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EXHIBIT 1
11,350,000 SHARES
ITT EDUCATIONAL SERVICES, INC.
COMMON STOCK
($.01 PAR VALUE)
UNDERWRITING AGREEMENT
___________, 1998
CREDIT SUISSE FIRST BOSTON CORPORATION
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
BT ALEX. ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. ITT Corporation, a Nevada corporation (the "Selling
Stockholder") and a wholly-owned subsidiary of Starwood Hotels & Resorts
Worldwide, Inc., a Maryland corporation ("Starwood"), proposes to sell (the
"Offering") an aggregate of 11,350,000 outstanding shares (the "Firm
Securities") of the common stock, par value $.01 per share (the "Securities") of
ITT Educational Services, Inc., a Delaware corporation (the "Company"), to the
several underwriters named in Schedule A hereto (the "Underwriters"), for whom
Credit Suisse First Boston Corporation ("CSFBC"), Bear, ▇▇▇▇▇▇▇ & Co. Inc., BT
Alex. ▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. are acting as
Representatives. The Selling Stockholder also proposes to sell to the
Underwriters, at the option of the Underwriters, an aggregate of not more than
1,700,000 additional shares of Securities (the "Optional Securities"). The Firm
Securities and the Optional Securities are herein collectively referred to as
the "Offered Securities".
The Company and the Selling Stockholder hereby agree with the several
Underwriters as follows:
2. Representations and Warranties of the Company and the Selling
Stockholder. (a) The Company represents and warrants to, and agrees with, the
several Underwriters that:
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(i) A registration statement (No. 333-46267) 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, 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 material incorporated by
reference therein, 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
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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 material respects to the
requirements of the Act and the rules and regulations of the
Commission ("Rules and Regulations") and did not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, (B) on the Effective Date of the Additional
Registration Statement (if any), each Registration Statement
conformed, or will conform, in all material respects to the
requirements of the Act and the Rules and Regulations and did not
include, or will not include, any untrue statement of a material fact
and did not omit, or will not omit, to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (C) on the date of this Agreement, the
Initial Registration Statement and, if the Effective Time of the
Additional Registration Statement is prior to the execution and
delivery of this Agreement, the Additional Registration Statement each
conforms, and at the time of filing of the Prospectus pursuant to Rule
424(b) or (if no such filing is required) on the Effective Date of the
Registration Statement in which the Prospectus is included, each
Registration Statement and the Prospectus will conform in all material
respects to the requirements of the Act and the Rules and Regulations,
and neither of such documents includes, or will include, any untrue
statement of a material fact or omits, or will omit, to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading. 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 material 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) hereof.
(iii) The Company has been duly incorporated and is a validly
existing corporation in good standing under the laws of the State of
Delaware, 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,
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leasing or operation of property or the conduct of its business
requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the condition
(financial or other), business, prospects, results of operations or
general affairs of the Company.
(iv) The Company does not have any subsidiaries.
(v) The Offered Securities and all other outstanding shares of
capital stock of the Company have been duly authorized and validly
issued, fully paid and nonassessable and conform in all material
respects to the description thereof contained in the Prospectus; and
the stockholders of the Company have no preemptive rights with respect
to the 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, 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.
(viii) The Offered Securities are listed on the New York Stock
Exchange.
(ix) Except as disclosed in the Prospectus, no consent, approval
or authorization, and no 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 to be obtained or
made by the Company for the consummation of the transactions
contemplated by this Agreement, except such as have been obtained and
made under the Act and such as may be required under state securities
laws.
(x) Except as disclosed in the Prospectus, the execution,
delivery and performance of this Agreement and the agreements,
documents or instruments entered into by the Company in connection
with the transactions described in the Prospectus (including, without
limitation, the transactions described under the caption "Relationship
with Selling Stockholder and Related Transactions"), and the
consummation of the transactions herein and 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
a default (or an event which with the giving of notice or the lapse 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 any assets or properties of the Company under (A) the
charter, by-laws or other organizational documents of the Company, (B)
any statute, any rule, regulation, requirement, order or decree of any
governmental, regulatory or accrediting agency or body or any court,
domestic or foreign, having jurisdiction over
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the Company or any of its 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 is a
party or by which the Company is bound or to which any of the
properties, assets or operations of the Company is subject, that
reasonably could be expected to have, individually or in the
aggregate, a material adverse effect on the condition (financial or
other), business, prospects, results of operations or general affairs
of the Company. The 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 (including, without limitation, the
transactions described under the caption "Relationship with Selling
Stockholder and Related 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.
(xii) The Company has good and marketable title to all real
properties and all other properties and assets owned by it free and
clear of any mortgage, pledge, lien, security interest, claim or other
encumbrance or defect that reasonably could be expected to,
individually or in the aggregate, materially affect the value thereof,
materially interfere with the use made or to be made thereof by it, or
have a material adverse effect on the condition (financial or other),
business, prospects, results of operations or general affairs of the
Company; the Company holds any leased real or personal property 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; except as disclosed in the Prospectus, the
Company is not in default under any such lease or sublease; and no
claim of any sort has been asserted by anyone adverse to the rights of
the Company under any such lease or sublease or affecting or
questioning the right of the Company to the continued possession of
the leased or subleased properties under any such lease or sublease
that reasonably could be expected to have, individually or in the
aggregate, a material adverse effect on the condition (financial or
other), business, prospects, results of operations or general affairs
of the Company.
(xiii) Except as described in the Prospectus, the Company
(including any individual institution within the Company) possesses
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 Programs of the HEA ("Title IV
Programs"), as are necessary to own, lease or operate its properties
and conduct the business now operated by it and all such Licenses are
in full force and effect. The Company is in substantial compliance
with its obligations under such Licenses, subject to such
qualifications as are described in the Prospectus, and, except as
disclosed in the Prospectus, the Company has not received notice of
any proceedings, investigations or inquiries (or is aware of any facts
that would form a reasonable basis for any proceedings, investigations
or inquiries) relating to the revocation, modification, termination or
suspension of any such License or impairment of the rights of the
Company thereunder that, if determined adversely to the Company,
reasonably could be expected to have, individually or in the
aggregate, a material adverse
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effect on the condition (financial or other), business, prospects,
results of operations or general affairs of the Company.
(xiv) No consent, approval, authorization, order, registration or
qualification of, or filing with, the U.S. Department of Education
under Title IV of the HEA or with any state agency under any state
statute pertaining to the authorization to operate postsecondary
educational institutions or any accrediting agency that presently
accredits any of the Company's schools is required to be obtained or
made by the Selling Stockholder for the consummation of the
transactions contemplated by this Agreement and the Prospectus.
