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Exhibit 1.01
Draft of 10/25/96
4,530,000 SHARES
EDUCATION MANAGEMENT CORPORATION
COMMON STOCK ($.01 PAR VALUE)
UNDERWRITING AGREEMENT
___________, 1996
CS FIRST BOSTON CORPORATION
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
THE CHICAGO CORPORATION
As Representatives of the Several Underwriters,
c/o CS First ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
Dear Sirs:
1. Introductory. Education Management Corporation, a
Pennsylvania corporation ("Company"), proposes to issue and sell 3,230,000
shares of its common stock, $.01 par value ("Securities"), and the shareholders
listed in Schedule A hereto ("Selling Shareholders") propose severally to sell
an aggregate of 1,300,000 shares of the Securities (such 4,530,000 shares of
Securities being hereinafter referred to as the "Firm Securities"). The
Company also proposes to sell to the several Underwriters named in Schedule B
hereto ("Underwriters"), at the option of the Underwriters, an aggregate of not
more than 142,209 additional shares of the Securities, and the Selling
Shareholders also propose to sell to the Underwriters, at the option of the
Underwriters, an aggregate of not more than 401,391 additional shares of the
Securities, as set forth below (such 543,600 additional shares being
hereinafter referred to as the "Optional Securities"). The Firm Securities and
the Optional Securities are herein collectively referred to as the "Offered
Securities". The Company and the Selling Shareholders hereby agree with the
Underwriters as follows:
2. Representations and Warranties of the Company and the Selling
Shareholders.
(a) The Company represents and warrants to, and agrees with, the
several Underwriters that:
(i) A registration statement (No. 333-10385) relating to
the Offered Securities, including a form of prospectus, has been filed
with the Securities and Exchange Commission ("Commission") and either
(A) has been declared effective under the Securities Act of 1933, as
amended ("Act"), and is not proposed to be amended or (B) is proposed
to be amended by amendment or post-effective amendment. If such
registration statement (the "initial registration statement") has been
declared effective, either (A) an additional registration statement
(the "additional registration statement") relating to the Offered
Securities may have been filed with the Commission pursuant to Rule
462(b) ("Rule 462(b)") under the Act and,
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if so filed, has become effective upon filing pursuant to such Rule
and the Offered Securities all have been duly registered under the Act
pursuant to the initial registration statement and, if applicable, the
additional registration statement or (B) such an additional
registration statement is proposed to be filed with the Commission
pursuant to Rule 462(b) and will become effective upon filing pursuant
to such Rule and upon such filing the Offered Securities will all have
been duly registered under the Act pursuant to the initial
registration statement and such additional registration statement. If
the Company does not propose to amend the initial registration
statement or if an additional registration statement has been filed
and the Company does not propose to amend it, and if any
post-effective amendment to either such registration statement has
been filed with the Commission prior to the execution and delivery of
this Agreement, the most recent amendment (if any) to each such
registration statement has been declared effective by the Commission
or has become effective upon filing pursuant to Rule 462(c) ("Rule
462(c)") under the Act or, in the case of the additional registration
statement, Rule 462(b). 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 (A) if the Company has advised the
Representatives that it does not propose to amend such registration
statement, the date and time as of which such registration statement,
or the most recent post-effective amendment thereto (if any) filed
prior to the execution and delivery of this Agreement, was declared
effective by the Commission or has become effective upon filing
pursuant to Rule 462(c), or (B) if the Company has advised the
Representatives that it proposes to file an amendment or
post-effective amendment to such registration statement, the date and
time as of which such registration statement, as amended by such
amendment or post-effective amendment, as the case may be, is declared
effective by the Commission. If an additional registration statement
has not been filed prior to the execution and delivery of this
Agreement but the Company has advised the Representatives that it
proposes to file one, "Effective Time" with respect to such additional
registration statement means the date and time as of which such
registration statement is filed and becomes effective pursuant to Rule
462(b). "Effective Date" with respect to the initial registration
statement or the additional registration statement (if any) means the
date of the Effective Time thereof. The initial registration
statement, as amended at its Effective Time, including all information
contained in the additional registration statement (if any) and deemed
to be a part of the initial registration statement as of the Effective
Time of the additional registration statement pursuant to the General
Instructions of the Form on which it is filed and including all
information (if any) deemed to be a part of the initial registration
statement as of its Effective Time pursuant to Rule 430A(b) ("Rule
430A(b)") under the Act, is hereinafter referred to as the "Initial
Registration Statement". The additional registration statement, as
amended at its Effective Time, including the contents of the initial
registration statement incorporated by reference therein and including
all information (if any) deemed to be a part of the additional
registration statement as of its Effective Time pursuant to Rule
430A(b), is hereinafter referred to as the "Additional Registration
Statement". The Initial Registration Statement and the Additional
Registration Statement are hereinafter referred to collectively as the
"Registration Statements" and individually as a "Registration
Statement". The form of prospectus relating to the Offered
Securities, as first filed with the Commission pursuant to and in
accordance with Rule 424(b) ("Rule 424(b)") under the Act or (if no
such filing is required) as included in a Registration Statement, is
hereinafter referred to as the "Prospectus". No document has been or
will be prepared or distributed in reliance on Rule 434 under the Act.
No stop order suspending the effectiveness of a Registration Statement
or any part thereof has been issued and no proceeding for that purpose
has been instituted or, to the best knowledge of the Company,
threatened by the Commission.
(ii) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement:
(A) on the Effective Date of the Initial Registration Statement, the
Initial Registration Statement conformed in all 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 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) on the Effective Date of the
Registration Statement in which the Prospectus is included, each
Registration Statement and the Prospectus will conform in all 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. If the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of
this Agreement: on the Effective Date of the Initial Registration
Statement, the Initial Registration Statement and the Prospectus will
conform in all respects to the requirements of the Act and the Rules
and Regulations, neither of such documents will include any untrue
statement of a material fact or will omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, and no Additional Registration Statement has
been or will be filed. The two preceding sentences do 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 Representatives specifically for use
therein, it being understood and agreed that the only such information
is that described as such in Section 7(c).
(iii) The Company has been duly incorporated and is a
validly subsisting corporation in good standing under the laws of the
Commonwealth of Pennsylvania, with corporate power and authority to
own, lease and operate its properties and conduct its business as
described in the Prospectus; and the Company is duly qualified to do
business as a foreign corporation in good standing in all other
jurisdictions in which its ownership, leasing or operation 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 financial condition, business or results of operations of the
Company and its subsidiaries taken as a whole ("Material Adverse
Effect").
(iv) Exhibit 1 hereto sets forth all subsidiaries of the
Company which are, individually or on a consolidated basis, material
to the operations of the Company and its subsidiaries and the conduct
of their respective businesses (collectively, "Material
Subsidiaries"). Each such subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, with
corporate power and authority to own, lease and operate its properties
and conduct its business as described in the Prospectus; and each such
subsidiary of the Company is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in
which its ownership, leasing or operation 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 each such subsidiary of the Company has
been duly authorized and validly issued and is fully paid and
nonassessable; and the capital stock of each such subsidiary is owned
by the Company, directly or through one or more of the Company's other
subsidiaries, free and clear of any mortgage, pledge, lien, security
interest,
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claim, encumbrance or defect of any kind, except for shares of the
capital stock of certain of the Company's subsidiaries which have been
pledged as collateral pursuant to the Company's Amended and Restated
Credit Agreement dated March 16, 1995, as amended (the "Revolving
Credit Agreement"); and there are no rights granted to or in favor of
any third party (whether acting in an individual, fiduciary or other
capacity) other than the Company to acquire such capital stock, any
additional capital stock or any other securities of any such
subsidiary.
(v) The Offered Securities have been duly authorized and
will be, when issued and paid for in accordance with this Agreement,
validly issued, fully paid and nonassessable and no further approval
or authorization of the shareholders or the Board of Directors of the
Company is or will be required for the issuance and sale of the
Offered Securities as contemplated by this Agreement; on each Closing
Date (as defined below), all other outstanding shares of capital stock
of the Company will be duly authorized, validly issued, fully paid and
nonassessable and will have been issued in compliance with applicable
federal and state securities laws; the authorized and outstanding
capital stock of the Company on each Closing Date will conform to the
descriptions thereof contained in the Prospectus under the captions
"Capitalization" and "Description of Capital Stock"; and on each
Closing Date the shareholders of the Company will have no preemptive
or similar rights with respect to the Offered Securities or any other
securities of the Company.
(vi) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
third party 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 the transactions contemplated by this
Agreement.
(vii) Except as disclosed in the Prospectus, on each
Closing Date there will be no contracts, agreements or understandings
between the Company and any third party (whether acting in an
individual, fiduciary or other capacity) granting such third party 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 third party or to require the Company to include such
securities in the Offered 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.
(viii) The Offered Securities have been approved for listing
subject to notice of issuance on the Nasdaq Stock Market's National
Market.
(ix) Except as disclosed in the Prospectus, no consent,
approval, authorization, order, registration or qualification of, or
filing with, any third party (whether acting in an individual,
fiduciary or other capacity) or any governmental, regulatory or
accrediting agency or body or any court is required for the
consummation by the Company of the transactions contemplated by this
Agreement in connection with the issuance and sale of the Offered
Securities or for the consummation by the Company of the other
transactions contemplated by this Agreement or the Prospectus,
including, without limitation, the transactions described in the
Prospectus under the captions "The Transactions" and "Use of
Proceeds", except such as have been obtained and made under the Act
and such as may be required under state securities laws.
