Exhibit 1.1
__________________ SHARES
MINDLEADERS.COM, INC.
COMMON SHARES
UNDERWRITING AGREEMENT
_____ __, 2000
LEHMAN BROTHERS INC.
J.C. BRADFORD & CO.
FIDELITY CAPITAL MARKETS, A DIVISION OF NATIONAL
FINANCIAL SERVICES CORPORATION
As Representatives of the several
Underwriters named in Schedule 1,
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Dear Gentlepeople:
MindLeaders.com, Inc., an Ohio corporation (the "Company"),
proposes to sell _________ shares (the "Firm Shares") of the Company's common
shares, no par value (the "Common Shares"). In addition, the Company proposes to
grant to the Underwriters named in Schedule 1 hereto (the "Underwriters") an
option to purchase up to an additional _______ Common Shares on the terms and
for the purposes set forth in Section 2 (the "Option Shares"). The Firm Shares
and the Option Shares, if purchased, are hereinafter collectively called the
"Shares." This is to confirm the agreement concerning the purchase of the Shares
from the Company by the Underwriters named in Schedule 1 hereto (the
"Underwriters").
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE
COMPANY. The Company represents, warrants and agrees that:
(a) A registration statement on Form S-1, and
amendments thereto, with respect to the Shares have (i) been
prepared by the Company in conformity with the requirements of the
United States Securities Act of 1933 (the "Securities Act") and the
rules and regulations (the "Rule and Regulations") of the United
States Securities and Exchange Commission (the "Commission")
thereunder, (ii) been filed with the Commission under the
Securities Act and (iii) become effective under the Securities Act.
Copies of such registration statement and the amendments thereto
have been delivered by the Company to you as the representatives
(the "Representatives") of the Underwriters. As used in this
Agreement, "Effective Time" means the date and the time as of which
such registration statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the
Commission; "Effective Date" means the date of the Effective Time;
"Preliminary Prospectus" means each prospectus included in such
registration statement, or amendments thereof, before it became
effective under the Securities Act and any prospectus filed with
the Commission by the Company with the consent of the
Representatives pursuant to Rule 424(a) of the Rules and
Regulations; "Registration Statement" means such registration
statement, as amended at the Effective Time, including all
information contained in the final prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations in
accordance with Section 5(a) hereof and deemed to be a part of the
registration statement as of the Effective Time pursuant to
paragraph (b) of Rule 430A of the Rules and Regulations; and
"Prospectus" means such final prospectus, as first filed with the
Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the
Rules and Regulations. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus or
Prospectus.
(b) The Registration Statement conforms, and the
Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will, when they become
effective or are filed with the Commission, as the case may be,
conform in all material respects to the requirements of the
Securities Act and the Rules and Regulations and do not and will
not, as of the applicable effective date (as to the Registration
Statement and any amendment thereto) and as of the applicable
filing date (as to the Prospectus and any supplement thereto)
contain an untrue statement of a material fact or omit to state a
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;
PROVIDED that no representation or warranty is made as to
information contained in or omitted from the Registration Statement
or the Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Representatives by
or on behalf of any Underwriter specifically for inclusion therein.
(c) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the State of Ohio, is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in
which its ownership or lease of property or the conduct of its
business requires such qualification, except where the failure to
obtain any such qualification would not have a material adverse
effect on the financial condition, shareholders' equity, results of
operations, business or prospects of the Company (a "Material
Adverse Effect"), and has all corporate power and authority
necessary to own or hold its properties and to conduct the business
in which it is engaged. The Company has no "subsidiaries," as such
term is defined in Rule 405 of the Rules and Regulations.
(d) At the First Delivery Date (as defined in Section
4), the Company will have an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of
the Company will have been duly and
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validly authorized and issued, will be fully paid and
non-assessable and will conform to the description thereof
contained in the Prospectus.
(e) The Shares to be issued and sold by the Company to
the Underwriters hereunder have been duly and validly authorized
and, when issued and delivered against payment therefor as provided
herein will be duly and validly issued, fully paid and
non-assessable and the Shares will conform to the description
thereof contained in the Prospectus.
(f) This Agreement has been duly authorized, executed
and delivered by the Company.
(g) The execution, delivery and performance of this
Agreement by the Company and the consummation of the transactions
contemplated hereby will not (i) conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement 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 property or assets of the Company is subject, except for any
such conflicts or breaches which, individually or in the aggregate,
would not have a Material Adverse Effect, or result in any
violation of the provisions of the articles of incorporation or
code of regulations of the Company or any statute or any order,
rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its properties or
assets; and except for the registration of the Shares under the
Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the United
States Securities Exchange Act of 1934 (the "Exchange Act") and
applicable state or foreign securities laws in connection with the
purchase and distribution of the Shares by the Underwriters, no
consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this
Agreement by the Company and the consummation of the transactions
contemplated hereby.
(h) Except as described in the Prospectus, 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 Securities Act with respect
to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in
any securities that may hereafter be registered pursuant to any
other registration statement filed by the Company under the
Securities Act.
(i) Except as described in the Prospectus and the
Registration Statement, the Company has not sold or issued any
Common Shares during the six-month period preceding the date of the
Prospectus, including any sales pursuant to Rule 144A under, or
Regulations D or S of, the Securities Act,
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other than shares issued pursuant to employee benefit plans,
qualified stock options plans or other employee compensation plans
or pursuant to outstanding options, rights or warrants.
(j) The Company has not sustained, since the date of
the latest audited financial statements included in the Prospectus,
any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since such date, there has not
been any change in the capital stock or long-term debt of the
Company or any material adverse change, or any development
involving a prospective material adverse change, in or affecting
the general affairs, management, financial position, shareholders'
equity or results of operations of the Company, otherwise than as
set forth or contemplated in the Prospectus.