(xv) No labor dispute with the employees of the Company exists
or, to the best knowledge of the Company, is imminent that reasonably
could be expected to have, individually or in the aggregate, a
material adverse effect on the condition (financial or other),
business, prospects, results of operations or general affairs of the
Company.
(xvi) The Company owns or has obtained valid licenses for all
trademarks, trademark registrations, service marks, service ▇▇▇▇
registrations, trade names, copyrights, copyright registrations,
patents, inventions, know-how, confidential information and any other
intellectual property described in the Prospectus as being owned,
licensed or used by the Company or that are necessary for the conduct
of its business (collectively, "Intellectual Property") and the
Company is not aware of any claim (or of any facts that would form a
reasonable basis for any claim) to the contrary or any challenge by
any third party to the rights of the Company with respect to any such
Intellectual Property or to the validity or scope of any such
Intellectual Property and the Company has no 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, reasonably could be expected to have,
individually or in the aggregate, a material adverse effect on the
condition (financial or other), business, prospects, results of
operations or general affairs of the Company. The Company has a good
faith belief in the distinctiveness and enforceability of all
trademarks, service marks and trade names and in the validity and
enforceability of all patents comprising the Intellectual Property.
(xvii) Except as described in the Prospectus, the properties,
assets and operations of the Company are in compliance with all
applicable federal, state, local and foreign laws (including, without
limitation, common law), 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 and to the protection or preservation of natural resources
and of plant and animal species, and activities or conditions related
thereto, including, without limitation, those relating to the
production, extraction, processing, manufacturing, generation,
handling, disposal, transportation or release of hazardous materials
(collectively, "Environmental Laws"), except where noncompliance
reasonably could not be expected to have, individually or in the
aggregate, a material adverse effect on the condition (financial or
other), business, prospects, results of operations or general affairs
of the Company. With respect to such properties, assets and operations
(including any previously owned, leased or operated properties, assets
or operations with respect to such prior period of ownership or
operation), there are no past, present or, to the best knowledge of
the Company, reasonably anticipated future events, conditions,
circumstances, activities, practices, incidents, actions or plans of
the Company that may interfere with or prevent compliance
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or continued compliance by the Company with applicable Environmental
Laws or otherwise result in liability to the Company pursuant to
applicable Environmental Law. Except as described in the Prospectus,
the Company is not the subject of any federal, state, local or foreign
investigation, and the Company has not received any notice or claim
(or is aware of any facts that would be expected to result in any such
claim), nor 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, reasonably anticipated or, to the best knowledge of
the Company, threatened actions, suits or proceedings against or
affecting the Company or its properties, assets or operations in
connection with any 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.
(xviii) Except as disclosed in the Prospectus, there are no
pending actions, suits, proceedings or investigations against or
affecting the Company (including any individual institution within the
Company) or any of its properties, assets or operations that, if
determined adversely to the Company, reasonably could be expected to
have, individually or in the aggregate, a material adverse effect on
the condition (financial or other), business, prospects, results of
operations or general affairs of the Company, 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 threatened or, to the best knowledge
of the Company, contemplated.
(xix) The financial statements and related schedules and notes
included in each Registration Statement and the Prospectus comply with
the requirements of the Act and the Rules and Regulations, present
fairly the financial position of the Company as of the dates shown and
its results of operations and cash flows for the periods shown, and
such financial statements have been prepared in conformity with the
generally accepted accounting principles in the United States applied
on a consistent basis. The financial information and statistical data
set forth in the Prospectus under the captions "Summary Financial and
Operating Data", "Selected Financial and Operating Data" and
"Capitalization" present fairly the information shown therein and have
been compiled on a basis consistent with that of the audited
consolidated financial statements included in the Registration
Statements.
(xx) Since the dates as of which information is given in each
Registration Statement and the Prospectus, (A) the Company has not
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 reasonably could be expected to result in a material reduction in
the future earnings of the Company; (B) there has been no change
except as contemplated by the Prospectus, 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 condition (financial or other),
business, prospects or results of operations or general affairs of the
Company.
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(xxi) The Company is not and, after giving effect to the offering
and sale of the Offered Securities, will not be an "investment
company" as defined in the Investment Company Act of 1940, as amended.
(xxii) Except as set forth 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
such shares, any such convertible or exchangeable securities or
obligations, or any such warrants, rights or obligations.
(xxiii) Each "employee benefit plan" within the meaning of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
that the Company sponsors and in which employees of the Company
participate (the "ERISA Plans") is in compliance with the applicable
provision of ERISA and the Internal Revenue Code of 1986, as amended
(the "Code"). The Company has no liability, with respect to the ERISA
Plans or otherwise and whether or not contingent, under Title IV of
ERISA, nor does the Company expect that any such liability will be
incurred. The Company has no liability, whether or not contingent,
with respect to any ERISA Plan that provides post-retirement welfare
benefits that would, individually or in the aggregate, have an adverse
effect on the condition (financial or other), business, prospects,
results of operations or general affairs of the Company in an amount
greater than $3,000,000.
(xxiv) The Company has filed on a timely basis all federal,
state, local and foreign tax returns required to be filed by the
Company (or such returns were included in the consolidated federal,
state, local or foreign tax returns of the Selling Stockholder), such
returns are complete and correct in all material respects, and all
taxes shown by such returns (or included in any consolidated returns
of the Selling Stockholder) or otherwise due and payable by the
Company 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 in respect
of any tax liability of the Company for any year not finally
determined are adequate to meet any assessments or reassessments for
additional taxes; and there has been no formal or informal tax
deficiency asserted against the Company and the Company is not aware
of any facts that would form a reasonable basis for the assertion of
any tax deficiency against the Company that reasonably could be
expected to have, individually or in the aggregate, a material adverse
effect on the condition (financial or other), business, prospects,
results of operations or general affairs of the Company. The Company
is not now and has never been a "United States real property holding
corporation" as defined in Section 897(c)(2) of the Code and the
Treasury Regulations promulgated thereunder.
(xxv) The Company maintains a system of internal accounting
controls sufficient for purposes of the prevention or detection of
errors or irregularities in amounts that reasonably could be expected
to be material to the Company's 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.
