Underwriting Agreement (2006)Full Document 

Start of Preview
                                4,000,000 SHARES

                            CAPELLA EDUCATION COMPANY

                                  COMMON STOCK

                             UNDERWRITING AGREEMENT

                                                              November ___, 2006


CREDIT SUISSE SECURITIES  LLC,
     As Representative of the Several Underwriters,
         Eleven Madison Avenue,
              New York, N.Y. 10010-3629

Dear Sirs:

         1. Introductory. Capella Education Company, a Minnesota corporation
(the "COMPANY"), proposes to issue and sell 3,632,140 shares of its Common
Stock, $0.10 par value per share ("SECURITIES"), and the stockholders listed in
Schedule A hereto ("SELLING STOCKHOLDERS") propose severally to sell an
aggregate of 367,860 outstanding shares of the Securities (such 4,000,000 shares
of Securities being hereinafter referred to as the "FIRM SECURITIES"), with each
Selling Stockholder selling the number of Firm Securities set forth opposite its
name on Schedule A. The Company also proposes to sell to the Underwriters, at
the option of the Underwriters, an aggregate of not more than 600,000 additional
shares of its Securities (such 600,000 additional shares being hereinafter
referred to as the "OPTIONAL SECURITIES"). The Firm Securities and the Optional
Securities are herein collectively called the "OFFERED SECURITIES". As part of
the offering contemplated by this Agreement, Piper Jaffray & Co. (the
"Designated Underwriter") has agreed to reserve out of the Firm Securities
purchased by it under this Agreement, up to 200,000 shares, for sale to the
Company's directors, employees and other parties associated with the Company
(collectively, the "PARTICIPANTS"), as set forth in the Prospectus (as defined
herein) under the heading "Underwriting" (the "DIRECTED SHARE PROGRAM"). The
Firm Securities to be sold by the Designated Underwriter pursuant to the
Directed Share Program (the "DIRECTED SHARES") will be sold by the Designated
Underwriter pursuant to this Agreement at the public offering price. Any
Directed Shares not subscribed for by the end of the business day on which this
Agreement is executed will be offered to the public by the Underwriters as set
forth in the Prospectus. The Company and each Selling Stockholder hereby agree,
severally and not jointly, with the several Underwriters named in Schedule B
hereto (the "UNDERWRITERS") as follows:

         2.  Representations  and  Warranties  of the  Company  and the  Selling
Stockholders.

                  (a) The Company represents and warrants to, and agrees with,
         the several Underwriters and the Selling Stockholders that:

                           (i) A registration statement (No. 333-124119) (the
                  "INITIAL REGISTRATION STATEMENT") relating to the Offered
                  Securities, including a form of prospectus, has been filed
                  with the Securities and Exchange Commission (the "COMMISSION")
                  and an additional registration statement (the "ADDITIONAL
                  REGISTRATION STATEMENT") relating to the Offered Securities
                  may have been or may be filed with the Commission pursuant to
                  Rule 462(b) ("RULE 462(b)") under the Securities Act of 1933
                  (the "ACT"). "INITIAL REGISTRATION STATEMENT" as of any time
                  means the initial registration statement, in the form then
                  filed with the Commission, including all information contained
                  in the additional registration statement (if any) and then
                  deemed to be a part of the initial