(k) The historical and PRO FORMA financial statements,
together with the related notes, set forth in the Prospectus comply
as to form in all material respects with the requirements of
Regulation S-X under the Securities Act applicable to registration
statements on Form S-1 under the Securities Act. The historical
financial statements (including the related notes and supporting
schedules) filed as part of the Registration Statement or included
in the Prospectus present fairly the financial condition and
results of operations of the entities purported to be shown
thereby, at the dates and for the periods indicated, and have been
prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved. The PRO FORMA financial statements have been prepared on
a basis consistent with such historical statements of the Company,
except for the PRO FORMA adjustments specified therein, and give
effect to assumptions made on a reasonable basis and in good faith
and present fairly the historical and proposed transactions
contemplated by the Prospectus and this Agreement. The other
financial information and data included in the Prospectus,
historical and PRO FORMA, have been derived from the financial
records of the Company and, in all material respects is fairly
presented and has been prepared on a basis consistent with such
books and records of the Company.
(l) Deloitte & Touche LLP, who have certified certain
financial statements of the Company, whose report appears in the
Prospectus and who have delivered the initial letter referred to in
Section 7(f) hereof, are independent public accountants as required
by the Securities Act and the Rules and Regulations.
(m) The Company has good and marketable title in fee
simple to all real property and good and marketable title to all
personal property owned by it that are material to the conduct of
its business, in each case free and clear of all liens,
encumbrances and defects except such as do not materially affect
the value of such property and do not materially interfere with the
use made and
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proposed to be made of such property by the Company; and all real
property and buildings held under lease by the Company are held by
it under valid, subsisting and enforceable leases, with such
exceptions as are not material and do not interfere with the use
made and proposed to be made of such property and buildings by the
Company.
(n) The Company carries, or is covered by, insurance
in such amounts and covering such risks as is adequate for the
conduct of its business and the value of its properties and as is
customary for companies engaged in similar businesses in similar
industries.
(o) Except as disclosed in the Prospectus, the Company
owns or possesses adequate rights to use all material trademarks,
service marks, trade names, trademark registrations, service mark
registrations, copyrights and licenses necessary for the conduct of
its business and has no knowledge that the conduct of its business
will conflict with, and has received no notice of any claim of
conflict with, any such rights of others.
(p) There are no legal or governmental proceedings
pending to which the Company is a party or of which any property or
assets of the Company is the subject which, if determined adversely
to the Company, would have a Material Adverse Effect; and to the
best of the Company's knowledge, no such proceedings have been
threatened or contemplated by governmental authorities or
threatened by others.
(q) There are no contracts or other documents which
are required to be described in the Prospectus or filed as exhibits
to the Registration Statement by the Securities Act or by the Rules
and Regulations which have not been described in the Prospectus or
filed as exhibits to the Registration Statement.
(r) No relationship, direct or indirect, exists
between or among the Company on the one hand, and the directors,
officers, shareholders, customers or suppliers of the Company on
the other hand, which is required to be described in the Prospectus
which is not so described.
(s) No labor disturbance by the employees of the
Company exists or, to the knowledge of the Company, is imminent
which would reasonably be expected to have a Material Adverse
Effect.
(t) The Company has filed all federal, state and local
income and franchise tax returns required to be filed through the
date hereof and has paid all taxes due thereon, and no tax
deficiency has been determined adversely to the Company which has
had (nor does the Company know of any tax deficiency which, if
determined adversely to the Company, would have) a Material Adverse
Effect.
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(u) Since the date as of which information is given in
the Prospectus through the date hereof, and except as may otherwise
be disclosed in the Prospectus, the Company has not (i) issued or
granted any securities, except pursuant to stock option or other
employee benefit plans existing on the date hereof, (ii) incurred
any liability or obligation, direct or contingent, other than
liabilities and obligations which were incurred in the ordinary
course of business, (iii) entered into any material transaction not
in the ordinary course of business or (iv) declared or paid any
dividend on its capital stock.
(v) The Company (i) makes and keeps accurate books and
records and (ii) maintains internal accounting controls sufficient
to provide reasonable assurance that (A) transactions are executed
in accordance with management's authorization, (B) transactions are
recorded as necessary to permit preparation of its financial
statements and to maintain accountability for its assets, (C)
access to its assets is permitted only in accordance with
management's authorization and (D) the reported accountability for
its assets is compared with existing assets at reasonable
intervals.
(w) The Company (i) is not in violation of its
articles of incorporation or code of regulations, (ii) is not in
default in any material respect, and no event has occurred which,
with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant
or condition contained in any material indenture, mortgage, deed of
trust, loan agreement or other material agreement or instrument to
which it is a party or by which it is bound or to which any of its
properties or assets is subject, (iii) is not in violation in any
material respect of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets
may be subject and (iv) except as disclosed in the Prospectus, has
not failed to obtain any material license, permit, certificate,
franchise or other governmental authorization or permit necessary
to the ownership of its property or to the conduct of its business.
(x) Neither the Company nor any director or officer
or, to the Company's knowledge, any agent, employee or other person
associated with or acting on behalf of the Company, has used any
corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expense relating to political activity; made any
direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; violated or
is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment.
(y) The Company is not, or will be after the offering
and use of proceeds therefrom, an "investment company" within the
meaning of such term under the Investment Company Act of 1940 and
the rules and regulations of the Commission thereunder.
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2. PURCHASE OF THE SHARES BY THE UNDERWRITERS. On the
basis of the representations and warranties contained in, and subject to the
terms and conditions of, this Agreement, the Company agrees to sell [_______]
Firm Shares to the several Underwriters and each of the Underwriters, severally
and not jointly, agrees to purchase the number of Firm Shares set opposite that
Underwriter's name in Schedule 1 hereto. The respective purchase obligations of
the Underwriters with respect to the Firm Shares shall be rounded among the
Underwriters to avoid fractional shares, as the Representatives may determine.
In addition, the Company grants to the Underwriters an option to
purchase up to [_______] Option Shares. Such option is granted for the purpose
of covering over-allotments in the sale of Firm Shares and is exercisable as
provided in Section 4 hereof. Option Shares shall be purchased severally for the
account of the Underwriters in proportion to the number of Firm Shares set
opposite the name of such Underwriters in Schedule 1 hereto. The respective
purchase obligations of each Underwriter with respect to the Option Shares shall
be adjusted by the Representatives so that no Underwriter shall be obligated to
purchase Option Shares other than in 100 share lots. The price of both the Firm
Shares and any Option Shares shall be $_____ per share.
