EXHIBIT 1.1
[FORM OF UNDERWRITING AGREEMENT]
▇▇▇▇▇▇ Software, Inc.
Shares a /
Common Shares
(without par value)
Underwriting Agreement
New York, New York
, 2004
Citigroup Global Markets Inc.
Wachovia Capital Markets, LLC
Friedman, Billings, ▇▇▇▇▇▇ & Co. Inc.
KeyBanc Capital Markets,
a division of McDonald Investments Inc.
As Representatives of the several Underwriters,
c/o Citigroup Global Markets Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇▇ Software, Inc., a corporation organized under the laws of
Ohio (the "Company"), proposes to sell to the several underwriters named in
Schedule I hereto (the "Underwriters"), for whom you (the "Representatives") are
acting as representatives, Common Shares, without par value ("Common
Shares"), of the Company, and the persons named in Schedule II hereto (the
"Selling Shareholders") propose to sell to the several Underwriters Common
Shares (such shares to be issued and sold by the Company and shares to be sold
by the Selling Shareholders collectively being hereinafter called the
"Underwritten Securities"). The Selling Shareholders also propose to grant to
the Underwriters an option to purchase up to additional Common Shares to
cover over-allotments (the "Option Securities"; the Option Securities, together
with the Underwritten Securities, being hereinafter called the "Securities"). To
the extent there are no additional Underwriters listed on Schedule I other than
you, the term
------------------
a/ Plus an option to purchase from the Selling Shareholders up to
additional Securities to cover over-allotments.
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Representatives as used herein shall mean you, as Underwriters, and the terms
Representatives and Underwriters shall mean either the singular or plural as the
context requires. In addition, to the extent that there is not more than one
Selling Shareholder named in Schedule II, the term Selling Shareholder shall
mean either the singular or plural. The use of the neuter in this Agreement
shall include the feminine and masculine wherever appropriate. Certain terms
used herein are defined in Section 17 hereof.
As part of the offering contemplated by this Agreement, Citigroup
Global Markets Inc. has agreed to reserve out of the Securities set forth
opposite its name on the Schedule I to this Agreement, up to shares, for
sale to the Company's employees, officers, and directors (collectively,
"Participants"), as set forth in the Prospectus under the heading "Underwriting"
(the "Directed Share Program"). The Securities to be sold by Citigroup Global
Markets Inc. pursuant to the Directed Share Program (the "Directed Shares") will
be sold by Citigroup Global Markets Inc. pursuant to this Agreement at the
public offering price. Any Directed Shares not orally confirmed for purchase by
any Participants by [7:30 A.M.] New York City time on the business day following
the date on which this Agreement is executed will be offered to the public by
Citigroup Global Markets Inc. as set forth in the Prospectus.
1. Representations and Warranties.
(i) The Company represents and warrants to, and agrees with, each
Underwriter as set forth below in this Section 1.
(a) The Company has prepared and filed with the Commission a
registration statement (Registration Number 333- ) on Form S-1, including
a related preliminary prospectus, for registration under the Act of the
offering and sale of the Securities. The Company may have filed one or
more amendments thereto, including a related preliminary prospectus, each
of which has previously been furnished to you. The Company will next file
with the Commission one of the following: either (1) prior to the
Effective Date of such registration statement, a further amendment to such
registration statement (including the form of final prospectus) or (2)
after the Effective Date of such registration statement, a final
prospectus in accordance with Rules 430A and 424(b). In the case of clause
(2), the Company has included in such registration statement, as amended
at the Effective Date, all information (other than Rule 430A Information)
required by the Act and the rules thereunder to be included in such
registration statement and the Prospectus. As filed, such amendment and
form of final prospectus, or such final prospectus, shall contain all Rule
430A Information, together with all other such required information, and,
except to the extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form furnished
to you prior to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional information
and other changes (beyond that contained in the latest Preliminary
Prospectus) as the Company has advised you, prior to the Execution Time,
will be included or made therein.
