3,565,000 Shares CAPELLA EDUCATION COMPANY Common Stock UNDERWRITING AGREEMENT
EXHIBIT 1.1
3,565,000 Shares
CAPELLA EDUCATION COMPANY
Common Stock
April [•], 2007
Credit Suisse Securities (USA) LLC,
As Representative of the Several Underwriters,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. Capella Education Company, a Minnesota corporation (the “Company”), proposes
to issue and sell 301,145 shares of its Common Stock, $0.01 par value per share (“Securities”), and
the stockholders listed in Schedule A hereto (“Selling Stockholders”) propose severally to sell an
aggregate of 2,798,855 outstanding shares of the Securities (such 3,100,000 shares of Securities
being hereinafter referred to as the “Firm Securities”), with each Selling Stockholder selling the
number of Firm Securities set forth opposite its name on Schedule A. The Company also proposes to
sell to the Underwriters, at the option of the Underwriters, an aggregate of not more than 45,172
additional shares of its Securities (the “Total Company Optional Securities”), and certain of the
Selling Stockholders also propose to sell to the Underwriters an aggregate of not more than 419,828
additional shares of the Securities (the “Total Selling Stockholder Optional Securities”) (such
465,000 additional shares being hereinafter referred to as the “Optional Securities”), in each case
as set forth below. The Firm Securities and the Optional Securities are herein collectively
called the “Offered Securities”. The Company and each Selling Stockholder hereby agree, severally
and not jointly, with the several Underwriters named in Schedule C hereto (the “Underwriters”) as
follows:
2. Representations and Warranties of the Company and the Selling Stockholders.
(a) The Company represents and warrants to, and agrees with, the several Underwriters
and the Selling Stockholders that:
(i) A registration statement (No. 333-141503) (the “initial registration
statement”) relating to the Offered Securities, including a form of prospectus, has
been filed with the Securities and Exchange Commission (the “Commission”) and an
additional registration statement (the “additional registration statement”)
relating to the Offered Securities may have been or may be filed with the
Commission pursuant to Rule 462(b) (“Rule 462(b)”) under the Securities Act of 1933
(the “Act”). “Initial Registration Statement” as of any time means the initial
registration statement, in the form then filed with the Commission, including all
information contained in the additional registration statement (if any) and then
deemed to be a part of the initial registration statement pursuant to the General
Instructions of the Form on which it is filed and all information (if any) included
in a prospectus then deemed to be a part of the initial registration statement
pursuant to Rule 430C (“Rule 430C”) under the Act or
retroactively deemed to be a part of the initial registration statement
pursuant to Rule 430A(b) (“Rule 430A(b)”) under the Act and that in any case has
not then been superseded or modified. “Additional Registration Statement” as of
any time means the additional registration statement in the form then filed with
the Commission, including the contents of the Initial Registration Statement
incorporated by reference therein and including all information (if any) included
in a prospectus then deemed to be a part of the additional registration statement
pursuant to Rule 430C or retroactively deemed to be a part of the additional
registration statement pursuant to Rule 430A(b) and that in any case has not then
been superseded or modified. The Initial Registration Statement and the Additional
Registration Statement are herein referred to collectively as the “Registration
Statements” and individually as a “Registration Statement”. “Registration
Statement” as of any time means the Initial Registration Statement and any
Additional Registration Statement as of such time. For purposes of the foregoing
definitions, information contained in a form of prospectus that is deemed
retroactively to be a part of a Registration Statement pursuant to Rule 430A shall
be considered to be included in such Registration Statement as of the time
specified in Rule 430A. 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,
“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) (“Rule 462(c)”) under the Act. If an Additional Registration
Statement has not been filed prior to the execution and delivery of this Agreement
but the Company has advised the Representative 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). “Effective Date” with respect to the Initial
Registration Statement or the Additional Registration Statement (if any) means the
date of the Effective Time thereof. A “Registration Statement” without reference
to a time means such Registration Statement as of its Effective Time. “Statutory
Prospectus” as of any time means the prospectus included in a Registration
Statement immediately prior to that time, including any information in a prospectus
deemed to be a part thereof pursuant to Rule 430A or 430C that has not been
superseded or modified. For purposes of the preceding sentence, information
contained in a form of prospectus that is deemed retroactively to be a part of a
Registration Statement pursuant to Rule 430A 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) (“Rule 424(b)”) under the Act.
“Prospectus” means the Statutory Prospectus that discloses the public offering
price and other final terms of the Offered Securities and otherwise satisfies
Section 10(a) of the Act. “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).
“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 specified in Schedule D to this Agreement. “Limited Use
Issuer Free Writing Prospectus” means any Issuer Free Writing Prospectus that is
not a General Use Issuer Free Writing Prospectus. “Applicable Time”
means [•] p.m. (Eastern time) on the date of this Agreement.
(ii) (A) On the Effective Date of the Initial Registration Statement, the
Initial Registration Statement conformed in all material respects to the
requirements of
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the Act and the rules and regulations of the Commission (“Rules and
Regulations”) and did 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, (B) on the Effective Date of the Additional
Registration Statement (if any), each Registration Statement conformed, or will
conform, in all material respects to the requirements of the Act and the Rules and
Regulations and did not include, or will not include, any untrue statement of a
material fact and did not omit, or will not omit, to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading and (C) on the date of this Agreement, the Initial Registration
Statement and, if the Effective Time of the Additional Registration Statement is
prior to the execution and delivery of this Agreement, the Additional Registration
Statement each conforms, and at the time of filing of the Prospectus pursuant to
Rule 424(b) or (if no such filing is required) at the Effective Date of the
Additional Registration Statement in which the Prospectus is included, each
Registration Statement and the Prospectus will conform in all material respects to
the requirements of the Act and the Rules and Regulations, and none of such
documents includes, or will include, any untrue statement of a material fact or
omits, or will omit, to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. The preceding sentence
does not apply to statements in or omissions from a Registration Statement or the
Prospectus based upon written information furnished to the Company by any
Underwriter through the Representative specifically for use therein, it being
understood and agreed that the only such information is that described as such in
Section 8(c) hereof.
(iii) (A) At the time of initial filing of the Initial Registration Statement
and (B) 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.
(iv) As of the Applicable Time, neither (A) the General Use Issuer Free
Writing Prospectus(es) issued at or prior to the Applicable Time, the preliminary
prospectus, dated April 6, 2007 (which is the most recent Statutory Prospectus
distributed to investors generally) and the other information, if any, stated in
Schedule E to this Agreement, all considered together (collectively, the “General
Disclosure Package”), nor (B) 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 prospectus included in the
Registration Statement or any Issuer Free Writing Prospectus in reliance upon and
in conformity with written information furnished to the Company by any Underwriter
through the Representative 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.
(v) 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 until any earlier date that the Company notified or notifies Credit
Suisse Securities (USA) LLC (“Credit Suisse”) 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
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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 included or 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 prevailing at
that subsequent time, not misleading, (i) the Company has promptly notified or will
promptly notify Credit Suisse 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. The foregoing two sentences
do not apply to statements in or omissions from any Issuer Free Writing Prospectus
in reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representative 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.
