maintain a system of internal accounting controls designed to provide reasonable assurance
that: (i) transactions are executed in accordance with management’s general or specific
authorizations; (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) amounts reflected on the
Company’s consolidated balance sheet for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any differences.
-12-
(o) The Company agrees not to, directly or indirectly, (i) offer, sell (including
“short” selling), assign, transfer, contract to sell, grant an option to purchase, establish
an open “put equivalent position” within the meaning of Rule 16a-1(h) under the Exchange
Act, or otherwise dispose of any shares of Common Stock or securities convertible or
exchangeable into, or exercisable for, Common Stock; or (ii) enter any swap or other
arrangement that transfers all or a portion of the economic consequences associated with the
ownership of any Common Stock (except, in each case, Common Stock sold pursuant to this
Agreement or issued pursuant to options, warrants or convertible securities currently
outstanding and except for options and restricted stock to be granted under existing equity
compensation plans) without the prior written consent of the Representative for a period of
180 days (the “Lock-Up Period”) after the date of the Rule 424 Prospectus; provided,
however, that if (1) during the last 17 days of the initial Lock-Up Period, the Company
releases earnings results or material news or a material event relating to the Company
occurs or (2) prior to the expiration of the initial Lock-Up Period, the Company announces
that it will release earnings results during the 16-day period beginning on the last day of
the initial Lock-Up Period, then in either case the Lock-Up Period will be extended until
the expiration of the 18-day period beginning on the date of release of the earnings results
or the occurrence of the material news or material event, as applicable, unless the
Representative waives, in writing, such extension.
(p) The Company hereby agrees that it will ensure that the Reserved Shares will be
restricted as required by FINRA or the NASD Rules from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of this Agreement. The
Underwriters will notify the Company as to which persons will need to be so restricted and
the Company’s obligations under this Section 5(p) will extend only to such persons. At the
request of the Underwriters, the Company will direct the transfer agent to place a stop
transfer restriction upon such securities for such period of time. Should the Company
release, or seek to release, from such restrictions any of the Reserved Shares, the Company
agrees to reimburse the Underwriters for any reasonable expenses (including, without
limitation, legal expenses) they incur in connection with such release.
(q) The Company will file and cause to become effective the Amended and Restated
Charter prior to the First Closing Date.
Section 6. Covenants of the Company and the Underwriters. The Company represents and
agrees that, unless it obtains the prior consent of the Representative, and each Underwriter,
severally and not jointly, represents and agrees that, unless it obtains the prior consent of the
Company and the Representative, it has not made and will not make any offer relating to the Shares
that would constitute an “issuer free writing prospectus,” as defined in Rule 433, or that would
otherwise constitute a “free writing prospectus,” as defined in Rule 405, required to be filed with
the Commission. Any such free writing prospectus consented to by the Representative or by the
Company and the Representative, as the case may be, is hereinafter referred to as a “Permitted Free
Writing Prospectus.” The Company represents that it has treated and agrees that it will treat each
Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433,
and has complied and will comply with the requirements of Rule 433 applicable to any Permitted Free
Writing Prospectus, including timely filing with the Commission where required, legending and
record-keeping.