(xxvi) The Company (including any individual institution within
the Company) is not in violation of (A) its charter, by-laws or other
organizational documents or (B) any applicable law, ordinance,
administrative or governmental or regulatory rule, regulation
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or accreditation requirement or standard or any order, decree or
judgment of any court or governmental, regulatory or accrediting
agency or body having jurisdiction over the Company; and no event of
default or event that, but for the giving of notice or the lapse of
time or both, would constitute an event of default exists, or upon
consummation of the transactions contemplated by this Agreement and
the Prospectus (including, without limitation, the transactions
described under the caption "Relationship with Selling Stockholder and
Related Transactions") will exist, under any indenture, mortgage, loan
or credit agreement, note, lease, permit, license or other agreement
or instrument to which the Company is a party or by which the Company
is bound or to which any of the properties, assets or operations of
the Company is subject, that reasonably could be expected to have,
individually or in the aggregate, a material adverse effect on the
condition (financial or other), business, prospects, results of
operations or general affairs of the Company. 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.
(xxvii) The Company carries or is 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
similar business, and all such insurance is in full force and effect.
(xxviii) On the date each Registration Statement was first filed
with the Commission, and at the Effective Time, the Company met the
conditions for use of Form S-3 under the Act and the Rules and
Regulations.
(xxix) The Company has not taken and will not take, directly or
indirectly, any action designed to, or that reasonably could be
expected to, cause or result in stabilization or manipulation of the
price of the Offered Securities to facilitate the sale or resale of
the Offered Securities.
(b) The Selling Stockholder represents and warrants to, and
agrees with, the Underwriters that:
(i) The Selling Stockholder has and on each Closing Date
hereinafter mentioned will have valid and unencumbered title to the
Offered Securities to be delivered by the Selling Stockholder on such
Closing Date and full right, power and authority to enter into this
Agreement and to sell, assign, transfer and deliver the Offered
Securities to be delivered by the Selling Stockholder on such Closing
Date hereunder; and upon the delivery of and payment for the Offered
Securities pursuant to this Agreement on each Closing Date hereunder
the several Underwriters will acquire valid and unencumbered title to
the Offered Securities to be delivered by the Selling Stockholder 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 conformed in all material respects to the
requirements of the Act and the Rules and
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Regulations and did not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, (B) on the
Effective Date of the Additional Registration Statement (if any), each
Registration Statement conformed, or will conform, in all material
respects to the requirements of the Act and the Rules and Regulations
did not include, or will not include, any untrue statement of a
material fact and did not omit, or will not omit, to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and (C) on the date of this
Agreement, the Initial Registration Statement and, if the Effective
Time of the Additional Registration Statement is prior to the
execution and delivery of this Agreement, the Additional Registration
Statement each conforms, and at the time of filing of the Prospectus
pursuant to Rule 424(b) or (if no such filing is required) at the
Effective Date of the Additional Registration Statement in which the
Prospectus is included, and on each Closing Date, each Registration
Statement and the Prospectus will conform, in all material respects to
the requirements of the Act and the Rules and Regulations, and neither
of such documents includes, or will include, any untrue statement of a
material fact or omits, or will omit, to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading. If the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of
this Agreement: (A) on the Effective Date of the Initial Registration
Statement, the Initial Registration Statement and the Prospectus will
conform in all material 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 (in the case of the Prospectus, in light of the circumstances
under which they were made) not misleading and (B) on each Closing
Date, the Initial Registration Statement and the Prospectus will
conform, in all material respects to the requirements of the Act and
the Rules and Regulations, and neither of such documents includes, or
will include, any untrue statement of a material fact or omits, or
will omit, to state any material fact required to be stated therein or
necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made)
not misleading. The two preceding sentences apply only to the extent
that any statements in or omissions from a Registration Statement or
the Prospectus are based on written information furnished to the
Company by the Selling Stockholder specifically for use therein.
(iii) This Agreement and, to the extent applicable to the Selling
Stockholder, the agreements, documents or instruments entered into by
the Selling Stockholder in connection with the transactions described
in the Prospectus under the caption "Relationship with Selling
Stockholder and Related Transactions" have been duly authorized,
executed and delivered by or on behalf of the Selling Stockholder and
constitute the legal, valid and binding obligations of the Selling
Stockholder enforceable against the Selling Stockholder in accordance
with their terms.
(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 court is required to be obtained or made
by the Selling Stockholder for the consummation of the transactions
contemplated by this Agreement and the Prospectus, except such as have
been obtained and made under the Act and such as may be required under
state securities laws or as may be required to be made with the U.S.
Department of Education under Title IV of the HEA or with any state
agency under any state statute pertaining to the authorization to
operate postsecondary educational institutions or any accrediting
agency that presently accredits any of the Company's schools.
(v) The Selling Stockholder has caused the Company to file, or
has filed, on a timely basis all federal, state, local and foreign tax
returns required to be filed (a) by the Company or (b) by the Selling
Stockholder that include the Company, such returns are
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complete and correct in all material respects, and all taxes shown by
such returns or otherwise 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 Selling Stockholder is not aware of
any facts that would form a reasonable basis for the assertion of any
tax deficiency against the Company that reasonably could be expected
to have, individually or in the aggregate, a material adverse effect
on the condition (financial or other), business, prospects, results of
operations or general affairs of the Company.
(vi) Each "employee benefit plan," within the meaning of ERISA,
that the Selling Stockholder sponsors and in which employees of the
Company participate or as to which the Company has any control group
liability (the "ITT ERISA Plans") is in compliance with the applicable
provision of ERISA and the Code. The Selling Stockholder has no
liability, with respect to the ITT ERISA Plans or otherwise and
whether or not contingent, under Title IV of ERISA, nor does the
Selling Stockholder expect that any such liability will be incurred.
The Selling Stockholder has no liability, whether or not contingent,
with respect to any ITT ERISA Plan that provides post-retirement
welfare benefits which would, individually or in the aggregate, have a
material adverse effect on the condition (financial or other),
business, prospects, results of operations or general affairs of the
Selling Stockholder.
(vii) The execution, delivery and performance by the Selling
Stockholder of this Agreement, the sale of the Offered Securities
being sold by the Selling Stockholder and the consummation by the
Selling Stockholder of any of the transactions contemplated by this
Agreement, the Prospectus, 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 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 the Selling Stockholder under (A) the
charter, by-laws or other organizational documents of the Selling
Stockholder (B) any statute, any rule, regulation, requirement, order
or decree of any governmental or regulatory agency or body, or any
court, domestic or foreign, having jurisdiction over the Selling
Stockholder or any of its properties, assets or operations or (C) any
indenture, mortgage, loan or credit agreement, note, lease, permit,
license of other agreement or instrument to which the Selling
Stockholder is a party or by which the Selling Stockholder is bound or
to which any of the properties, assets or operations of the Selling
Stockholder is subject, that reasonably could be expected to have,
individually or in the aggregate, a material adverse effect on the
ability of the Selling Stockholder to consummate the transactions
contemplated by this Agreement.