The Company shall not be obligated to deliver any of the Shares to
be delivered on any Delivery Date (as hereinafter defined), as the case may be,
except upon payment for all the Shares to be purchased on such Delivery Date as
provided herein.
3. OFFERING OF SHARES BY THE UNDERWRITERS.
Upon authorization by the Representatives of the release of the
Firm Shares, the several Underwriters propose to offer the Firm Shares for sale
upon the terms and conditions set forth in the Prospectus.
It is understood that [_______] Firm Shares will initially be
reserved by the several Underwriters for offer and sale upon the terms and
conditions set forth in the Prospectus and in accordance with the rules and
regulations of the National Association of Securities Dealers, Inc. to employees
and persons having business relationships with the Company who have heretofore
delivered to the Representatives offers or indications of interest to purchase
Firm Shares in form satisfactory to the Representatives, and that any allocation
of such Firm Shares among such persons will be made in accordance with timely
directions received by the Representatives from the Company; PROVIDED, that
under no circumstances will the Representatives or any Underwriter be liable to
the Company or to any such person for any action taken or omitted in good faith
in connection with such offering to employees and persons having business
relationships with the Company. It is further understood that any such Firm
Shares which are not purchased by such persons will be offered by the
Underwriters to the public upon the terms and conditions set forth in the
Prospectus.
4. DELIVERY OF AND PAYMENT FOR THE SHARES. Delivery of
and payment for the Firm Shares shall be made at the office of Weil, Gotshal &
Manges LLP, 767 Fifth Avenue, New York, New York 10153, at 10:00 A.M., New York
City time, on the fourth full business day following the date of this Agreement
or at such other date or place as shall
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be determined by agreement between the Representatives and the Company. This
date and time are sometimes referred to as the "First Delivery Date." On the
First Delivery Date, the Company shall deliver or cause to be delivered
certificates representing the Firm Shares to the Representatives for the account
of each Underwriter against payment to or upon the order of the Company of the
purchase price by wire transfer in immediately available funds. Time shall be of
the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Firm Shares shall be registered in such names and
in such denominations as the Representatives shall request in writing not less
than two full business days prior to the First Delivery Date.
The option granted in Section 2 will expire 30 days after the date
of this Agreement and may be exercised in whole or in part from time to time by
written notice being given to the Company by the Representatives. Such notice
shall set forth the aggregate number of Option Shares as to which the option is
being exercised, the names in which the Option Shares are to be registered, the
denominations in which the Option Shares are to be issued and the date and time,
as determined by the Representatives, when the Option Shares are to be
delivered; PROVIDED, HOWEVER, that this date and time shall not be earlier than
the First Delivery Date nor earlier than the second business day after the date
on which the option shall have been exercised nor later than the fifth business
day after the date on which the option shall have been exercised. The date and
time the Option Shares are delivered are sometimes referred to as a "Second
Delivery Date" and the First Delivery Date and any Second Delivery Date are
sometimes each referred to as a "Delivery Date."
Delivery of and payment for the Option Shares shall be made at the
place specified in the first sentence of the first paragraph of this Section 4
(or at such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., New York City time, on such
Second Delivery Date. On such Second Delivery Date, the Company shall deliver or
cause to be delivered the certificates representing the Option Shares to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by wire transfer in immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Option Shares shall
be registered in such names and in such denominations as the Representatives
shall request in the aforesaid written notice.
5. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees:
(a) To prepare the Prospectus in a form approved by
the Representatives and to file such Prospectus pursuant to Rule
424(b) under the Securities Act not later than the Commission's
close of business on the second business day following the
execution and delivery of this Agreement or, if applicable, such
earlier time as may be required by Rule 430A(a)(3) under the
Securities Act; to make no further amendment or any supplement to
the Registration Statement or to the Prospectus except as permitted
herein; to advise the Representatives, promptly after it receives
notice thereof, of the time when any amendment to the Registration
Statement has been filed or
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becomes effective or any supplement to the Prospectus has been
filed and to furnish the Representatives with copies thereof; to
advise the Representatives, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of
any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, of the suspension of the
qualification of the Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or the
Prospectus or for additional information; and, in the event of the
issuance of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus or
suspending any such qualification, to use promptly its best efforts
to obtain its withdrawal;
(b) To furnish promptly to each of the Representatives
and to counsel for the Underwriters a signed copy of the
Registration Statement as originally filed with the Commission, and
each amendment thereto filed with the Commission, including all
consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such
number of the following documents as the Representatives shall
reasonably request: (i) conformed copies of the Registration
Statement as originally filed with the Commission and each
amendment thereto (in each case excluding exhibits other than this
Agreement and the computation of per share earnings) and (ii) each
Preliminary Prospectus, the Prospectus and any supplemented
Prospectus and, if the delivery of a prospectus is required at any
time after the Effective Time in connection with the offering or
sale of the Shares or any other securities relating thereto and if
at such time any events shall have occurred as a result of which
the Prospectus as then supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall
be necessary to supplement the Prospectus in order to comply with
the Securities Act, to notify the Representatives and, upon their
request, to prepare and furnish without charge to each Underwriter
and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of a
supplemented Prospectus which will correct such statement or
omission or effect such compliance.