Section 7. Payment of Expenses. Whether or not the transactions contemplated
hereunder are consummated or this Agreement becomes effective as to all of its provisions or is
terminated, the Company agrees to pay (i) all costs, fees and expenses (other than legal fees and
disbursements of counsel for the Underwriters and the expenses incurred by the Underwriters)
incurred in connection with the performance of the Company’s obligations hereunder, including
without limiting the
-13-
generality of the foregoing, all fees and expenses of legal counsel for the Company and of the
Company’s independent accountants, all costs and expenses incurred in connection with the
preparation, printing, filing and distribution (including electronic delivery) of the Registration
Statement, each preliminary prospectus, any Permitted Free Writing Prospectus and the Prospectus
(including all exhibits and financial statements) and all amendments and supplements provided for
herein, this Agreement, the Pricing Agreement and a blue sky memorandum, (ii) all reasonable
third-party costs, fees and expenses (including reasonable legal fees and disbursements of outside
counsel for the Underwriters) incurred by the Underwriters in connection with qualifying or
registering all or any part of the Shares for offer and sale under blue sky laws, including
clearance of such offering with FINRA; (iii) all fees and expenses of the Company’s transfer agent,
printing of the certificates for the Shares and all transfer taxes, if any, with respect to the
sale and delivery of the Shares to the several Underwriters; (iv) all reasonable third-party costs,
fees and expenses (including reasonable legal fees of outside counsel for the Underwriters)
incurred by the Underwriters related to the offering of the Reserved Shares which are designated by
the Company for sale to Invitees; and (v) all third-party costs, fees and expenses (including
without limitation any damages or other amounts payable in connection with legal or contractual
liability) associated with the reforming of any contracts for sale of the Shares made by the
Underwriters caused by a breach of the representation contained in the second paragraph of Section
2(b); provided, however, that, except as provided in this Section 7, Section 9, Section 11 and
Section 14 hereof, the Underwriters will pay all of their own costs and expenses, including the
fees of their counsel (except as set forth above), stock transfer taxes on the resale of any Shares
by them and any expenses relating to the publishing of “tombstone” advertisements.
Section 8. Conditions of the Obligations of the Underwriters. The obligations of the
several Underwriters to purchase and pay for the Firm Shares on the First Closing Date and the
Option Shares on the Second Closing Date shall be subject to the accuracy of the representations
and warranties on the part of the Company herein set forth as of the date hereof and as of the
First Closing Date or the Second Closing Date, as the case may be, to the accuracy of the
statements of officers of the Company made pursuant to the provisions hereof, to the performance by
the Company of its obligations hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective either prior to the
execution of this Agreement or not later than 1:00 P.M., Chicago Time, on the first full
business day after the date of this Agreement, or such later time as shall have been
consented to by you but in no event later than 1:00 P.M., Chicago Time, on the third full
business day following the date hereof; and prior to the First Closing Date or the Second
Closing Date, as the case may be, 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 shall be pending or, to the knowledge of the Company or you, shall be
contemplated by the Commission. If the Company has elected to rely upon Rule 430A, the
information concerning the initial public offering price of the Shares and price-related
information shall have been transmitted to the Commission for filing pursuant to Rule 424(b)
in the manner and within the prescribed time period (without reliance on Rule 424(b)(8)) and
the Company will provide evidence satisfactory to the Representative of such timely filing
(or a post-effective amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rules 430A and 424(b)). If a Rule 462(b)
Registration Statement is required, such Registration Statement shall have been transmitted
to the Commission for filing and become effective within the prescribed time period and,
prior to the First Closing Date, the Company shall have provided evidence of such filing and
effectiveness in accordance with Rule 462(b).
(b) The Shares shall have been qualified for sale under the blue sky laws of such
states as shall have been specified by the Representative.
-14-
(c) The legality and sufficiency of the authorization, issuance and sale or transfer
and sale of the Shares hereunder, the validity and form of the certificates representing the
Shares, the execution and delivery of this Agreement and the Pricing Agreement, and all
corporate proceedings and other legal matters incident thereto, and the form of the
Registration Statement, the Disclosure Package, any Issuer Limited Use Free Writing
Prospectus and the Prospectus (except financial statements) shall have been approved by
counsel for the Underwriters exercising reasonable judgment.
(d) You shall not have advised the Company that the Registration Statement, the
Disclosure Package, any Issuer Limited Use Free Writing Prospectus, when considered together
with the Disclosure Package, or the Prospectus or any amendment or supplement thereto,
contains an untrue statement of fact, which, in the opinion of counsel for the Underwriters,
is material or omits to state a fact which, in the opinion of such counsel, is material and
is required to be stated therein or necessary to make the statements therein not misleading.
