GRAND CANYON EDUCATION, INC. Common Stock UNDERWRITING AGREEMENT
Exhibit 1.1
Common Stock
, 2008
As Representatives of the Several Underwriters
Dear Sirs and Mesdames:
1. Introductory. Grand Canyon Education, Inc., a Delaware corporation (“Company”) agrees with
the several Underwriters named in Schedule A hereto (“Underwriters”) to issue and sell to
the several Underwriters shares of its Common Stock, $0.01 par value per share
(“Securities”) (such shares of Securities being hereinafter referred to as the
“Firm Securities”). The Company also agrees with the Underwriters to issue and sell to the
Underwriters, at the option of the Underwriters, an aggregate of not more than
additional outstanding shares (“Optional Securities”) of the Company’s Securities, as set forth
below. The Firm Securities and the Optional Securities are herein collectively called the “Offered
Securities”. As part of the offering contemplated by this Agreement, (the
“Designated Underwriter”) has agreed to reserve out of the Firm Securities purchased by it under
this Agreement, up to shares, for sale to the Company’s directors, officers,
employees and other parties associated with the Company (collectively, “Participants”), as set
forth in the Final Prospectus (as defined herein) under the heading “Underwriting” (the “Directed
Share Program”). The Firm Securities to be sold by the Designated Underwriter pursuant to the
Directed Share Program (the “Directed Shares”) will be sold by the Designated Underwriter pursuant
to this Agreement at the public offering price. Any Directed Shares not subscribed for by the end
of the business day on which this Agreement is executed will be offered to the public by the
Underwriters as set forth in the Final Prospectus.
2. Representations and Warranties of the Company. The Company represents and warrants to, and
agrees with, the several Underwriters that:
(a) Filing and Effectiveness of Registration Statement; Certain Defined Terms. The Company
has filed with the Commission a registration statement on Form S-1 (No. 333-150876) covering the
registration of the Offered Securities under the Act, including a related preliminary prospectus or
prospectuses. At any particular time, this initial registration statement, in the form then on
file with the Commission, including all information contained in the registration statement (if
any) pursuant to Rule 462(b) and then deemed to be a part of the initial registration statement,
and all 430A Information, that in any case has not then been superseded or modified, shall be
referred to as the “Initial Registration Statement”. The Company may also have filed, or may file
with the Commission, a Rule 462(b) registration statement covering the registration of Offered
Securities. At any particular time, this Rule 462(b) registration statement, in the form then on
file with the Commission, including the contents of the Initial Registration Statement incorporated
by reference therein and including all 430A Information, that in
any case has not then been superseded or modified, shall be referred to as the “Additional
Registration Statement”.
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As of the time of execution and delivery of this Agreement, the Initial Registration Statement
has been declared effective under the Act and is not proposed to be amended. Any Additional
Registration Statement has or will become effective upon filing with the Commission pursuant to
Rule 462(b) and is not proposed to be amended. The Offered Securities all have been or will be
duly registered under the Act pursuant to the Initial Registration Statement and, if applicable,
the Additional Registration Statement.
For purposes of this Agreement:
“430A Information”, with respect to any registration statement, means information included in
a prospectus and retroactively deemed to be a part of such registration statement pursuant to Rule
430A(b).
“Act” means the Securities Act of 1933, as amended.
“Applicable Time” means :00 pm (Eastern time) on the date of this Agreement.
“Closing Date” has the meaning defined in Section 3 hereof.
“Commission” means the Securities and Exchange Commission.
“Effective Date” with respect to the Initial Registration Statement or the Additional
Registration Statement (if any) means the date of the Effective Time thereof.
“Effective Time” with respect to the Initial Registration Statement or, if filed prior to the
execution and delivery of this Agreement, the Additional Registration Statement means the date and
time as of which such Registration Statement was declared effective by the Commission or has become
effective upon filing pursuant to Rule 462(c). If an Additional Registration Statement has not been
filed prior to the execution and delivery of this Agreement but the Company has advised the
Representatives that it proposes to file one, “Effective Time” with respect to such Additional
Registration Statement means the date and time as of which such Registration Statement is filed and
becomes effective pursuant to Rule 462(b).
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Final Prospectus” means the Statutory Prospectus that discloses the public offering price,
other 430A Information with respect to the Offered Securities and otherwise satisfies Section 10(a)
of the Act.
“General Use Issuer Free Writing Prospectus” means any Issuer Free Writing Prospectus that is
intended for general distribution to prospective investors, as evidenced by its being so specified
in Schedule B to this Agreement.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in
Rule 433, relating to the Offered Securities in the form filed or required to be filed with the
Commission or, if not required to be filed, in the form retained in the Company’s records pursuant
to Rule 433(g).
“Limited Use Issuer Free Writing Prospectus” means any Issuer Free Writing Prospectus that is
not a General Use Issuer Free Writing Prospectus.
The Initial Registration Statement and the Additional Registration Statement are referred to
collectively as the “Registration Statements” and individually as a “Registration Statement”. A
“Registration Statement” with reference to a particular time means the Initial Registration
Statement and any Additional Registration Statement as of such time. A “Registration Statement”
without reference to a time means such Registration Statement as of its Effective Time. For
purposes of the foregoing definitions,
430A Information with respect to a Registration Statement shall be considered to be included
in such Registration Statement as of the time specified in Rule 430A.
“Rules and Regulations” means the rules and regulations of the Commission.
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“Securities Laws” means, collectively, the Xxxxxxxx-Xxxxx Act of 2002 (“Xxxxxxxx-Xxxxx”), the
Act, the Exchange Act, the Rules and Regulations, the auditing principles, rules, standards and
practices applicable to auditors of “issuers” (as defined in Xxxxxxxx-Xxxxx) promulgated or
approved by the Public Company Accounting Oversight Board and, as applicable, the rules of the New
York Stock Exchange and the NASDAQ Stock Market (“Exchange Rules”).
“Statutory Prospectus” with reference to a particular time means the prospectus included in a
Registration Statement immediately prior to that time, including, if applicable any 430A
Information with respect to such Registration Statement. For purposes of the foregoing definition,
430A Information shall be considered to be included in the Statutory Prospectus as of the actual
time that form of prospectus is filed with the Commission pursuant to Rule 424(b) or Rule 462(c)
and not retroactively.
Unless otherwise specified, a reference to a “rule” is to the indicated rule under the Act.
(b) (i) At their respective Effective Times, on the date of this Agreement and on each Closing
Date, each of the Initial Registration Statement and the Additional Registration Statement (if any)
conformed and will conform in all respects to the requirements of the Act, (ii) on its date, at
the time of filing of the Final Prospectus pursuant to Rule 424(b) or (if no such filing is
required) at the Effective Time of the Additional Registration Statement in which the Final
Prospectus is included, and on each Closing Date, the Final Prospectus will conform in all respects
to the requirements of the Act and the Rules and Regulations and will not include any 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 not misleading, and (iii) on the date of this Agreement,
at their respective Effective Times or issue dates and on each Closing Date, each Registration
Statement, the Final Prospectus, any Statutory Prospectus, any prospectus wrapper and any Issuer
Free Writing Prospectus complied or comply, and such documents and any further amendments or
supplements thereto will comply, with any applicable laws or regulations of foreign jurisdictions
in which the Final Prospectus, any Statutory Prospectus, any prospectus wrapper or any Issuer Free
Writing Prospectus, as amended or supplemented, if applicable, are distributed in connection with
the Directed Share Program. The preceding sentence does not apply to statements in or omissions
from any such document based upon written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein, it being understood and agreed that the
only such information is that described as such in Section 8(c) hereof.