(x) The execution, delivery and performance by the
Company of this Agreement and the agreements, documents or instruments
entered into by the Company in connection with the transactions
described in the Prospectus under the captions "The Transactions" and
"Certain Transactions" and the consummation by the Company of the
transactions herein and therein contemplated have been duly authorized
by all necessary corporate action on the part
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of the Company and, to the extent required, its shareholders and do
not and will not conflict with or result in a breach or violation of
any of the terms and provisions of, and do not and will not constitute
a default (or an event which with the giving of notice or the lapse of
time or both could reasonably be likely to constitute a default)
under, and do not and will not result in the creation or imposition of
any lien, charge or encumbrance upon any assets or properties of the
Company or any of its Material Subsidiaries (including any individual
institution within such entity) under, (A) the charter, by-laws or
other organizational documents of the Company or any such subsidiary,
(B) any statute, any rule, regulation, requirement, order or decree of
any governmental, regulatory or accrediting agency or body or any
court having jurisdiction over the Company or any such subsidiary or
any of their properties, assets or operations, including, without
limitation, The Higher Education Act of 1965, as amended, and the
regulations promulgated thereunder (the "HEA"), or (C) any indenture,
mortgage, loan or credit agreement, note, lease, permit, license or
other agreement or instrument to which the Company or any such
subsidiary is a party or by which the Company or any such subsidiary
is bound or to which any of the properties, assets or operations of
the Company or any such subsidiary is subject, except for such
conflicts, breaches, violations, defaults, liens, charges and
encumbrances which would not, individually or in the aggregate, have a
Material Adverse Effect. The issuance and sale of the Offered
Securities or consummation of the other transactions contemplated by
this Agreement or the Prospectus will not constitute a change in
ownership resulting in a "change of control" of the Company as defined
in the HEA.
(xi) This Agreement and the agreements, documents or
instruments entered into by the Company in connection with the
transactions described in the Prospectus under the captions "The
Transactions" and "Certain Transactions" have been duly authorized,
executed and delivered by the Company and constitute the legal, valid
and binding obligations of the Company enforceable against the Company
in accordance with their respective terms, except to the extent that
(A) enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to
creditors' rights generally and by general principles of equity and
(B) rights to indemnity and contribution may be limited by federal and
state securities laws or policies underlying such laws.
(xii) The Company and its Material Subsidiaries have good
and marketable title to all real properties and all other material
properties and assets owned by them, in each case free and clear of
any mortgage, pledge, lien, security interest, claim or other
encumbrance or defect that would, individually or in the aggregate,
materially interfere with the use made or to be made thereof by them,
or have a Material Adverse Effect; the Company and its Material
Subsidiaries hold all their material leased real or personal
properties under valid, subsisting and enforceable leases or subleases
with no exceptions that would materially interfere with the use made
or to be made thereof by them; neither the Company nor any Material
Subsidiary is in default under any such lease or sublease, except for
any such defaults which would not, individually or in the aggregate,
have a Material Adverse Effect; and, to the knowledge of the Company,
no claim of any sort has been asserted in writing by anyone adverse to
the rights of the Company or any such subsidiary under any such lease
or sublease or affecting or questioning the right of such entity to
the continued possession of the leased or subleased properties under
any such lease or sublease.
(xiii) Except as disclosed in the Prospectus, the Company
and its Material Subsidiaries (including any individual institution
within such entity) possess all accreditations, approvals,
authorizations, certificates, permits and licenses (collectively,
"Licenses") issued by appropriate governmental, regulatory or
accrediting agencies or bodies, including, without limitation, all
authorizations required for participation in federal aid programs
under Title IV of the HEA ("Title IV Programs"), as are necessary to
own, lease or operate their properties
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and to conduct the business now operated by them and all such Licenses
are in full force and effect, except where the failure to possess such
Licenses or the failure of such Licenses to be in full force and
effect would not, individually or in the aggregate, have a Material
Adverse Effect; the Company and its Material Subsidiaries are in
substantial compliance with their respective obligations under such
Licenses, subject to such qualifications as are described in the
Prospectus; and neither the Company nor any of its Material
Subsidiaries has received written notice of any proceedings,
investigations or inquiries (or has knowledge of any facts that could
form a reasonable basis for any proceedings, investigations or
inquiries) relating to the revocation, modification, termination or
suspension of any such License, except where any such noncompliance,
revocation, modification, termination or suspension would not,
individually or in the aggregate, have a Material Adverse Effect.
(xiv) No labor dispute with the employees of the Company or
any Material Subsidiary exists or, to the knowledge of the Company, is
imminent that would, individually or in the aggregate, have a Material
Adverse Effect.
(xv) The Company and its Material Subsidiaries own or have
obtained valid licenses for all trademarks, trademark registrations,
service marks, service ▇▇▇▇ registrations, trade names, copyrights,
copyright registrations, confidential information and any other
intellectual property described in the Prospectus as being owned,
licensed or used by the Company or any of its Material Subsidiaries or
that are necessary for the conduct of the businesses (collectively,
"Intellectual Property"), except where the failure to own or obtain
any such Intellectual Property would not, individually or in the
aggregate, have a Material Adverse Effect, and the Company has no
knowledge of any written claim to the contrary or any challenge in
writing by any third party with respect to the rights of the Company
or any such subsidiaries in any such Intellectual Property or to the
validity or scope of any such Intellectual Property and neither the
Company nor any of its subsidiaries has any written claim against a
third party with respect to the infringement by such third party to
any such Intellectual Property that, if determined adversely to the
Company or any of its subsidiaries, would, individually or in the
aggregate, have a Material Adverse Effect. The Company and its
subsidiaries have a good faith belief in the distinctiveness and
enforceability of all trademarks, service marks and trade names
comprising the Intellectual Property.
(xvi) The Company and its Material Subsidiaries are in
compliance with all applicable federal, state and local environmental
laws, rules and regulations, orders, decrees, judgments, permits and
licenses relating to public and worker health and safety, and to the
protection and clean-up of the natural environment including, without
limitation, those relating to the production, generation, handling,
disposal, transportation or release of hazardous materials
(collectively, "Environmental Laws"), except where noncompliance would
not, individually or in the aggregate, have a Material Adverse Effect,
and the Company has no knowledge of any matters that could interfere
with or prevent compliance or continued compliance by the Company and
its subsidiaries with applicable Environmental Laws. To the knowledge
of the Company, neither the Company nor any of its Material
Subsidiaries is the subject of any federal, state or local
investigation, and neither the Company nor any such subsidiaries has
received any written notice or claim (or has knowledge of any facts
that could form a reasonable basis for any such claim), or entered
into any negotiations or agreements with any third party relating to
any liability or potential liability or remedial action or potential
remedial action under Environmental Laws, nor are there any pending
or, to the knowledge of the Company, threatened in writing actions,
suits or proceedings against or affecting the Company, any of its
Material Subsidiaries or their properties, assets or operations in
connection with any such Environmental Laws. The term "hazardous
materials" shall mean those substances that are regulated by or form
the basis for liability under any applicable Environmental Laws.
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(xvii) Except as disclosed in the Prospectus, there are no
pending actions, suits, proceedings or investigations against or
affecting the Company or any of its Material Subsidiaries (including
any individual institution within such entity) or any of their
respective properties, assets or operations that, if determined
adversely to the Company or any of its Material Subsidiaries, would,
individually or in the aggregate, have a Material Adverse Effect or
could 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, proceedings or investigations are, to the
knowledge of the Company, threatened.
(xviii) The audited financial statements and related
schedules and notes included in each Registration Statement and the
Prospectus 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, have been prepared
in conformity with the generally accepted accounting principles in the
United States applied on a consistent basis, and, to the knowledge of
the Company, comply with the requirements of the Act and the Rules and
Regulations. The financial information and statistical data set forth
in the Prospectus under the captions "Summary Consolidated Financial
and Other Data", "Capitalization" and "Selected Consolidated Financial
and Other Data" present fairly the information shown therein and, with
the exception of any pro forma information, have been compiled on a
basis consistent with that of the audited consolidated financial
statements included in the Registration Statements. The pro forma
financial information included in the Prospectus present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the pro forma basis
described therein. In the opinion of the Company, the assumptions
used therefor provide a reasonable basis for presenting the
significant effects directly attributable to the transactions or
events described therein, the related pro forma adjustments give
appropriate effect to those assumptions, and the pro forma columns
therein reflect the proper application of those adjustments to the
corresponding historical financial statement amounts.
(xix) Since the dates as of which information is given in
each Registration Statement and the Prospectus, (A) neither the
Company nor any of its Material Subsidiaries has incurred any material
liability or obligation (indirect, direct or contingent) or entered
into any material verbal or written agreement or other transaction
that is not in the ordinary course of business or that could result in
a material reduction in the future earnings of the Company; (B)
except as described in the Prospectus, there has been no material
change in the indebtedness of the Company, no change in the capital
stock of the Company and no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock; and (C) there has been no material adverse change, nor any
development or event involving a prospective material adverse change,
in the financial condition, business or results of operations of the
Company and its subsidiaries taken as a whole.