(e) Subsequent to the execution and delivery of this Agreement, there shall not have
occurred any material adverse change, or any development involving a prospective material
adverse change, in or affecting particularly the business or properties of the Company or
its subsidiaries, taken as a whole, whether or not arising in the ordinary course of
business, which, in the judgment of the Representative, makes it impractical or inadvisable
to proceed with the public offering of the Shares as contemplated hereby.
(f) There shall have been furnished to you, as Representative of the Underwriters, on
the First Closing Date or the Second Closing Date, as the case may be, except as otherwise
expressly provided below:
(i) An opinion of Xxxxx & Xxxxxxx L.L.P., counsel for the Company, addressed to
the Underwriters and dated the First Closing Date or the Second Closing Date, as the
case may be, in form and substance reasonably satisfactory to the Underwriters.
(ii) A letter from Xxxxx & Xxxxxxx L.L.P., counsel for the Company, addressed
to the Underwriters and dated the First Closing Date or the Second Closing Date, as
the case may be, in form and substance reasonably satisfactory to the Underwriters.
(iii) Such opinion or opinions of Sidley Austin LLP, counsel for the
Underwriters, dated the First Closing Date or the Second Closing Date, as the case
may be, with respect to the incorporation of the Company, the validity of the
Shares, the Registration Statement, the Disclosure Package and the Prospectus and
other related matters as you may reasonably require, and the Company shall have
furnished to such counsel such documents and shall have exhibited to them such
papers and records as they reasonably request for the purpose of enabling them to
pass upon such matters.
(iv) A certificate of the chief executive officer and the principal financial
officer of the Company, dated the First Closing Date or the Second Closing Date, as
the case may be, to the effect that:
(1) the representations and warranties of the Company set forth in
Section 2 of this Agreement are true and correct as of the date of this
Agreement and as of the First Closing Date or the Second Closing Date, as
the case may be,
-15-
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to such
Closing Date;
(2) the Commission has not issued an order preventing or suspending the
use of the Prospectus or any preliminary prospectus filed as a part of the
Registration Statement or any amendment thereto; no stop order suspending
the effectiveness of the Registration Statement has been issued; and to the
best knowledge of the respective signers, no proceedings for that purpose
have been instituted or are pending or contemplated under the 1933 Act; and
(3) subsequent to the date of the most recent financial statements
included in the Registration Statement and Prospectuses, and except as set
forth or contemplated in the Prospectuses, (A) none of the Company and its
consolidated subsidiaries has incurred any material liabilities or
obligations, direct or contingent, or entered into any material transactions
not in the ordinary course of business, and (B) there has not been any
change that has had or would reasonably be expected to have a material
adverse effect upon the Company and its subsidiaries taken as a whole or any
material change in their short-term debt or long-term debt.
The delivery of the certificate provided for in this subparagraph shall be and
constitute a representation and warranty of the Company as to the facts required in
the immediately foregoing clauses (1), (2) and (3) to be set forth in said
certificate.
(v) At the time the Pricing Agreement is executed and also on the First Closing
Date or the Second Closing Date, as the case may be, there shall be delivered to you
a letter addressed to you, as Representative of the Underwriters, from McGladrey &
Xxxxxx, LLP, an independent registered public accountant firm, the first one to be
dated the date of the Pricing Agreement, the second one to be dated the First
Closing Date and the third one (in the event of a second closing) to be dated the
Second Closing Date, in form and substance reasonably satisfactory to the
Underwriters. There shall not have been any change or decrease specified in the
letters referred to in this subparagraph which makes it impractical or inadvisable
in the judgment of the Representative to proceed with the public offering or
purchase of the Shares as contemplated hereby.