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(b) On the Effective Date, the Registration Statement did or will,
and when the Prospectus is first filed (if required) in accordance with
Rule 424(b) and on the Closing Date (as defined herein) and on any date on
which Option Securities are purchased, if such date is not the Closing
Date (a "settlement date"), the Prospectus (and any supplements thereto)
will, comply in all material respects with the applicable requirements of
the Act and the rules thereunder; on the Effective Date and at the
Execution Time, the Registration Statement did not or will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading; and, on the Effective Date, the Prospectus, if not
filed pursuant to Rule 424(b), will not, and on the date of any filing
pursuant to Rule 424(b) and on the Closing Date and any settlement date,
the Prospectus (together with any supplement thereto) will not, include
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to the
information contained in or omitted from the Registration Statement, or
the Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to the Company by or on
behalf of any Underwriter through the Representatives specifically for
inclusion in the Registration Statement or the Prospectus (or any
supplement thereto).
(c) Each of the Company and its subsidiary has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or organized
with full corporate power and authority to own or lease, as the case may
be, and to operate its properties and conduct its business as described in
the Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction
which requires such qualification, except for such jurisdictions where the
failure to so qualify would not, individually or in the aggregate, have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business, properties or results of operations of the
Company and its subsidiary, taken as a whole, whether or not arising from
transactions in the ordinary course of business (a "Material Adverse
Effect"). The Company is qualified to do business as a foreign corporation
and is in good standing under each jurisdiction listed on Annex A hereto.
(d) All the outstanding shares of capital stock of the Company's
subsidiary have been duly and validly authorized and issued and are fully
paid and nonassessable, and, except for the one share owned by the
Company's Brazilian agent pursuant to requirements under local law, or, as
otherwise set forth in the Prospectus, all outstanding shares of capital
stock of such subsidiary are owned by the Company directly, free and clear
of any perfected security interest or any other security interests,
claims, liens or encumbrances.
(e) The Company's authorized equity capitalization is as set forth
in the Prospectus; the capital stock of the Company conforms in all
material respects to
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the description thereof contained in the Prospectus; the outstanding
shares of Common Shares have been duly and validly authorized and issued
and are fully paid and nonassessable; the Securities have been duly and
validly authorized, and, when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be fully paid and
nonassessable; the Securities will be duly listed as of the Closing Date
and are duly listed as of the settlement date, if applicable, and admitted
and authorized for trading, subject to official notice of issuance and
evidence of satisfactory distribution, on the New York Stock Exchange; the
certificates for the Securities are in valid and sufficient form; the
holders of outstanding shares of capital stock of the Company are not
entitled to preemptive or other rights to subscribe for the Securities;
and, except as set forth in the Prospectus, no options, warrants or other
rights to purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities for, shares of
capital stock in the Company are outstanding;
(f) There is no franchise, contract or other document of a character
required to be described in the Registration Statement or Prospectus, or
to be filed as an exhibit thereto, which is not described or filed as
required; and the statements in the Prospectus under the headings
"Business - Intellectual Property", "Business - Legal Proceedings",
"Description of Capital Stock", "Shares Eligible for Future Sale" and
"Material U.S. Federal Tax Considerations for Non-U.S. Holders of Common
Shares", insofar as such statements summarize legal matters, agreements,
documents or proceedings discussed therein, are accurate and fair
summaries of such legal matters, agreements, documents or proceedings.
(g) This Agreement has been duly authorized, executed and delivered
by the Company.
(h) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(i) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained under
the Act, the Exchange Act and such as may be required under rules
promulgated by the National Association of Securities Dealers, Inc. (the
"NASD") or blue sky laws of any U.S. jurisdiction in connection with the
purchase and distribution of the Securities by the Underwriters in the
manner contemplated herein and in the Prospectus.