(xx) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of the
proceeds therefrom as described in the Prospectus, will not be an
"investment company" as defined in the Investment Company Act of 1940,
as amended.
(xxi) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida
Statutes.
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(xxii) Except as described in the Prospectus, there are no
outstanding (A) securities or obligations of the Company convertible
into or exchangeable for any capital stock of the Company, (B)
warrants, rights or options to subscribe for or purchase from the
Company any such capital stock or any such convertible or exchangeable
securities or obligations or (C) obligations of the Company to issue
any such capital stock, convertible or exchangeable securities or
obligations, or warrants, rights or obligations.
(xxiii) Each "employee benefit plan" within the meaning of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), in which employees of the Company or any subsidiary of the
Company participate or as to which the Company or any such subsidiary
has any liability (the "ERISA Plans") is in substantial compliance
with the applicable provisions of ERISA and the Internal Revenue Code
of 1986, as amended (the "Code"). Neither the Company nor any
subsidiary of the Company has any liability, whether or not
contingent, with respect to the ERISA Plans or otherwise under Title
IV of ERISA, nor does the Company have knowledge of any facts that
could form a reasonable basis for any such liability. Neither the
Company nor any subsidiary of the Company has any liability, whether
or not contingent, with respect to any ERISA Plan that provides
post-retirement welfare benefits. The descriptions of the Company's
stock arrangements set forth in the Prospectus are accurate and
complete in all material respects.
(xxiv) The Company's Employee Stock Ownership Plan and Trust
(the "ESOP") constitutes an "employee stock ownership plan" as defined
in Section 4957(e)(7) of the Code and Section 407(d)(6) of ERISA. All
loans to the trust created pursuant to the ESOP (the "ESOP Trust") and
each pledge of shares of the Securities by the ESOP Trust in
connection with the ESOP has satisfied and continues to satisfy the
requirements of Section 4975(d)(3) of the Code and Section 408(b)(3)
of ERISA, and has not and will not subject the Company or any
subsidiary to a tax imposed under Section 4975 of the Code or a civil
penalty assessed under Section 502(i) of ERISA. The Securities
satisfy the definition of a "qualifying employer security" within the
meaning of Section 4975(e)(8) of the Code and Section 407(d)(5) of
ERISA. Sales of shares of Securities to the ESOP Trust have satisfied
and continue to satisfy the requirements of Section 4975(d)(13) of the
Code and Section 408(e) of ERISA, and such sales have not and will not
subject the Company nor any subsidiary to a tax imposed under Section
4975 of the Code of a civil penalty assessed under Section 502(i) of
ERISA. None of the transactions involving the ESOP described in the
Prospectus under the captions "The Transactions" or "Certain
Transactions" constitute or will constitute a violation of, or result
or will result in liability under, ERISA or the Code (including,
without limitation, any tax under Section 4975 or Section 4978B of the
Code).
(xxv) The Company and its subsidiaries have filed on a
timely basis all federal, state and local tax returns required to be
filed, such returns are complete and correct in all material respects,
and all taxes shown by such returns or otherwise assessed that are due
and payable have been paid, except such taxes as are being contested
in good faith and as to which adequate reserves have been provided.
The charges, accruals and reserves on the books of the Company and its
subsidiaries in respect of any tax liability for any year not finally
determined are adequate to meet any assessments or reassessments for
additional taxes; and there has been no tax deficiency asserted and
the Company has no knowledge of any facts that could form a reasonable
basis for the assertion of any tax deficiency against the Company or
any of its subsidiaries that would, individually or in the aggregate,
have a Material Adverse Effect.
(xxvi) The Company and its subsidiaries maintain a system of
internal accounting controls sufficient in all material respects for
purposes of the prevention or detection of errors or irregularities in
amounts that could be expected to be material to the Company's
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consolidated financial statements and the recording of transactions so
as to permit the preparation of such consolidated financial statements
in conformity with generally accepted accounting principles.
(xxvii) Neither the Company nor any of its Material
Subsidiaries (including any individual institution within such entity)
is in violation of (A) its charter, by-laws or other organizational
documents or (B) any statute, any rule, regulation, requirement,
order, decree or judgment of any governmental, regulatory or
accrediting agency or body or any court having jurisdiction over the
Company or any such subsidiary, except for any such violations which
would not, individually or in the aggregate, have a Material Adverse
Effect; and no event of default or event which with the giving of
notice or the lapse of time or both, could constitute an event of
default exists, or upon consummation of the transactions contemplated
by this Agreement or the Prospectus, including, without limitation,
the use of proceeds from the sale of the Offered Securities in the
manner contemplated by the description under the caption "Use of
Proceeds" contained in the Prospectus and consummation of the
transactions described in the Prospectus under the captions "The
Transactions" and "Certain Transactions", will exist, under any
indenture, mortgage, loan or credit agreement, note, lease, permit,
license or other agreement or instrument to which the Company or any
such subsidiary is a party or by which the Company or any such
subsidiary is bound or to which any of the properties, assets or
operations of the Company or any such subsidiary is subject, except
for any such defaults which would not, individually or in the
aggregate, have a Material Adverse Effect. There are no statutes,
regulations, contracts or other documents that are required to be
described in the Registration Statements or the Prospectus or to be
filed as an exhibit to the Registration Statements that are not
described or filed as required.
(xxviii) The Company and its subsidiaries carry or are
entitled to the benefits of insurance in such amounts and covering
such risks as are generally maintained by companies of established
repute engaged in the same or a similar business, and all such
insurance is in full force and effect.
(xxix) The Company has not taken and will not take, directly
or indirectly, any action designed to or that could cause or result in
the stabilization or manipulation of the price of the Offered
Securities to facilitate the sale or resale of the Offered Securities.
(b) Each Selling Shareholder severally represents and warrants to,
and agrees with, the several Underwriters that:
(i) Such Selling Shareholder on each Closing Date will
have valid and unencumbered title to the Offered Securities to be
delivered by such Selling Shareholder on such Closing Date and has
full right, power and authority to enter into this Agreement and the
Custody Agreement (the "Custody Agreement") and Irrevocable Power of
Attorney (the "Power of Attorney") entered into by such Selling
Shareholder in connection with the transactions contemplated hereby
and will have full right, power and authority to sell, assign,
transfer and deliver the Offered Securities to be delivered by such
Selling Shareholder 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 Shareholder on such Closing Date.
(ii) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement:
(A) on the Effective Date of the Initial Registration Statement, the
Initial Registration Statement 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
9
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statements therein not misleading, (B) on the Effective Date of the
Additional Registration Statement (if any), each Registration
Statement 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, 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 Registration Statement in which the Prospectus is included,
each Registration Statement and the Prospectus does not include, or
will not include, any untrue statement of a material fact or does 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. If the Effective Time of the Initial Registration
Statement is subsequent to the execution and delivery of this
Agreement: on the Effective Date of the Initial Registration
Statement, neither the Initial Registration Statement nor the
Prospectus will include any untrue statement of a material fact or
will omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. The two
preceding sentences apply to each Selling Shareholder only to the
extent that any statements in or omissions from a Registration
Statement or the Prospectus are based upon written information
furnished to the Company or its representatives by or on behalf of
such Selling Shareholder specifically for use therein.
(iii) This Agreement, the Custody Agreement and Power of
Attorney and, to the extent applicable to such Selling Shareholder,
the agreements, documents or instruments entered into by such Selling
Shareholder in connection with the transactions described in the
Prospectus under the caption "The Transactions" have each been duly
authorized, executed and delivered by or on behalf of such Selling
Shareholder and constitute the legal, valid and binding obligations of
such Selling Shareholder enforceable against such Selling Shareholder
in accordance with their respective terms, except to the extent that
(A) enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to
creditors' rights generally and by general principles of equity and
(B) rights to indemnity and contribution may be limited by federal and
state securities laws or policies underlying such laws.
(iv) No consent, approval, authorization, order,
registration or qualification of, or filing with, any third party
(whether acting in an individual, fiduciary or other capacity) or any
governmental or regulatory agency or body or any court is required to
be obtained or made for the consummation of the transactions
contemplated by this Agreement, the Custody Agreement and Power of
Attorney by such Selling Shareholder in connection with the sale of
the Offered Securities or for the consummation of the other
transactions contemplated by this Agreement or the Prospectus,
including, without limitation, the consummation by such Selling
Shareholder, to the extent applicable, of the transactions described
in the Prospectus under the caption "The Transactions", except such as
have been obtained and made under the Act and such as may be required
under state securities laws.