(vi) A certificate of the chief executive officer and the principal financial
officer of the Company, dated the First Closing Date or the Second Closing Date, as
the case may be, regarding certain statistical or financial figures included in the
Prospectus which you may reasonably request and which have not been otherwise
verified by the letters referred to in clause (v) above, such verification to
include the provision of documentary evidence supporting any such statistical or
financial figure.
(vii) Such further certificates and documents as you may reasonably request.
All such opinions, certificates, letters and documents shall be in compliance with the
provisions hereof only if they are satisfactory to you and to Sidley Austin LLP, counsel for the
Underwriters, which approval shall not be unreasonably withheld. The Company shall furnish you
with such manually signed or conformed copies of such opinions, certificates, letters and documents
as you request.
-16-
If any condition to the Underwriters’ obligations hereunder to be satisfied prior to or at the
First Closing Date is not so satisfied, this Agreement at your election will terminate upon
notification to the Company without liability on the part of any Underwriter or the Company, except
for the expenses to be paid or reimbursed by the Company pursuant to Sections 7 and 9 hereof and
except to the extent provided in Section 11 hereof.
Section 9. Reimbursement of Underwriters’ Expenses. If the sale to the Underwriters
of the Firm Shares on the First Closing Date is not consummated because any condition of the
Underwriters’ obligations hereunder is not satisfied or because of any refusal, inability or
failure on the part of the Company to perform any agreement herein or to comply with any provision
hereof, unless such failure to satisfy such condition or to comply with any provision hereof is due
to the default or omission of any Underwriter, the Company agrees to reimburse you and the other
Underwriters upon demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been reasonably incurred by you and them in connection
with the proposed purchase and the sale of the Shares. Any such termination shall be without
liability of any party to any other party except that the provisions of this Section 9, Section 7
and Section 11 shall at all times be effective and shall apply.
Section 10. Effectiveness of Registration Statement. You and the Company will use
your and its best efforts to cause the Registration Statement to become effective, if it has not
yet become effective, and to prevent the issuance of any stop order suspending the effectiveness of
the Registration Statement and, if such stop order be issued, to obtain as soon as possible the
lifting thereof.
Section 11. Indemnification. (a) The Company agrees to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within the meaning of the
1933 Act or the Exchange Act against any losses, claims, damages or liabilities, joint or several,
to which such Underwriter or such controlling person may become subject under the 1933 Act, the
Exchange Act or other federal or state statutory law or regulation, at common law or otherwise
(including in settlement of any litigation if such settlement is effected with the written consent
of the Company), insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, including the information deemed to be part
of the Registration Statement at the time of effectiveness pursuant to Rule 430A, any preliminary
prospectus, any Issuer Free Writing Prospectus, the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to state therein a
material fact, in the case of the Registration Statement or any amendment or supplement thereto,
required to be stated therein or necessary to make the statements therein not misleading and, in
the case of any preliminary prospectus, any Issuer Free Writing Prospectus, the Prospectus, or any
amendment or supplement thereto, necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and will reimburse each Underwriter and
each such controlling person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not be liable in any
such case to the extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged omission made in the
Registration Statement, any preliminary prospectus, any Issuer Free Writing Prospectus, the
Prospectus or any amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through the Representative,
specifically for use therein. In addition to its other obligations under this Section 11(a), the
Company agrees that, as an interim measure during the pendency of any claim, action, investigation,
inquiry or other proceeding arising out of or based upon any statement or omission, or any alleged
statement or omission, described in this Section 11(a), it will reimburse the Underwriters on a
monthly basis for all reasonable legal and other expenses incurred in connection with investigating
or defending any such claim, action, investigation, inquiry or other
-17-
proceeding, notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Company’s obligation to reimburse the Underwriters for such expenses and the
possibility that such payments might later be held to have been improper by a court of competent
jurisdiction. This indemnity agreement will be in addition to any liability which the Company may
otherwise have.