(j) Neither the issue and sale of the Securities nor the
consummation of any other of the transactions herein contemplated nor the
fulfillment of the terms hereof will conflict with, result in a breach or
violation of, or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or its
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subsidiary pursuant to, (i) the articles of incorporation or code of
regulations of the Company or the corresponding charter documents of its
subsidiary, (ii) the terms of any indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the Company or its
subsidiary is a party or bound or to which its or their property is
subject, or (iii) any statute, law, rule, regulation, judgment, order or
decree applicable to the Company or its subsidiary of any court,
regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or its subsidiary or
any of its or their properties.
(k) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement, except
for Recall Total Information Management, Inc. ("Recall"), which has
effectively waived its rights to registration with respect to the
remainder of its securities of the Company with respect to the offering of
Securities contemplated by this Agreement.
(l) The consolidated historical financial statements and schedules
of the Company and its consolidated subsidiary included in the Prospectus
and the Registration Statement present fairly in all material respects the
financial condition, results of operations and cash flows of the Company
as of the dates and for the periods indicated, comply as to form with the
applicable accounting requirements of the Act and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved (except as otherwise
noted therein). The selected financial data set forth under the caption
"Selected Consolidated Financial Data" in the Prospectus and Registration
Statement fairly present, on the basis stated in the Prospectus and the
Registration Statement, the information included therein.
(m) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or its subsidiary or its or their property is pending or, to the
best knowledge of the Company, threatened that (i) could reasonably be
expected to have a Material Adverse Effect on the performance of this
Agreement or the consummation of any of the transactions contemplated
hereby or (ii) could reasonably be expected to have a Material Adverse
Effect, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(n) Except as disclosed in or contemplated in the Prospectus, each
of the Company and its subsidiary owns or leases all such properties as
are necessary to the conduct of its operations as presently conducted.
(o) Neither the Company nor its subsidiary is in violation or
default of (i) any provision of its articles of incorporation or code of
regulations, (ii) the terms of any indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which it is a party or
bound or to which its property is subject, or (iii) any statute, law,
rule, regulation, judgment, order or decree of any court, regulatory
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body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or such subsidiary or any
of its properties, as applicable, except for such violations or defaults
referenced in clauses (ii) and (iii) above that would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(p) Ernst & Young LLP, who have certified certain financial
statements of the Company and its consolidated subsidiary and delivered
their report with respect to the audited consolidated financial statements
and schedules included in the Prospectus, are independent public
accountants with respect to the Company within the meaning of the Act and
the applicable published rules and regulations thereunder.
(q) There are no transfer taxes or other similar fees or charges
under Federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and delivery
of this Agreement or the issuance by the Company or sale by the Company of
the Securities.
(r) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a
Material Adverse Effect, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto)) and has paid all taxes
required to be paid by it and any other assessment, fine or penalty levied
against it by a federal, state or local government entity, to the extent
that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good
faith or as would not have a Material Adverse Effect, except as set forth
in or contemplated in the Prospectus (exclusive of any supplement
thereto).
(s) No labor problem or dispute with the employees of the Company or
its subsidiary exists or is threatened or imminent that could have a
Material Adverse Effect, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
(t) The Company and its subsidiary are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which they
are engaged; all policies of insurance insuring the Company or its
subsidiary or their respective businesses, assets, employees, officers and
directors are in full force and effect; the Company and its subsidiary are
in compliance with the terms of such policies and instruments in all
material respects; and there are no claims by the Company or its
subsidiary under any such policy or instrument as to which any insurance
company is denying liability or defending under a reservation of rights
clause; neither the Company nor any such subsidiary has been refused any
insurance coverage sought or applied for; and neither the Company nor any
such subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from
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similar insurers as may be necessary to continue its business at a cost
that would not have a Material Adverse Effect, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto).