(vi) The Company has been duly incorporated and is an existing corporation in
good standing under the laws of the State of Minnesota, 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 where the failure to be so qualified or in good standing
would not, individually or in the aggregate, have a material adverse effect on the
condition (financial or other), business, properties or results of operations of
the Company and Capella University, a Minnesota corporation (“Capella University”),
taken as a whole (“Material Adverse Effect”). The State of Minnesota and the State
of Arizona are the only jurisdictions in which the Company or any of its
subsidiaries maintains an office or leases property.
(vii) Capella University is the only subsidiary of the Company; Capella
University has been duly incorporated and is an existing corporation in good
standing under the laws of the State of Minnesota, with power and authority
(corporate and other) to own its properties and conduct its business as described
in the General Disclosure Package; Capella University 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 so qualified or in good standing
would not, individually or in the aggregate, have a Material Adverse Effect; all of
the issued and outstanding capital stock of Capella University has been duly
authorized and validly issued and is fully paid and nonassessable; and the capital
stock of Capella University is owned free from liens, encumbrances and defects.
(viii) Capella University is the only entity in which the Company, directly or
indirectly, owns an equity interest. Capella University is the only entity in
which the Company, directly or indirectly, owns an equity interest that (A) engages
in any business, activity or operation or (B) owns or holds any assets or has any
liabilities, contingent or otherwise.
(ix) The Offered Securities and all other outstanding shares of capital stock
of the Company have been duly authorized; 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 such Closing Date (as defined below), such
Offered Securities will have been, validly issued, fully paid and nonassessable,
will be consistent with the information in the General Disclosure Package and will
conform to the description thereof contained in the Prospectus; and the
stockholders of the Company have no preemptive rights with respect to the
Securities.
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(x) Each Offered Security of a Selling Stockholder that will be issued to such
Selling Stockholder on a Closing Date upon the exercise by such Selling Stockholder
of an option (an “Underlying Option Share”, and the option associated with such
Underlying Option Share is referred to herein as a “Subject Option”) is identified
on Schedule B hereto. All Subject Options have been duly authorized, granted and
issued by the Company to the applicable Selling Stockholders pursuant to and in
accordance with the terms of the Company’s 1993 Stock Option
Plan, 1999 Stock Option Plan or 2005 Stock Incentive Plan, as the case
may be. All Subject
Options have vested in accordance with their terms and have not expired and are
currently exercisable by the applicable Selling Stockholders into the number of
Underlying Option Shares identified on Schedule B hereto.
(xi) 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.
(xii) 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 securities
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.
(xiii) The Offered Securities have been approved for listing subject to notice
of issuance on The Nasdaq Stock Market.
(xiv) No consent, approval, authorization, or order of, or filing with, any
governmental agency or body, any accrediting agency 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 issuance or sale of the
Offered Securities, except such as have been obtained and made under the Act and
such as may be required under foreign or state securities laws or under the rules
of the National Association of Securities Dealers, Inc. (“NASD”).
(xv) The execution, delivery and performance by the Company of this Agreement
and the consummation of the transactions herein contemplated by the Company will
not result in a breach or violation of any of the terms and provisions of, or
constitute a default or change of control under, (A) any statute, any rule,
regulation, standard or order of any governmental agency or body applicable to the
Company, any accrediting agency or any court, domestic or foreign, having
jurisdiction over the Company, Capella University or any of their properties,
including, without limitation, the Higher Education Act of 1965, as amended (the
“HEA”), (B) any agreement or instrument to which the Company or Capella University
is a party or by which the Company or Capella University is bound or to which any
of the properties of the Company or Capella University is subject, except such
breaches, violations or defaults that would not, individually or in the aggregate,
have a Material Adverse Effect, or (C) the charter or by-laws of the Company or
Capella University, and the Company has full power and authority to authorize,
issue and sell the Offered Securities as contemplated by this Agreement.
(xvi) This Agreement has been duly authorized, executed and delivered by the
Company.
(xvii) The Company and Capella University have good and marketable title to
all real properties and all other properties and assets owned by them, in each case
free
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from liens, 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 Capella
University hold any leased real or personal property under valid and enforceable
leases with no exceptions that would materially interfere with the use made or to
be made thereof by them.
(xviii) The Company and Capella University 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, 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 Capella University, would, individually or in the
aggregate, have a Material Adverse Effect.
(xix) No labor dispute with the employees of the Company or Capella University
exists or, to the knowledge of the Company, is imminent that could reasonably be
expected to have a Material Adverse Effect.
(xx) The Company and Capella University 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 Capella University, would, individually or in the aggregate, have a
Material Adverse Effect.
(xxi) Except as disclosed in the General Disclosure Package, neither the
Company nor Capella University 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”),
owns or operates any real property contaminated with any substance that is subject
to any environmental laws, is liable for any off-site disposal or contamination
pursuant to any environmental laws, or 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.
(xxii) Except as disclosed in the General Disclosure Package, there are no
pending actions, suits or proceedings against or affecting the Company, Capella
University or any of their respective properties that, if determined adversely to
the Company or Capella University, 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 which are otherwise
material in the context of the sale of the Offered Securities; and no such actions,
suits or proceedings are, to the Company’s knowledge, threatened.
(xxiii) The financial statements included in the 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
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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 the Registration Statement present fairly the information
required to be stated therein; there are no pro forma or as adjusted financial
statements which are required to be included in the Registration Statement and
General Disclosure Package in accordance with Regulation S-X under the Act; 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 may have a material current or future effect on the Company’s
financial condition, results of operations, liquidity, capital expenditures or
capital resources of the Company and Capella University taken as a whole.
(xxiv) Each of the Company and Capella University maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (A)
transactions are executed in accordance with management’s general or specific
authorizations, (B) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles
and to maintain asset accountability, (C) access to assets is permitted only in
accordance with management’s general or specific authorization, and (D) 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 Rules and Regulations, the Company will
maintain disclosure controls and procedures (as such term is defined in Rule 13a-14
under the Securities Exchange Act of 1934 (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.
(xxv) Except as disclosed in the Disclosure Package and the Prospectus, since
the end of the Company’s most recent audited fiscal year, there has been (i) no
material weakness in the Company’s internal control over financial reporting
(whether or not remediated) and (ii) no change in the Company’s internal control
over financial reporting that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial reporting.
(xxvi) The Company will be in compliance with all applicable provisions of the
Xxxxxxxx-Xxxxx Act of 2002 and the applicable rules and regulations thereunder upon
the applicability of such provisions, rules or regulations, as the case may be, to
the Company.
(xxvii) The section entitled “Management’s Discussion and Analysis of
Financial Condition and Results of Operation–Critical Accounting Policies and Use
of 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.
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(xxviii) 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 fully describes all material trends,
demands, commitments, events, uncertainties and risks, and the potential effects
thereof, that the Company believes would materially affect liquidity and are
reasonably likely to occur.
(xxix) Except as disclosed in the General Disclosure Package, there are no
outstanding guarantees or other contingent obligations of the Company or Capella
University that could, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(xxx) Except as disclosed in the General Disclosure Package, since the date of
the latest audited financial statements included 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 other),
business, properties or results of operations of the Company and Capella University
taken as a whole, and, 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.
(xxxi) 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 an “investment company” as defined in
the Investment Company Act of 1940.