                  registration statement pursuant to the General Instructions of
                  the Form on which it is filed and all information (if any)
                  included in a prospectus then deemed to be a part of the
                  initial registration statement pursuant to Rule 430C ("RULE
                  430C") under the Act or retroactively deemed to be a part of
                  the initial registration statement pursuant to Rule 430A(b)
                  ("Rule 430A(b)") under the Act and that in any case has not
                  then been superseded or modified. "ADDITIONAL REGISTRATION
                  STATEMENT" as of any time means the additional registration
                  statement in the form then filed with the Commission,
                  including the contents of the Initial Registration Statement
                  incorporated by reference therein and including all
                  information (if any) included in a prospectus then deemed to
                  be a part of the additional registration statement pursuant to
                  Rule 430C or retroactively deemed to be a part of the
                  additional registration statement pursuant to Rule 430A(b) and
                  that in any case has not then been superseded or modified. The
                  Initial Registration Statement and the Additional Registration
                  Statement are herein referred to collectively as the
                  "REGISTRATION STATEMENTS" and individually as a "REGISTRATION
                  STATEMENT". "REGISTRATION STATEMENT" as of any time means the
                  Initial Registration Statement and any Additional Registration
                  Statement as of such time. For purposes of the foregoing
                  definitions, information contained in a form of prospectus
                  that is deemed retroactively to be a part of a Registration
                  Statement pursuant to Rule 430A shall be considered to be
                  included in such Registration Statement as of the time
                  specified in Rule 430A. As of the time of execution and
                  delivery of this Agreement, the Initial Registration Statement
                  has been declared effective under the Act and is not proposed
                  to be amended. Any Additional Registration Statement has or
                  will become effective upon filing with the Commission pursuant
                  to Rule 462(b) and is not proposed to be amended. The Offered
                  Securities all have been or will be duly registered under the
                  Act pursuant to the Initial Registration Statement and, if
                  applicable, the Additional Registration Statement. For
                  purposes of this Agreement, "EFFECTIVE TIME" with respect to
                  the Initial Registration Statement or, if filed prior to the
                  execution and delivery of this Agreement, the Additional
                  Registration Statement means the date and time as of which
                  such Registration Statement was declared effective by the
                  Commission or has become effective upon filing pursuant to
                  Rule 462(c) ("RULE 462(C)") under the Act. If an Additional
                  Registration Statement has not been filed prior to the
                  execution and delivery of this Agreement but the Company has
                  advised the Representative that it proposes to file one,
                  "EFFECTIVE TIME" with respect to such Additional Registration
                  Statement means the date and time as of which such
                  Registration Statement is filed and becomes effective pursuant
                  to Rule 462(b). "EFFECTIVE DATE" with respect to the Initial
                  Registration Statement or the Additional Registration
                  Statement (if any) means the date of the Effective Time
                  thereof. A "REGISTRATION STATEMENT" without reference to a
                  time means such Registration Statement as of its Effective
                  Time. "STATUTORY PROSPECTUS" as of any time means the
                  prospectus included in a Registration Statement immediately
                  prior to that time, including any information in a prospectus
                  deemed to be a part thereof pursuant to Rule 430A or 430C that
                  has not been superseded or modified. For purposes of the
                  preceding sentence, information contained in a form of
                  prospectus that is deemed retroactively to be a part of a
                  Registration Statement pursuant to Rule 430A shall be
                  considered to be included in the Statutory Prospectus as of
                  the actual time that form of prospectus is filed with the
                  Commission pursuant to Rule 424(b) ("RULE 424(B)") under the
                  Act. "PROSPECTUS" means the Statutory Prospectus that
                  discloses the public offering price and other final terms of
                  the Offered Securities and otherwise satisfies Section 10(a)
                  of the Act. "ISSUER FREE WRITING PROSPECTUS" means any "issuer
                  free writing prospectus", as defined in Rule 433, relating to
                  the Offered Securities in the form filed or required to be
                  filed with the Commission or, if not required to be filed, in
                  the form retained in the Company's records pursuant to Rule
                  433(g). "GENERAL USE ISSUER FREE WRITING PROSPECTUS" means any
                  Issuer Free Writing Prospectus that is intended for general
                  distribution to prospective investors, as evidenced by its
                  being specified in Schedule C to this Agreement. "LIMITED USE
                  ISSUER FREE WRITING PROSPECTUS" means any Issuer Free Writing
                  Prospectus that is not a General Use Issuer Free Writing
                  Prospectus. "APPLICABLE TIME" means ___:00 _m (Eastern time)
                  on the date of this Agreement.