(viii) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Selling
Stockholder and any third party that would give rise to a valid claim
against the Selling Stockholder or any Underwriter for a brokerage
commission, finder's fee or other like payment in connection with the
transactions contemplated by this Agreement.
(ix) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to, or that reasonably
could be expected to, 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.
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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 Selling Stockholder agrees to sell to
the Underwriters, and the Underwriters agree, severally and not jointly, to
purchase from the Selling Stockholder, at a purchase price of $[ ] per share,
the respective numbers of shares of Firm Securities set forth opposite the names
of the Underwriters in Schedule A hereto.
The Selling Stockholder will deliver the Firm Securities to the
Representatives for the accounts of the Underwriters, against payment of the
purchase price in Federal (same day) funds by wire transfer to an account of the
Selling Stockholder at a bank acceptable to CSFBC, at the office of ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ LLP, 1301 Avenue of the Americas, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, at
10:00 A.M., New York time, on _____________, 1998, or at such other time not
later than seven full business days thereafter as CSFBC and the Selling
Stockholder determine (such time being herein referred to as the "First Closing
Date"). For purposes of Rule 15c6-1 under the Securities Exchange Act of 1934,
the First Closing Date (if later than the otherwise applicable settlement date)
shall be the settlement date for payment of funds and delivery of securities for
all the Offered Securities sold pursuant to the Offering. The certificates for
the Firm Securities so to be delivered will be in definitive form, in such
denominations and registered in such names as CSFBC requests and will be made
available for checking and packaging at the office of Credit Suisse First Boston
Corporation, New York, New York, at least 24 hours prior to the First Closing
Date.
In addition, upon written notice from CSFBC given to the Company and the
Selling Stockholder 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 Selling Stockholder agrees to sell to the Underwriters the
number of shares of Optional Securities specified in such notice and the
Underwriters agree, severally and not jointly, to purchase such Optional
Securities. Such Optional Securities shall be purchased for the account of each
Underwriter in the same proportion as the number of Firm Securities set forth
opposite such Underwriter's name in Schedule A hereto bears to the total number
of Firm Securities (subject to adjustment by CSFBC 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 CSFBC to the Selling Stockholder. It is
understood that CSFBC is authorized to make payment for and accept delivery of
such Optional Securities on behalf of the Underwriters pursuant to the terms of
CSFBC's instructions to the Selling Stockholder.
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 CSFBC
but shall be not later than five full business days after written notice of
election to purchase Optional Securities is given. The Selling Stockholder will
deliver the Optional Securities being purchased on each Optional Closing Date to
the Representatives for the accounts of the several Underwriters, against
payment of the purchase price therefor in Federal (same day) funds by wire
transfer to an account of the Selling Stockholder at a bank acceptable to CSFBC,
at the above office of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP. The certificates for the Optional
Securities being purchased on each Optional Closing Date will be in definitive
form, in
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such denominations and registered in such names as CSFBC requests upon
reasonable notice prior to such Optional Closing Date and will be made available
for checking and packaging at the above office of CSFBC, 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.
5. Certain Agreements of the Company, the Selling Stockholder, Starwood and
the Underwriters.
(A) The Company agrees with 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 CSFBC, 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 CSFBC 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
CSFBC.
(b) The Company will advise CSFBC promptly of any proposal to amend or
supplement the initial 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 CSFBC's prior consent; and the Company will
also advise CSFBC 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 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 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 CSFBC 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 CSFBC's consent to,
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nor the Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 6.
(d) As soon as practicable, but not later than the Availability Date
(as defined below), the Company will make generally available to its
securityholders an earnings statement covering a period of at least 12 months
beginning after the Effective Date of the Initial Registration Statement (or, if
later, the Effective Date of the Additional Registration Statement) which will
satisfy the provisions of Section 11(a) of the Act. For the purpose of the
preceding sentence, "Availability Date" means the 45th day after the end of the
fourth fiscal quarter following the fiscal quarter that includes such Effective
Date, except that, if such fourth fiscal quarter is the last quarter of the
Company's fiscal year, "Availability Date" means the 90th day after the end of
such fourth fiscal quarter.
(e) The Company will furnish to the Representatives copies of each
Registration Statement (two of which will be signed and will include all
exhibits), each related preliminary prospectus, and, so long as a prospectus
relating to the Offered Securities is required to be delivered under the Act in
connection with sales by any Underwriter or dealer, the Prospectus and all
amendments and supplements to such documents, in each case in such quantities as
CSFBC 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 so furnished as soon
as available. The Company will pay the expenses of printing and distributing to
the Underwriters all such documents.
(f) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFBC designates and
will continue such qualifications in effect so long as required for the
distribution.
(g) During the period of two years hereafter, the Company will furnish
to the Representatives and, upon request, to each of the other Underwriters, as
soon as practicable after the end of each fiscal year, a copy of its annual
report to stockholders for such year; and the Company will furnish to the
Representatives (i) as soon as available, a copy of each report and any
definitive proxy statement of the Company filed with the Commission under the
Securities Exchange Act of 1934 or mailed to stockholders, and (ii) from time to
time, such other information concerning the Company as CSFBC 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, announce the intention to sell, pledge or otherwise dispose of,
directly or indirectly, or file with the Commission a registration statement
under the Act relating to, any Securities or securities or other rights
convertible into or exchangeable or exercisable for any Securities, or publicly
disclose the intention to make any such offer, sale, pledge, disposition or
filing, without the prior written consent of CSFBC; except in connection with
grants of employee stock options pursuant to the terms of a plan in effect on
the date hereof or issuances of Securities pursuant to the exercise of such
options.
(i) The Company will use its reasonable best efforts to cause the
executive officers of the Company listed on Schedule B hereto to agree that for
a period of 180 days after the date of the initial public offering of the
Offered Securities, they will not offer, sell, contract to sell, announce the
intention to sell, pledge or otherwise dispose of, directly or indirectly, or
request or demand the filing with the Commission of a registration statement
under the Act
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relating to, any Securities or securities or other rights convertible into or
exchangeable or exercisable for any Securities, or publicly disclose the
intention to make any such offer, sale, pledge, disposition or filing, without
the prior written consent of CSFBC.