(c) (i) At the time of the initial filing of the Initial Registration Statement and (ii) at
the date of this Agreement, the Company was not and is not an “ineligible issuer,” as defined in
Rule 405, including (x) the Company or any other subsidiary in the preceding three years not having
been convicted of a felony or misdemeanor or having been made the subject of a judicial or
administrative decree or order as described in Rule 405 and (y) the Company in the preceding three
years not having been the subject of a bankruptcy petition or insolvency or similar proceeding, not
having had a registration statement be the subject of a proceeding under Section 8 of the Act and
not being the subject of a proceeding under Section 8A of the Act in connection with the offering
of the Offered Securities, all as described in Rule 405.
(d) As of the Applicable Time, neither (i) the General Use Issuer Free Writing Prospectus(es)
issued at or prior to the Applicable Time, the preliminary prospectus, dated , 2008
(which is the most recent Statutory Prospectus distributed to investors generally) and the other
information, if any, stated in Schedule B to this Agreement to be included in the General
Disclosure Package, all considered together (collectively, the “General Disclosure Package”), nor
(ii) any individual Limited Use Issuer Free Writing Prospectus, when considered together with the
General Disclosure Package, included any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The preceding sentence does not apply to
statements in or omissions from any Statutory Prospectus or any
Issuer Free Writing Prospectus in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through the Representatives specifically for use
therein, it being understood and agreed that the only such information furnished by any Underwriter
consists of the information described as such in Section 8(c) hereof.
(e) 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 Offered Securities or, if earlier, the
date the Company
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notified or notifies the Representatives as described in the next sentence, did
not, does not and will not include any information that conflicted, conflicts or will conflict with
the information then contained in the Registration Statement. If at any time following 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 then
contained in the Registration Statement or as a result of which such Issuer Free Writing
Prospectus, if republished immediately following such event or development, would include an untrue
statement of a material fact or omitted or would omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which they were made, not
misleading, (i) the Company has promptly notified or will promptly notify the Representatives and
(ii) the Company has promptly amended or will promptly amend or supplement such Issuer Free Writing
Prospectus to eliminate or correct such conflict, untrue statement or omission.
(f) The Company has been duly incorporated and is existing and in good standing under the laws
of the State of Delaware, with power and authority (corporate and other) to own its properties and
conduct its business as described in the General Disclosure Package; and the Company is duly
qualified to do business as a foreign corporation in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its business requires such
qualification, except, in each case, where the failure to be in good standing or to be so qualified
would not, individually or in the aggregate, result in a material adverse effect on the condition
(financial or otherwise), results of operations, business, properties or prospects of the Company
and its subsidiaries taken as a whole (“Material Adverse Effect”).
(g) Each subsidiary of the Company has been duly incorporated and is existing and in good
standing under the laws of the jurisdiction of its incorporation, with power and authority
(corporate and other) to own its properties and conduct its business as described in the General
Disclosure Package; and each subsidiary of the Company is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification, except where the failure to be
in good standing or to be so qualified would not, individually or in the aggregate, result in a
Material Adverse Effect; all of the issued and outstanding capital stock of each subsidiary of the
Company has been duly authorized and validly issued and is fully paid and nonassessable; and the
capital stock of each subsidiary owned by the Company, directly or through subsidiaries, is owned
free from liens, encumbrances and defects.
(h) The Offered Securities and all other outstanding shares of capital stock of the Company
have been duly authorized; the authorized equity capitalization of the Company is as set forth in
the General Disclosure Package; all outstanding shares of capital stock of the Company are, and,
when the Offered Securities have been delivered and paid for in accordance with this Agreement on
each Closing Date, such Offered Securities will have been, validly issued, fully paid and
nonassessable, will conform to the information in the General Disclosure Package and to the
description of such Offered Securities contained in the Final Prospectus; the stockholders of the
Company have no preemptive rights with respect to the Offered Securities; and none of the
outstanding shares of capital stock of the Company have been issued in violation of any preemptive
or similar rights of any security holder.
(i) Except as disclosed in the General Disclosure Package, there are no contracts, agreements
or understandings between the Company and any person that would give rise to a valid claim against
the Company or any Underwriter for a brokerage commission, finder’s fee or other like payment in
connection with this offering.
(j) Except as disclosed in the General Disclosure Package, there are no contracts, agreements
or understandings between the Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to any securities of the
Company owned or to be owned by such person or to require the Company to include such securities in
the offering registered pursuant to a Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Company under the Act (collectively,
“registration rights”), and any person to whom the Company has granted registration rights has
agreed not to exercise such rights until after the expiration of the Lock-Up Period referred to in
Section 5(k) hereof.
(k) The Offered Securities have been approved for listing on the Nasdaq Stock Market, subject
to notice of issuance.
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(l) No consent, approval, authorization, or order of, or filing or registration with, any
person (including any governmental agency or body or any court) is required to be obtained or made
by the Company for the consummation of the transactions contemplated by this Agreement in
connection with the sale of the Offered Securities, except such as have been obtained, or made and
such as may be required under state securities laws. No authorization, consent, approval, license,
qualification or order of, or filing or registration with any person (including any governmental
agency or body or any court) in any foreign jurisdiction is required for the consummation of the
transactions contemplated by this Agreement in connection with the offering, issuance and sale of
the Directed Shares under the laws and regulations of such jurisdiction except such as have been
obtained or made.
(m) Except as disclosed in the General Disclosure Package, the Company and its subsidiaries
have good and marketable title to all real properties and all other properties and assets owned by
them, in each case free from liens, charge, encumbrances and defects that would materially affect
the value thereof or materially interfere with the use made or to be made thereof by them and,
except as disclosed in the General Disclosure Package, the Company and its subsidiaries hold any
leased real or personal property under valid and enforceable leases with no terms or provisions
that would materially interfere with the use made or to be made thereof by them.
(n) The execution, delivery and performance of this Agreement, and the issuance and sale of
the Offered Securities, will not result in a breach or violation of any of the terms and provisions
of, or constitute a default or a Debt Repayment Triggering Event (as defined below) under, or
result in the imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, (i) the charter or by-laws of the Company or any of
its subsidiaries, (ii) any statute, rule, regulation or order of any governmental agency or body or
any court, domestic or foreign, having jurisdiction over the Company or any of its subsidiaries or
any of their properties, including, without limitation, the Higher Education Act of 1965 (the
“HEA”), or (iii) any agreement or instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound or to which any of the properties
of the Company or any of its subsidiaries is subject except, in the cases of clauses (ii) and (iii)
such breaches, defaults or impositions that would not, individually or in the aggregate, result in
a Material Adverse Effect.; a “Debt Repayment Triggering Event” means any event or condition that
gives, or with the giving of notice or lapse of time would give, the holder of any note, debenture,
or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such indebtedness by the
Company or any of its subsidiaries.