(d) To file promptly with the Commission any amendment
to the Registration Statement or any supplement to the Prospectus
that may, in the reasonable judgment of the Company or the
Representatives, be required by the Securities Act or requested by
the Commission;
(e) Prior to filing with the Commission any amendment
to the Registration Statement or supplement to the Prospectus or
any Prospectus pursuant to Rule 424 of the Rules and Regulations,
to furnish a copy thereof
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to the Representatives and counsel for the Underwriters and obtain
the consent of the Representatives to the filing, such consent not
to be unreasonably withheld or delayed;
(f) As soon as practicable after the Effective Date
(it being understood that the Company shall have until at least 410
days after the end of the Company's current fiscal quarter OR, if
the fourth quarter following the fiscal quarter that includes the
Effective Date is the last fiscal quarter of the Company's fiscal
year, 455 days after the end of the Company's current fiscal
quarter), to make generally available to the Company's security
holders and to deliver to the Representatives an earnings statement
of the Company and any subsidiaries (which need not be audited)
complying with Section 11(a) of the Securities Act and the Rules
and Regulations (including, at the option of the Company, Rule
158);
(g) For a period of three years following the
Effective Date, to furnish to the Representatives copies of all
materials furnished by the Company to its shareholders and all
public reports and all reports and financial statements furnished
by the Company to the Nasdaq Stock Market or the principal national
securities exchange upon which the Common Shares may be listed
pursuant to requirements of or agreements with Nasdaq or such
exchange or to the Commission pursuant to the Exchange Act or any
rule or regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as
the Representatives may request to qualify the Shares for offering
and sale under the securities laws of such jurisdictions as the
Representatives may reasonably request and to comply with such laws
so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the
distribution of the Shares; PROVIDED that in connection therewith
the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in
any jurisdiction;
(i) For a period of 180 days from the date of the Prospectus, not
to, directly or indirectly, (1) offer for sale, sell, contract to
sell, pledge, hedge or otherwise dispose, directly or indirectly,
of any Common Shares or securities convertible into or exchangeable
for Common Shares (other than the Shares and shares issued pursuant
to employee benefit plans, qualified stock option plans or other
employee compensation plans existing on the date hereof or pursuant
to currently outstanding options, warrants or rights), or sell or
grant options, rights or warrants with respect to any Common Shares
or securities convertible into or exchangeable for Common Shares
(other than the grant of options pursuant to option plans existing
on the date hereof), or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in
part, any of the economic benefits or risks of ownership of such
Common Shares, whether any such transaction described in clause (1)
or (2) above is to be settled by delivery of Common Shares or other
securities, in cash or
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otherwise, or (3) publicly disclose an intention to make any such
offer, sale, pledge, hedge, swap or other transaction, in each case
without the prior written consent of Lehman Brothers Inc.; and to
cause each officer and director of the Company to furnish to the
Representatives, prior to the First Delivery Date, a letter or
letters, in form and substance satisfactory to counsel for the
Underwriters, pursuant to which each such person shall agree not
to, directly or indirectly, (1) offer for sale, sell, pledge or
otherwise dispose of (or enter into any transaction or device which
is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any Common Shares or
securities convertible into or exchangeable for Common Shares or
(2) enter into any swap or other derivatives transaction that
transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such Common Shares, whether any
such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Shares or other securities, in cash
or otherwise, in each case for a period of 180 days from the date
of the Prospectus, without the prior written consent of Lehman
Brothers Inc;
(j) Prior to the Effective Date, to apply for the
inclusion of the Shares in the National Market System of the Nasdaq
Stock Market and to use its best efforts to complete that listing,
subject only to official notice of issuance and evidence of
satisfactory distribution, prior to the First Delivery Date;
(k) Prior to filing with the Commission its initial
Report on Form 10-Q containing the information specified in Rule
463 of the Rules and Regulations, to furnish a copy thereof to the
counsel for the Underwriters at a reasonable time prior to filing
such report with the Commission, and receive and consider its
comments thereon, which will be provided promptly to the Company,
and to deliver promptly to the Representatives a signed copy of
such Report on Form 10-Q filed by it with the Commission;
(l) To take such steps as shall be necessary to ensure
that neither the Company nor any subsidiary shall become an
"investment company" within the meaning of such term under the
Investment Company Act of 1940 and the rules and regulations of the
Commission thereunder.
6. EXPENSES. The Company agrees to pay (a) the costs
incident to the authorization, issuance, sale and delivery of the Shares and any
taxes payable in that connection; (b) the costs incident to the preparation,
printing and filing under the Securities Act of the Registration Statement and
any amendments and exhibits thereto; (c) the costs of distributing the
Registration Statement as originally filed and each amendment thereto and any
post-effective amendments thereof (including, in each case, exhibits), any
Preliminary Prospectus, the Prospectus and any supplement to the Prospectus, all
as provided in this Agreement; (d) the costs of producing and distributing this
Agreement and any other related documents in connection with the offering,
purchase, sale and delivery of the Shares; (e) the filing fees incident to
securing any required review by the National Association of Securities Dealers,
Inc. of the terms of sale of the Shares; (f) any applicable listing or other
fees; (g) the
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fees and expenses of qualifying the Shares under the securities laws of the
several jurisdictions as provided in Section 5; (h) and of preparing, printing
and distributing a Blue Sky Memorandum (including related reasonable fees and
expenses of counsel to the Underwriters); (i) all costs and expenses of the
Underwriters, including the reasonable fees and disbursements of counsel for the
Underwriters, incident to the offer and sale of the Shares by the Underwriters
to employees and persons having business relationships with the Company, as
described in Section 3; and (j) all other costs and expenses incident to the
performance of the obligations of the Company under this Agreement; PROVIDED
that, except as provided in this Section 6 and in Section 12 the Underwriters
shall pay their own costs and expenses, including the costs and expenses of
their counsel, any transfer taxes on the Shares which they may sell and the
expenses of advertising any offering of the Shares made by the Underwriters.
7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The
respective obligations of the Underwriters hereunder are subject to the
accuracy, when made and on each Delivery Date, of the representations and
warranties of the Company contained herein, to the performance by the Company of
its obligations hereunder, and to each of the following additional terms and
conditions:
(a) The Prospectus shall have been timely filed with
the Commission in accordance with Section 5(a); no stop order
suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission;
and any request of the Commission for inclusion of additional
information in the Registration Statement or the Prospectus or
otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed
to the Company on or prior to such Delivery Date that the
Registration Statement or the Prospectus or any amendment or
supplement thereto contains an untrue statement of a fact which, in
the opinion of Weil, Gotshal & Manges LLP, counsel for the
Underwriters, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not
misleading.
(c) All corporate proceedings incident to the
authorization, form and validity of this Agreement, the Shares, the
Registration Statement and the Prospectus, and all other legal
matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Underwriters, and the Company
shall have furnished to such counsel all documents and information
that they may reasonably request to enable them to pass upon such
matters.