(v) The execution, delivery and performance by such
Selling Shareholder of this Agreement, the Custody Agreement and Power
of Attorney and, to the extent applicable to such Selling Shareholder,
the agreements, documents or instruments entered into by such Selling
Shareholder in connection with the transactions described in the
Prospectus under the caption "The Transactions", the sale of the
Offered Securities being sold by such Selling Shareholder and the
consummation by such Selling Shareholder of any of the other
transactions herein or therein contemplated, do not and will not
conflict with or result in a breach or violation of any of the terms
and provisions of, or constitute or will constitute a default (or an
event which with the giving of notice or the lapse of time or both
could
10
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reasonably be likely to constitute a default) under, or result in the
creation or imposition of any lien, charge or encumbrance upon the
Offered Securities to be sold by such Selling Shareholder under (A)
the charter, by-laws or other organizational documents of such Selling
Shareholder, (B) any statute, any rule, regulation, requirement, order
or decree of any governmental or regulatory agency or body, or any
court having jurisdiction over such Selling Shareholder or any of its
properties, assets or operations or (C) any indenture, mortgage, loan
or credit agreement, note, lease, permit, license or other agreement
or instrument to which such Selling Shareholder is a party or by which
such Selling Shareholder is bound or to which any of the properties,
assets or operations of such Selling Shareholder is subject, except,
in the case of clauses (B) and (C), for such conflicts, breaches,
violations, defaults, liens, charges and encumbrances which could not,
individually or in the aggregate, have a material adverse effect on
the ability of such Selling Shareholder to consummate the transactions
contemplated by this Agreement and the Custody Agreement and Power of
Attorney or perform such Selling Shareholder's obligations hereunder
or thereunder.
(vi) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between such Selling
Shareholder and any third party that would give rise to a valid claim
against such Selling Shareholder or any Underwriter for a brokerage
commission, finder's fee or other like payment in connection with the
transactions contemplated by this Agreement, the Custody Agreement and
Power of Attorney.
(vii) Such Selling Shareholder has not taken and will not
take, directly or indirectly, any action designed to or that could
cause or result in the stabilization or manipulation of the price of
the Offered Securities to facilitate the sale or resale of the Offered
Securities.
3. Purchase, Sale and Delivery of Offered Securities. On the
basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company and each
Selling Shareholder 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 Shareholder, at a purchase price of
$[_____] per share, that number of Firm Securities (rounded up or down, as
determined by CS First Boston Corporation ("CS First Boston") in its
discretion, in order to avoid fractions) obtained by multiplying [_________]
Firm Securities in the case of the Company and the number of Firm Securities
set forth opposite the name of such Selling Shareholder in Schedule A hereto,
in the case of a Selling Shareholder, 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 B hereto and the denominator of which is the total
number of Firm Securities.
Certificates in negotiable form representing securities convertible
into or exercisable for (upon the consummation of the Articles Amendment and,
as the case may be, the Warrant Exercise, both as described in the Prospectus
under the caption "The Transactions") the Offered Securities to be sold by the
Selling Shareholders hereunder have been placed in custody, for delivery under
this Agreement, under Custody Agreements with the Company, as custodian
("Custodian"). Each Selling Shareholder agrees that the shares represented by
the certificates held in custody for the Selling Shareholders under such
Custody Agreements are subject to the interests of the Underwriters hereunder,
that the arrangements made by the Selling Shareholders for such custody are to
that extent irrevocable, and that the obligations of the Selling Shareholders
hereunder shall not be terminated by operation of law.
The Company and the Custodian will deliver the Firm Securities to the
Representatives for the accounts of the Underwriters, against payment of the
purchase price by wire transfers to a bank (or banks) acceptable to CS First
Boston in Federal Reserve (same day) funds to an account of the Company in the
case of 3,230,000 shares of Firm Securities and to an account of the Custodian
in the
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case of 1,300,000 shares of Firm Securities, at the office of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 A.M., New York
time, on _____________, 1996, or at such other time not later than seven full
business days thereafter as CS First Boston and the Company determine, such
time being herein referred to as the "First Closing Date". The certificates
for the Firm Securities so to be delivered will be in definitive form, in such
denominations and registered in such names as CS First Boston requests upon
reasonable notice prior to the First Closing Date and will be made available
for checking and packaging at the office of CS First Boston, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ at least 24 hours prior to the First Closing Date.
In addition, upon written notice from CS First Boston given to the
Company and the Selling Shareholders 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 Shareholders
agree, severally and not jointly, to sell to the Underwriters the respective
numbers of Optional Securities obtained by multiplying the number of Optional
Securities specified in such notice by a fraction the numerator of which is
142,209 in the case of the Company and the number of shares set forth opposite
the names of such Selling Shareholders in Schedule A hereto under the caption
"Number of Optional Securities to be Sold" in the case of the Selling
Shareholders and the denominator of which is the total number of Optional
Securities (subject to adjustment by CS First Boston to eliminate fractions).
Such Optional Securities shall be purchased from the Company and each Selling
Shareholder 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 CS First Boston
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 CS First
Boston to the Company and the Selling Shareholders.
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 CS
First Boston 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 the Representatives for the accounts of the
Underwriters, against payment of the purchase price by wire transfer to a bank
(or banks) acceptable to CS First Boston in Federal Reserve (same day) funds to
an account of the Company in the case of _______ Optional Securities and to an
account of the Custodian in the case of ________ Optional Securities, at the
office of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇. The certificates for the Optional Securities being purchased on each
Optional Closing Date will be in definitive form, in such denominations and
registered in such names as CS First Boston requests upon reasonable notice
prior to such Optional Closing Date and will be made available for checking and
packaging at the office of CS First Boston, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ at a reasonable time in advance of such Optional Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
It is further understood that up to an aggregate of 225,000 Firm
Securities will be reserved for offering and sale to employees of the Company
and other persons identified by the Company who have heretofore delivered to CS
First Boston Corporation, in a timely manner and in form satisfactory to CS
First Boston Corporation, written indications of interest to purchase such Firm
Securities. Up to 175,000 of such shares may be purchased by employees at the
initial public offering price less
12
13
underwriting discounts and commissions. The Company shall reimburse the
Underwriters for the underwriting discounts and commissions on such sales. Any
other sales to employees or sales to other persons identified by the Company
will be at the initial public offering price. Under no circumstances shall the
Representatives or any Underwriter be liable to the Company, any of its
subsidiaries or any such persons for any action taken or omitted in good faith
in connection with such offering and sale to such persons. Any Firm Securities
not purchased by such persons at the First Closing Date will be offered to the
public by the Underwriters as set forth in the Prospectus.
5. Certain Agreements of the Company and the Selling
Shareholders. The Company agrees with the several Underwriters and the Selling
Shareholders and, with respect to clauses (l), (m) and (n) below, the Selling
Shareholders agree with the Company and the several Underwriters that:
(a) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement,
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 CS First Boston, 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 CS First Boston promptly of any such filing
pursuant to Rule 424(b). If the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement and 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 such execution and
delivery, 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 CS First Boston.
(b) The Company will advise CS First Boston promptly of any
proposal to amend or supplement the initial registration statement or
any additional registration statement as filed or the related
prospectus or the Initial Registration Statement, the Additional
Registration Statement (if any) or the Prospectus and will not effect
such amendment or supplementation without CS First Boston's prior
consent; and the Company will also advise CS First Boston promptly of
the effectiveness of each 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
the 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 required to be delivered under the Act in connection
with sales by any Underwriter or dealer, any event occurs or a
condition exists 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 CS
First Boston 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 CS First Boston'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 6.
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(d) As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make generally
available to its security holders an earnings statement covering a
period of at least 12 months beginning after the Effective Date of the
Initial Registration Statement (or, if later, the Effective 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 Representatives copies of
each Registration Statement (three of which will be signed and will
include all exhibits and a signed accountant's report of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP), 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 CS First Boston
reasonably requests. The Prospectus shall be so furnished on or prior
to 3:00 P.M., New York time, on the business day following the later
of the execution and delivery of this Agreement or the Effective Time
of the Initial Registration Statement. All other such documents shall
be 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, in cooperation with CS First Boston and
counsel for the Underwriters, arrange for the qualification of the
Offered Securities for sale under the laws of such jurisdictions as CS
First Boston designates and will continue such qualifications in
effect so long as required for the distribution; provided, that the
Company shall not be required to file a general consent to service of
process or qualify to do business in any jurisdiction in which it is
not so qualified.
(g) During the period ending on the fifth anniversary hereof,
the Company will furnish to the Representatives and, upon request, to
each of the other Underwriters, (i) as soon as practicable after the
end of each of its fiscal years, a copy of its annual report to
shareholders for such year, (ii) as soon as available, a copy of each
report and definitive proxy statement of the Company filed with the
Commission under the Securities Exchange Act of 1934, as amended, or
mailed to shareholders and (iii) from time to time, such other
information concerning the Company as CS First Boston may reasonably
request.
(h) For a period of 180 days after the date of the initial
public offering of the Offered Securities, the Company will not offer,
sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, or file or cause to be filed with the Commission a
registration statement under the Act relating to, any shares of
Securities or securities or other rights convertible into or
exchangeable or exercisable for any shares of Securities, or publicly
disclose the intention to make any such offer, sale, pledge, disposal
or filing, without the prior written consent of CS First Boston.
(i) The Company will use its best efforts to cause its
officers, directors and shareholders (other than the Selling
Shareholders) of the Company who beneficially own an aggregate of
[________________] outstanding shares (or _____%) of the Securities
and vested options to purchase an additional [ ] shares of
the Securities to agree that each such holder will not offer, sell,
contract to sell, pledge or otherwise dispose of, directly or
indirectly, or cause to be filed with the Commission a registration
statement under the Act relating to, any shares of the Securities or
securities or other rights convertible into or exchangeable or
exercisable for any shares of Securities, or publicly disclose the
intention to
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make any such offer, sale, pledge or disposal, without the prior
written consent of CS First Boston, for a period of 180 days after the
date of the initial public offering of the Offered Securities.