(b) Each Underwriter will severally indemnify and hold harmless the Company, each of its
directors, each of its officers who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of the 1933 Act or the Exchange Act, against any losses,
claims, damages or liabilities to which the Company, or any such director, officer or controlling
person may become subject under the 1933 Act, the Exchange Act or other federal or state statutory
law or regulation, at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of such Underwriter), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any
untrue or alleged untrue statement of any material fact contained in the Registration Statement,
any preliminary prospectus, any Issuer Free Writing Prospectus, the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged omission to state
therein a material fact , in the case of the Registration Statement or any amendment or supplement
thereto, required to be stated therein or necessary to make the statements therein not misleading
and, in the case of any preliminary prospectus, any Issuer Free Writing Prospectus, the Prospectus,
or any amendment or supplement thereto, necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission or alleged omission
was made in the Registration Statement, any preliminary prospectus, any Issuer Free Writing
Prospectus, the Prospectus, or any amendment or supplement thereto in reliance upon and in
conformity with Section 3 of this Agreement or any other written information furnished to the
Company by such Underwriter through the Representative specifically for use in the preparation
thereof; and will reimburse any legal or other expenses reasonably incurred by the Company, or any
such director, officer or controlling person in connection with investigating or defending any such
loss, claim, damage, liability or action. In addition to their other obligations under this
Section 11(b), the Underwriters agree that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon any statement or
omission, or any alleged statement or omission, described in this Section 11(b), they will
reimburse the Company on a monthly basis for all reasonable legal and other expenses incurred in
connection with investigating or defending any such claim, action, investigation, inquiry or other
proceeding, notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Underwriters’ obligation to reimburse the Company for such expenses and the
possibility that such payments might later be held to have been improper by a court of competent
jurisdiction. This indemnity agreement will be in addition to any liability which such Underwriter
may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 11 of notice of the
commencement of any action, such indemnified party will, if a claim in respect thereof is to be
made against an indemnifying party under this Section 11, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party except to the extent that the indemnifying
party was prejudiced by such failure to notify. In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in, and, to the extent that it may wish, jointly
with all other indemnifying parties similarly notified, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided, however, if the defendants in any such
action include both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded based on the advice of outside counsel that there may be legal
defenses available to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, or the indemnified and indemnifying parties
-18-
may have conflicting interests which would make it inappropriate for the same counsel to
represent both of them, the indemnified party or parties shall have the right to select separate
counsel to assume such legal defense and otherwise to participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to
such indemnified party of its election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such indemnified party
under this Section 11 for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof unless (i) the indemnified party shall have employed
such counsel in connection with the assumption of legal defense in accordance with the proviso to
the next preceding sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, approved by the Representative in the
case of paragraph (a) representing all indemnified parties not having different or additional
defenses or potential conflicting interest among themselves who are parties to such action), (ii)
the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after notice of commencement of
the action or (iii) the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any pending or
threatened 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 arising out of such
proceeding.
(d) If the indemnification provided for in this Section 11 is unavailable to an indemnified
party under paragraphs (a) or (b) hereof in respect of any losses, claims, damages or liabilities
referred to therein, then each applicable 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 or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Underwriters 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 Underwriters in connection with
the statements or omissions which resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The respective relative benefits received by the
Company and the Underwriters shall be deemed to be in the same proportion, in the case of the
Company, as the total price paid to the Company for the Shares by the Underwriters (net of
underwriting discount but before deducting expenses) bears to, and in the case of the Underwriters,
as the underwriting discount received by them bears to, the total of such amounts paid to the
Company and received by the Underwriters as underwriting discount, in each case as contemplated by
the Prospectus. The relative fault of the Company and the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the Company or by the
Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a party as a result
of the losses, claims, damages and liabilities referred to above shall be deemed to include any
legal or other fees or expenses reasonably incurred by such party in connection with investigating
or defending any action or claim.
The Company and the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 11(d) were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section 11(d), no
Underwriter shall be required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were offered 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
-19-
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) 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 11(d) are several in proportion to
their respective underwriting commitments and not joint.