(u) The Company's subsidiary is not currently prohibited, directly
or indirectly, from paying any dividends to the Company, from making any
other distribution on such subsidiary's capital stock, from repaying to
the Company any loans or advances to such subsidiary from the Company or
from transferring any of such subsidiary's property or assets to the
Company or any other subsidiary of the Company, except as described in or
contemplated by the Prospectus (exclusive of any supplement thereto).
(v) The Company and its subsidiary possess all licenses,
certificates, permits and other authorizations issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
their respective businesses, except where failure to possess such
licenses, certificates, permits or other authorizations would not have a
Material Adverse Effect, and neither the Company nor its subsidiary has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a Material Adverse Effect, except as set
forth in or contemplated in the Prospectus (exclusive of any supplement
thereto).
(w) The Company and its subsidiary maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(x) The Company has not taken, directly or indirectly, any action
designed to or that would constitute or that might reasonably be expected
to cause or result in, under the Exchange Act or otherwise, stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(y) The Company and its subsidiary are (i) in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received and are in compliance with all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) have
not received notice of any actual or potential liability under any
environmental law, except where such non-compliance with
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Environmental Laws, failure to receive required permits, licenses or other
approvals, or liability would not, individually or in the aggregate, have
a Material Adverse Effect, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto). Except as set forth in
the Prospectus, neither the Company nor its subsidiary has been named as a
"potentially responsible party" under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
(z) Neither the Company nor its subsidiary maintains or is required
to contribute to a "welfare plan" (as defined in Section 3(1) of Employee
Retirement Income Security Act of 1974, as amended, and the regulations
and published interpretations thereunder ("ERISA")) which provides retiree
or other post-employment welfare benefits or insurance coverage (other
than "continuation coverage" (as defined in Section 602 of ERISA)) [Note:
Need to confirm]; [and each welfare plan established or maintained by the
Company and/or its subsidiary is in compliance in all material respects
with the currently applicable provisions of ERISA.]
(aa) There is and has been no failure on the part of the Company and
any of the Company's directors or officers, in their capacities as such,
to comply with, if applicable, any provision of the Sarbanes Oxley Act of
2002 and the rules and regulations promulgated in connection therewith
(the "Sarbanes Oxley Act"), including Section 402 related to loans and
Sections 302 and 906 related to certifications.
(bb) Neither the Company nor its subsidiary nor, to the knowledge of
the Company, any director, officer, agent, employee or affiliate of the
Company or its subsidiary is aware of or has taken any action, directly or
indirectly, that would result in a violation by such Persons of the FCPA,
including, without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of an
offer, payment, promise to pay or authorization of the payment of any
money, or other property, gift, promise to give, or authorization of the
giving of anything of value to any "foreign official" (as such term is
defined in the FCPA) or any foreign political party or official thereof or
any candidate for foreign political office, in contravention of the FCPA
and the Company, its subsidiary and, to the knowledge of the Company, its
affiliates have conducted their businesses in compliance with the FCPA and
have instituted and maintain policies and procedures designed to ensure,
and which are reasonably expected to continue to ensure, continued
compliance therewith, except, in each case, as would not reasonably be
expected to have a Material Adverse Effect.
"FCPA" means Foreign Corrupt Practices Act of 1977, as amended, and
the rules and regulations thereunder.
(cc) The operations of the Company and its subsidiary are and have
been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act
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of 1970, as amended, the money laundering statutes of all jurisdictions,
the rules and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the "Money Laundering Laws") and no
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or its
subsidiary with respect to the Money Laundering Laws is pending or, to the
best knowledge of the Company, threatened.
(dd) Neither the Company nor its subsidiary nor, to the knowledge of
the Company, any director, officer, agent, employee or affiliate of the
Company or its subsidiary is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department ("OFAC"); and the Company will not directly or indirectly use
the proceeds of the offering, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or other
person or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by OFAC.