                                       2



                   (ii) (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) at the Effective Date of the
                  Additional Registration Statement in which the Prospectus is
                  included, each Registration Statement and the Prospectus will
                  conform in all material respects to the requirements of the
                  Act and the Rules and Regulations, and none of such documents
                  includes, or will include, any untrue statement of a material
                  fact or omits, or will omit, to state any material fact
                  required to be stated therein or necessary to make the
                  statements therein not misleading. The preceding sentence does
                  not apply to statements in or omissions from a Registration
                  Statement or the Prospectus based upon written information
                  furnished to the Company by any Underwriter through the
                  Representative specifically for use therein, it being
                  understood and agreed that the only such information is that
                  described as such in Section 8(c) hereof.

                           (iii) (A) At the time of initial filing of the
                  Initial Registration Statement and (B) at the date of this
                  Agreement, the Company was not and is not an "ineligible
                  issuer", as defined in Rule 405, including (x) the Company or
                  any other subsidiary in the preceding three years not having
                  been convicted of a felony or misdemeanor or having been made
                  the subject of a judicial or administrative decree or order as
                  described in Rule 405 and (y) the Company in the preceding
                  three years not having been the subject of a bankruptcy
                  petition or insolvency or similar proceeding, not having had a
                  registration statement be the subject of a proceeding under
                  Section 8 of the Act and not being the subject of a proceeding
                  under Section 8A of the Act in connection with the offering of
                  the Offered Securities, all as described in Rule 405.

                           (iv) As of the Applicable Time, neither (A) the
                  General Use Issuer Free Writing Prospectus(es) issued at or
                  prior to the Applicable Time, the preliminary prospectus,
                  dated ____________, 2006 (which is the most recent Statutory
                  Prospectus distributed to investors generally) and the other
                  information, if any, stated in Schedule D to this Agreement,
                  all considered together (collectively, the "GENERAL DISCLOSURE
                  PACKAGE"), nor (ii) any individual Limited Use Issuer Free
                  Writing Prospectus, when considered together with the General
                  Disclosure Package, included any untrue statement of a
                  material fact or omitted to state any material fact necessary
                  in order to make the statements therein, in the light of the
                  circumstances under which they were made, not misleading. The
                  preceding sentence does not apply to statements in or
                  omissions from any prospectus included in the Registration
                  Statement or any Issuer Free Writing Prospectus in reliance
                  upon and in conformity with written information furnished to
                  the Company by any Underwriter through the Representative
                  specifically for use therein, it being understood and agreed
                  that the only such information furnished by any Underwriter
                  consists of the information described as such in Section 8(c)
                  hereof.

                           (v) Each Issuer Free Writing Prospectus, as of its
                  issue date and at all subsequent times through the completion
                  of the public offer and sale of the Offered Securities or
                  until any earlier date that the Company notified or notifies
                  Credit Suisse Securities (USA) LLC ("CREDIT SUISSE") as
                  described in the next sentence, did not, does



                                       3



                  not and will not include any information that conflicted,
                  conflicts or will conflict with the information then contained
                  in the Registration Statement. If at any time following
                  issuance of an Issuer Free Writing Prospectus there occurred
                  or occurs an event or development as a result of which such
                  Issuer Free Writing Prospectus conflicted or would conflict
                  with the information then contained in the Registration
                  Statement or included or would include an untrue statement of
                  a material fact or omitted or would omit to state a material
                  fact necessary in order to make the statements therein, in the
                  light of the circumstances prevailing at that subsequent time,
                  not misleading, (i) the Company has promptly notified or will
                  promptly notify Credit Suisse and (ii) the Company has
                  promptly amended or will promptly amend or supplement such
                  Issuer Free Writing Prospectus to eliminate or correct such
                  conflict, untrue statement or omission. The foregoing two
                  sentences do not apply to statements in or omissions from any
                  Issuer Free Writing Prospectus in reliance upon and in
                  conformity with written information furnished to the Company
                  by any Underwriter through the Representative specifically for
                  use therein, it being understood and agreed that the only such
                  information furnished by any Underwriter consists of the
                  information described as such in Section 8(c) hereof.