(j) Upon the written request of CSFBC or any Underwriter, the Company
shall (i) furnish to CSFBC or any other Underwriter, a certification, as
contemplated by and in compliance with Treasury regulations Section 1.897-2(h),
that as of any Closing Date (or such other date as may be specified in such
request), the Offered Securities are not United States real property interests
as defined in Section 897(c)(1) of the Code, (ii) file such certification with
the Internal Revenue Service in the manner and within the time period specified
in Treasury regulations Section 1.897-2(h) and (iii) promptly after such filing,
furnish to CSFBC or the Underwriter that has requested a certificate, as the
case may be, proof of such filing.
(k) The Company agrees with the several Underwriters that the Company
will pay all expenses incident to the performance of the obligations of the
Selling Stockholder and the obligations of the Company under this Agreement, for
any filing fees and other expenses (including fees and disbursements of counsel)
in connection with qualification of the Offered Securities for sale under the
laws of such jurisdictions as CSFBC designates and the printing of memoranda
relating thereto, for the filing fee incident to, and the fees and disbursements
of counsel to the Underwriters in connection with the review by the National
Association of Securities Dealers, Inc. of the Offered Securities, for any
travel expenses of the Company's officers and employees and any other expenses
of the Company in connection with attending or hosting meetings with prospective
purchasers of the Offered Securities and for expenses incurred in distributing
preliminary prospectuses and the Prospectuses (including any amendments and
supplements thereto) to the Underwriters; provided, however, that the Selling
Stockholder shall be responsible for any transfer taxes on the sale by the
Selling Stockholder of the Offered Securities to the Underwriters.
(B) The Selling Stockholder and Starwood agree with the several
Underwriters that:
(a) The Selling Stockholder agrees with the Underwriters that the
Selling Stockholder shall be responsible for any transfer taxes on the sale of
its Offered Securities to the Underwriters.
(b) The Selling Stockholder agrees to deliver to CSFBC, 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).
(c) For a period of 180 days after the date of the initial public
offering of the Offered Securities, neither the Selling Stockholder nor Starwood
will offer, sell, contract to sell, announce the intention to sell, pledge or
otherwise dispose of, directly or indirectly, or file with the Commission a
registration statement under the Act relating to, any Securities or securities
or other rights convertible into or exchangeable or exercisable for any
Securities, or, except as required by law or stock exchange requirement,
publicly disclose the intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of CSFBC.
(C) The several Underwriters agree with the Company that the Underwriters
will not sell Offered Securities to the public in the Offering such that, to the
knowledge of the Underwriters, such sale would result in any stockholder of the
Company (other than the Selling Stockholder)
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acquiring beneficial ownership (as defined in Rule 13d-3 of the Exchange Act) of
ten percent or more of the issued and outstanding Securities immediately after
the Offering.
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 Stockholder herein and to
the performance by the Company, the Selling Stockholder and Starwood 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 the registration statement to be filed shortly prior to such
Effective Time), of Price Waterhouse LLP confirming that they are independent
public accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating to the effect that:
(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 interim 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 stockholders and
directors (including each committee thereof of the Company), inquiries of
officials of the Company who have responsibility for financial and
accounting matters, nothing came to their attention that caused them to
believe that:
(A) the unaudited interim financial statements included in the
Registration Statements 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 interim financial
statements for them to be in conformity with generally acceptable
accounting principles;
(B) 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 or, at the
date of the latest available balance sheet read by such accountants,
there was any decrease in 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
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(C) for the period from the date of the latest income
statement included in the Registration Statements and the
Prospectus to the date, not more than three business days
prior to the date of this Agreement, 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 net revenues or
net income, or in the total or per share amounts of net income
or income from continuing operations before extraordinary
item, or any increases or decreases, as the case may be, in
other items specified by the Representatives;
except in all cases set forth in clauses (B) and (C) above for changes,
increases or decreases which the Prospectus discloses have occurred;
(iv) 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 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 Statement 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 Statement is prior to the execution and delivery of
this Agreement but the Effective Time of the Additional Registration 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.
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Registration
Statements for purposes of this subsection.
(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 CSFBC.
If the Effective Time of the Additional Registration Statement (if any) is not
prior to the execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of this
Agreement or, if earlier, the time the Prospectus is printed and distributed to
any Underwriter, or shall have occurred at such later date as shall have been
consented to by CSFBC. If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this 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
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purpose shall have been instituted or, to the knowledge of the Company, the
Selling Stockholder or the Representatives, shall be contemplated by the
Commission.
(c) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event involving a
prospective change, in the condition (financial or other), business, properties
or results of operations of the Company 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 NYSE or any setting of minimum prices for trading on any 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 either
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 ▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Company, to the effect that:
(i) The Company has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of Delaware, 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 and all
other outstanding shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and nonassessable; no further
approval or authority of the shareholders or the Board of Directors of the
Company is or will be required for the sale of the Offered Securities as
contemplated by this Agreement; and the shareholders of the Company have no
preemptive or similar rights with respect to the Securities.
(iii) Except as disclosed in the Prospectus, to the best knowledge of
such counsel, 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.
(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,
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regulatory or accrediting agency or body or any court is required to
be obtained or made by the Company for the consummation of the
transactions contemplated by the Agreement in connection with the sale
of the Offered Securities, except such as have been obtained and made
under the Act and such as may be required under state securities laws.
(v) Except as disclosed in the Prospectus, the execution,
delivery and performance of this Agreement by the Company and the
agreements, documents or instruments entered into by the Company in
connection with the transactions described in the Prospectus
(including, without limitation, the transactions described under the
caption "Relationship with Selling Stockholder and Related
Transactions") 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, or result in the creation or imposition
of any lien, charge or encumbrance upon any assets or properties of
the Company under, and the Company is not in violation of (A) the
charter, by-laws or other organizational documents of the Company, (B)
to the best knowledge of such counsel, 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 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 the Company is a
party or by which the Company or any subsidiary is bound or to which
any of the properties, assets or operations of the Company is subject,
that reasonably could be expected to have, individually or in the
aggregate, a material adverse effect on the condition (financial or
other), business, prospects, results of operations or general affairs
of the Company.
(vi) This Agreement and the agreements, documents or instruments
entered into by the Company in connection with the transactions
described in the Prospectus (including, without limitation, the
transactions described under the caption "Relationship with Selling
Stockholder and Related Transactions") have been duly authorized,
executed and delivered by the Company and, to the extent required, its
stockholders.
(vii) Except as disclosed in the Prospectus, to the best
knowledge of such counsel, there are no pending or threatened actions,
suits, proceedings or investigations against or affecting the Company
or any of its properties, assets or operations that 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, will not be an
"investment company" as defined in the Investment Company Act of 1940,
as amended.
(ix) To the best 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 in all material respects 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 or any contracts or
documents of a character required to be described in a Registration
Statement or the
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Prospectus or to be filed as exhibits to a Registration Statement
which are not described and filed as required.