(o) Neither the Company nor any of its subsidiaries is (i) in violation of its respective
charter or by-laws, or (ii) in default (or with the giving of notice or lapse of time would be in
default) under any existing obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or instrument to which any of them is
a party or by which any of them is bound or to which any of the properties of any of them is
subject, except such defaults that would not, individually or in the aggregate, result in a
Material Adverse Effect.
(p) This Agreement has been duly authorized, executed and delivered by the Company.
(q) The Company and its subsidiaries possess, and are in compliance, in all material respects,
with the terms of all certificates, authorizations, franchises, licenses and permits (“Licenses”)
necessary to the conduct of the business now conducted by them, 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
Licenses that, if determined adversely to the Company or any of its subsidiaries, would,
individually or in the aggregate, result in a Material Adverse Effect.
(r) No labor dispute with the employees of the Company or any of its subsidiaries exists or,
to the knowledge of the Company, is imminent that would reasonably be expected to have a Material
Adverse Effect.
(s) None of the following events has occurred or exists: (i) a failure by the Company or any
of its subsidiaries to fulfill the material obligations, if any, under the minimum funding
standards of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Employee Retirement Income Security Act of 1974, as
amended, and the regulations and
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published interpretations thereunder (“ERISA”) with respect to a
Plan (as defined below), determined without regard to any waiver of such obligations or extension
of any amortization period; (ii) an audit or investigation by the Internal Revenue Service, the
U.S. Department of Labor, the Pension Benefit Guaranty Corporation or any other federal or state
governmental agency or any foreign regulatory agency with respect to the employment or compensation
of employees by the Company that individually or in the aggregate would reasonably be expected to
have a Material Adverse Effect; or (iii) any breach of any contractual obligation, or any violation
of law or applicable qualification standards, with respect to the employment or compensation of
employees by the Company or any of its subsidiaries that, to the knowledge of the Company would
individually or in the aggregate would reasonably be expected to have a Material Adverse Effect.
None of the following events has occurred or, to the knowledge of the Company, is expected to
occur: (A) a material increase in the aggregate amount of contributions required to be made to all
Plans in the current fiscal year of the Company and its subsidiaries compared to the amount of such
contributions made in the most recently completed fiscal year of the Company and its subsidiaries;
(B) a material increase in the “accumulated post-retirement benefit obligations” (within the
meaning of Statement of Financial Accounting Standards 106) of the Company and its subsidiaries
compared to the amount of such obligations in the most recently completed fiscal year of the
Company; (C) any event or condition giving rise to a liability for the Company or any of its
subsidiaries under Title IV of ERISA that would individually or in the aggregate have a Material
Adverse Effect; or (D) the filing of a claim by one or more employees or former employees of the
Company or any of its subsidiaries related to their employment that individually or in the
aggregate have a Material Adverse Effect. For purposes of this paragraph, the term “Plan” means a
plan (within the meaning of Section 3(3) of ERISA) subject to Title IV of ERISA with respect to
which the Company or any of its subsidiaries may have any liability.
(t) The Company and its subsidiaries own, possess or can acquire on reasonable terms, adequate
trademarks, trade names and other rights to inventions, know-how, patents, copyrights, confidential
information and other intellectual property (collectively, “intellectual property rights”)
necessary to conduct the business now operated by them, or presently employed by them, and have not
received any notice of infringement of or conflict with asserted rights of others with respect to
any intellectual property rights that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a Material Adverse Effect.
(u) Except as disclosed in the General Disclosure Package, neither the Company nor any of its
subsidiaries (A) is in violation of any statute, any rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to the use, disposal or
release of hazardous or toxic substances or relating to the protection or restoration of the
environment or human exposure to hazardous or toxic substances (collectively, “environmental
laws”), (B) owns or operates any real property that is contaminated with any substance that is
subject to any environmental laws, (C) is liable for any off-site disposal or contamination
pursuant to any environmental laws, or (D) is subject to any claim relating to any environmental
laws, which violation, contamination, liability or claim would
individually or in the aggregate have a Material Adverse Effect; and the Company is not aware
of any pending investigation which might lead to such a claim.
(v) The statements in the General Disclosure Package and the Final Prospectus under the
headings “U.S. Federal Tax Considerations”, “Description of Capital Stock” and “Regulation,”
insofar as such statements summarize legal matters, agreements, documents or proceedings discussed
therein, are accurate and fair summaries of such legal matters, agreements, documents or
proceedings and present the information required to be shown.
(w) The Company has not taken, directly or indirectly, any action that is designed to or that
has constituted or that would reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale or resale of the
Offered Securities.
(x) Any third-party statistical and market-related data included in a Registration Statement,
a Statutory Prospectus or the General Disclosure Package are based on or derived from sources that
the Company believes to be reliable and accurate.
(y) 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
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with generally accepted accounting principles and to maintain
asset accountability, (iii) access to assets is permitted only in accordance with management’s
general or specific authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with respect to any
differences. To the extent required by the applicable Rules and Regulations, the Company will
maintain disclosure controls and procedures (as such term is defined in Rule 13a-14 under the
Exchange Act) that are effective in ensuring 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 rules and forms of the
Commission, 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 or officers and its principal financial officer or officers, as
appropriate to allow timely decisions regarding required disclosure.
(z) A member of the Company’s audit committee (the “Audit Committee”) of the Company’s Board
of Directors has confirmed to the Chief Executive Officer, Chief Financial Officer or General
Counsel that, except as set forth in the General Disclosure Package, the Audit Committee is not
reviewing or investigating, and neither the Company’s independent auditors nor its internal
auditors have recommended that the Audit Committee review or investigate, (i) adding to, deleting,
changing the application of, or changing the Company’s disclosure with respect to, any of the
Company’s material accounting policies; (ii) any matter which could result in a restatement of the
Company’s financial statements for any annual or interim period during the current or prior three
fiscal years; or (iii) a significant deficiency, material weakness, change in internal controls,
including, but not limited to, disclosure controls and procedures, internal controls over
accounting matters and financial reporting, an internal audit function and legal and regulatory
compliance controls, or fraud involving management or other employees who have a significant role
in internal controls.
(aa) The Company is in compliance with all applicable provisions of Xxxxxxxx-Xxxxx and the
applicable rules and regulations thereunder.
(bb) Except as disclosed in the General Disclosure Package, there are no pending actions,
suits or proceedings (including any inquiries or investigations by any court or governmental agency
or body, domestic or foreign) against or affecting the Company, any of its subsidiaries or any of
their respective properties that, (i) if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a Material Adverse Effect, or would
materially and adversely affect
the ability of the Company to perform its obligations under this Agreement, or (ii) are
required to be disclosed in the Registration Statement and the General Disclosure Package; and no
such actions, suits or proceedings (including any inquiries or investigations by any court or
governmental agency or body, domestic or foreign) are, to the Company’s knowledge, threatened or
contemplated.