(e) In connection with the offer and sale of the Reserved Shares, the Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of the 1933 Act or the Exchange Act against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or such controlling person may become
subject under the 1933 Act, the Exchange Act or other federal or state statutory law or regulation,
at common law or otherwise (including in settlement of any litigation if such settlement is
effected with the written consent of the Company) (i) arising out of any untrue statement or
alleged untrue statement of a material fact contained in any prospectus wrapper or other material
prepared by or with the consent of the Company for distribution to Invitees in connection with the
offering of the Reserved Shares 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; or (ii) arising out of or based upon the failure of any Invitee to pay for
and accept delivery of Reserved Shares which have been orally confirmed for purchase by any Invitee
by the end of the first business day after the date of this Agreement, other than losses, claims,
damages or liabilities (or expenses relating thereto) that are finally judicially determined to
have resulted from the bad faith, willful misconduct or gross negligence of any such Underwriter.
(f) The provisions of this Section 11 shall survive any termination of this Agreement.
Section 12. Default of Underwriters. It shall be a condition to the agreement and obligation
of the Company to sell and deliver the Shares hereunder, and of each Underwriter to purchase the
Shares hereunder, that, except as hereinafter in this paragraph provided, each of the Underwriters
shall purchase and pay for all Shares agreed to be purchased by such Underwriter hereunder upon
tender to the Representative of all such Shares in accordance with the terms hereof. If any
Underwriter or Underwriters default in their obligations to purchase Shares hereunder on the First
Closing Date and the aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed 10 percent of the total number of Shares which the
Underwriters are obligated to purchase on the First Closing Date, the Representative may make
arrangements satisfactory to the Company for the purchase of such Shares by other persons,
including any of the Underwriters, but if no such arrangements are made by such date the
nondefaulting Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the Shares which such defaulting Underwriters agreed but failed
to purchase on such date. If any Underwriter or Underwriters so default and the aggregate number
of Shares with respect to which such default or defaults occur is more than the above percentage
and arrangements satisfactory to the Representative and the Company for the purchase of such Shares
by other persons are not made within 36 hours after such default, this Agreement will terminate
without liability on the part of any nondefaulting Underwriter or the Company, except for the
expenses to be paid by the Company pursuant to Section 7 hereof and except to the extent provided
in Section 11 hereof.
In the event that Shares to which a default relates are to be purchased by the nondefaulting
Underwriters or by another party or parties, the Representative or the Company shall have the right
to postpone the First Closing Date for not more than seven business days in order that the
necessary changes in the Registration Statement, Prospectus and any other documents, as well as any
other arrangements, may be effected. As used in this Agreement, the term “Underwriter” includes
any
-20-
person substituted for an Underwriter under this Section. Nothing herein will relieve a
defaulting Underwriter from liability for its default.
Section 13. Effective Date. This Agreement shall become effective immediately as to
Sections 7, 9, 11 and 14 and as to all other provisions at 10:00 A.M., Chicago Time, on the day
following the date upon which the Pricing Agreement is executed and delivered, unless such a day is
a Saturday, Sunday or holiday (and in that event this Agreement shall become effective at such hour
on the business day next succeeding such Saturday, Sunday or holiday); but this Agreement shall
nevertheless become effective at such earlier time after the Pricing Agreement is executed and
delivered as you may determine on and by notice to the Company or by release of any Shares for sale
to the public. For the purposes of this Section, the Shares shall be deemed to have been so
released upon the release for publication of any newspaper advertisement relating to the Shares or
upon the release by you of written communications (i) advising Underwriters that the Shares are
released for public offering, or (ii) offering the Shares for sale to securities dealers, whichever
may occur first.
Section 14. Termination. Without limiting the right to terminate this Agreement
pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice to you or by you by
notice to the Company at any time prior to the time this Agreement shall become effective as
to all its provisions, and any such termination shall be without liability on the part of
the Company to any Underwriter (except for the expenses to be paid or reimbursed pursuant to
Section 7 hereof and except to the extent provided in Section 11 hereof) or of any
Underwriter to the Company.