(b) Each Selling Stockholder severally, and not jointly, represents and warrants to,
and agrees with, the several Underwriters that:
(i) Upon the consummation of the transactions contemplated herein, and, with
respect to each Selling Stockholder identified on Schedule B hereto as holding
Subject Options (an “Option Holding Selling Stockholder”), the exercise by such
Option Holding Selling Stockholder of all Subject Options, such Selling Stockholder
will have valid and unencumbered title to the Offered Securities to be delivered by
such Selling Stockholder on such Closing Date and full right, power and authority
to enter into this Agreement and to sell, assign, transfer and deliver the Offered
Securities to be delivered by such Selling Stockholder on such Closing Date
hereunder; and, upon the delivery of and payment for the Offered Securities on each
Closing Date hereunder, the several Underwriters will acquire valid and
unencumbered title to the Offered Securities to be delivered by such Selling
Stockholder on such Closing Date, subject to any interests created by the several
Underwriters.
(ii) With respect to each Option Holding Selling Stockholder, such Option
Holding Selling Stockholder has valid and unencumbered title to all Subject Options
listed on Schedule B hereto as being held by such Option Holding Selling
Stockholder; and all such Subject Options have vested in accordance with their
terms and have not expired and are currently exercisable by such Option Holding
Selling Stockholder.
(iii) Except with respect to TH Xxx, Xxxxxx Investment Trust-TH Xxx, Xxxxxx
Emerging Opportunities Portfolio (the “Xxxxxx Selling Stockholder”), such Selling
Stockholder has, and on each Closing Date will have, full legal right, power and
authority, and all authorization and approval required by law, to enter into the
Custody Agreement (the “Custody Agreement”) signed by such Selling Stockholder and
the Custodian (as defined below) relating to the deposit of the Offered Securities
to be sold by such Selling Stockholder, and the Power of Attorney (the “Power of
Attorney”) appointing Xxxxxxx X. Xxxxx and Xxxxxxx X. Xxxx as such Selling
Stockholder’s
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attorneys-in-fact to the extent set forth therein and relating to the
transactions contemplated hereby (including the exercise of all Subject Options),
and to sell, assign, transfer and deliver the Offered Securities to be sold by such
Selling Stockholder in the manner provided herein and therein. Each Option Holding
Selling Stockholder has delivered to Xxxxx Fargo Bank, National Association, as
custodian under the Custody Agreement (the “Custodian”), all documents necessary to
effect the exercise of all Subject Options of such Option Holding Selling
Stockholder (the “Option Exercise Documents”), and upon the exercise of such
Subject Options the related Underlying Option Shares will be subject to the terms
of the Custody Agreement.
(iv) No consent, approval, authorization or order of, or filing with, any
governmental agency or body or any court is required to be obtained or made by such
Selling Stockholder for the consummation of the transactions contemplated by the
Power of Attorney and related Custody Agreement, except, in each case, with respect
to the Xxxxxx Selling Stockholder, or this Agreement in connection with the sale of
the Offered Securities sold by such Selling Stockholder, except such as may be
required under the Act and under state and foreign securities laws.
(v) This Agreement has been duly authorized, executed and delivered by or on
behalf of such Selling Stockholder.
(vi) Except with respect to the Xxxxxx Selling Stockholder, the Power of
Attorney and related Custody Agreement with respect to such Selling Stockholder
have been duly authorized, executed and delivered by such Selling Stockholder and
constitute valid and legally binding obligations of such Selling Stockholder
enforceable in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights and to general equity
principles.
(vii) Except with respect to the Xxxxxx Selling Stockholder, the execution,
delivery and performance of the Power of Attorney and related Custody Agreement and
the consummation of the transactions therein contemplated will not result in a
breach or violation of any of the terms and provisions of, or constitute a default
under, (A) any statute, any rule or regulation governing transactions of this type
or any order applicable to such Selling Stockholder of any governmental agency or
body or any court, domestic or foreign, having jurisdiction over such Selling
Stockholder or any of its properties, (B) any material agreement or material
instrument to which such Selling Stockholder is a party or by which such Selling
Stockholder is bound or to which any of the properties of such Selling Stockholder
is subject or (C) the charter or by-laws of such Selling Stockholder if such
Selling Stockholder is a corporation, the partnership agreement of such Selling
Stockholder if such Selling Stockholder is a partnership, the trust agreement of
such Selling Stockholder if such Selling Stockholder is a trust or any other
constituent documents of such Selling Stockholder.
(viii) The execution, delivery and performance of this Agreement and the
consummation of the transactions herein contemplated will not result in a breach or
violation of any of the terms and provisions of, or constitute a default under, (A)
any statute, any rule or regulation governing transactions of this type or any
order applicable to such Selling Stockholder of any governmental agency or body or
any court, domestic or foreign, having jurisdiction over such Selling Stockholder
or any of its properties, (B) any material agreement or material instrument to
which such Selling Stockholder is a party or by which such Selling Stockholder is
bound or to which any of the properties of such Selling Stockholder is subject or
(C) the charter or by-laws of such Selling Stockholder if such Selling Stockholder
is a corporation, the partnership agreement of such Selling Stockholder if such
Selling Stockholder is a partnership, the trust agreement
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of such Selling Stockholder if such Selling Stockholder is a trust or any
other constituent documents of such Selling Stockholder.
(ix) (A) On the Effective Date of the Initial Registration Statement, the
Initial Registration Statement conformed in all material respects to the
requirements of the Act and the Rules and Regulations and did 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, (B)
on the Effective Date of the Additional Registration Statement (if any), each
Registration Statement conformed, or will conform, in all material respects to the
requirements of the Act and the Rules and Regulations and did not include, or will
not include, any untrue statement of a material fact and did not omit, or will not
omit, to state any material fact required to be stated therein or necessary to make
the statements therein not misleading and (C) on the date of this Agreement, the
Initial Registration Statement and, if the Effective Time of the Additional
Registration Statement is prior to the execution and delivery of this Agreement,
the Additional Registration Statement each conforms, and at the time of filing of
the Prospectus pursuant to Rule 424(b) or (if no such filing is required) at the
Effective Date of the Additional Registration Statement in which the Prospectus is
included, each Registration Statement and the Prospectus will conform in all
material respects to the requirements of the Act and the Rules and Regulations, and
neither of such documents includes, or will include, any untrue statement of a
material fact or omits, or will omit, to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.
Notwithstanding any inference to the contrary, the preceding sentence applies only
to the extent that any statements in or omissions from a Registration Statement or
the Prospectus are based on written information furnished to the Company by such
Selling Stockholder specifically for use therein, it being understood and agreed
that the only such information furnished by such Selling Stockholder to the Company
consists of the information relating to such Selling Stockholder that appears in
the table (and the corresponding footnotes thereto) under the caption “Principal
and Selling Shareholders” in the Prospectus (the “Selling Stockholder
Information”).
(x) As of the Applicable Time, neither (A) the General Disclosure Package nor
(B) 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 applies only to the extent statements in or
omissions from the General Disclosure Package or any individual Limited Use Issuer
Free Writing Prospectus are based upon Selling Stockholder Information.
(xi) All Selling Stockholder Information contained in any Issuer Free Writing
Prospectus, as of its issue date and at all subsequent times through the completion
of the public offering and sale of the Offered Securities or until any earlier date
that the Selling Stockholders notified or notify the Company and the Representative
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 Selling Stockholder Information conflicted or would conflict
with the information then 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 in order to make the statements therein, in the
light of the circumstances prevailing at that subsequent time, not misleading, such
Selling Stockholder has promptly notified or will promptly notify the Company and
the Representative and will provide the Company with all necessary information so
as to correct such untrue statement or omission.