(cc) The financial statements included in each Registration Statement and the General
Disclosure Package present fairly the financial position of the Company and its consolidated
subsidiaries as of the dates shown and their results of operations and cash flows for the periods
shown, and such financial statements have been prepared in conformity with the generally accepted
accounting principles in the United States (“GAAP”) applied on a consistent basis; all non-GAAP
financial information included in the Registration Statement and the General Disclosure Package
complies with the requirements of Regulation G and Item 10 of Regulation S-K under the Act; the
schedules included in each Registration Statement present fairly the information required to be
stated therein; and, except as disclosed in the General Disclosure Package, there are no material
off-balance sheet arrangements (as defined in Regulation S-K under the Act, Item 303(a)(4)(ii))
that would reasonably be expected to have a material current or future effect on the Company’s
financial condition, results of operation, liquidity, capital expenditures or capital resources of
the Company and its subsidiaries, taken as a whole.
(dd) The Company and its subsidiaries have filed all federal, state, local and non-U.S. tax
returns that are required to be filed or have requested extensions thereof (except in any case in
which the failure so to file would not have a Material Adverse Effect); and, except as set forth in
the General Disclosure Package, the Company and its subsidiaries have paid all taxes (including any
assessments, fines or penalties) required to be paid by them, except for any such taxes,
assessments, fines or penalties currently being contested in good faith or as would not,
individually or in the aggregate, have a Material Adverse Effect.
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(ee) The Company and its subsidiaries are insured by insurers with appropriately rated claims
paying abilities against such losses and risks and in such amounts as are prudent and customary for
the businesses in which they are engaged; all policies of insurance insuring the Company or any of
its subsidiaries or their respective businesses, assets, employees, officers and directors are in
full force and effect; the Company and its subsidiaries are in compliance with the terms of such
policies and instruments in all material respects; and there are no claims by the Company or any of
its subsidiaries under any such policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause; neither the Company nor any such
subsidiary has been refused any insurance coverage sought or applied for; neither the Company nor
any such subsidiary has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary at a cost that would not have a Material Adverse Effect, except as set
forth in or contemplated in the General Disclosure Package; and the Company currently has or will
obtain directors’ and officer’s insurance in such amounts as is appropriate for a public company in
its industry of comparable size.
(ff) Except as disclosed in the General Disclosure Package, since the end of the period
covered by the latest audited financial statements included in the General Disclosure Package (A)
there has been no change, nor any development or event involving a prospective change, in the
condition (financial or otherwise), results of operations, business, properties or prospects of the
Company and its subsidiaries, taken as a whole, that is material and adverse, (B) except as
disclosed in or contemplated by the General Disclosure Package, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of its capital stock
and (C) except as disclosed in or contemplated by the General Disclosure Package, there has been no
change in the capital stock, short-term indebtedness, long-term indebtedness, net current assets or
net assets of the Company and its subsidiaries that has had, or that would reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect.
(gg) The section entitled “Management’s Discussion and Analysis of Financial Condition and
Results of Operation—Critical Accounting Policies and Estimates” in the Registration Statement and
the General Disclosure Package accurately and fully describes (A) accounting policies which the
Company believes are the most important in the portrayal of the financial condition and results of
operations of the Company and its consolidated subsidiaries and which require management’s most
difficult, subjective or complex judgments (“Critical Accounting Policies”), (B) judgments and
uncertainties affecting the application of Critical Accounting Policies, and (C) to the extent
required by the Rules and Regulations, explanations of the likelihood that materially different
amounts would be reported under different conditions or using different assumptions.
(hh) To the extent required by the Rules and Regulations, the section entitled “Management’s
Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital
Resources” in the Registration Statement and the General Disclosure Package accurately and fairly
describes material trends, demands, commitments, events, uncertainties and risks, and the potential
effects thereof, that the Company believes would materially affect its liquidity and are reasonably
likely to occur.
(ii) The Company is not and, after giving effect to the offering and sale of the Offered
Securities and the application of the proceeds thereof as described in the General Disclosure
Package, will not be required to register as an “investment company” under the Investment Company
Act of 1940, as amended (the “Investment Company Act”).
(jj) The execution, delivery and performance of this Agreement, and the issuance and sale of
the Offered Securities will not constitute a change in ownership resulting in a “change of control”
of the Company pursuant to the applicable regulations promulgated under the HEA or any applicable
statute or regulation.
(kk) The Company has not offered or sold, or caused the Underwriters to offer or sell, any
Offered Securities to any person pursuant to the Directed Share Program with the specific intent to
unlawfully influence (i) a customer or supplier of the Company to alter the customer’s or
supplier’s level or type of business with the Company, or (ii) a trade journalist or publication to
write or publish favorable information about the Company or its products.
8
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the representations,
warranties and agreements and subject to the terms and conditions set forth herein, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Company, at a purchase price of $ per share, the respective number
of Firm Securities set forth opposite the name of such Underwriter in Schedule A hereto.
The Company will deliver the Firm Securities to or as instructed by the Representatives for
the accounts of the several Underwriters in a form reasonably acceptable to the Representatives
against payment of the purchase price in Federal (same day) funds by wire transfer to an account at
a bank acceptable to the Representatives drawn to the order of in the case
of shares of Firm Securities and in the case of shares
of Firm Securities, at the office of DLA Piper US LLP, in Phoenix, Arizona, at A.M.,
New York time, on , 2008 or at such other time not later
than seven full business days thereafter as the Representatives and the Company determine, such
time being herein referred to as the “First Closing Date”. For purposes of Rule 15c6-1 under the
Securities Exchange Act of 1934, the First Closing Date (if later than the otherwise applicable
settlement date) shall be the settlement date for payment of funds and delivery of securities for
all the Offered Securities sold pursuant to the offering. The Firm Securities so to be delivered or
evidence of their issuance will be made available for checking at the above office of DLA Piper US
LLP at least 24 hours prior to the First Closing Date.
In addition, upon written notice from the Representatives given to the Company from
time to time not more than 30 days subsequent to the date of the Final Prospectus, the Underwriters
may purchase all or less than all of the Optional Securities at the purchase price per Optional
Security to be paid for the Firm Securities. The Company agrees to sell to the Underwriters the
number of shares of Optional Securities specified in such notice and the Underwriters agree,
severally and not jointly, to purchase such Optional Securities. Such Optional Securities shall be
purchased from the Company for the account of each Underwriter in the same proportion as the number
of Firm Securities set forth opposite such Underwriter’s name bears to the total number of Firm
Securities (subject to adjustment by the Representatives to eliminate fractions) and may be
purchased by the Underwriters only for the purpose of covering over-allotments made in connection
with the sale of the Firm Securities. No Optional Securities shall be sold or delivered unless the
Firm Securities previously have been, or simultaneously are, sold and delivered. The right to
purchase the Optional Securities or any portion thereof may be exercised from time to time and to
the extent not previously exercised may be surrendered and terminated at any time upon notice by
the Representatives to the Company.