(j) The Company will apply the net proceeds from the sale of
the Offered Securities sold by it in the manner set forth in the
Prospectus under the caption "Use of Proceeds".
(k) The Company will pay all expenses incident to the
performance of the obligations of the Company and each Selling
Shareholder under this Agreement and will reimburse the Underwriters
(if and to the extent incurred by them) for any filing fees and other
expenses (including fees and disbursements of counsel) incurred by
them in connection with the qualification of the Offered Securities
for sale under the laws of such jurisdictions as CS First Boston
designates in accordance with clause (f) and the printing of memoranda
relating thereto, for the filing fee of the National Association of
Securities Dealers, Inc. relating to 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 and for
expenses incurred in printing and distributing preliminary
prospectuses and the Prospectus (including any amendments and
supplements thereto) or related documents. Each Selling Shareholder
will reimburse the Underwriters (if and to the extent incurred by
them) for any transfer taxes on the sale by the Selling Shareholders
of the Offered Securities to the Underwriters.
(l) Each Selling Shareholder agrees to deliver to CS First
Boston (Attention: Transactions Advisory Group) on or prior to the
First Closing Date a properly completed and executed United States
Treasury Department Form W-9 (or other applicable form or statement
specified by Treasury Department regulations in lieu thereof).
(m) Each Selling Shareholder agrees, for a period of 180 days
after the date of the initial public offering of the Offered
Securities, not to offer, sell, contract to sell, pledge or otherwise
dispose of, directly or indirectly, or cause to be filed with the
Commission a registration statement under the Act relating to any
shares of the Securities of the Company or securities or other rights
convertible into or exchangeable or exercisable for any shares of
Securities, or publicly disclose the intention to make any such offer,
sale, pledge or disposal, without the prior written consent of CS
First Boston.
6. 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
Shareholders 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 Shareholders of their obligations hereunder and to the following
additional conditions precedent:
(a) The Representatives shall have received a letter, dated
the date of delivery thereof (which, if the Effective Time of the
Initial Registration Statement is prior to the execution and delivery
of this Agreement, shall be on or prior to the date of this Agreement
or, if the Effective Time of the Initial Registration Statement is
subsequent to the execution and delivery of this Agreement, shall be
prior to the filing of the amendment or post-effective amendment to be
filed shortly prior to such Effective Time), of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
confirming that they are independent public accountants within the
meaning of the Act and the applicable Rules and Regulations and
stating to the effect that:
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(i) in their opinion the financial statements and
schedules examined by them and included in the Registration
Statements comply as to form in all material respects with the
applicable accounting requirements of the Act and the related
published Rules and Regulations;
(ii) they have performed the procedures specified
by the American Institute of Certified Public Accountants for
a review of interim financial information as described in
Statement of Auditing Standards No. 71, Interim Financial
Information, on the unaudited financial statements included in
the Registration Statements;
(iii) on the basis of the review referred to in
clause (ii) above, a reading of the latest available interim
financial statements of the Company, a reading of the minutes
of all meetings of the shareholders and directors (including
each committee thereof) of the Company and its subsidiaries,
inquiries of officials of the Company who have responsibility
for financial and accounting matters and other specified
procedures, nothing came to their attention that caused them
to believe that:
(A) the unaudited financial statements
included in the Registration Statements and the
Prospectus do not comply as to form in all material
respects with the applicable accounting requirements
of the Act and the related published Rules and
Regulations or any material modifications should be
made to such unaudited financial statements for them
to be in conformity with generally accepted
accounting principles;
(B) the information set forth in the
Prospectus under the captions "Summary Consolidated
Financial and Other Data" and "Selected Consolidated
Financial and Other Data" does not agree with the
amounts set forth in the unaudited consolidated
financial statements or the audited consolidated
financial statements, as the case may be, from which
it was derived or were not determined on a basis
substantially consistent with that of the
corresponding amounts in the audited statements
included in the Registration Statements and the
Prospectus;
(C) at the date of the latest available
balance sheet read by such accountants, or at a
subsequent specified date not more than three days
prior to the date of this Agreement, there was any
decrease in shareholders' equity or change in the
capital stock or any increase in short-term
indebtedness or long-term debt of the Company and its
consolidated subsidiaries or, at the date of the
latest available balance sheet read by such
accountants, there was any decrease in consolidated
net current assets or net assets, as compared with
amounts shown on the latest balance sheet included in
the Registration Statements and the Prospectus; or
(D) for the period from the closing date of
the latest income statement included in the
Registration Statements and the Prospectus to the
closing date of the latest available income statement
read by such accountants there were any decreases, as
compared with the corresponding period of the
previous year and with the period of corresponding
length ended the date of the latest income statement
included in the Registration Statements and the
Prospectus, in consolidated net revenues or
consolidated net income, or in the total or per share
amounts of consolidated net income or income from
continuing operations before extraordinary item, or
any
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increases or decreases, as the case may be, in other items
specified by the Representatives;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses
have occurred;
(iv) they have proved the arithmetic accuracy of
the application of the pro forma adjustments to the historical
amounts in the unaudited pro forma statements of earnings and
balance sheet data included in the Registration Statements and
the Prospectus and on the basis of the foregoing procedure and
a reading of the unaudited pro forma financial statements
included in the Registration Statements and the Prospectus, a
reading of the minutes of all meetings of the stockholders and
directors (including each committee thereof) of the Company
and its subsidiaries, inquiries of officials of the Company
who have responsibility for financial and accounting matters
and other specified procedures, nothing came to their
attention that caused them to believe that the pro forma
financial statements included in the Registration Statements
and the Prospectus do not comply in all material respects with
the applicable accounting requirements of Rule 11-02 of
Regulation S-X or that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation
of such financial statements or on the pro forma basis
described in the notes thereto;
(v) they have compared specified dollar amounts
(or percentages derived from such dollar amounts) and other
financial information contained in the Registration Statements
and the Prospectus (in each case to the extent that such
dollar amounts, percentages, numerical data and other
financial information are derived from the general accounting
records of the Company and its subsidiaries subject to the
internal controls of the Company's accounting system or are
derived directly from such records by analysis or computation)
with the results obtained from inquiries, a reading of such
general accounting records and other procedures specified in
such letter and have found such dollar amounts, percentages,
numerical data and other financial information to be in
agreement with such results.
For purposes of this subsection, (i) if the Effective Time of the
Initial Registration Statements is subsequent to the execution and
delivery of this Agreement, "Registration Statements" shall mean the
initial registration statement as proposed to be amended by the
amendment or post-effective amendment to be filed shortly prior to its
Effective Time; (ii) if the Effective Time of the Initial Registration
Statements is prior to the execution and delivery of this Agreement
but the Effective Time of the Additional Registration Statement is
subsequent to such execution and delivery, "Registration Statements"
shall mean the Initial Registration Statement and the additional
registration statement as proposed to be filed or as proposed to be
amended by the post-effective amendment to be filed shortly prior to
its Effective Time; and (iii) "Prospectus" shall mean the prospectus
included in the Registration Statements.
(b) If the Effective Time of the Initial Registration
Statement 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 such later
date as shall have been consented to by CS First Boston. 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 such later
date as shall have been consented to by CS First Boston. If the
Effective Time of the Initial Registration Statement is prior to the
execution and delivery of this
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18
Agreement, 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 Shareholder, the Company or the
Representatives, shall be threatened 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, prospects, results of operations or
general affairs of the Company and its subsidiaries taken as a whole
which, in the judgment of a majority in interest of the Underwriters
including the Representatives, 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 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 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
suspension or limitation of trading in securities generally on the New
York Stock Exchange, or any setting of minimum prices for trading on
such exchange, or any suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market; (iv) any
banking moratorium declared by U.S. Federal or New York authorities;
or (v) any outbreak or escalation of major hostilities in which the
United States is involved, any declaration of war by Congress or any
other substantial national or international calamity or emergency if,
in the judgment of a majority in interest of the Underwriters
including the Representatives, the effect of any such outbreak,
escalation, 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 Representatives shall have received an opinion, dated
such Closing Date, of ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the
Company, to the effect that:
(i) The Company has been duly incorporated and is
a validly subsisting corporation in good standing under the
laws of the Commonwealth of Pennsylvania, with corporate power
and authority to own, lease and operate its properties and
conduct its business as described in the Prospectus.
(ii) The Offered Securities delivered on such
Closing Date by the Company have been duly authorized and will
be, when issued and paid for in accordance with this
Agreement, validly issued, fully paid and nonassessable and
the Offered Securities delivered on such Closing Date by the
Selling Shareholders have been duly authorized, validly
issued, fully paid and nonassessable; no further approval or
authorization of the shareholders or the Board of Directors of
the Company is or will be required for the issuance and sale
of the Offered Securities as contemplated by this Agreement;
and, to the knowledge of such counsel, the shareholders of the
Company have no preemptive or similar rights with respect to
the Offered Securities.
(iii) All outstanding shares of the capital stock
of the Company have been duly authorized, are validly issued,
fully paid and non-assessable and have been issued in
compliance with applicable federal and state securities laws;
the authorized and outstanding shares of capital stock of the
Company are as set forth in the Prospectus under the captions
"Capitalization" and "Description of Capital Stock" and
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19
conform to the descriptions thereof contained in the Prospectus; and
the shareholders of the Company have no preemptive or similar rights
with respect to any securities of the Company.