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(xii) Except as disclosed in the General Disclosure Package, there are no
contracts, agreements or understandings between such Selling Stockholder and any
person that would give rise to a valid claim against such Selling Stockholder or
any Underwriter for a brokerage commission, finder’s fee or other like payment in
connection with this offering.
(xiii) At any time during the period during which a prospectus relating to the
Offered Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, if there is any change in the Selling
Stockholder Information with respect to a Selling Stockholder, such Selling
Stockholder will immediately notify the Representative of such change.
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 and
each Selling Stockholder agree, severally and not jointly, to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the Company and each Selling
Stockholder, at a purchase price of $ [•] per share, that number of Firm
Securities (rounded up or down, as determined by Credit Suisse in its discretion, in order to avoid
fractions) obtained by multiplying 301,145 Firm Securities in the case of the Company and the
number of Firm Securities set forth opposite the name of such Selling Stockholder in Schedule A
hereto, in the case of a Selling Stockholder, in each case by a fraction the numerator of which is
the number of Firm Securities set forth opposite the name of such Underwriter in Schedule C hereto
and the denominator of which is the total number of Firm Securities.
Certificates in negotiable form for the Offered Securities to be sold by all Selling
Stockholders other than the Xxxxxx Selling Stockholder (collectively, the “Custodial Selling
Stockholders”) hereunder, and all Option Exercise Documents, in each case have been placed in
custody under Custody Agreements made with the Custodian for purposes of effectuating delivery of
all Offered Securities (including Underlying Option Shares) of the Custodial Selling Stockholders
under this Agreement. Each Custodial Selling Stockholder agrees, severally and not jointly, that
the shares represented by the certificates held in custody for such Custodial Selling Stockholder
under such Custody Agreement (including all Underlying Option Shares) are subject to the interests
of the Underwriters hereunder, that the arrangements made by such Custodial Selling Stockholder for
such custody are, to that extent, irrevocable and that the obligations of such Custodial Selling
Stockholder hereunder shall not be terminated by operation of law, whether by the death of any
individual Custodial Selling Stockholder or the occurrence of any other event, or in the case of a
trust, by the death of any trustee or trustees or the termination of such trust. If any individual
Custodial Selling Stockholder or any such trustee or trustees should die, or if any other such
event should occur, or if any of such trusts should terminate, before the delivery of the Offered
Securities hereunder, certificates for such Offered Securities shall be delivered by the Custodian
in accordance with the terms and conditions of this Agreement as if such death or other event or
termination had not occurred, regardless of whether or not the Custodian shall have received notice
of such death or other event or termination.
The Company, the Xxxxxx Selling Stockholder and the Custodian will deliver the Firm Securities
to or as instructed by the Representative for the accounts of the several Underwriters, in a form
reasonably acceptable to the Representative, against payment of the purchase price by the
Underwriters in Federal (same-day) funds by official bank check or checks or wire transfer to an
account at a bank acceptable to Credit Suisse drawn to the order of the Company in the case of
301,145 shares of Firm Securities, the Xxxxxx Selling Stockholder in the case of 449,639 shares of
Firm Securities and the Custodian, for the accounts of the Selling Stockholders, in the case of
2,349,216 shares of Firm Securities, at the office of Faegre & Xxxxxx LLP, at 10:00 a.m., New York
time, on [•], or at such other time not later than seven full business days
thereafter as Credit Suisse and the Company determine, such time being herein referred to as the
“First Closing Date”. For purposes of Rule 15c6-1 under the Exchange Act, 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 Faegre & Xxxxxx LLP at least 24 hours prior to the First Closing
Date.
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In addition, upon written notice from Credit Suisse given to the Company and the Selling
Stockholders from time to time, not more than 30 days subsequent to the date of the Prospectus, the
Underwriters may purchase all or less than all of the Optional Securities at the purchase price per
Security to be paid for the Firm Securities.
The Company and the Selling Stockholders agree, severally and not jointly, to sell to the
Underwriters the number of Optional Securities specified in each such notice, with each sale of
such Optional Securities being allocated among the Company and the Selling Stockholders such that
(x) the Company shall sell the Company Percentage of the Optional Securities specified in each such
notice and (y) each Selling Stockholder shall sell such Selling Stockholder’s Selling Stockholder
Percentage of the Optional Securities specified in each such notice (in each case subject to
adjustment by Credit Suisse to eliminate fractions). Such Optional Securities shall be purchased
from the Company and each Selling Stockholder, as applicable, 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 Credit Suisse 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 Credit Suisse to the Company and the Selling Stockholders.
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 Credit Suisse but shall be not later than five full business days after
written notice of election to purchase Optional Securities is given.
The Company and the Custodian will
deliver the Optional Securities being purchased on each Optional Closing Date to or as instructed
by Credit Suisse for the accounts of the several Underwriters in a form reasonably acceptable to
Credit Suisse against payment of the purchase price therefor in Federal (same-day) funds by
official bank check or checks or wire transfer to an account at a bank acceptable to Credit Suisse
drawn to the order of (a) the Company and (b) the Custodian, in
the case of the Custodial Selling Stockholders, at the above office of Faegre & Xxxxxx 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 Faegre & Xxxxxx LLP at a reasonable time
in advance of such Optional Closing Date.
For purposes of this Section 3, (i) the Company Percentage is equal to the quotient obtained
by dividing the Total Company Optional Securities by 465,000 and (ii) the Selling Stockholder
Percentage with respect to each Selling Stockholder is equal to the quotient obtained by dividing
the number of shares set forth opposite the name of such Selling Stockholder in Schedule A hereto
under the caption “Number of Optional Securities to be Sold” and the denominator of which is
465,000.
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 Prospectus.
5. Certain Agreements of the Company and the Selling Stockholders. The Company agrees with
the several Underwriters and the Selling Stockholders that:
(a) The Company will file the Prospectus with the Commission pursuant to and in
accordance with subparagraph (1) (or, if applicable and if consented to by Credit Suisse,
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 Date of the Initial Registration Statement.
The Company will advise Credit Suisse promptly of any such filing pursuant to Rule
424(b). 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
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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 Prospectus is
printed and distributed to any Underwriter, or will make such filing at such later date as
shall have been consented to by Credit Suisse.
(b) The Company will advise Credit Suisse and each Selling Stockholder promptly 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 Credit Suisse’s consent, which shall not be
unreasonably withheld or delayed; and the Company will also advise Credit Suisse promptly
of the effectiveness of any Additional Registration Statement (if its Effective Time is
subsequent to the execution and delivery of this Agreement) and of any amendment or
supplementation of a Registration Statement or any Statutory Prospectus and of the
institution by the Commission of any stop order proceedings in respect of a Registration
Statement and will use its reasonable best efforts to prevent the issuance of any such stop
order and to obtain as soon as possible its lifting, if issued.
(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 in
connection with sales by any Underwriter or dealer, any event occurs as a result of which
the 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 Prospectus to comply with the Act, the Company will
promptly notify Credit Suisse and each Selling Stockholder of such event and will promptly
prepare and file with the Commission, at its own expense, an amendment or supplement which
will correct such statement or omission or an amendment which will effect such compliance.
Neither Credit Suisse’s 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.