(d) Vorys, Sater, Seymour and Pease LLP shall have
furnished to the Representatives their written opinion, as counsel
to the Company, addressed to the Underwriters and dated such
Delivery Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
12
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the State of Ohio, and has all corporate power and authority
necessary to own or hold its properties and conduct the businesses
in which it is engaged as described in the Prospectus;
(ii) The Company has an authorized capitalization as
set forth in the Prospectus, and all of the issued shares of
capital stock of the Company have been duly authorized and validly
issued, are fully paid and non-assessable and conform in all
material respects to the description thereof contained in the
Prospectus; and all of the Shares to be delivered on such Delivery
Date have been duly authorized and, when issued upon payment
therefor in accordance with this Agreement, will be validly issued,
fully paid and non-assessable;
(iii) There are no preemptive or, except as described
in the Prospectus, other rights to subscribe for or to purchase,
and there will not be, immediately after the First Delivery Date,
any restriction upon the voting or transfer of, any Shares pursuant
to the Company's articles of incorporation or code of regulations
or any agreement or other instrument known to such counsel to which
the Company is a party;
(iv) To such counsel's knowledge and except as
described in the Prospectus, there are no legal or governmental
proceedings pending to which the Company is a party or of which any
property or assets of the Company is the subject which, if
determined adversely to the Company, could reasonably be expected
to have a Material Adverse Effect; and, to such counsel's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(v) The Registration Statement was declared effective
under the Securities Act as of the date and time specified in such
opinion, the Prospectus was filed with the Commission pursuant to
the subparagraph of Rule 424(b) of the Rules and Regulations
specified in such opinion on the date specified therein and, to the
knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose is pending or threatened by the
Commission;
(vi) The Registration Statement and the Prospectus and
any further amendments or supplements thereto made by the Company
prior to such Delivery Date (other than the financial and
statistical data therein related notes and schedules thereto, as to
which such counsel need express no opinion) comply as to form in
all material respects with the requirements of the Securities Act
and the Rules and Regulations;
13
(vii) The statements contained in the Prospectus under
the captions "Management - Employment Agreements," "Certain
Transactions," "Principal Shareholders," "Description of
Capital Stock," and "Shares Eligible for Future Sale," insofar as
they describe charter documents, contracts, statutes, rules and
regulations and other legal matters, constitute an accurate summary
thereof in all material respects;
(viii) The statements contained in the Prospectus
under the captions "United States Income Tax Consequences to
Non-U.S. Holders," insofar as they describe federal statutes, rules
and regulations, constitute a fair summary thereof ;
(ix) To such counsel's knowledge, there are no
contracts or other documents which are required to be described in
the Prospectus or filed as exhibits to the Registration Statement
by the Securities Act or by the Rules and Regulations which have
not been described or filed as exhibits to the Registration
Statement;
(x) This Agreement been duly authorized, executed and
delivered by the Company; and
(xi) The issue and sale of the Shares being delivered
on such Delivery Date by the Company and the compliance by the
Company with all of the provisions of this Agreement and the
consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument known to such counsel to which the
Company is a party or by which the Company is bound or to which any
of the property or assets of the Company is subject, nor will such
actions result in any violation of the provisions of the articles
of incorporation or code of regulations of the Company or any
statute or any order, rule or regulation known to such counsel of
any court or governmental agency or body having jurisdiction over
the Company or any of its properties or assets; and, except for the
registration of the Shares under the Securities Act and such
consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and
applicable state or foreign securities laws in connection with the
purchase and distribution of the Shares by the Underwriters, no
consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this
Agreement by the Company and the issuance and sale of the Shares
hereunder; and
14
(xii) To the best of such counsel's knowledge, there
are no contracts, agreements or understandings between the Company
and any person granting such person the right (other than rights
which have been waived or satisfied) to require the Company to file
a registration statement under the Securities Act with respect to
any securities of the Company owned or to be owned by such person
or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in
any securities being registered pursuant to any other registration
statement filed by the Company under the Securities Act.
In rendering such opinion, such counsel may state that their opinion is
limited to matters governed by the Federal laws of the United States of
America and the laws of the State of Ohio. Such counsel shall also have
furnished to the Representatives a written statement, addressed to the
Underwriters and dated such Delivery Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that (x)
such counsel has acted as counsel to the Company in connection with the
preparation of the Registration Statement and during the course of the
preparation of the Registration Statement and Prospectus, such counsel
participated in conferences with representatives of the Company and its
accountants and the representatives of the Underwriters and at which the
contents of the Registration Statement and the Prospectus and related
matters were discussed, and (y) based on the foregoing, no facts have
come to the attention of such counsel which lead them to believe that the
Registration Statement (except as to financial and statistical data
contained therein and related notes and schedules thereto, and except for
the information referred to under the caption "Experts" as having been
included in the Prospectus on the authority of the Company's independent
accountants as experts, as to which such counsel need express no
opinion), as of the Effective 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 not
misleading, or that the Prospectus (except as to financial and
statistical data therein and related notes and schedules thereto, and
except for the information referred to under the caption "Experts" as
having been included in the Prospectus on the authority of the Company's
independent accountants as experts, as to which such counsel need express
no opinion) contains any untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which
they were made, not misleading. The foregoing opinion and statement may
be qualified by a statement to the effect that such counsel does not
assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement or the Prospectus
except for the statements made in the Prospectus under the captions
identified in Section 7(d)(vii) and (viii).
(e) The Representatives shall have received from Weil Gotshal &
Manges LLP, counsel for the Underwriters, such opinion or opinions, dated
15
such Delivery Date, with respect to the issuance and sale of the Shares,
the Registration Statement, the Prospectus and other related matters as
the Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they reasonably request for
the purpose of enabling them to pass upon such matters.