(iv) Except as disclosed in the Prospectus, no
consent, approval, authorization, order, registration or
qualification of, or filing with, any third party (whether
acting in an individual, fiduciary or other capacity) or any
governmental or regulatory agency or body or any court is
required for the consummation by the Company of the
transactions contemplated by this Agreement in connection with
the issuance and sale of the Offered Securities or for the
consummation by the Company of the other transactions
contemplated by this Agreement or the Prospectus, including,
without limitation, the transactions described in the
Prospectus under the captions "The Transactions" and "Use of
Proceeds", except such as have been obtained and made under
the Act, such as may be required under state securities laws
and such as may be required under the HEA or any similar state
statute.
(v) The execution, delivery and performance by
the Company of this Agreement and the agreements, documents or
instruments entered into by the Company in connection with the
transactions described in the Prospectus under the captions
"The Transactions" and "Certain Transactions" and the
consummation by the Company of the transactions herein and
therein contemplated have been duly authorized by all
necessary corporate action on the part of the Company and, to
the extent required, its shareholders and do not and will not
conflict with or result in a breach or violation of any of the
terms and provisions of, and do not and will not constitute a
default (or an event which with the giving of notice or the
lapse of time or both could reasonably be likely to constitute
a default) under, and do not and will not result in the
creation or imposition of any lien, charge or encumbrance upon
any assets or properties of the Company or any of its Material
Subsidiaries (including any individual institution within such
entity) under, (A) the charter, by-laws or other
organizational documents of the Company or any such
subsidiary, (B) except as to the HEA or any similar state
statute and any rules, regulations, requirements, orders or
decrees related thereto as to which such counsel need express
no opinion, to the knowledge of such counsel, any statute, any
rule, regulation, requirement, order or decree of any
governmental or regulatory agency or body or any court having
jurisdiction over the Company or any such subsidiary or any of
their properties, assets or operations, or (C) to the
knowledge of such counsel, any indenture, mortgage, loan or
credit agreement, note, lease, permit, license or other
agreement or instrument to which the Company or any such
subsidiary is a party or by which the Company or any such
subsidiary is bound or to which any of the properties, assets
or operations of the Company or any such subsidiary is
subject, except for such conflicts, breaches, violations,
defaults, liens, charges and encumbrances which would not,
individually or in the aggregate, have a Material Adverse
Effect.
(vi) This Agreement and the agreements, documents
or instruments entered into by the Company in connection with
the transactions described in the Prospectus under the
captions "The Transactions" and "Certain Transactions" have
been duly authorized, executed and delivered by the Company
and constitute the legal, valid and binding obligations of the
Company enforceable against the Company in accordance with
their respective terms, except to the extent that (A)
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to
creditors' rights generally and by general principles of
equity and (B) rights to indemnity and contribution may be
limited by federal and state securities laws or policies
underlying such laws.
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(vii) Except as disclosed in the Prospectus, there
are no pending or, to the knowledge of such counsel,
threatened actions, suits, proceedings or investigations
against or affecting the Company or any of its Material
Subsidiaries (including any individual institution within such
entity) or any of their respective properties, assets or
operations that, if determined adversely to the Company or any
of its Material Subsidiaries, would, individually or in the
aggregate, have a Material Adverse Effect or could 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.
(viii) The Company is not and, after giving effect
to the offering and sale of the Offered Securities and the
application of the proceeds therefrom as described in the
Prospectus, will not be an "investment company" as defined in
the Investment Company Act of 1940, as amended.
(ix) The transactions contemplated in the
Prospectus under the caption "The Transactions" have been duly
authorized and consummated; all consents, approvals and other
authorizations required to consummate such transactions have
been duly obtained; and there is no pending or, to the best
knowledge of such counsel, threatened legal or governmental
proceedings with respect to such transactions.
(x) To the knowledge of such counsel, the
descriptions in the Registration Statements and the Prospectus
of statutes, legal and governmental proceedings and contracts
and other documents are accurate and fairly present 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 or of
any contracts or documents of a character required to be
described or to be filed as exhibits to a Registration
Statement or the Prospectus which, in each case, are not
described and filed as required (it being understood that such
counsel need express no opinion as to the portions of the
Registration Statements and the Prospectus as to which Dow,
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ is providing an opinion to the
Underwriters).
(xi) The Initial Registration Statement was
declared effective under the Act as of the date 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 either was filed with the Commission pursuant to
the subparagraph of Rule 424(b) specified in such opinion on
the date specified therein or was included in the Initial
Registration Statement or the Additional Registration
Statement (as the case may be), 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 threatened 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. Such
counsel have participated in the preparation of the
Registration Statements and the Prospectus and have no reason
to believe that any part of a Registration Statement or any
amendment thereto, as of its effective date or as of such
Closing Date, contained any untrue statement of a material
fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus or any amendment or
supplement thereto, as of its issue date or as of
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21
such Closing Date, 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 (it
being understood that such counsel need express no opinion as
to the financial statements and schedules or other financial
data contained in the Registration Statements or the Prospectus
or the portions of the Registration Statements and the
Prospectus as to which Dow, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ is providing an
opinion to the Underwriters).
Such opinion shall be to such further effect with respect to
other legal matters relating to this Agreement and the transactions
contemplated hereby as the Representatives and counsel to the
Underwriters may reasonably request. In rendering such opinion, such
counsel may rely as to matters governed by the laws of jurisdictions
other than the laws of jurisdictions in which such counsel are
admitted to practice and the federal laws of the United States upon
the opinions of counsel reasonably satisfactory to the Representatives
and counsel to the Underwriters.
(e) The Representatives shall have received an opinion, dated
such Closing Date, of ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Vice President, General
Counsel and Secretary of the Company, to the effect that:
(i) Each of the Company's Material Subsidiaries
has been duly incorporated and is a validly existing
corporation in good standing under the laws of the
jurisdiction of its incorporation, with corporate power and
authority to own, lease and operate its properties and conduct
its business as described in the Prospectus.
(ii) Each of the Company and its Material
Subsidiaries is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in
which its ownership, leasing or operation of property or the
conduct of its business requires such qualification, other
than where the failure to be so qualified or in good standing
would not, individually or in the aggregate, have a Material
Adverse Effect.
(iii) All of the issued and outstanding capital
stock of each of the Company's Material Subsidiaries has been
duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company, directly or
through one or more of its other subsidiaries, free and clear
of any mortgage, pledge, lien, security interest, claim,
encumbrance or defect of any kind, except for shares of the
capital stock of certain of the Company's subsidiaries which
have been pledged as collateral pursuant to the Revolving
Credit Agreement; and there are no rights granted to or in
favor of any third party (whether acting in an individual,
fiduciary or other capacity) other than the Company to acquire
such capital stock, any additional capital stock [or any other
securities] of any such subsidiary.
(iv) Except as disclosed in the Prospectus, there
are no contracts, agreements or understandings between the
Company and any third party (whether acting in an individual,
fiduciary or other capacity) granting such third party 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 third party or to require the
Company to include such securities in the Offered 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.
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(v) Except as disclosed in the Prospectus, the
Company and its Material Subsidiaries (including any
individual institution within such entity) possess all
Licenses issued by appropriate governmental, regulatory or
accrediting agencies or bodies, including, without limitation,
all authorizations required for participation in Title IV
Programs, as are necessary to own, lease or operate their
properties and conduct the business now operated by them and
all such Licenses are in full force and effect, except where
the failure to possess such Licenses or the failure of such
Licenses to be in full force and effect would not,
individually or in the aggregate, have a Material Adverse
Effect. The Company and its Material Subsidiaries are in
substantial compliance with their respective obligations under
such Licenses, subject to such qualifications as are described
in the Prospectus, and neither the Company nor any of its
Material Subsidiaries has received notice of any proceedings,
investigations or inquiries (or has knowledge of any facts
that could form a reasonable basis for any proceedings,
investigations or inquiries) relating to the revocation,
modification, termination or suspension of any such License,
except where any such noncompliance, revocation, modification,
termination or suspension would not, individually or in the
aggregate, have a Material Adverse Effect.
(vi) Except as disclosed in the Prospectus, there
are no pending or, to the best knowledge of such counsel,
threatened actions, suits, proceedings or investigations
against or affecting the Company or any of its Material
Subsidiaries (including any individual institution within such
entity) or any of their respective properties, assets or
operations that, if determined adversely to the Company or any
of its Material Subsidiaries, would, individually or in the
aggregate, have a Material Adverse Effect or could 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.
(vii) Except as disclosed in the Prospectus, there
are no outstanding (A) securities or obligations of the
Company convertible into or exchangeable for any capital stock
of the Company, (B) warrants, rights or options to subscribe
for or purchase from the Company any such capital stock or any
such convertible or exchangeable securities or obligations or
(C) obligations of the Company to issue any capital stock,
convertible or exchangeable securities or obligations, or any
warrants, rights or obligations.