Each time for the delivery of and payment for the Optional Securities, being herein referred
to as an “Optional Closing Date”, which may be the First Closing Date (the First Closing Date and
each Optional Closing Date, if any, being sometimes referred to as a “Closing Date”), shall be
determined by the Representatives but shall be not later than five full business days after written
notice of election to purchase Optional Securities is given. The Company will deliver the Optional
Securities being purchased on each Optional Closing Date to or as instructed by the Representatives
for the accounts of the several Underwriters in a form reasonably acceptable to the
Representatives, against payment of the purchase price therefore in Federal (same day) funds by
wire transfer to an account at a bank acceptable to the Representatives drawn to the order of , at
the above office of DLA Piper US LLP. The Optional Securities being purchased on
each Optional Closing Date or evidence of their issuance will be made available for checking at the
above office of DLA Piper US LLP at a reasonable time in advance of such Optional Closing Date.
As compensation for the Underwriters’ commitments, the Company will pay to the Representatives
for the Underwriters’ proportionate accounts the sum of $ per share times
the total number of Offered Securities purchased by the Underwriters from the Company on each
Closing Date. Such payment will be made on each Closing Date with respect to the Offered Securities
purchased on such Closing Date.
4. Offering by Underwriters. It is understood that the several Underwriters propose to offer
the Offered Securities for sale to the public as set forth in the Final Prospectus.
5. Certain Agreements of the Company . The Company agrees with the several Underwriters that:
(a) Unless filed pursuant to Rule 462(c) as part of the Additional Registration Statement in
accordance with the next sentence, the Company will file the Final Prospectus, in a form approved
by the
9
Representatives, with the Commission pursuant to and in accordance with subparagraph (1) (or,
if applicable and if consented to by the Representatives, subparagraph (4)) of Rule 424(b) not
later than the earlier of (A) the second business day following the execution and delivery of this
Agreement or (B) the fifteenth business day after the Effective Time of the Initial Registration
Statement. The Company will advise the Representatives promptly of any such filing pursuant to
Rule 424(b) and confirm such timely filing in writing to the Representatives. If an Additional
Registration Statement is necessary to register a portion of the Offered Securities under the Act
but the Effective Time thereof has not occurred as of the execution and delivery of this Agreement,
the Company will file the Additional Registration Statement or, if filed, will file a
post-effective amendment thereto with the Commission pursuant to and in accordance with Rule 462(b)
on or prior to 10:00 P.M., New York time, on the date of this Agreement or, if earlier, on or prior
to the time the Final Prospectus is finalized and distributed to any Underwriter, or will make such
filing at such later date as shall have been consented to by the Representatives.
(b) The Company will promptly advise the Representatives of any proposal to amend or
supplement at any time the Initial Registration Statement, any Additional Registration Statement or
any Statutory Prospectus and will not effect such amendment or supplementation without the
Representatives’ consent, such consent not to be unreasonably refused or delayed; and the Company
will also advise the Representatives promptly of (i) the effectiveness of any Additional
Registration Statement (if its Effective Time is subsequent to the execution and delivery of this
Agreement), (ii) any amendment or supplementation of a Registration Statement or any Statutory
Prospectus, (iii) any request by the Commission or its staff for any amendment to any Registration
Statement, for any supplement to any Statutory Prospectus or for any additional information, (iv)
the institution by the Commission of any stop order proceedings in respect of a Registration
Statement or the threatening of any proceeding for that purpose, and (v) the receipt by the Company
of any notification with respect to the suspension of the qualification of the Offered Securities
in any jurisdiction or the institution or threatening of any proceedings for such purpose. The
Company will use its best efforts to prevent the issuance of any such stop order or the suspension
of any such qualification and, if issued, to obtain as soon as possible the withdrawal thereof.
(c) If, at any time when a prospectus relating to the Offered Securities is (or but for the
exemption in Rule 172 would be) required to be delivered under the Act by any Underwriter or
dealer, any event occurs as a result of which the Final Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend the Registration Statement or supplement the
Final Prospectus to comply with the Act, the Company will promptly notify the Representatives of
such event and will promptly prepare and file with the Commission and furnish, at its own expense,
to the Underwriters and the dealers and any other dealers upon request of the Representatives, an
amendment or supplement which will correct such statement or omission or an amendment which will
effect such compliance. Neither the Representatives’ consent to, nor the Underwriters’ delivery
of, any such amendment or supplement shall constitute a waiver of any of the conditions set forth
in Section 7 hereof.
(d) As soon as practicable, but not later than the Availability Date (as defined below), the
Company will make generally available to its security holders an earnings statement covering a
period of at least 12 months beginning after the Effective Date of the Initial Registration
Statement (or, if later, the Effective Time of the Additional Registration Statement) which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under the Act. For the purpose of
the preceding sentence, “Availability Date” means the day after the end of the fourth fiscal
quarter following the fiscal quarter that includes such Effective Time on which the Company is
required to file its Form 10-Q for such fiscal quarter except that, if such fourth fiscal quarter
is the last quarter of the Company’s fiscal year, “Availability Date” means the day after the end
of such fourth fiscal quarter on which the Company is required to file its Form 10-K.
(e) The Company will furnish to the Representatives copies of each Registration Statement (4
of which will be signed and will include all exhibits), each related Statutory Prospectus, and, so
long as a prospectus relating to the Offered Securities is (or but for the exemption in Rule 172
would be) required to be delivered under the Act, the Final Prospectus and all amendments and
supplements to such documents, in each case in such quantities as the Representatives request. The
Final Prospectus shall be so furnished on or prior to 3:00 P.M., New York time, on the business day
following the execution and delivery of this Agreement. All other such documents shall be so
furnished promptly after they are available. The Company will pay the expenses of printing and
distributing to the Underwriters all such documents.
10
(f) The Company will arrange for the qualification of the Offered Securities for sale under
the laws of such jurisdictions as the Representatives designate and will continue such
qualifications in effect so long as required for distribution.
(g) During the period of three years hereafter, the Company will furnish to the
Representatives and, upon request, to each of the other Underwriters, as soon as practicable after
the end of each fiscal year, a copy of its annual report to stockholders for such year; and the
Company will furnish to the Representatives (i) as soon as available, a copy of each report and any
definitive proxy statement of the Company filed with the Commission under the Exchange Act or
mailed to stockholders, and (ii) from time to time, such other information concerning the Company
as the Representatives may reasonably request. However, so long as the Company is subject to the
reporting requirements of either Section 13 or Section 15(d) of the Exchange Act and is timely
filing reports with the Commission on its Electronic Data Gathering, Analysis and Retrieval system
(“XXXXX”), it is not required to furnish such reports or statements to the Underwriters.