(f) At the time of execution of this Agreement, the Representatives
shall have received from Deloitte & Touche LLP a letter, in form and
substance satisfactory to the Representatives, addressed to the
Underwriters and dated the date hereof (i) confirming that they are
independent public accountants within the meaning of the Securities Act
and are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date hereof (or, with respect to
matters involving changes or developments since the respective dates as
of which specified financial information is given in the Prospectus, as
of a date not more than five days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial
information and other matters ordinarily covered by accountants' "comfort
letters" to underwriters in connection with registered public offerings.
(g) With respect to the letter of Deloitte & Touche LLP referred to
in the preceding paragraph and delivered to the Representatives
concurrently with the execution of this Agreement (the "initial letter"),
the Company shall have furnished to the Representatives a letter (the
"bring-down letter") of such accountants, addressed to the Underwriters
and dated such Delivery Date (i) confirming that they are independent
public accountants within the meaning of the Securities Act and are in
compliance with the applicable requirements relating to the qualification
of accountants under Rule 2-01 of Regulation S-X of the Commission, (ii)
stating, as of the date of the bring-down letter (or, with respect to
matters involving changes or developments since the respective dates as
of which specified financial information is given in the Prospectus, as
of a date not more than five days prior to the date of the bring-down
letter), the conclusions and findings of such firm with respect to the
financial information and other matters covered by the initial letter and
(iii) confirming in all material respects the conclusions and findings
set forth in the initial letter.
(h) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairperson of the Board,
its President or a Vice President and its Chief Financial Officer stating
that, to their knowledge:
(i) The representations, warranties and agreements
of the Company in Section 1 are true and correct as of such Delivery
Date; the Company has complied with all its agreements contained
herein; and the conditions set forth in Subsections (a) and (i) of
this Section 7 have been fulfilled; and
16
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of the
Effective Date, the Registration Statement and Prospectus did not
include any untrue statement of a material fact and did not omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and (B) since the
Effective Date no event has occurred which should have been set forth
in a supplement or amendment to the Registration Statement or the
Prospectus.
(i) (i) The Company shall not have sustained since the date of the
latest audited financial statements included in the Prospectus any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus or (ii) since such date there shall not have been
any change in the capital stock or long-term debt of the Company or any change,
or any development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause (i) or
(ii), is, in the judgment of the Representatives, so material and adverse as to
make it impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered on such Delivery Date on the terms and in
the manner contemplated in the Prospectus.
(j) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or in
the over-the-counter market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or minimum
prices shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall have been
declared by Federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment of
the Representatives impracticable or inadvisable to proceed with the public
offering or delivery of the Shares being delivered on such Delivery Date on the
terms and in the manner contemplated in the Prospectus.
17
(k) The Nasdaq Stock Market shall have approved the Shares
for inclusion in the National Market System, subject only to official
notice of issuance and evidence of satisfactory distribution.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless
each Underwriter, its officers and employees and each person, if any,
who controls any Underwriter within the meaning of the Securities
Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited
to, any loss, claim, damage, liability or action relating to
purchases and sales of Shares), to which that Underwriter, officer,
employee or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained
(A) in any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or (B) in any
materials or information provided to investors by, or with the
approval of, the Company in connection with the marketing of the
offering of the Shares ("Marketing Materials"), including any
roadshow or investor presentations made to investors by the Company
(whether in person or electronically), (ii) the omission or alleged
omission to state in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or in any amendment or supplement
thereto, or in any Marketing Materials or Blue Sky Application any
material fact required to be stated therein or necessary to make the
statements therein not misleading or (iii) any act or failure to act
or any alleged act or failure to act by any Underwriter in connection
with, or relating in any manner to, the Shares or the offering
contemplated hereby, and which is included as part of or referred to
in any loss, claim, damage, liability or action arising out of or
based upon matters covered by clause (i) or (ii) above (provided that
the Company shall not be liable under this clause (iii) to the extent
that it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or action
resulted directly from any such acts or failures to act undertaken or
omitted to be taken by such Underwriter through its gross negligence
or willful misconduct), and shall reimburse each Underwriter and each
such officer, employee or controlling person promptly upon demand for
any legal or other expenses reasonably incurred by that Underwriter,
officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such
loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the indemnification provided in
this paragraph (a) with respect to any Preliminary Prospectus shall
not inure to the benefit of any Underwriter (or to the benefit of any
18
officer, employee or controlling person of such Underwriter) on
account of any such loss, claim, damage or liability, joint or
several, or any action in respect thereof, arising from the sale of
the Shares by such Underwriter to any person if a copy of the
Prospectus shall have been provided to such Underwriter in a timely
manner and shall not have been sent to such person within the time
required by the Securities Act, and the untrue statement or alleged
untrue statement or omission or alleged omission of a material fact
contained in such Preliminary Prospectus was corrected in the
Prospectus; and provided further, however, that the Company shall not
be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or in any such amendment or supplement,
in reliance upon and in conformity with written information
concerning such Underwriter furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for
inclusion therein which information consists solely of the
information specified in Section 8(e). The foregoing indemnity
agreement is in addition to any liability which the Company may
otherwise have to any Underwriter or to any officer, employee or
controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, its officers and employees,
each of its directors and each person, if any, who controls the
Company within the meaning of the Securities Act, from and against
any loss, claim, damage or liability, joint or several, or any action
in respect thereof, to which the Company or any such director,
officer or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained
(A) in any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or (B) in any
Blue Sky Application or (ii) the omission or alleged omission to
state in any Preliminary Prospectus, the Registration Statement or
the Prospectus, or in any amendment or supplement thereto, or in any
Blue Sky Application any material fact required to be stated therein
or necessary to make the statements therein not misleading, but in
each case only to the extent that the untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information concerning such
Underwriter furnished to the Company through the Representatives by
or on behalf of that Underwriter specifically for inclusion therein,
and shall reimburse the Company and any such director, officer or
controlling person for any legal or other expenses reasonably
incurred by the Company or any such director, officer or controlling
person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as
such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any
19
Underwriter may otherwise have to the Company or any such director,
officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under
this Section 8 of notice of any claim or the commencement of any
action, the indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under this Section 8,
notify the indemnifying party in writing of the claim or the
commencement of that action; PROVIDED, HOWEVER, that the failure to
notify the indemnifying party shall not relieve it from any liability
which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, PROVIDED FURTHER,
that the failure to notify the indemnifying party shall not relieve
it from any liability which it may have to an indemnified party
otherwise than under this Section 8. If any such claim or action
shall be brought against an indemnified party, and it shall notify
the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes,
jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to
the indemnified party. After notice from the indemnifying party to
the indemnified party of its election to assume the defense of such
claim or action, the indemnifying party shall not be liable to the
indemnified party under this Section 8 for any legal or other
expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of
investigation; PROVIDED, HOWEVER, that the Representatives shall have
the right to employ counsel to represent jointly the Representatives
and those other Underwriters and their respective officers, employees
and controlling persons who may be subject to liability arising out
of any claim in respect of which indemnity may be sought by the
Underwriters against the Company under this Section 8 if, in the
reasonable judgment of the Representatives, it is advisable for the
Representatives and those Underwriters, officers, employees and
controlling persons to be jointly represented by separate counsel,
and in that event the fees and expenses of such separate counsel
shall be paid by the Company. No indemnifying party shall (i) without
the prior written consent of the indemnified parties (which consent
shall not be unreasonably withheld), settle or compromise or consent
to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or
not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding, or
(ii) be liable for any settlement of any such action effected without
its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party
or if there be a final judgment of the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of
such settlement or judgment.