(viii) Neither the Company nor any of its Material
Subsidiaries (including any individual institution within such
entity) is in violation of (A) its charter, by-laws or other
organizational documents or (B) any statute, any rule,
regulation, requirement, order or decree of any governmental,
regulatory or accrediting agency or body or any court having
jurisdiction over the Company or any of its Material
Subsidiaries, except for any such violations which would not,
individually or in the aggregate, have a Material Adverse
Effect; and no event of default or event which with the giving
of notice or the lapse of time or both, could be reasonably be
expected to constitute an event of default exists, or upon
consummation of the transactions contemplated by this
Agreement or the Prospectus, including, without limitation,
the use of proceeds from the sale of the Offered Securities in
the manner contemplated by the description under the caption
"Use of Proceeds" contained in the Prospectus and consummation
of the transactions described in the Prospectus under the
captions "The Transactions" and "Certain Transactions", will
exist, under any indenture, mortgage, loan or credit
agreement, note, lease, permit, license or other agreement or
instrument to which the Company or any Material Subsidiary is
a party or by which the Company or any such subsidiary is
bound or to which any
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23
of the properties, assets or operations of the Company or any
such subsidiary is subject, except for any such defaults which
would not, individually or in the aggregate, have a Material
Adverse Effect.
(ix) Such counsel has participated in the
preparation of the Registration Statements and the Prospectus
and has no reason to believe that any part of a Registration
Statement or any amendment thereto, as of its effective date
or as of such Closing Date, contained any untrue statement of
a material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus or any amendment
or supplement thereto, as of its issue date or as of such
Closing Date, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein,
in the light of the circumstances under which they were made,
not misleading (it being understood that such counsel need
express no opinion as to the financial statements and
schedules or other financial data contained in the
Registration Statements and the Prospectus or the portions of
the Registration Statements and the Prospectus as to which
Dow, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ is providing an opinion to the
Underwriters).
Such opinion shall be to such further effect with respect to
other legal matters relating to this Agreement and the transactions
contemplated hereby as the Representatives and counsel to the
Underwriters may reasonably request. In rendering such opinion, such
counsel may rely as to matters governed by the laws of jurisdictions
other than the laws of jurisdictions in which such counsel is admitted
to practice and the federal laws of the United States upon the
opinions of counsel reasonably satisfactory to the Representatives and
counsel for the Underwriters.
(f) The Representatives shall have received an opinion, dated
such Closing Date, of [ ], counsel for the Selling
Shareholders, to the effect that:
(i) To the best knowledge of such counsel, each
Selling Shareholder has valid and unencumbered title to the
Offered Securities delivered by such Selling Shareholder on
such Closing Date and has full right, power and authority to
enter into this Agreement and the Custody Agreement and Power
of Attorney and to sell, assign, transfer and deliver the
Offered Securities delivered by such Selling Shareholder on
such Closing Date; and upon the delivery of and payment for
the Offered Securities on such Closing Date the several
Underwriters have acquired valid and unencumbered title to the
Offered Securities delivered by such Selling Shareholder on
such Closing Date;
(ii) This Agreement, the Custody Agreement and
Power of Attorney and, to the extent applicable to such
Selling Shareholder, the agreements, documents or instruments
entered into by such Selling Shareholder in connection with
the transactions described in the Prospectus under the caption
"The Transactions" have each been duly authorized, executed
and delivered by or on behalf of such Selling Shareholder and
constitute the legal, valid and binding obligations of such
Selling Shareholder enforceable against such Selling
Shareholder in accordance with their respective terms, except
to the extent that (A) enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to creditors' rights generally and by
general principles of equity and (B) rights to indemnity and
contribution may be limited by federal and state securities
laws or policies underlying such laws.
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24
(iii) To the best knowledge of such counsel, no
consent, approval, authorization, order, registration or
qualification of, or filing with, any third party (whether
acting in an individual, fiduciary or other capacity) or any
governmental or regulatory agency or body or any court is
required to be obtained or made by such Selling Shareholder
for the consummation of the transactions contemplated by this
Agreement, the Custody Agreement and the Power of Attorney in
connection with the sale of the Offered Securities or for the
consummation of the other transactions contemplated by this
Agreement or the Prospectus, including without limitation, the
consummation by such Selling Shareholder, to the extent
applicable, of the transactions contemplated in the Prospectus
under the caption "The Transactions", except such as have been
obtained and made under the Act and such as may be required
under state securities laws.
(iv) The execution, delivery and performance by
such Selling Shareholder of this Agreement, the Custody
Agreement and Power of Attorney, and, to the extent applicable
to such Selling Shareholder, the agreements, documents or
instruments entered into by such Selling Shareholder in
connection with the transactions described in the Prospectus
under the caption "The Transactions", the sale of the Offered
Securities being sold by such Selling Shareholder and the
consummation by such Selling Shareholder of any of the other
transactions herein or therein contemplated, do not and will
not conflict with or result in a breach or violation of any of
the terms and provisions of, and do not and will not
constitute or will constitute a default (or an event which
with the giving of notice or the lapse of time or both could
reasonably be likely to constitute a default) under, or result
in the creation or imposition of any lien, charge or
encumbrance upon the Offered Securities to be sold by such
Selling Shareholder under (A) the charter, by-laws or other
organizational documents of such Selling Shareholder, (B) to
the best knowledge of such counsel, any statute, any rule,
regulation, requirement, order or decree of any governmental
or regulatory agency or body, or any court having jurisdiction
over such Selling Shareholder or any of its properties, assets
or operations or (C) to the best knowledge of such counsel,
any indenture, mortgage, loan or credit agreement, note,
lease, permit, license or other agreement or instrument to
which such Selling Shareholder is a party or by which such
Selling Shareholder is bound or to which any of the
properties, assets or operations of such Selling Shareholder
is subject, except, in the case of clauses (B) and (C), for
such conflicts, breaches, violations, defaults, liens, charges
and encumbrances which could not, individually or in the
aggregate, have a material adverse effect on the ability of
such Selling Shareholder to consummate the transactions
contemplated by this Agreement and the Custody Agreement and
Power of Attorney or perform such Selling Shareholder's
obligations hereunder or thereunder.
(g) The Representatives shall have received from Dow, ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇▇, special regulatory counsel to the Company, such opinion
or opinions, dated as of such Closing Date, to the effect that:
(i) The statements contained in the Prospectus
under the captions "Risk Factors -- Potential Adverse Effects
of Regulation"; "Risk Factors -- Student Loan Defaults"; "Risk
Factors -- Financial Responsibility Standards"; "Risk Factors
-- Regulatory Consequences of a Change of Ownership or
Control"; "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Regulation"; "Business
-- Accreditation"; "Business -- Student Financial Assistance";
"Business -- Nature of Federal Support for Postsecondary
Education"; "Business -- Availability of Lenders"; "Business
-- Other Financial Aid Programs"; "Business --
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25
Federal Oversight of Title IV Programs" and "Business -- State
Authorization" and other references in the Prospectus to
educational regulatory matters (collectively, "Regulatory
Matters"), insofar as such statements constitute a summary of
legal matters, documents or proceedings, are accurate and
complete in all material respects.
(ii) Such counsel have participated in the
preparation of those portions of the Registration Statements
and the Prospectus relating to Regulatory Matters and have no
reason to believe that the information relating to Regulatory
Matters contained in any Registration Statement or any
amendment thereto, as of its effective date or as of such
Closing Date, contained any untrue statement of a material
fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, or that any such information contained in the
Prospectus or any amendment or supplement thereto, as of its
issue date or as of such Closing Date, contained any untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(iii) Except as disclosed in the Prospectus, no
consent, approval, authorization, order, registration or
qualification of, or filing with, any third party (whether
acting in an individual, fiduciary or other capacity) or any
governmental or regulatory agency or body or any court under
the HEA or any similar state statute is required for the
consummation of the transactions contemplated by this
Agreement by the Company in connection with the issuance and
sale of the Offered Securities or for the consummation by the
Company of the other transactions contemplated by this
Agreement or the Prospectus, including, without limitation,
the transactions described in the Prospectus under the
captions "The Transactions" and "Use of Proceeds", except such
as have been obtained and made under the Act and such as may
be required under state securities laws.
(iv) To the best knowledge of such counsel, the
execution, delivery and performance by the Company of this
Agreement and the agreements, documents or instruments entered
into by the Company in connection with the transactions
described in the Prospectus under the captions "The
Transactions" and "Certain Transactions" and the consummation
by the Company of the transactions herein and therein
contemplated do not and will not conflict with or result in a
breach or violation of (A) the HEA or any similar state
statute, or (B) any rule, regulation or requirement of any
governmental or regulatory agency or body or any order or
decree of any court having jurisdiction over the Company or
any Material Subsidiary or any of their properties, assets or
operations, implementing or otherwise related to the HEA or
any similar state statute, except for such conflicts, breaches
or violations which could not, individually or in the
aggregate, have a material adverse effect on the Company and
its subsidiaries taken as a whole.
(v) The issuance and sale of the Offered
Securities and the consummation of the other transactions
contemplated by this Agreement or the Prospectus will not
constitute a change in ownership resulting in a "change in
control" as defined in the HEA.
(vi) To the best knowledge of such counsel, except
as disclosed in the Prospectus, the Company and its
subsidiaries have all necessary Licenses required for
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26
the Company and such subsidiaries to participate in Title IV
Programs as described in the Registration Statements and the
Prospectus.
(h) The Representatives shall have received from ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, counsel for the Underwriters, such opinion or opinions,
dated such Closing Date, with respect to the validity of the Offered
Securities delivered on such Closing Date, the Registration
Statements, the Prospectus and other related matters as the
Representatives may require, and the Selling Shareholders and the
Company shall have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass upon such
matters.