(b) This Agreement may also be terminated by you prior to the First Closing Date, and
the option referred to in Section 4, if exercised, may be cancelled at any time prior to the
Second Closing Date, if (i) trading in securities on the New York Stock Exchange or The
Nasdaq Stock Market shall have been suspended or minimum prices shall have been established
on such exchange or market, or (ii) a banking moratorium shall have been declared by
Illinois, New York, or United States authorities, or (iii) there shall have been any
material adverse change in financial markets or any material adverse change in political,
economic or financial conditions which, in the opinion of the Representative, either renders
it impracticable or inadvisable to proceed with the offering and sale of the Shares on the
terms set forth in the Prospectus or materially and adversely affects the market for the
Shares, or (iv) there shall have been an outbreak of major armed hostilities between the
United States and any foreign power or terrorist organization which in the opinion of the
Representative makes it impractical or inadvisable to offer or sell the Shares. Any
termination pursuant to this paragraph (b) shall be without liability on the part of any
Underwriter to the Company or on the part of the Company to any Underwriter (except for
expenses to be paid or reimbursed pursuant to Section 7 hereof and except to the extent
provided in Section 11 hereof).
Section 15. Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of the Company, of its
officers and of the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on behalf of any
Underwriter or the Company or any of its or their partners, principals, members, officers or
directors or any controlling person, and will survive delivery of and payment for the Shares sold
hereunder.
Section 16. Notices. All communications hereunder will be in writing and, if sent to
the Underwriters will be mailed, delivered or telegraphed and confirmed to you x/x Xxxxxxx Xxxxx &
-00-
Xxxxxxx, X.X.X., 000 Xxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, with a copy to Xxxxxx X.
Xxxxxxx, c/o Xxxxxx Xxxxxx LLP, Xxx Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000; if sent to the
Company will be mailed, delivered or telegraphed and confirmed to the Company at its corporate
headquarters with a copy to Xxxxxxx X. Silver, c/o Hogan & Xxxxxxx L.L.P., 000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxxxx, XX 00000.
Section 17. No Advisory or Fiduciary Relationship. The Company acknowledges and
agrees that (a) the purchase and sale of the Shares pursuant to this Agreement, including the
determination of the initial public offering price of the Shares and any related discounts and
commissions, is an arm’s-length commercial transaction between the Company, on the one hand, and
the several Underwriters, on the other hand, (b) in connection with the offering of the Shares
contemplated by this Agreement and the process leading to such transaction each Underwriter is and
has been acting solely as a principal and is not the agent or fiduciary of the Company or its
stockholders, creditors, employees or any other party, (c) no Underwriter has assumed or will
assume an advisory or fiduciary responsibility in favor of the Company with respect to the offering
of the Shares contemplated by this Agreement or the process leading thereto (irrespective of
whether such Underwriter has advised or is currently advising the Company on other matters) and no
Underwriter has any obligation to the Company with respect to the offering of the Shares
contemplated by this Agreement except the obligations expressly set forth in this Agreement, (d)
the Underwriters and their respective affiliates may be engaged in a broad range of transactions
that involve interests that differ from those of the Company and (e) the Underwriters have not
provided any legal, accounting, regulatory or tax advice with respect to the offering of the Shares
contemplated by this Agreement and the Company has consulted its own legal, accounting, regulatory
and tax advisors to the extent it deemed appropriate.
Section 18. Successors. This Agreement and the Pricing Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective successors, personal
representatives and assigns, and to the benefit of the officers and directors and controlling
persons referred to in Section 11, and no other person will have any right or obligation hereunder.
The term “successors” shall not include any purchaser of the Shares as such from any of the
Underwriters merely by reason of such purchase.