(x) The Initial Registration Statement was declared effective
under the Act as of the date and time specified in such opinion, the
Additional Registration Statement (if any) was filed and became
effective under the Act as of the date and time (if determinable)
specified in such opinion, the Prospectus 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 best knowledge of such
counsel, no stop order suspending the effectiveness of a Registration
Statement or any part thereof has been issued and no proceedings for
that purpose have been instituted or are pending or contemplated under
the Act, and each Registration Statement and the Prospectus, and each
amendment or supplement thereto, as of their respective effective or
issue dates, complied as to form in all material respects with the
requirements of the Act and the Rules and Regulations. 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 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.
In rendering such opinion, such counsel need express no
opinion as to (i) the financial statements or other financial data
contained in the Registration Statements and the Prospectus, (ii) the
portions of the Registration Statements and the Prospectus as to which
Dow, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, PLLC is providing an opinion to the
Underwriters or (iii) any federal, state or accrediting commission
laws, regulations and/or standards pertaining to federal student
financial aid programs or accrediting or licensing of educational
institutions. 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 ▇▇▇▇▇▇▇.▇▇ 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 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice President, General Counsel
and Secretary of the Company, to the effect that:
(i) The Company is duly qualified to transact business as a
foreign corporation in good standing in all jurisdictions other than
the jurisdiction of its incorporation in which it owns, leases or
operates properties or in which the conduct of its business or its
ownership, leasing or operation of property requires such
qualification, except for such jurisdictions where the failure to
qualify would not have a material adverse effect on the condition
(financial or other), business, prospects, results of operations or
general affairs of the Company.
(ii) The Company does not have any subsidiaries.
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(iii) All outstanding shares of the capital stock of the Company
have been duly authorized, are validly issued, are 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 conform in all material respects 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, 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.
(v) Except as disclosed in the Prospectus, no consent, approval,
authorization, order, registration or qualification of, or filing
with, any state agency under any state statute pertaining to the
authorization to operate postsecondary educational institutions, or
any accrediting agency that presently accredits any of the Company's
schools is required for the consummation by the Company of the
transactions contemplated by this Agreement or the Prospectus in
connection with the sale of the Offered Securities.
(vi) To the best knowledge of such counsel, the execution,
delivery and performance by the Company of this Agreement and the
consummation by the Company of the transactions contemplated in the
Prospectus (including, without limitation, the consummation of the
transactions described in the Prospectus under the caption
"Relationship with Selling Stockholder and Related Transactions"), do
not and will not conflict with or result in a violation of (A) any
state statute pertaining to the authorization to operate postsecondary
educational institutions, or (B) the standards of accreditation of any
accrediting agency that presently accredits any of the Company's
schools, except for such conflicts or violations which would not be
reasonably likely to, individually or in the aggregate, have a
material adverse effect on the Company.
(vii) To the best knowledge of such counsel, except as disclosed
in the Prospectus, the Company possesses all necessary Licenses issued
by appropriate governmental, regulatory or accrediting agencies or
bodies, including, without limitation, all authorizations required
for, or pertaining to, (A) the ownership, leasing or operation of the
Company's properties and the conduct of the business now operated by
the Company, (B) participation in federal aid programs under Title IV
Programs, (C) state authorization to operate postsecondary educational
institutions as are required for participation in Title IV Programs as
described in the Registration Statement and the Prospectus and (D)
accrediting agency approvals as are required for participation in
Title IV Programs as described in the Registration Statement and the
Prospectus, 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 be reasonably likely
to, individually or in the aggregate, have a material adverse effect
on the Company. Except as disclosed in the Prospectus, to the
knowledge of such counsel, the Company has not received notice
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of any proceedings, investigations or inquiries, nor are any such
proceedings, investigations or inquiries threatened, relating to the
revocation, modification, termination or suspension of any such
License, except where any such revocation, modification, termination
or suspension would not be reasonably likely to, individually or in
the aggregate, have a material adverse effect on the Company.
(viii) 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 properties, assets or operations that could individually
or in the aggregate have a material adverse effect on the Company.
(ix) Except as set forth 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
such shares, any such convertible or exchangeable securities or
obligations, or any such warrants, rights or obligations.
(x) The Company (including any individual institution within the
Company) is not in violation of (A) its charter, by-laws or other
organizational documents or (B) to the best knowledge of such counsel,
any order, decree or judgment of any governmental, regulatory or
accrediting agency or body or any court having jurisdiction over the
Company or any of its properties, assets or operations and no event of
default or event that, but for the giving of notice or the lapse of
time or both, would constitute an event of default exists, or upon
consummation of the transactions contemplated by this Agreement and
the Prospectus (including, without limitation, the transactions
described under the caption "Relationship with Selling Stockholder and
Related Transactions") will exist, under any indenture, mortgage, loan
or credit agreement, note, lease, permit, license or other agreement
or instrument to which the Company is a party or by which the Company
is bound or to which any of the properties, assets or operations of
the Company is subject, that reasonably could be expected to have,
individually or in the aggregate, a material adverse effect on the
condition (financial or other), business, prospects, results of
operations or general affairs of the Company.
(xi) Such counsel has participated in the preparation of the
Registration Statements and the Prospectus and has no reason to
believe that any part of the 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).
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
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counsel is admitted to practice and the federal laws of the United States upon
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 Sidley & Austin, counsel for the Selling Stockholder, to
the effect that:
(i) To the best knowledge of such counsel, immediately prior to
such Closing Date, the Selling Stockholder was the sole registered
owner of the Offered Securities and has the corporate power and
authority to enter into this Agreement and to sell, assign, transfer
and deliver the Offered Securities delivered by the Selling
Stockholder on such Closing Date;
(ii) This Agreement has been duly authorized, executed and
delivered by or on behalf of each of the Selling Stockholder and
Starwood and, to the extent required, their shareholders.
(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 either the
Selling Stockholder or Starwood for the consummation of the
transactions contemplated by this Agreement and the Prospectus in
connection with the sale of the Offered Securities except such as have
been obtained and made under the Act and such as may be required under
state securities laws or as may be required to be made with the U.S.
Department of Education under Title IV of the HEA or with any state
agency under any state statute pertaining to the authorization to
operate postsecondary educational institutions or any accrediting
agency that presently accredits any of the Company's schools.