(i) The Representatives 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: (A) the representations and
warranties of the Company in this Agreement are true and correct; (B)
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; (C) 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; (D) 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 time the Prospectus was printed and distributed to
any Underwriter; (E) subsequent to the dates as of which information
is given in the Registration Statements and the Prospectus, 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, prospects, results of operations or
general affairs of the Company and its subsidiaries taken as a whole;
and (vi) they have carefully examined the Registration Statements and
the Prospectus and neither any Registration Statement nor the
Prospectus or any amendment or supplement thereto, as of their
respective effective or issue dates, contained an untrue statement of
a material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading.
(j) The Representatives shall have received a letter, dated
such Closing Date, of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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.
(k) The Representatives shall have received written
undertakings of shareholders of the Company (other than the Selling
Shareholders) who beneficially own an aggregate of [______________]
shares (or ___%) of the outstanding Securities and vested options to
purchase an additional [________] shares of the Securities immediately
following the Offering to the effect contemplated in subsection (i) of
Section 5 hereof unless otherwise waived or agreed to by the
Representatives.
(l) The transactions described in the Prospectus under the
caption "The Transactions" shall have been duly authorized and
consummated; all consents, approvals and other authorizations required
to consummate such transactions shall have been duly obtained; and
there shall not be any pending or threatened legal or governmental
proceedings with respect to such transactions.
(m) The Offered Securities shall have been approved for
listing upon notice of issuance as a national market security on the
Nasdaq Stock Market's National Market.
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(n) The Representatives shall have received such other
opinions, certificates, letters and other documents from or on behalf
of the Company or the Selling Shareholders as the Representatives
shall reasonably request.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof, only if they are reasonably satisfactory
in form and substance to CS First Boston and counsel for the Underwriters. The
Company and the Selling Shareholders will furnish the Representatives with such
conformed copies of such opinions, certificates, letters and documents as the
Representatives reasonably requests. CS First Boston 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.
7. Indemnification and Contribution. (a) The Company will
indemnify and hold harmless each Underwriter 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 Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary 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 extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement in or
omission or alleged omission from any of such documents in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein, it being understood
and agreed that the only such information furnished by any Underwriter consists
of the information described as such in subsection (c) below.
(b) The Selling Shareholders, severally and not jointly, will
indemnify and hold harmless each Underwriter 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 Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary 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, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement was made in reliance upon and in
conformity with written information furnished to the Company or its
representatives by or on behalf of such Selling Shareholder specifically for
use therein, 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 liability of each
Selling Shareholder pursuant to this Section 7(b) is limited to the proceeds
received (less underwriting discounts and commissions) by such Selling
Shareholder from the sale of the Offered Securities; provided further, however,
that the Selling Shareholders will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by an Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in subsection (c) below.
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(c) Each Underwriter will severally and not jointly indemnify and
hold harmless the Company and each Selling Shareholder against any losses,
claims, damages or liabilities to which the Company or such Selling Shareholder
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 Registration Statement, the Prospectus, or any amendment
or supplement thereto, or any related preliminary 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 Representatives
specifically for use therein, and will reimburse any legal or other expenses
reasonably incurred by the Company and each Selling Shareholder 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: (i) the
legend concerning over-allotments and stabilizing on the inside front cover
page and (ii) the information appearing under the caption "Underwriting" with
respect to (A) the list of names of the Underwriters and the number of Offered
Securities to be purchased by each Underwriter, (B) concession and discount
figures and (C) discretionary sales.
(d) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under
subsection (a), (b) or (c) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any 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 relevant indemnified party, effect any settlement of any pending
or threatened action in respect of which such indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release of
such indemnified party from all liability on any claims that are the subject
matter of such action.
(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 Shareholders on the one hand
and the Underwriters on the other from the offering of the Offered 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 Shareholders on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by the
Company and the Selling Shareholders on the one hand and the Underwriters on
the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting
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29
expenses) received by the Company and the Selling Shareholders 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 Shareholders or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (e) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of
this subsection (e). Notwithstanding the provisions of this subsection (e), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Offered 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 no
Selling Shareholder shall be required to contribute any amount in excess of the
amount by which the proceeds received (less underwriting discounts and
commissions) by such Selling Shareholder from the sale of the Offered
Securities exceeds the amount of any damages which such Selling Shareholder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (e) to
contribute are several in proportion to their respective underwriting
obligations and not joint. The Selling Shareholders' obligations in this
subsection (e) to contribute are several and not joint.
(f) The obligations of the Company and the Selling Shareholders under
this Section shall be in addition to any liability which the Company and the
Selling Shareholders 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.
8. Default of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase Offered Securities hereunder on either
the First Closing Date 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, CS First Boston may make arrangements satisfactory to the Company
and the Selling Shareholders for the purchase of such Offered Securities by
other persons, including any of the Underwriters, and 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 exceed 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 CS First Boston, the Company
and the Selling Shareholders 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 Shareholders, except as provided in
Section 9 (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).
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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.
9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Selling Shareholders, 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
Shareholder, 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 8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the
respective obligations of the Company, the Selling Shareholders, and the
Underwriters pursuant to Section 7 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 8 or the occurrence of any event specified in clause (iii),
(iv) or (v) of Section 6(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.
10. Notices. All communications hereunder will be in writing and,
if sent to the Underwriters, will be mailed, delivered or telegraphed and
confirmed to the Representatives, c/o CS First ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Investment Banking Department -
Transactions Advisory Group, or, if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it at Education Management
Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
[__________]; or if sent to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Appreciation Partnership No.
IV, L.P., ML Offshore LBO Partnership No. IV, ML IBK Positions, Inc., ▇▇▇▇▇▇▇
▇▇▇▇▇ Capital Corporation, ML Employees LBO Partnership No. I, L.P., ▇▇▇▇▇▇▇
▇▇▇▇▇ KECALP L.P. 1986 or any of them, will be mailed, delivered or telegraphed
and confirmed to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇; or if sent to National Union Fire Insurance Company of Pittsburgh, PA,
will be mailed, delivered or telegraphed and confirmed to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ at
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; or if sent to The Northwestern
Mutual Life Insurance Company, will be mailed, delivered or telegraphed and
confirmed to J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; provided, however, that any notice to an Underwriter pursuant
to Section 7 will be mailed, delivered or telegraphed and confirmed to such
Underwriter.
11. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7, and no
other person will have any right or obligation hereunder.
12. Representation. The Representatives will act for the several
Underwriters in connection with the transactions contemplated by this
Agreement, and any action taken under this Agreement by the Representatives
jointly or by CS First Boston will be binding upon all the Underwriters. The
Custodian will act for the Selling Shareholders in connection with such
transactions, and any action taken under or in respect of this Agreement by the
Custodian will be binding upon all the Selling Shareholders.
13. 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.
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14. 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.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
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If the foregoing is in accordance with the Representatives'
understanding of our agreement, kindly sign and return to the Company one of
the counterparts hereof, whereupon it will become a binding agreement among the
Selling Shareholders, the Company and the several Underwriters in accordance
with its terms.
Very truly yours,
EDUCATION MANAGEMENT CORPORATION
By________________________________
Name:
Title:
SELLING SHAREHOLDERS:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL APPRECIATION
PARTNERSHIP NO. IV, L.P.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ LBO Partners No. I, L.P.,
General Partner
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Partners, Inc.,
General Partner
By________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ML OFFSHORE LBO PARTNERSHIP NO. IV
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ LBO Partners No. I, L.P.,
Investment General Partner
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Partners, Inc.,
General Partner
By________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ML IBK POSITIONS, INC.
By________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL CORPORATION
By________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
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ML EMPLOYEES LBO PARTNERSHIP NO. I, L.P.
By: ML Employees LBO Managers, Inc.,
General Partner
By________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇ KECALP L.P. 1986
By: KECALP Inc., General Partner
By________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
NATIONAL UNION FIRE INSURANCE
COMPANY OF PITTSBURGH, PA
By________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
By________________________________
Name:
Title:
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The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above
written.
CS FIRST BOSTON CORPORATION
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
THE CHICAGO CORPORATION
Acting on behalf of themselves and as the
Representatives of the several
Underwriters.
By CS FIRST BOSTON CORPORATION
By________________________
Name:
Title:
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SCHEDULE A
Number of Number of
Firm Optional
Securities Securities
Selling Shareholder to be Sold to be Sold
------------------- --------------- ---------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Appreciation Partnership No. IV, L.P.
ML Offshore LBO Partnership No. IV
ML IBK Positions, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation
ML Employees LBO Partnership No. I, ▇.▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇ KECALP L.P. 1986
National Union Fire Insurance Company of Pittsburgh, PA
The Northwestern Mutual Life Insurance Company
----------- ----------
Total . . . . . . . . . . . . . . . . . . . . . . .
=========== ==========
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SCHEDULE B
Number of
Firm Securities
Underwriter to be Purchased
----------- ---------------
CS First Boston Corporation . . . . . . . . . . . . . . . . . . . . . . . . .
▇▇▇▇▇ ▇▇▇▇▇▇ Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Chicago Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . .
-----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
===========
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EXHIBIT 1
SUBSIDIARIES
Name of Subsidiary Jurisdiction of Incorporation
------------------ -----------------------------
37