Section 19. Representation of Underwriters. You will act as Representative for the
several Underwriters in connection with this financing, and any action under or in respect of this
Agreement taken by you will be binding upon all the Underwriters.
Section 20. Partial Unenforceability. If any section, paragraph or provision of this
Agreement is for any reason determined to be invalid or unenforceable, such determination shall not
affect the validity or enforceability of any other section, paragraph or provision hereof.
Section 21. Applicable Law. This Agreement and the Pricing Agreement shall be
governed by and construed in accordance with the laws of the State of Illinois.
-22-
If the foregoing is in accordance with your understanding of our agreement, kindly sign and
return to us the enclosed duplicates hereof, whereupon it will become a binding agreement among the
Company and the several Underwriters including you, all in accordance with its terms.
| Very truly yours, American Public Education, Inc. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
-23-
The foregoing Agreement is hereby
confirmed and accepted as of
the date first above written.
confirmed and accepted as of
the date first above written.
Xxxxxxx Xxxxx & Company, L.L.C.
Acting as Representative of the
several Underwriters named in
Schedule A.
several Underwriters named in
Schedule A.
By: Xxxxxxx Xxxxx & Company, L.L.C.
By:
Principal
Principal
-24-
Schedule A
| Number of | ||||
| Firm Shares | ||||
| Underwriter | to be Purchased | |||
Xxxxxxx Xxxxx & Company, L.L.C. |
||||
Xxxxx Xxxxxxx & Co. |
||||
Xxxxxx, Xxxxxxxx & Company |
||||
ThinkEquity Partners LLC |
||||
BMO Capital Markets Corp. |
||||
Signal Hill Capital Group LLC |
||||
Total |
||||
A-1
Schedule B
Issuer General Use Free Writing Prospectuses
Issuer General Use Free Writing Prospectuses
[None]
B-1
Exhibit A
American Public Education, Inc.
Shares Common Stock2
Pricing Agreement
, 2007
Xxxxxxx Xxxxx & Company, L.L.C.
As Representative of the Several
Underwriters
c/o Xxxxxxx Xxxxx & Company, L.L.C.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
As Representative of the Several
Underwriters
c/o Xxxxxxx Xxxxx & Company, L.L.C.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated , 2007 (the “Underwriting Agreement”) relating to the sale by the Company and the purchase by the several Underwriters for
whom Xxxxxxx Xxxxx & Company, L.L.C. is acting as representative (the “Representative”), of the
above Shares. All terms herein shall have the definitions contained in the Underwriting Agreement
except as otherwise defined herein.
Pursuant to Section 4 of the Underwriting Agreement, the Company agrees with the
Representative as follows:
1. The initial public offering price per share for the Shares shall be $ .
2. The purchase price per share for the Shares to be paid by the several Underwriters shall be
$ , being an amount equal to the initial public offering price set forth above less
$ per share.
| 2 | Plus an option to acquire up to additional shares to cover overallotments |
If the foregoing is in accordance with your understanding of our agreement, kindly sign and
return to us the enclosed duplicates hereof, whereupon it will become a binding agreement among the
Company and the several Underwriters, including you, all in accordance with its terms.
| Very truly yours, American Public Education, Inc. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
The foregoing Agreement is hereby
confirmed and accepted as of
the date first above written.
confirmed and accepted as of
the date first above written.
Xxxxxxx Xxxxx & Company, L.L.C.
Acting as Representative of the
several Underwriters named in
Schedule A to the Underwriting
Agreement.
several Underwriters named in
Schedule A to the Underwriting
Agreement.
By: Xxxxxxx Xxxxx & Company, L.L.C.
By:
Principal
Principal
Schedule A to Pricing Agreement
Pricing Information
Pricing Information
| • | Total Shares Offered: (with overallotment option: ) | |
| • | Price to Public: $ | |
| • | Underwriting Discount: $ | |
| • | Expected Settlement Date: , 2007 |