(d) As soon as practicable, but not later than the Availability Date (as defined
below), the Company will make generally available to its securityholders 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 Date of the Additional
Registration Statement) which will satisfy the provisions of Section 11(a) of the Act. For
the purpose of the preceding sentence, “Availability Date” means the 45th day after the end
of the fourth fiscal quarter following the fiscal quarter that includes such Effective
Date, except that, if such fourth fiscal quarter is the last quarter of the Company’s
fiscal year, “Availability Date” means the 90th day after the end of such fourth fiscal
quarter.
(e) The Company will furnish to the Representative and each Selling Stockholder copies
of each Registration Statement (three of which will be signed and will include all
exhibits), each related preliminary prospectus, and, so long as a prospectus relating to
the Offered Securities is required to be delivered under the Act in connection with sales
by any Underwriter or dealer, the Prospectus and all amendments and supplements to such
documents, in each case in such quantities as Credit Suisse requests. The 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 as
soon as available. The Company will pay the expenses of printing and distributing to the
Underwriters all such documents.
(f) The Company will arrange for the qualification of the Offered Securities for sale
under the laws of such jurisdictions as Credit Suisse designates and will continue such
qualifications in effect so long as required for the distribution; provided that in
connection therewith the Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any jurisdiction or to subject itself
to taxation in respect of doing business in any jurisdiction in which it is not otherwise
so subject.
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(g) The Company and each Selling Stockholder agree with the several Underwriters that
the Company will pay all expenses incident to the performance of the obligations of the
Company and such Selling Stockholder, as the case may be, under this Agreement, for any
filing fees and other expenses (including fees and disbursements of counsel) in connection
with qualification of the Offered Securities for sale under the laws of such jurisdictions
as Credit Suisse designates and the printing of memoranda relating thereto, for the filing
fee incident to the review by the NASD of the Offered Securities, for any travel expenses
of the Company’s officers and employees and any other expenses of the Company in connection
with attending or hosting meetings with prospective purchasers of the Offered Securities,
including the cost of any aircraft chartered in connection with attending or hosting such
meetings, for any transfer taxes on the sale by the Selling Stockholders of the Offered
Securities to the Underwriters, for expenses incurred in distributing preliminary
prospectuses and the 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; provided,
however, that each Selling Stockholder will be responsible for (i) any fees and
disbursements of any counsel for such Selling Stockholder and (ii) for any discounts,
commissions or transfer taxes on the sale by such Selling Stockholder of the Offered
Securities to the Underwriters.
(h) For the period specified below (the “Lock-Up Period”), the Company will not offer,
sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file
with the Commission a registration statement under the Act relating to, any additional
shares of its Securities or securities convertible into or exchangeable or exercisable for
any shares of its Securities, or publicly disclose the intention to make any such offer,
sale, pledge, disposition or filing, without the prior written consent of Credit Suisse;
provided that that the Company may (i) issue Securities pursuant to the
consummation of the transactions contemplated herein, (ii) issue Securities pursuant to
any stock split recommended by the Pricing Committee of the Board of Directors of the
Company in connection with the consummation of the transactions contemplated herein, (iii)
file with the Commission one or more registration statements on Form S-8 registering the
Securities issuable under the Company’s stock option plans and
employee stock purchase plan in effect on the date hereof,
(iv) grant stock options or restricted stock awards or other equity awards (and issue
Securities upon exercise thereof) pursuant to the terms of any employee stock option plan
or employee stock purchase plan in effect on the date hereof, (v) redeem any warrants
outstanding on the date hereof and (vi) make contributions of Securities to the Capella
Education Company Employee Stock Ownership Plan. The initial Lock-Up Period will commence
on the date hereof and will continue and include the date 90 days after the date hereof or
such earlier date that Credit Suisse consents 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 occurrence of the material news or material event, as applicable,
unless Credit Suisse waives, in writing, such extension; provided, however,
that the Lock-Up Period will not be extended pursuant to this proviso at any time at which
the Securities are “actively traded securities”, as defined in Regulation M under the
Exchange Act and research reports under Rule 139 of the Act, may otherwise be issued with
respect to the Company. The Company will provide Credit Suisse with notice of any
announcement described in clause (2) of the preceding sentence that gives rise to an
extension of the Lock-Up Period.
6. Free Writing Prospectuses. The Company represents and agrees that, unless it obtains the
prior consent of Credit Suisse, and each Underwriter represents and agrees that, unless it obtains
the prior consent of the Company and Credit Suisse, 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 Credit Suisse is hereinafter referred to as a “Permitted Free Writing Prospectus”. The Company
represents that it has treated and agrees that it
14
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 on the part of the Company and the Selling Stockholders herein, to
the accuracy of the statements of Company officers made pursuant to the provisions hereof, to the
performance by the Company and the Selling Stockholders of their obligations hereunder and to the
following additional conditions precedent:
(a) The Representative shall have received a letter, in the form attached as
Exhibit A hereto, dated the date of delivery thereof (which shall be on or prior to
the date of this Agreement), of Ernst & Young LLP. For purposes of this subsection, if the
Effective Time of the Additional Registration Statement is subsequent to the execution and
delivery of this Agreement, “Registration Statements” shall mean the Initial Registration
Statement and the Additional Registration Statement as proposed to be filed shortly prior
to its Effective Time, and “Prospectus” shall mean the prospectus included in the
Registration Statements.
(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 Prospectus is printed and distributed to any Underwriter, or shall
have occurred at such later date as shall have been consented to by Credit Suisse. Prior
to such Closing Date, the Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) of this Agreement. Prior to such
Closing Date, no stop order suspending the effectiveness of a Registration Statement shall
have been issued and no proceedings for that purpose shall have been instituted or, to the
knowledge of any Selling Stockholder, the Company or the Representative, 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 other), business, properties or results of operations of the
Company and Capella University taken as one enterprise which, in the judgment of a majority
in interest of the Underwriters including the Representative, is material and adverse and
makes it impractical or inadvisable to proceed with completion of the public offering or
the sale of and payment for the Offered Securities; (ii) any downgrading in the rating of
any debt securities or preferred stock of the Company by any “nationally recognized
statistical rating organization” (as defined for purposes of Rule 436(g) under the Act), or
any public announcement that any such organization has under surveillance or review its
rating of any debt securities or preferred stock of the Company (other than an announcement
with positive implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (iii) any change in U.S. or international financial,
political or economic conditions or currency exchange rates or exchange controls as would,
in the judgment of a majority in interest of the Underwriters including the Representative,
be likely to prejudice materially the success of the proposed issue, sale or distribution
of the Offered Securities, whether in the primary market or in respect of dealings in the
secondary market; (iv) any material suspension or material limitation of trading in
securities generally on The Nasdaq Stock Market or any setting of minimum prices for
trading on such exchange; (v) any suspension of trading of any securities of the Company on
any exchange or in the over-the-counter market; (vi) any banking moratorium declared by
U.S. Federal or New York authorities; (vii) any major disruption of settlements of
securities or clearance services in the United States; or (viii) 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
15
the judgment of a majority in interest of the Underwriters including the
Representative, the effect of any such attack, outbreak, escalation, act, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with completion of the
public offering or the sale of and payment for the Offered Securities.