20
(d) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold
harmless an indemnified party under Section 8(a) or 8(b) in respect
of any loss, claim, damage or liability, or any action in respect
thereof, referred to therein, then each indemnifying party shall, in
lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the
other from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault
of the Company on the one hand and the Underwriters on the other with
respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as
any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the
other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Shares
purchased under this Agreement (before deducting expenses) received
by the Company, on the one hand, and the total underwriting discounts
and commissions received by the Underwriters with respect to the
Shares purchased under this Agreement, on the other hand, bear to the
total gross proceeds from the offering of the Shares under this
Agreement, in each case as set forth in the table on the cover page
of the Prospectus. The relative fault shall be determined by
reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the
Underwriters, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this
Section were to be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the
equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above
in this Section shall be deemed to include, for purposes of this
Section 8(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section
8(d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public was offered to the
public exceeds the amount of any damages which such Underwriter has
otherwise paid or become liable to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 8(d), the Company
shall not be
21
required to contribute an amount in excess of the amount for which it
would have been liable if the provisions of Section 8(a) had been
available. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as
provided in this Section 8(d) are several in proportion to their
respective underwriting obligations and not joint.
(e) The Underwriters severally confirm and the Company
acknowledges that the statements with respect to the public offering
of the Shares by the Underwriters set forth in the last paragraph on
the cover page of, and the information contained in paragraphs 3, 10
and 12 under the caption "Underwriting" in, the Prospectus are
correct and constitute the only information concerning such
Underwriters furnished in writing to the Company by or on behalf of
the Underwriters specifically for inclusion in the Registration
Statement and the Prospectus.
9. DEFAULTING UNDERWRITERS.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Shares which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of Firm Shares set opposite the name
of each remaining non-defaulting Underwriter in Schedule 1 hereto bears to the
total number of Firm Shares set opposite the names of all the remaining
non-defaulting Underwriters in Schedule 1 hereto; PROVIDED, HOWEVER, that the
remaining non-defaulting Underwriters shall not be obligated to purchase any of
the Shares on such Delivery Date if the total number of Shares which the
defaulting Underwriter or Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the total number of Shares to be purchased on such
Delivery Date, and any remaining non-defaulting Underwriter shall not be
obligated to purchase more than 110% of the number of Shares which it agreed to
purchase on such Delivery Date pursuant to the terms of Section 2. If the
foregoing maximums are exceeded, the remaining non-defaulting Underwriters, or
those other underwriters satisfactory to the Representatives who so agree, shall
have the right, but shall not be obligated, to purchase, in such proportion as
may be agreed upon among them, all the Shares to be purchased on such Delivery
Date. If the remaining Underwriters or other underwriters satisfactory to the
Representatives do not elect to purchase the shares which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such Delivery Date,
this Agreement (or, with respect to the Second Delivery Date, the obligation of
the Underwriters to purchase, and of the Company to sell, the Option Shares)
shall terminate without liability on the part of any non-defaulting Underwriter
or the Company, except that the Company will continue to be liable for the
payment of expenses to the extent set forth in Sections 6 and 12. As used in
this Agreement, the term "Underwriter" includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 9, purchases Firm Shares which a
defaulting Underwriter agreed but failed to purchase.
22
Nothing contained herein shall relieve a defaulting Underwriter of
any liability it may have to the Company for damages caused by its default. If
other underwriters are obligated or agree to purchase the Shares of a defaulting
or withdrawing Underwriter, either the Representatives or the Company may
postpone the applicable Delivery Date for up to seven full business days in
order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
10. DIRECTED SHARE PROGRAM. (a) It is understood that approximately
__ Firm Shares (the "Directed Shares") will initially be reserved by the
Underwriters for offer and sale to employees and persons having business
relationships with the Company ("Directed Shares Participants") in a directed
share program ("Directed Share Program") upon the terms and conditions set forth
in the Prospectus and in accordance with the rules and regulations of the
National Association of Securities Dealers, Inc. Under no circumstances will
Lehman Brothers or any Underwriter be liable to the Company or to any Directed
Share Participant for any action taken or omitted to be taken in good faith in
connection with the Directed Share Program. To the extent that any Directed
Shares are not affirmatively reconfirmed for purchase by any Directed Share
Participant on or immediately after the date of this Agreement, such Directed
Shares may be offered to the public as part of the public offering contemplated
hereby.
(b) The Company agrees to pay all fees and disbursements incurred by
the Underwriters in connection with the Directed Share Program, including
counsel fees and any stamp duties or other taxes incurred by the Underwriters in
connection with the Directed Share Program.