(iv) The execution, delivery and performance by the Selling
Stockholder and Starwood of this Agreement, the sale of the Offered
Securities being sold by the Selling Stockholder and the consummation
of any of the transactions contemplated by this Agreement and the
Prospectus in connection with the sale of the Offered Securities, 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 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 the Selling
Stockholder under (A) the charter, by-laws or other organizational
documents of the Selling Stockholder and Starwood, (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, domestic or foreign, having jurisdiction over
the Selling Stockholder and Starwood or any of their properties,
assets or operations or (C) to the best knowledge of such counsel, any
indenture, mortgage, loan or credit agreement, note, lease, permit,
license of other agreement or instrument to which the Selling
Stockholder or Starwood is a party or by which the Selling Stockholder
or Starwood is bound or to which any of the properties, assets or
operations of the Selling Stockholder or Starwood is subject, that
reasonably could be expected to have, individually or in the
aggregate, a material adverse effect on the ability of the Selling
Stockholder to consummate the transactions contemplated by this
Agreement.
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(g) The Representatives shall have received from Dow, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇, PLLC, 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 -- Change in
Control"; "Risk Factors -- Potential Adverse Effects of Regulation --
Risk of Legislative Action"; "Risk Factors -- Potential Adverse
Effects of Regulation -- Student Loan Defaults"; "Risk Factors --
Potential Adverse Effects of Regulation -- Financial Responsibility
Standards"; "Risk Factors -- Potential Adverse Effects of Regulation
-- "The '85/15 Rule'"; "Risk Factors -- Potential Adverse Effects of
Regulation -- Additional Locations and Program Offerings of ITT
Technical Institutes"; "Risk Factors -- Potential Adverse Effects of
Regulation -- Availability of Lenders and Guarantors"; "Risk Factors
-- Potential Adverse Effects of Regulation -- State Authorization and
Accreditation"; "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- General"; "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources"; "Business --
Regulation of Federal Financial Aid Programs"; "Business -- Regulation
of Federal Financial Aid Programs -- Risk of Legislative Action";
"Business -- Regulation of Federal Financial Aid Programs -- Student
Loan Defaults"; "Business -- Regulation of Federal Financial Aid
Programs -- Financial Responsibility Standards"; "Business --
Regulation of Federal Financial Aid Programs -- "The '85/15 Rule'";
"Business -- Regulation of Federal Financial Aid Programs --
Additional Locations and Program Offerings of ITT Technical
Institutes"; "Business -- Regulation of Federal Financial Aid Programs
-- Administrative Capability"; "Business -- Regulation of Federal
Financial Aid Programs -- Eligibility and Certification Procedures";
"Business -- Regulation of Federal Financial Aid Programs -- Title IV
Program Funds Management"; "Business -- Regulation of Federal
Financial Aid Programs -- Availability of Lenders and Guarantors";
"Business -- Regulation of Federal Financial Aid Programs --
Compliance with Regulatory Standards and Effect of Regulatory
Violations"; "Business -- State Authorization and Accreditation"; and
"Business -- Change in Control" (collectively, "Regulatory Matters"),
insofar as such statements constitute a summary of legal matters,
documents or proceedings with respect to the operation of
postsecondary educational institutions and the offering of programs of
postsecondary education, are accurate and complete in all material
respects.
(ii) Although (a) such counsel have not independently verified
any statements in the Prospectus (except for the particular portions
of the Prospectus under the captions referred to and specified in
paragraph (i) above) and cannot and do not assume responsibility for
the accuracy or completeness of any statements in the Prospectus
(except for the particular portions of the Prospectus under the
captions referred to and specified in paragraph (i) above), and (b)
such counsel's participation in the preparation of the Prospectus
(consisting of intermittent participation in certain of the
conferences between officers and representatives of the Company,
counsel for the Company, representatives of the Underwriters,
Underwriters' counsel and independent accountants of the Company, as
well as a review of certain documents provided to such counsel) has
been limited solely to certain matters relating to Title IV of the
HEA, no facts have come to the attention of such counsel in the course
of such participation which cause such counsel to believe that the
statements in the Registration Statement collectively defined in the
Underwriting Agreement as Regulatory Matters (and specifically
excluding the financial statements and the notes and schedules annexed
thereto, as well as any financial, statistical or accounting
information), contain any untrue
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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, 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, the U.S. Department of Education under Title IV of the
HEA is required for the consummation by the Company of the
transactions contemplated by this Agreement in connection with the
sale of the Offered Securities.
(iv) To the best knowledge of such counsel, the execution,
delivery and performance by the Company of this Agreement and the
consummation of the transactions contemplated herein and the
execution, delivery and performance by the Company of the agreements
contemplated and described in the Prospectus under the caption
"Relationship with Selling Stockholder and Related Transactions --
Agreements with Selling Stockholder" do not and will not conflict with
or result in a violation of Title IV of the HEA or any rule,
regulation or requirement of the U.S. Department of Education
promulgated under Title IV of the HEA, except for such conflicts or
violations which would not be reasonably likely to, individually or in
the aggregate, have a material adverse effect on the Company.
(v) The consummation of the transactions contemplated by this
Agreement in connection with the sale of the Offered Securities will
not constitute a change in ownership resulting in a "change in
control" as defined in the HEA. In giving this opinion, Dow, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇, PLLC will have received from ▇▇▇▇▇ & ▇▇▇▇▇▇▇ a legal
opinion to the effect that the sale of the Offered Securities does not
give rise to the obligation to file a Form 8-K with the Commission
notifying the Commission of a change of control.
(vi) To the best knowledge of such counsel, except as disclosed
in the Prospectus, the Company possesses all necessary Licenses issued
by the U.S. Department of Education as are required for the Company's
schools to participate in Title IV Programs as described in the
Registration Statement and the Prospectus, 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 be reasonably likely to, individually or in the
aggregate, have a material adverse effect on the Company. Except as
disclosed in the Prospectus, to the knowledge of such counsel, the
Company has not received notice of any proceedings, investigations or
inquiries, nor are any such proceedings, investigations or inquiries
threatened, relating to the revocation, modification, termination or
suspension of any such License, except where any such revocation,
modification, termination or suspension would not be reasonably likely
to, individually or in the aggregate, have a material adverse effect
on the Company.
(h) The Representatives shall have received from ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
LLP, 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 Prospectuses and other related
matters as the Representatives may require, and the Company
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26
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 shall
state that, to the best of their knowledge after reasonable investigation: the
representations and warranties of the Company in this Agreement are true and
correct; the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to
such Closing Date; no stop order suspending the effectiveness of any
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are contemplated by the Commission; the Additional
Registration Statement (if any) satisfying the requirements of subparagraphs (1)
and (3) of Rule 462(b) was filed pursuant to Rule 462(b), including payment of
the applicable filing fee in accordance with Rule 111(a) or (b) under the Act,
prior to the time either Prospectus was printed and distributed to any
Underwriter; subsequent to the dates of the most recent financial statements in
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, properties or results of operations of the
Company except as set forth in or contemplated by the Prospectus; and 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 and as of such Closing
Date, 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 Price Waterhouse 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 business days prior to such
Closing Date for the purposes of this subsection.