(d) The Representative shall have received an opinion, dated such Closing Date, of
Faegre & Xxxxxx LLP, counsel for the Company, to the effect that:
(i) The Company has been duly incorporated and is an existing corporation in
good standing under the laws of the State of Minnesota, with corporate power and
authority to own its properties and conduct its business as described in the
General Disclosure Package;
(ii) Capella University has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Minnesota, with
corporate power and authority to own its properties and conduct its business as
described in the General Disclosure Package; all of the issued and outstanding
capital stock of Capella University has been duly authorized and validly issued and
is fully paid and nonassessable; and the capital stock of Capella University is
owned of record by the Company, and, to the knowledge of such counsel, free from
liens and encumbrances;
(iii) The Offered Securities delivered on such Closing Date and all other
outstanding shares of capital stock of the Company have been duly authorized; all
outstanding Securities are, and when the Offered Securities have been delivered and
paid for in accordance with this Agreement on such Closing Date, will be, validly
issued, fully paid and nonassessable, are consistent with the information in the
General Disclosure Package and conform in all material respects to the description
thereof contained in the Prospectus; and the stockholders of the Company have no
preemptive rights with respect to the Securities;
(iv) Except as described in the Registration Statement, there are no
contracts, agreements or understandings known to such counsel 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 securities registered pursuant to the Registration Statement or
in any securities being registered pursuant to any other registration statement
filed by the Company under the Act;
(v) No consent, approval, authorization or order of, or filing with, 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 issuance or sale of the Offered Securities, except such as have
been obtained and made under the Act and such as may be required under state or
foreign securities laws or pursuant to the rules of the NASD;
(vi) The execution, delivery and performance by the Company of this Agreement
and the consummation of the transactions herein contemplated by the Company will
not result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any rule, regulation applicable to the
Company or order of any governmental agency or body or any court having
jurisdiction over the Company or Capella University or any of their properties, or
any agreement or instrument known to such counsel to which the Company or Capella
University is a party or by which the Company or Capella University is bound or to
which any of the properties of the Company or Capella University is subject, or the
charter or by-laws of the Company or Capella University;
16
(vii) The Initial Registration Statement was declared effective under the Act
as of the date and time specified in such opinion, the Additional Registration
Statement (if any) was filed and became effective under the Act as of the date and
time (if determinable) specified in such opinion, the Prospectus was filed with the
Commission pursuant to the subparagraph of Rule 424(b) specified in such opinion on
the date specified therein, and, to the knowledge of such counsel, no stop order
suspending the effectiveness of a Registration Statement or any part thereof has
been issued and no proceedings for that purpose have been instituted or are pending
or contemplated under the Act, and each Registration Statement and the Prospectus,
and each amendment or supplement thereto, as of their respective effective or issue
dates, complied as to form in all material respects with the requirements of the
Act and the Rules and Regulations; the descriptions in the Registration Statements
and Prospectus set forth under the headings “Description of Capital Stock” and
“U.S. Federal Tax Consequences to Non-U.S. Holders of Common Stock” of statutes,
legal and governmental proceedings and contracts and other documents are accurate
and fairly present in all material respects the information required to be shown;
and such counsel do not know of any legal or governmental proceedings required to
be described in a Registration Statement or the Prospectus which are not described
as required or of any contracts or documents of a character required to be
described in a Registration Statement or the Prospectus or to be filed as exhibits
to a Registration Statement which are not described and filed as required; it being
understood that such counsel need express no opinion as to the financial statements
or other financial data contained in the Registration Statements or the Prospectus;
and
(viii) This Agreement has been duly authorized, executed and delivered by the
Company.
In addition to the matters set forth above, such opinion shall also include a statement to the
effect that, during the preparation of the Registration Statement and the General Disclosure
Package, such counsel has participated in conferences with officers and other representatives of
the Company, representatives of the independent accountants for the Company and representatives of
the Underwriters, at which conferences the contents of the General Disclosure Package, the
Registration Statement and related matters were discussed, reviewed and revised. Based upon such
participation but without independent review or verification, and without assuming responsibility
for the accuracy, completeness or fairness of the statements contained in the Registration
Statement and General Disclosure Package, nothing has come to such counsel’s attention which causes
it to believe that, at the time the Registration Statement became effective and as of the Closing
Date, the Registration Statement (including any amendments or supplements thereto) (except as to
financial statements and related notes, financial and accounting data and supporting schedules
included therein or omitted therefrom, as to which such counsel need express no opinion) contained
any untrue statement of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, not misleading, or the Prospectus (including
any amendments or supplements thereto) as of its issue date and as of the Closing Date (except as
to financial statements and related notes, financial and accounting data and supporting schedules
included therein or omitted therefrom, as to which such counsel need express no opinion) contained
any untrue statement of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading, and such counsel have no reason to believe that, as of the Applicable
Time, the documents specified in a schedule to such counsel’s letter, consisting of those included
in the General Disclosure Package, when considered together with the price to the public on the
cover page of the Prospectus (except as to financial statements and related notes, financial and
accounting data and supporting schedules included therein or omitted therefrom, as to which such
counsel need express no opinion), contained 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.
(e) The Representative shall have received an opinion, dated such Closing Date, of
Xxxxxxx X. Xxxx, Vice President and General Counsel for the Company, to the effect that:
17
(i) The Company is duly qualified to do business as a foreign corporation in
good standing in the following jurisdictions other than its jurisdiction of
incorporation: none;
(ii) Capella University is duly qualified to do business as a foreign
corporation in good standing in the following jurisdictions other than its
jurisdiction of incorporation: Alabama, Arizona, Ohio, Virginia and Washington;
(iii) Except as disclosed in the General Disclosure Package, to the knowledge
of such counsel, there are no pending actions, suits or proceedings against or
affecting the Company, Capella University or any of their respective properties
that, if determined adversely to the Company or Capella University, 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 which are otherwise material in the context of
the sale of the Offered Securities; and, to the knowledge of such counsel, no such
actions, suits or proceedings are threatened in writing; and
(iv) To the knowledge of such counsel, the Company and Capella University 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 Capella University, would, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(f) The Representative shall have received an opinion, dated such Closing Date, of
Drinker, Xxxxxx and Xxxxx LLP, special regulatory counsel for the Company, to the effect
that:
(i) The statements contained in the General Disclosure Package under the
headings “Risk Factors—Risks Related to the Extensive Regulation of Our Business”
and “Regulatory Environment,” insofar as they constitute a summary of legal
matters, documents or proceedings with respect to the operation of postsecondary
educational institutions and the offering of programs of postsecondary education
under Title IV of the HEA, the statutes of the states in which Capella University
is presently licensed or authorized to operate or offer degrees, as applicable, or
the standards of accreditation of the Higher Learning Commission of the North
Central Association of Colleges and Schools (the “Higher Learning Commission”), are
accurate in all material respects;
(ii) The execution, delivery and performance of this Agreement by the Company
and the issuance and sale by the Company of the Securities will not result in a
breach or violation of (A) Title IV of the HEA, (B) any regulation of the U.S.