(h) The Company agrees with the several Underwriters that the Company will pay all expenses
incident to the performance of the obligations of the Company under this Agreement, including, but
not limited to, any filing fees and other expenses (including reasonable fees and disbursements of
counsel to the Underwriters) incurred in connection with qualification of the Offered Securities
for sale under the laws of such jurisdictions as the Representatives designate and the preparation
and printing of memoranda relating thereto, costs and expenses related to the review by the
Financial Institutions Regulatory Authority (“FINRA”) of the Offered Securities (including filing
fees and the fees and expenses of counsel for the Underwriters relating to such review), costs and
expenses of the Company relating to investor presentations or any “road show” in connection with
the offering and sale of the Offered Securities including, without limitation, any travel expenses
of the Company’s officers and employees and any other expenses of the Company including 50 percent
of the costs of chartering of airplanes, fees and expenses incident to listing the Offered
Securities on the New York Stock Exchange, American Stock Exchange, NASDAQ Stock Market and other
national and foreign exchanges, fees and expenses in connection with the registration of the
Offered Securities under the Exchange Act, and expenses incurred in distributing preliminary
prospectuses and the Final Prospectus (including any amendments and supplements thereto) to the
Underwriters and for expenses incurred for preparing, printing and distributing any Issuer Free
Writing Prospectuses to investors or prospective investors.
(i) The Company will use the net proceeds received by it in connection with this offering in
the manner described in the “Use of Proceeds” section of the General Disclosure Package and, except
as disclosed in the General Disclosure Package, the Company does not intend to use any of the
proceeds from the sale of the Offered Securities hereunder to repay any outstanding debt owed to
any affiliate of any Underwriter.
(j) The Company will not take, directly or indirectly, any action designed to or that would
constitute or that might reasonably be expected to cause or result in, stabilization or
manipulation of the price of any securities of the Company to facilitate the sale or resale of the
Offered Securities.
(k) For the period specified below (the “Lock-Up Period”), the Company will not, directly or
indirectly, take any of the following actions with respect to its Securities or any securities
convertible into or exchangeable or exercisable for any of its Securities (“Lock-Up Securities”):
(i) offer, sell, issue, contract to sell, pledge or otherwise dispose of Lock-Up Securities, (ii)
offer, sell, issue, contract to sell, contract to purchase or grant any option, right or warrant to
purchase Lock-Up Securities, (iii) enter into any swap, hedge or any other agreement that
transfers, in whole or in part, the economic consequences of ownership of Lock-Up Securities, (iv)
establish or increase a put equivalent position or liquidate or decrease a call equivalent position
in Lock-Up Securities within the meaning of Section 16 of the Exchange Act or (v) file with the
Commission a registration statement under the Act relating to Lock-Up Securities, or publicly
disclose the intention to take any such action, without the prior written consent of the
Representatives. The initial Lock-Up Period will commence on the date hereof and continue for 180
days after the date of the Final Prospectus or such earlier date that the Representatives consent
to in writing; 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 each 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
11
occurrence of the materials news or material event, as applicable, unless the Representatives
waive, in writing, such extension. The Company will provide the Representatives with notice of any
announcement described in clause (2) of the preceding sentence that gives rise to an extension of
the Lock-Up Period. Anything herein to the contrary not withstanding, the foregoing obligations
set forth in this paragraph will not apply to the offer, sale, issuance, or disposal by the Company
of the Offered Securities pursuant to this Agreement, or any other Securities of the Company, or
any securities convertible into or exchangeable or exercisable for any of its Securities, pursuant
to any equity compensation plan described in the Registration Statement or the General Disclosure
Package.
(l) In connection with the Directed Share Program, the Company will ensure that the Directed
Shares will be restricted to the extent required by FINRA or the FINRA rules from sale, transfer,
assignment, pledge or hypothecation for a period of three months following the date of the
effectiveness of the Registration Statement. The Designated Underwriter will notify the Company as
to which Participants will need to be so restricted. The Company will direct the transfer agent to
place stop transfer restrictions upon such securities for such period of time.
(m) The Company will pay all fees and disbursements of counsel (including non-U.S. counsel)
incurred by the Underwriters in connection with the Directed Share Program and stamp duties,
similar taxes or duties or other taxes, if any, incurred by the Underwriters in connection with the
Directed Share Program.
(n) The Company will comply with all applicable securities and other laws, rules and
regulations in each foreign jurisdiction in which the Directed Shares are offered in connection
with the Directed Share Program.
6. Free Writing Prospectuses. The Company represents and agrees that, unless it obtains the
prior consent of the Representatives, and each Underwriter represents and agrees that, unless it
obtains the prior consent of the Company and the Representatives, it has not made and will not make
any offer relating to the Offered Securities that would constitute an Issuer Free Writing
Prospectus, 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
Company and the Representatives 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 Rules 164 and 433 applicable to any
Permitted Free Writing Prospectus, including timely Commission filing where required, legending and
record keeping. The Company represents that is has satisfied and agrees that it will satisfy the
conditions in Rule 433 to avoid a requirement to file with the Commission any electronic road show.
7. Conditions of the Obligations of the Underwriters. The obligations of the several
Underwriters to purchase and pay for the Firm Securities on the First Closing Date and the Optional
Securities to be purchased on each Optional Closing Date will be subject to the accuracy of the
representations and warranties of the Company herein (as though made on such Closing Date), to the
accuracy of the statements of Company officers made pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder and to the following additional conditions
precedent:
(a) The Representatives shall have received letters, dated, respectively, the date hereof and
each Closing Date, of Ernst & Young LLP confirming that they are a registered public accounting
firm and independent public accountants within the meaning of the Securities Laws and substantially
in the form of Schedule C hereto (except that, in any letter dated a Closing Date,
the specified date referred to in Schedule C hereto shall be a date no more than three days
prior to such Closing Date).
(b) If the Effective Time of the Additional Registration Statement (if any) is not prior to
the execution and delivery of this Agreement, such Effective Time shall have occurred not later
than 10:00 P.M., New York time, on the date of this Agreement or, if earlier, the time the Final
Prospectus is finalized and distributed to any Underwriter, or shall have occurred at such later
time as shall have been consented to by the Representatives. The Final Prospectus shall have been
filed with the Commission in accordance with the Rules and Regulations and Section 5(a) hereof.
Prior to such Closing Date, no stop order suspending the effectiveness of a
12
Registration
Statement shall have been issued and no proceedings for that purpose shall have been
instituted or, to the knowledge of, the Company or the Representatives, shall be contemplated by
the Commission.
(c) Subsequent to the execution and delivery of this Agreement, there shall not have occurred
(i) any change, or any development or event involving a prospective change, in the condition
(financial or otherwise), results of operations, business, properties or prospects of the Company
and its subsidiaries taken as a whole which, in the judgment of the Representatives, is material
and adverse and makes it impractical or inadvisable to market the Offered Securities; (ii) any
change in U.S. or international financial, political or economic conditions or the effect of which
is such as to make it, in the judgment of the Representatives, impractical to market or to enforce
contracts for the sale of the Offered Securities, whether in the primary market or in respect of
dealings in the secondary market; (iii) any suspension or material limitation of trading in
securities generally on The Nasdaq Stock Market, or any setting of minimum or maximum prices for
trading on such exchange; (iv) or any suspension of trading of any securities of the Company on any
exchange or in the over-the-counter market; (v) any banking moratorium declared by any U.S. federal
or New York authorities; (vi) any major disruption of settlements of securities, payment or
clearance services in the United States or any other country where such securities are listed, or
(vii) any attack on, outbreak or escalation of hostilities or act of terrorism involving the United
States, any declaration of war by Congress or any other national or international calamity or
emergency if, in the judgment of the Representatives, the effect of any such attack, outbreak,
escalation, act, declaration, calamity or emergency is such as to make it impractical or
inadvisable to market the Offered Securities or to enforce contracts for the sale of the Offered
Securities.