                           (vi) The Company has been duly incorporated and is an
                  existing corporation in good standing under the laws of the
                  State of Minnesota, with power and authority (corporate and
                  other) to own its properties and conduct its business as
                  described in the General Disclosure Package; and the Company
                  is duly qualified to do business as a foreign corporation in
                  good standing in all other jurisdictions in which its
                  ownership or lease of property or the conduct of its business
                  requires such qualification, except where the failure to be so
                  qualified or in good standing would not, individually or in
                  the aggregate, have a material adverse effect on the condition
                  (financial or other), business, properties or results of
                  operations of the Company and Capella University, a Minnesota
                  corporation ("CAPELLA UNIVERSITY"), taken as a whole
                  ("MATERIAL ADVERSE EFFECT"). The State of Minnesota and the
                  State of Arizona are the only jurisdictions in which the
                  Company or any of its subsidiaries maintains an office or
                  leases property.

                           (vii) Capella University and Aprisa, Inc., a
                  __________ corporation ("APRISA"), are the only subsidiaries
                  of the Company; Capella University has been duly incorporated
                  and is an existing corporation in good standing under the laws
                  of the State of Minnesota, with power and authority (corporate
                  and other) to own its properties and conduct its business as
                  described in the General Disclosure Package; Capella
                  University is duly qualified to do business as a foreign
                  corporation in good standing in all other jurisdictions in
                  which its ownership or lease of property or the conduct of its
                  business requires such qualification, except where the failure
                  to be so qualified or in good standing would not, individually
                  or in the aggregate, have a Material Adverse Effect; all of
                  the issued and outstanding capital stock of Capella University
                  has been duly authorized and validly issued and is fully paid
                  and nonassessable; and the capital stock of Capella University
                  is owned free from liens, encumbrances and defects.

                           (viii) Capella University and Aprisa are the only
                  entities in which the Company, directly or indirectly, owns an
                  equity interest. Capella University is the only entity in
                  which the Company, directly or indirectly, owns an equity
                  interest that (A) engages in any business, activity or
                  operation or (B) owns or holds any assets or has any
                  liabilities, contingent or otherwise.

                           (ix) The Offered Securities and all other outstanding
                  shares of capital stock of the Company have been duly
                  authorized; all outstanding shares of capital stock of the
                  Company are, and, when the Offered Securities have been
                  delivered and paid for in accordance with this Agreement on
                  such Closing Date (as defined below), such Offered Securities
                  will have been, validly issued, fully paid and nonassessable,
                  will be consistent with the information in the General
                  Disclosure Package and will conform to the




                                       4



                  description thereof contained in the Prospectus; and the
                  stockholders of the Company have no preemptive rights with
                  respect to the Securities.

                           (x) Except as disclosed in the General Disclosure
                  Package, there are no contracts, agreements or understandings
                  between the Company and any person that would give rise to a
                  valid claim against the Company or any Underwriter for a
                  brokerage commission, finder's fee or other like payment in
                  connection with this offering.

                           (xi) Except as disclosed in the General Disclosure
                  Package, there are no contracts, agreements or understandings
                  between the Company and any person granting such person the
                  right to require the Company to file a registration statement
                  under the Act with respect to any securities of the Company
                  owned or to be owned by such person, or to require the Company
                  to include such securities in the securities registered
                  pursuant to a Registration Statement or in any securities
                  being registered pursuant to any other registration statement
                  filed by the Company under the Act.

                           (xii) The Offered Securities have been approved for
                  listing subject to notice of issuance on The Nasdaq Stock
                  Market.

                           (xiii) No consent, approval, authorization, or order
                  of, or filing with, any governmental agency or body, any

End of Preview