Department of Education promulgated under Title IV of the HEA, (C) the statutes of
the states in which Capella University is presently licensed or authorized to
operate or offer degree programs, as applicable, or (D) the standards of
accreditation of the Higher Learning Commission;
(iii) Except as disclosed in the General Disclosure Package, the Company and
Capella University have all necessary authorizations, approvals, accreditations and
certifications (collectively, “Licenses”) required for the Company and Capella
University to participate in the federal aid programs under Title IV of the HEA, as
described in the Registration Statement and the General Disclosure Package; and
(iv) Except as disclosed in the General Disclosure Package, no consent,
approval, authorization, order, registration or qualification of, or filing with,
the U.S. Department of Education under Title IV of the HEA, the Minnesota Office of
Higher Education, or the Higher Learning Commission is required for the
consummation by the
18
Company of the transactions contemplated by this Agreement in connection with
the issuance and sale of the Securities.
(g) The
Representative shall have received an opinion, dated such Closing Date, of
Xxxxxxxx Xxxx & Xxxxxxx, P.A., counsel for the Custodial
Selling Stockholders, to the effect that:
(i) Each Custodial Selling Stockholder had valid and unencumbered title to the
Offered Securities delivered by such Custodial Selling Stockholder on such Closing
Date and had full right, power and authority to sell, assign, transfer and deliver
the Offered Securities delivered by such Custodial Selling Stockholder on such
Closing Date hereunder; and the several Underwriters have acquired valid and
unencumbered title to the Offered Securities purchased by them from such Custodial
Selling Stockholder on such Closing Date hereunder;
(ii) No consent, approval, authorization or order of, or filing with, any
governmental agency or body or any court is required to be obtained or made by such
Custodial Selling Stockholder for the consummation of the transactions contemplated
by the Power of Attorney, the Custody Agreement or this Agreement in connection
with the sale of the Offered Securities sold by such Custodial Selling Stockholder,
except such as have been obtained and made under the Act and such as may be
required under state securities laws or pursuant to the rules of the NASD;
(iii) The execution, delivery and performance of the Power of Attorney, the
Custody Agreement and this Agreement and the consummation of the transactions
therein and herein contemplated will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, (A) any statute, any
rule, regulation or order of any governmental agency or body or any court having
jurisdiction over such Custodial Selling Stockholder or any of his properties, (B)
any agreement or instrument to which such Custodial Selling Stockholder is a party
or by which such Custodial Selling Stockholder is bound or to which any of the
properties of such Custodial Selling Stockholder is subject or (C) with respect to
each Custodial Selling Stockholder that is not a natural person, the charter and
by-laws (or other similar organizational documents) of such Custodial Selling
Stockholders; and
(iv) Each of this Agreement and the Power of Attorney and related Custody
Agreement with respect to such Custodial Selling Stockholder have been duly
authorized, executed and delivered by such Custodial Selling Stockholder and
constitute valid and legally binding obligations of such Custodial Selling
Stockholder enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors’ rights and to general
equity principles.
(h) The Representative shall have received an opinion, dated such Closing Date, of
Ropes & Xxxx LLP, counsel for the Xxxxxx Selling Stockholder, substantially in the form of
Exhibit B attached hereto.
(i)
The Representative shall have received an opinion, dated such Closing Date, of
Xxxxxxxx & Xxxxx LLP, counsel for Forstmann Little & Co. Equity Partnership-VI, L.P,
Forstmann Little & Co. Equity Partnership-VII, L.P and Forstmann Little & Co. Subordinated
Debt and Equity Management Buyout Paternship-VIII, L.P., substantially in the form of Exhibit C
attached hereto.
(j) The Representative shall have received from Cravath, Swaine & Xxxxx LLP, counsel
for the Underwriters, such opinion or opinions, dated such Closing Date, with respect to
the incorporation of the Company, the validity of the Offered Securities delivered on such
Closing Date, the Registration Statements, the Prospectus and other related matters as the
Representative
19
may require, and the Selling Stockholders 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.
(k) The Representative shall have received a certificate, dated such Closing Date, of
the President or any Vice President and a principal financial or accounting officer of the
Company in which such officers, to the best of their knowledge after reasonable
investigation, 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 are contemplated by
the Commission; the Additional Registration Statement (if any) satisfying the requirements
of subparagraphs (1) and (3) of Rule 462(b) was filed pursuant to Rule 462(b), including
payment of the applicable filing fee in accordance with Rule 111(a) or (b) under the Act,
prior to the Applicable Time; and, subsequent to the respective 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 other), business, properties or results of operations 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.
(l) The Representative shall have received a letter, dated such Closing Date, of Ernst
& Young LLP which meets the requirements of subsection (a) of this Section, except that the
specified date referred to in such subsection will be a date not more than three days prior
to such Closing Date for the purposes of this subsection.
(m) On or prior to the date of this Agreement, the Representative shall have received
lockup letters from each of the executive officers and directors of the Company and each
equityholder and optionholder of the Company listed in Schedule F hereto.
(n) The Custodian will deliver to Credit Suisse a letter stating that it will deliver
to each Custodial Selling Stockholder a United States Treasury Department Form 1099 (or
other applicable form or statement specified by the United States Treasury Department
regulations in lieu thereof) on or before January 31 of the year following the date of this
Agreement.
(o) To avoid a 28% backup withholding tax, the Xxxxxx Selling Stockholder will deliver
to the Representative a properly completed and executed United States Treasury Department
Form W-9 (or other applicable form or statement specified by Treasury Department
regulations in lieu thereof).
The Selling Stockholders and the Company will furnish the Representative with such conformed copies
of such opinions, certificates, letters and documents as the Representative reasonably requests.
Credit Suisse may in its 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.
8. Indemnification and Contribution. (a) The Company will indemnify and hold harmless each
Underwriter, its partners, members, directors and officers and each person, if any, who controls
such Underwriter within the meaning of Section 15 of the Act, against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject, under the Act 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 Prospectus or any Issuer Free Writing Prospectus, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such loss, claim, damage, liability or action as such expenses
are incurred; provided, however, that the Company will not be liable in any such
case to the
20
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 Representative 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; provided, further, 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 the Selling Stockholder Information.
(b) The Selling Stockholders severally, and not jointly, will indemnify and hold
harmless the Company, the directors and officers of the Company, each person, if any, who
controls the Company within the meaning of Section 15 of the Act, each Underwriter, its
partners, directors and officers and each person who controls such Underwriter within the
meaning of Section 15 of the Act, against any losses, claims, damages or liabilities, joint
or several, to which such Underwriter may become subject, under the Act 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 Prospectus or any Issuer Free Writing Prospectus,
or arise out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and each Underwriter for any legal or other
expenses reasonably incurred by the Company and such Underwriter in connection with
investigating or defending any such loss, claim, damage, liability or action as such
expenses are incurred 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 the Selling Stockholder Information relating to such Selling
Stockholder; provided, however, that the liability under this subsection of
each Selling Stockholder shall be limited to an amount equal to the aggregate gross
proceeds after underwriting commissions and discounts, but before expenses, to such Selling
Stockholder from the sale of the Firm Securities sold by such Selling Stockholder
hereunder.