(d) The Representatives shall have received an opinion, dated such Closing Date, of DLA Piper
US LLP, counsel for the Company, to the effect set forth on Schedule D hereto.
(e) The Representatives shall have received an opinion, dated such Closing Date, of Dow Xxxxxx
PLLC, special regulatory counsel for the Company, to the effect set forth on Schedule E
hereto.
(f) The Representatives shall have received from Xxxxxx & Xxxxxxx LLP, counsel for the
Underwriters, such opinion or opinions, dated such Closing Date, with respect to such matters as
the Representatives may require, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon such matters.
(g) The Representatives shall have received a certificate, dated such Closing Date, of an
executive officer of the Company and a principal financial or accounting officer of the Company in
which such officers shall state that: the representations and warranties of the Company in this
Agreement are true and correct; the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to such Closing Date; no
stop order suspending the effectiveness of any Registration Statement has been issued and no
proceedings for that purpose have been instituted or, to the best of their knowledge and after
reasonable investigation, are contemplated by the Commission; the Additional Registration Statement
(if any) satisfying the requirements of subparagraphs (1) and (3) of Rule 462(b) was timely filed
pursuant to Rule 462(b), including payment of the applicable filing fee in accordance with Rule
111(a) or (b) of Regulation S-T of the Commission; and, subsequent to the dates of the most recent
financial statements in the General Disclosure Package, there has been no material adverse change,
nor any development or event involving a prospective material adverse change, in the condition
(financial or otherwise), results of operations, business, properties or prospects of the Company
and its subsidiaries taken as a whole except as set forth in the General Disclosure Package or as
described in such certificate.
(h) On or prior to the date hereof, the Representatives shall have received lock-up letters
from each of the executive officers and directors of the Company and from each stockholder of the
Company listed in Schedule F hereto.
The Representatives may in their sole discretion waive on behalf of the Underwriters compliance
with any conditions to the obligations of the Underwriters hereunder, whether in respect of an
Optional Closing Date or otherwise.
13
8. Indemnification and Contribution. (a) The Company will indemnify and hold harmless each
Underwriter, its partners, members, directors, officers, employees, agents, affiliates and each
person, if any, who controls such Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act (each an “Indemnified Party”), against any and all losses, claims,
damages or liabilities, joint or several, to which such Indemnified Party may become subject, under
the Act, the Exchange Act, other Federal or state statutory law or regulation or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact contained in any
part of any Registration Statement at any time, any Statutory Prospectus as of any time, the Final
Prospectus or any Issuer Free Writing Prospectus, or arise out of or are based upon the omission or
alleged omission of a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Indemnified Party for any legal or other
expenses reasonably incurred by such Indemnified Party in connection with investigating or
defending against any loss, claim, damage, liability, action, litigation, investigation or
proceeding whatsoever (whether or not such Indemnified Party is a party thereto), whether
threatened or commenced, and in connection with the enforcement of this provision with respect to
any of the above as such expenses are incurred; 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 in or omission or alleged omission
from any of such documents in reliance upon and in conformity with written information furnished to
the Company by any Underwriter through the Representatives specifically for use therein, it being
understood and agreed that the only such information furnished by any Underwriter consists of the
information described as such in subsection (c) below.
(b) The Company agrees to indemnify and hold harmless the Designated Underwriter and its
affiliates and each person, if any, who controls the Designated Underwriter within the meaning of
either Section 15 of the Act or Section 20 of the Exchange Act (the “Designated Entities”), from
and against any and all losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or investigating any such
action or claim) (i) arising out of or based upon any untrue statement or alleged untrue statement
of a material fact contained in any material prepared by or with the consent of the Company for
distribution to Participants in connection with the Directed Share Program or arising out of or
based upon any omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading; (ii) arising out of or based upon the
failure of any Participant to pay for and accept delivery of Directed Shares that the Participant
agreed to purchase; or (iii) arising out of, related to, or in connection with the Directed Share
Program, other than losses, claims, damages or liabilities (or expenses relating thereto) that are
finally judicially determined to have resulted from the willful misconduct or gross negligence of
the Designated Entities.
(c) Each Underwriter will severally and not jointly indemnify and hold harmless the Company,
each of its directors and each of its officers who signs a Registration Statement and each person,
if any, who controls the Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act (each, an “Underwriter Indemnified Party”), against any losses, claims, damages or
liabilities to which such Underwriter Indemnified Party may become subject, under the Act, the
Exchange Act, or other Federal or state statutory law or regulation or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact contained in any
Registration Statement at any time, any Statutory Prospectus at any time, the Final Prospectus or
any Issuer Free Writing Prospectus or arise out of or are based upon the omission or the alleged
omission of a material fact required to be stated therein or necessary to make the statements
therein 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 reliance upon and
in conformity with written information furnished to the Company by such Underwriter through the
Representatives specifically for use therein, and will reimburse any legal or other expenses
reasonably incurred by such Underwriter Indemnified Party in connection with investigating or
defending against any such loss, claim, damage, liability, action, litigation, investigation or
proceeding whatsoever (whether or not such Underwriter Indemnified Party is a party thereto),
whether threatened or commenced, based upon any such untrue statement or omission, or any such
alleged untrue statement or omission as such expenses are incurred, it being understood and agreed
that the only such information furnished by any Underwriter consists of the following information
in the Final Prospectus furnished on behalf of each Underwriter: the concession figure appearing in
the fourth paragraph under the caption “Underwriting”, and the information relating to stabilizing
transactions, over-allotment
14
transactions, syndicate covering transactions and penalty bids contained in the fifteenth and
sixteenth paragraphs under the caption “Underwriting”.
(d) Promptly after receipt by an indemnified party under this Section 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 subsection (a), (b) or (c) above, notify the indemnifying
party of the commencement thereof; but the failure to notify the indemnifying party shall not
relieve it from any liability that it may have under subsection (a), (b) or (c) above except to the
extent that it has been materially prejudiced (through the forfeiture of substantive rights or
defenses) by such failure; and provided further that the failure to notify the indemnifying party
shall not relieve it from any liability that it may have to an indemnified party otherwise than
under subsection (a), (b) or (c) above. 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 therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the indemnifying party will not
be liable to such indemnified party under this Section for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other than reasonable
costs of investigation. Notwithstanding anything contained herein to the contrary, if indemnity may
be sought pursuant to Section 8(b) hereof in respect of such action or proceeding, then in addition
to such separate firm for the indemnified parties, the indemnifying party shall be liable for the
reasonable fees and expenses of not more than one separate firm (in addition to any local counsel)
for the Designated Underwriter for the defense of any losses, claims, damages and liabilities
arising out of the Directed Share Program, and all persons, if any, who control the Designated
Underwriter within the meaning of either Section 15 of the Act of Section 20 of the Exchange Act.