(k) The Representatives shall have received the written
undertakings of the executive officers of the Company listed on Schedule B to
the effect contemplated by subsection (A)(i) of Section 5 hereof, unless
otherwise waived or agreed to by the Representative.
(l) The Representatives shall have received such other opinions,
certificates, letters and other documents from or on behalf of the Company or
the Selling Stockholder 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 CSFBC and counsel for the Underwriters. The Company and
the Selling Stockholder will furnish the Representatives with such conformed
copies of such opinions, certificates, letters and documents as the
Representatives reasonably requests. CSFBC 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
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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; and provided, further,
that with respect to any untrue statement or alleged untrue statement in or
omission or alleged omission from any preliminary prospectus, the indemnity
agreement contained in this subsection (a) shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased the Offered Securities concerned, to the extent that a
prospectus relating to such Offered Securities was required to be delivered by
such Underwriter under the Act in connection with such purchase and any such
loss, claim, damage or liability of such Underwriter results from the fact that
there was not sent or given to such person, at or prior to the written
confirmation of the sale of such Offered Securities to such person, a copy of
the Prospectus correcting such untrue statement or alleged untrue statement in
or omission or alleged omission from such preliminary prospectus if the Company
had previously furnished such quantity of copies thereof to such Underwriter as
reasonably requested by or on behalf of such Underwriter.
(b) The Selling Stockholder 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 Selling Stockholder 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; and provided, further,
that with respect to any untrue statement or alleged untrue statement in or
omission or alleged omission from any preliminary prospectus, the indemnity
agreement contained in this subsection (b) shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased the Offered Securities concerned, to the extent that a
prospectus relating to such Offered Securities was required to be delivered by
such Underwriter under the Act in connection with such purchase and any such
loss, claim, damage or liability of such Underwriter results from the fact that
there was not sent or given to such person, at or prior to the written
confirmation of
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the sale of such Offered Securities to such person, a copy of the Prospectus
correcting such untrue statement or alleged untrue statement in or omission or
alleged omission from such preliminary prospectus if the Company had previously
furnished such quantity of copies thereof to such Underwriter as reasonably
requested by or on behalf of such Underwriter.
(c) Each Underwriter will severally and not jointly indemnify and
hold harmless the Company, the Selling Stockholder and Starwood against any
losses, claims, damages or liabilities to which the Company, the Selling
Stockholder and Starwood 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
Representative specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by the Company, the Selling Stockholder and
Starwood in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being understood
and agreed that the only such information furnished by any Underwriter consists
of the following information in the Prospectus furnished on behalf of each
Underwriter: the information appearing [in the fourth paragraph] under the
caption "Underwriting" with respect to concession and discount figures and the
information in the [ninth] paragraph appearing under the caption "Underwriting".
(d) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under subsection (a), (b) or (c) above, notify the indemnifying party of the
commencement thereof; but the 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 satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement 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 of the Company, the Selling
Stockholder, Starwood and the Underwriters (collectively, the "Contributing
Parties") 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)
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above (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company, the Selling Stockholder and Starwood, as the case may
be, on the one hand and the Underwriters on the other from the offering of the
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company, the Selling Stockholder and Starwood, as the case may be,
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, the Selling Stockholder and Starwood, as the
case may be, on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Selling Stockholder 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 a
Contributing Party and the Contributing Party's relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this subsection (e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this subsection (e).
Notwithstanding the provisions of this subsection (e), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(e) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) The obligations of the Company, the Selling Stockholder and
Starwood under this Section shall be in addition to any liability which the
Company, the Selling Stockholder and Starwood 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, the Selling Stockholder or
Starwood, 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 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, CSFBC may
make arrangements satisfactory to the Selling Stockholder for the purchase of
such Offered Securities by other persons, including any of the Underwriters, but
if no such arrangements are made by such Closing Date the non-defaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the Offered Securities that such defaulting
Underwriters agreed but failed to purchase on such Closing Date. If any
Underwriter or Underwriters so default and the aggregate number of shares
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of Offered Securities with respect to which such default or defaults occur
exceeds 10% of the total number of shares of Offered Securities that the
Underwriters are obligated to purchase on such Closing Date and arrangements
satisfactory to CSFBC and the Selling Stockholder 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, the Selling Stockholder 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). 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
Company, the Selling Stockholder and Starwood, and their respective 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, the Company,
the Selling Stockholder, Starwood, 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 Stockholder, Starwood 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 Credit Suisse First Boston Corporation,
Eleven Madison Avenue, New York, N.Y. 10010-3629, Attention: Investment Banking
Department " Transactions Advisory Group, or, if sent to the Company, will be
mailed, delivered or telegraphed and confirmed to it at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ Drive, P.O. Box 50466, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or if sent to the Selling Stockholder or Starwood, will be
mailed, delivered or telegraphed and confirmed to [ ] 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 of Underwriters. The Representatives will act for the
several Underwriters in connection with the transactions contemplated by this
Agreement, and any action under this Agreement taken by the Representatives
jointly or by CSFBC will be binding upon all the Underwriters.
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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.
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, the Selling Stockholder and Starwood each hereby submit 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
Company, the Selling Stockholder, Starwood and the several Underwriters in
accordance with its terms.
Very truly yours,
ITT EDUCATIONAL SERVICES, INC.
By__________________________________
Name:
Title:
ITT CORPORATION
By__________________________________
Name:
Title:
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
By__________________________________
Name:
Title:
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The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the
date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
BT ALEX. ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
Acting on behalf of themselves and as the
Representatives of the several Underwriters.
BY CREDIT SUISSE FIRST BOSTON CORPORATION
By_______________________________________
Name:
Title:
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SCHEDULE A
NUMBER OF
FIRM SECURITIES
TO BE PURCHASED
-----------------
Credit Suisse First Boston Corporation............................
Bear, ▇▇▇▇▇▇▇ & Co. Inc...........................................
BT Alex. ▇▇▇▇▇ Incorporated.......................................
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated................
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated.................................
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.................................................. ------------
Total.................................. 11,350,000
============
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SCHEDULE B
EXECUTIVE OFFICERS OF THE COMPANY
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