(c) In connection with the offer and sale of the Directed Shares, the
Company agrees, promptly upon request in writing, to indemnify and hold harmless
Lehman Brothers and the other Underwriters from and against any loss, claim,
damage, expense, liability or action which (i) arises out of, or is based upon,
any untrue statement or alleged untrue statement of a material fact contained in
any materials prepared by or with the approval of the Company for distribution
to Directed Share Participants in connection with the Directed Share Program or
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii)
arises out of the failure of any Directed Share Participant to pay for and
accept delivery of Directed Shares that the Participant agreed to purchase, or
(iii) is otherwise related to the Directed Share Program, other than losses,
claims, damages pr liabilities (or expenses relating thereto) that are finally
judicially determined to have resulted directly from the gross negligence or
willful misconduct of Lehman Brothers.
11. TERMINATION. The obligations of the Underwriters hereunder
may be terminated by the Representatives by notice given to and received by the
Company prior to delivery of and payment for the Firm Shares if, prior to that
time, any of the events described in Sections 7(j) or 7(k), shall have occurred
or if the Underwriters shall decline to purchase the Shares for any reason
permitted under this Agreement.
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12. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If (a) the
Company shall fail to tender the Shares for delivery to the Underwriters by
reason of any failure, refusal or inability on the part of the Company to
perform any agreement on its part to be performed, or because any other
condition of the Underwriters' obligations hereunder required to be fulfilled by
the Company is not fulfilled, the Company will reimburse the Underwriters for
all reasonable out-of-pocket expenses (including fees and disbursements of
counsel) incurred by the Underwriters in connection with this Agreement and the
proposed purchase of the Shares, and upon demand the Company shall pay the full
amount thereof to the Representative(s). If this Agreement is terminated
pursuant to Section 9 by reason of the default of one or more Underwriters, the
Company shall not be obligated to reimburse any defaulting Underwriter on
account of those expenses.
13. NOTICES, ETC. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to Lehman Brothers Inc., Three
World Financial Center, New York, New York 10285, Attention:
Syndicate Department (Fax: 212-526-6588), with a copy, in the case of
any notice pursuant to Section 8(d), to the Director of Litigation,
Office of the General Counsel, Lehman Brothers Inc., 3 World
Financial Center, 10th Floor, New York, NY 10285;
(b) if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set
forth in the Registration Statement, Attention: Carol A. Clark (Fax:
(614) 340-7301, with a facsimile copy to Susan E. Brown, Esq. (Fax:
(614) 719-4642) ;
PROVIDED, HOWEVER, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by Lehman Brothers Inc.
14. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the Company,
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Underwriter within the meaning of Section 15 of
the Securities Act and (B) the indemnity agreement of the Underwriters contained
in Section 8(b) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning
of Section 13 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the
24
persons referred to in this Section 14, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
15. SURVIVAL. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters contained in this
Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Shares and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
16. DEFINITION OF THE TERMS "BUSINESS DAY" AND "SUBSIDIARY".
For purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
17. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of New York.
18. COUNTERPARTS. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
19. HEADINGS. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
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If the foregoing correctly sets forth the agreement between the
Company and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
MINDLEADERS.COM, INC.
By
-------------------------
NAME:
TITLE:
Accepted:
LEHMAN BROTHERS INC.
J.C. BRADFORD & CO.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By LEHMAN BROTHERS INC.
By
-----------------------------------
AUTHORIZED REPRESENTATIVE
26
SCHEDULE 1
Number of
Underwriters Shares
- ------------ -----------------
Lehman Brothers Inc...........................
J.C. Bradford & Co. ..........................
Fidelity Capital Markets, a division of National Financial
Services Corporation
Total _
_____________, 2000
MindLeaders.com, Inc.
851 West Third Avenue
Columbus, Ohio 43212
Lehman Brothers Inc.
J.C. Bradford & Co.
Fidelity Capital Markets, a division of National
Financial Services Corporation
As Representatives of the Several Underwriters
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Ladies and Gentlemen:
The undersigned understands that you and certain other firms
propose to enter into an Underwriting Agreement (the "Underwriting Agreement")
providing for the purchase by you and such other firms (the "Underwriters") of
common shares (the "Shares") of Common Shares, no par value (the "Common
Shares"), of MindLeaders.com, Inc. (the "Company") and that the Underwriters
propose to reoffer the Common Shares to the public (the "Offering").
In consideration of the execution of the Underwriting
Agreement by the Underwriters, and for other good and valuable consideration,
the undersigned hereby irrevocably agrees that, without the prior written
consent of Lehman Brothers Inc., the undersigned will not, directly or
indirectly, (1) offer for sale, sell, pledge, or otherwise dispose of (or enter
into any transaction or device that is designed to, or could be expected to,
result in the disposition by any person at any time in the future of) any Common
Shares (including, without limitation, Common Shares that may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and Common Shares that may
be issued upon exercise of any option or warrant) or securities convertible into
or exchangeable for Common Shares owned by the undersigned on the date of
execution of this Lock-Up Letter Agreement or on the date of the completion of
the Offering, or (2) enter into any swap or other derivatives transaction that
transfers to another, in whole or in part, any of the economic benefits or risks
of ownership of such Common Shares, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Shares or other
securities, in cash or otherwise, for a period of 180 days after the date of the
final Prospectus relating to the Offering.
In furtherance of the foregoing, the Company and its Transfer
Agent are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this Lock-Up Letter
Agreement.
It is understood that, if the Company notifies you that it
does not intend to proceed with the Offering, if the Underwriting Agreement does
not become effective, or if the Underwriting Agreement (other than the
provisions thereof which survive termination) shall terminate or be terminated
prior to payment for and delivery of the Common Shares, the undersigned will be
released from its obligations under this Lock-Up Letter Agreement.
The undersigned understands that the Company and the
Underwriters will proceed with the Offering in reliance on this Lock-Up Letter
Agreement.
The undersigned hereby represents and warrants that the
undersigned has full power and authority to enter into this Lock-Up Letter
Agreement and that, upon request, the undersigned will execute any additional
documents necessary in connection with the enforcement hereof. Any obligations
of the undersigned shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
Very truly yours,
By:__________________________________
Name:
Title:
Dated: _______________
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