(c) Each Underwriter will severally, and not jointly, indemnify and hold harmless the
Company, the directors and officers of the Company, each person, if any, who controls the
Company within the meaning of Section 15 of the Act, each Selling Stockholder, the
directors and officers of each Selling Stockholder, if any, and each person, if any, who
controls such Selling Stockholder within the meaning of Section 15 of the Act against any
losses, claims, damages or liabilities to which such persons may become subject, under the
Act 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 Prospectus or any Issuer Free Writing
Prospectus, or arise out of or are based upon the omission or the alleged omission to state
therein 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 Representative specifically for use therein, and will reimburse any
legal or other expenses reasonably incurred by the Company and each Selling Stockholder in
connection with investigating or defending any such loss, claim, damage, liability or
action 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
Prospectus furnished on behalf of each Underwriter: the concession figure appearing in the
[fourth] paragraph under the caption “Underwriting” and the information contained in the
[sixth] paragraph 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
21
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. 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 and the Selling Stockholders, on the one hand, and the
Underwriters, on the other hand, 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 and the Selling Stockholders,
on the one hand, and the Underwriters, on the other hand, 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 and
the Selling Stockholders, on the one hand, and the Underwriters, on the other hand, shall
be deemed to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Selling Stockholders 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, the Selling Stockholders 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), (i) 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 and (ii) the
liability under this subsection of each Selling Stockholder shall be limited to an amount
equal to the aggregate gross proceeds after underwriting commissions and discounts, but
before expenses, to such Selling Stockholder from the sale of the Firm Securities sold by
such Selling Stockholder hereunder. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
22
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 Selling
Stockholders’ obligations in this subsection (e) to contribute are several in proportion to
their respective aggregate gross proceeds received after underwriting commissions and
discounts, but before expenses, from the sale of the Firm Securities sold by the Selling
Stockholders hereunder and not joint.
(f) The obligations of the Company and the Selling Stockholders under this Section
shall be in addition to any liability which the Company and the Selling Stockholders may
otherwise have and shall extend, upon the same terms and conditions, to each person, if
any, who controls any Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and conditions, to
each director of the Company, to each officer of the Company who has signed a Registration
Statement and to each person, if any, who controls the Company within the meaning of the
Act.
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, Credit Suisse may
make arrangements satisfactory to the Company and the Selling Stockholders 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 Credit Suisse, the Company and the Selling Stockholders 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, the Company or the
Selling Stockholders, 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 Selling Stockholders, of the
Company or 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, or statement as to
the results thereof, made by or on behalf of any Underwriter, any Selling Stockholder, 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 this Agreement is terminated
pursuant to Section 9 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company and each Selling Stockholder shall remain responsible
for the expenses to be paid or reimbursed by such party pursuant to Section 5 and the respective
obligations of the Company, the Selling Stockholders and the Underwriters pursuant to Section 8
shall remain in effect, and if any Offered Securities have been purchased hereunder the
representations and warranties in Section 2 and all obligations under Section 5 shall also remain
in effect. 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 or the
occurrence of any event specified in clause (iii), (iv), (vi), (vii) or (viii) of Section 7(c), 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.
11. Notices. All communications hereunder will be in writing and:
23
(a) if sent to the Underwriters, will be mailed, delivered or faxed and confirmed to
the Representative at c/o Credit Suisse Securities (USA) LLC, Eleven Xxxxxxx Xxxxxx, Xxx
Xxxx, XX 00000-0000, Attention: LCD-IBD (fax: 000-000-0000);
(b) if sent to the Company, will be mailed, delivered or faxed and confirmed to it at
000 Xxxxx Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxxxxxx, XX 00000-0000, Attention: General Counsel
(fax: 000-000-0000);
(c) if sent to Custodial Selling Stockholders, will be mailed, delivered or faxed and
confirmed to them at [ ];
(d) if sent to the Xxxxxx Selling Stockholder, will be mailed, delivered or faxed and
confirmed to it at Xxx Xxxx Xxxxxx Xxxxxx, Xxxxxx, XX 00000, Attention: Xxxx X. Xxxx (fax:
000-000-0000);
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 Representative will act for the several Underwriters in connection
with the transactions contemplated by this Agreement, and any action under this Agreement taken by
the Representative will be binding upon all the Underwriters. Pursuant to the Power of Attorney
executed by each Custodial Selling Stockholder, Xxxxxxx X. Xxxxx and Xxxxxxx X. Xxxx will act for
the Custodial Selling Stockholders in connection with such transactions, and any action under or in
respect of this Agreement taken by Xxxxxxx X. Xxxxx and Xxxxxxx X. Xxxx will be binding upon all
the Custodial Selling Stockholders.
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. Applicable Law. This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York, without regard to principles of conflicts of laws.
16. Absence of Fiduciary Relationship. The Company and each Selling Stockholder acknowledges
and agrees that:
(a) the Representative has been retained solely to act as an underwriter in connection with
the sale of the Company’s Offered Securities and that no fiduciary, advisory or agency relationship
between the Company, any Selling Stockholder and the Representative has been created in respect of
any of the transactions contemplated by this Agreement or the Prospectus, irrespective of whether
the Representative has advised or is advising the Company or any Selling Stockholder on other
matters;
(b) the price of the Offered Securities set forth in this Agreement was established by the
Company and the attorneys-in-fact for the Custodial Selling Stockholders following discussions and
arms-length negotiations with the Representative, and each of the Company and the attorneys-in-fact
for the Custodial Selling Stockholders is capable of evaluating and understanding and understands
and accepts the terms, risks and conditions of the transactions contemplated by this Agreement;
(c) it has been advised that the Representative and its affiliates are engaged in a broad
range of transactions which may involve interests that differ from those of the Company or the
Selling Stockholders and that the Representative has no obligation to disclose such interests and
transactions to the
24
Company or any of the Selling Stockholders by virtue of any fiduciary, advisory or agency
relationship; and
(d) it waives, to the fullest extent permitted by law and to the extent arising out of this
Agreement and the purchase and sale of the Offered Securities, any claims it may have against the
Representative for breach of fiduciary duty or alleged breach of fiduciary duty and agrees that the
Representative shall have no liability (whether direct or indirect) to the Company or any of the
Selling Stockholders 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, any of the Selling Stockholders or
any of their respective stockholders, employees or creditors.
[Remainder of this page intentionally left blank]
25
If the foregoing is in accordance with the Representative’s 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 Selling Stockholders, the Company and the several Underwriters in
accordance with its terms.
Very truly yours, Capella Education Company |
||||
By | ||||
Name: | ||||
Title: | ||||
26
TH Xxx, Xxxxxx Investment Trust-TH Xxx, Xxxxxx Emerging Opportunities Portfolio By TH Xxx, Xxxxxx Capital Management, LLC |
||||
By | ||||
Name: | ||||
Title: | ||||
A copy of the Declaration of TH Xxx, Xxxxxx Investment Trust-TH Xxx, Xxxxxx Emerging Opportunities
Portfolio on file with the Secretary of State of the Commonwealth of Massachusetts. Notice is given
that this agreement is executed on behalf of the Trustees of TH Xxx, Xxxxxx Investment Trust-TH
Xxx, Xxxxxx Emerging Opportunities Portfolio as Trustees and not individually and that the
obligations of this agreement are not binding on any of the Trustees or officers or shareholders
individually, but are binding only on the assets and property of TH Xxx, Xxxxxx Investment Trust-TH
Xxx, Xxxxxx Emerging Opportunities Portfolio with respect to its obligations hereunder.
27
Custodial
Selling stockholders: |
||||
By | ||||
Name: | ||||
Title: | Attorney-in-Fact | |||
28
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the date first above written. | ||||
Credit Suisse Securities (USA) LLC | ||||
By
|
||||
Name: | ||||
Title: |
Acting on behalf of itself and as the
Representative of the several
Underwriters.
Representative of the several
Underwriters.
29