No indemnifying party shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action 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 (i) includes an unconditional release of such indemnified party from all
liability on any claims that are the subject matter of such action and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of an
indemnified party.
(e) If the indemnification provided for in this Section is unavailable or insufficient to hold
harmless an indemnified party under subsection (a), (b) or (c) above, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a), (b) or (c) above (i) in such
proportion as is appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other from the offering of the Securities 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 on the one hand and the Underwriters on the other 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 relative benefits received by the Company
on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by the Company bear
to the total underwriting discounts and commissions received by the Underwriters. The relative
fault shall be determined by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a material fact relates
to information supplied by the Company or the Underwriters and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such untrue statement or
omission. The amount paid by an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (e) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this subsection (e).
Notwithstanding the provisions of this subsection (e), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which the Securities
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 untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation. The
Underwriters’ obligations in this subsection (e) to contribute are several in proportion to their
respective underwriting obligations and not joint. The Company and the Underwriters agree that it
would not be just
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and equitable if contribution pursuant to this Section 8(e) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations referred to in
this Section 8(e).
9. Default of Underwriters. If any Underwriter or Underwriters default in their obligations
to purchase Offered Securities hereunder on either the First or any Optional Closing Date and the
aggregate number of shares of Offered Securities that such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed 10% of the total number of shares of Offered
Securities that the Underwriters are obligated to purchase on such Closing Date, the
Representatives may make arrangements satisfactory to the Company for the purchase of such Offered
Securities by other persons, including any of the Underwriters, but if no such arrangements are
made by such Closing Date, the non-defaulting Underwriters shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the Offered Securities that such
defaulting Underwriters agreed but failed to purchase on such Closing Date. If any Underwriter or
Underwriters so default and the aggregate number of shares of Offered Securities with respect to
which such default or defaults occur exceeds 10% of the total number of shares of Offered
Securities that the Underwriters are obligated to purchase on such Closing Date and arrangements
satisfactory to the Representatives and the Company for the purchase of such Offered Securities by
other persons are not made within 36 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter or the Company, except as provided
in Section 10 (provided that if such default occurs with respect to Optional Securities after the
First Closing Date, this Agreement will not terminate as to the Firm Securities or any Optional
Securities purchased prior to such termination). As used in this Agreement, the term “Underwriter”
includes any person substituted for an Underwriter under this Section. Nothing herein will relieve
a defaulting Underwriter from liability for its default.
10. Survival of Certain Representations and Obligations. The respective indemnities,
agreements, representations, warranties and other statements of the Company 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, or statement as to the results thereof, made by or on behalf of
any Underwriter, the Company or any of their respective representatives, officers or directors or
any controlling person, and will survive delivery of and payment for the Offered Securities. If
the purchase of the Offered Securities by the Underwriters is not consummated for any reason other
than solely because of the termination of this Agreement pursuant to Section 9 hereof, the Company
will reimburse the Underwriters for all out-of-pocket expenses (including fees and disbursements of
counsel) reasonably incurred by them in connection with the offering of the Offered Securities, and
the respective obligations of the Company and the Underwriters pursuant to Section 8 hereof shall
remain in effect.
11. Notices. All communications hereunder will be in writing and, if sent to the
Underwriters, will be mailed, delivered or telegraphed and confirmed to the Representatives, c/o
Credit Suisse Securities (USA) LLC, Eleven Madison Avenue, New York, N.Y. 10010-3629, Attention:
LCD-IBD and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, 4 World Financial Center, New York,
N.Y. 10080, Attention: , or, if sent to the Company, will be mailed, delivered
or telegraphed and confirmed to it at Grand Canyon Education, Inc., 0000 Xxxx Xxxxxxxxx Xxxx,
Xxxxxxx, Xxxxxxx 00000, Attention: Xxxxxxxxxxx X. Xxxxxxxxxx; provided, however, that any notice to
an Underwriter pursuant to Section 8 will be mailed, delivered or faxed and confirmed to such
Underwriter.
12. Successors. This Agreement will inure to the benefit of and be binding upon the parties
hereto and their respective personal representatives and successors and the officers and directors
and controlling persons referred to in Section 8, and no other person will have any right or
obligation hereunder.
13. Representation. The Representatives will act for the several Underwriters in connection
with the transactions contemplated by this Agreement, and any action under this Agreement taken by
the Representatives jointly will be binding upon all the Underwriters.
14. Counterparts. This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all such counterparts shall together constitute one and the
same Agreement.
15. Absence of Fiduciary Relationship. The Company acknowledges and agrees that:
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(a) No Other Relationship. The Representatives have been retained solely to act as underwriters
in connection with the sale of the Offered Securities and that no fiduciary, advisory or agency
relationship between the Company, on the one hand, and the Representatives, on the other, has been
created in respect of any of the transactions contemplated by this Agreement or the Final
Prospectus, irrespective of whether the Representatives have advised or is advising the Company on
other matters;
(b) Arms’ Length Negotiations. The price of the Offered Securities set forth in this Agreement
was established by Company following discussions and arms-length negotiations with the
Representatives and the Company is capable of evaluating and understanding and understands and
accepts the terms, risks and conditions of the transactions contemplated by this Agreement;
(c) Absence of Obligation to Disclose. The Company has been advised that the Representatives and
their affiliates are engaged in a broad range of transactions which may involve interests that
differ from those of the Company and that the Representatives have no obligation to disclose such
interests and transactions to the Company by virtue of any fiduciary, advisory or agency
relationship; and
(d) Waiver. The Company waives, to the fullest extent permitted by law, any claims they may have
against the Representatives for breach of fiduciary duty or alleged breach of fiduciary duty and
agree that the Representatives shall have no liability (whether direct or indirect) to the Company
in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on
behalf of or in right of the Company, including stockholders, employees or creditors of the
Company.
16. Applicable Law. This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York.
The Company hereby submits to the non-exclusive jurisdiction of the Federal and state courts
in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby. The Company irrevocably and
unconditionally waives any objection to the laying of venue of any suit or proceeding arising out
of or relating to this Agreement or the transactions contemplated hereby in Federal and state
courts in the Borough of Manhattan in the City of New York and irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any such suit or proceeding in any
such court has been brought in an inconvenient forum.
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If the foregoing is in accordance with the Representatives’ understanding of our agreement,
kindly sign and return to the Company one of the counterparts hereof, whereupon it will become a
binding agreement among the Company and the several Underwriters in accordance with its terms.
| Very truly yours, GRAND CANYON EDUCATION, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of the
date first above written.
Acting on behalf of themselves and as
the Representatives of the
several Underwriters.
By
|
Credit Suisse Securities (USA) LLC | |||
By: |
||||
| Name: | ||||
| Title: | ||||
By
|
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx | |||
| Incorporated | ||||
By: |
||||
| Name: | ||||
| Title: |
18