(ee) The Company's subsidiary listed on Annex A attached hereto is
not a significant subsidiary of the Company as defined by Rule 1-02 of
Regulation S-X. The Company does not own or control, directly or
indirectly, any corporation or other entity other than the subsidiary
listed on Annex A.
(ff) The Company and its subsidiary own, possess, license or have
other rights to use, on reasonable terms, all patents, patent
applications, trade and service marks, trade and service ▇▇▇▇
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property in the
United States (collectively, the "Intellectual Property") necessary for
the conduct of the Company's business as now conducted or as proposed in
the Prospectus to be conducted, except where the failure to own, possess,
license or otherwise have a right to use, on reasonable terms, such
Intellectual Property would not have a Material Adverse Effect. Except as
set forth in the Prospectus under the caption "Business - Intellectual
Property", (a) there are no rights of third parties to any such
Intellectual Property, except for licensors' rights, if any; (b) to the
Company's knowledge, there is no material infringement, misappropriation
or violation by third parties of any such Intellectual Property; (c) there
is no pending or, to the Company's knowledge, threatened action, suit,
proceeding or claim by others challenging the Company's rights in or to
any such Intellectual Property; (d) the Intellectual Property owned by the
Company and, to the Company's knowledge, the Intellectual Property
licensed to the Company have not been adjudged invalid or unenforceable,
in whole or in part, and there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others
challenging the validity or scope of any such Intellectual Property, and
the Company is unaware of any facts which would form a reasonable basis
for any such claim; (e) there is no pending or, to the Company's
knowledge, threatened action, suit,
10
proceeding or claim by others that the Company infringes, misappropriates
or otherwise violates any patent, trademark, copyright, trade secret or
other proprietary rights of others, and the Company has not received any
written notice of such claim and the Company is unaware of any other fact
which would form a reasonable basis for any such claim except as set forth
in clause (d) above; (f) to the Company's knowledge, there is no U.S.
patent or published U.S. patent application which contains claims that
dominate or may dominate any Intellectual Property described in the
Prospectus as being owned by or licensed to the Company or that interferes
with the issued or pending claims of any such Intellectual Property except
as set forth in clause (d) above; (g) there is no prior art of which the
Company is aware that may render any U.S. patent held by the Company
invalid or any U.S. patent application held by the Company unpatentable
which the Company is obliged to have disclosed to the U.S. Patent and
Trademark Office and which has not been disclosed; and (h) to the
Company's knowledge, no employee of the Company is in or has ever been in
violation of any term of any employment contract, patent disclosure
agreement, invention assignment agreement, non-competition agreement,
non-solicitation agreement, nondisclosure agreement or any restrictive
covenant to or with a former employer where the basis of such violation
relates to such employee's employment with the Company or actions
undertaken by the employee while employed with the Company.
Furthermore, the Company represents and warrants to Citigroup Global
Markets Inc. that (i) the Registration Statement, the Prospectus and any
preliminary prospectus comply, and any further amendments or supplements thereto
will comply, with any applicable laws or regulations of foreign jurisdictions in
which the Prospectus or any preliminary prospectus, as amended or supplemented,
if applicable, are distributed in connection with the Directed Share Program,
and that (ii) no authorization, approval, consent, license, order, registration
or qualification of or with any government, governmental instrumentality or
court, other than such as have been obtained, is necessary under the securities
laws and regulations of foreign jurisdictions in which the Directed Shares are
offered outside the United States. The Company has not offered, or caused the
Underwriters to offer, Securities to any person pursuant to the Directed Share
Program with the specific intent to unlawfully influence (i) a customer or
supplier of the Company to alter the customer's or supplier's level or type of
business with the Company, or (ii) a trade journalist or publication to write or
publish favorable information about the Company or its products.
Any certificate signed by any officer of the Company and delivered
to the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
(ii) Each Selling Shareholder represents and warrants to, and agrees
with, each Underwriter that:
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(a) Such Selling Shareholder is the record and beneficial owner of
the Securities to be sold by it hereunder free and clear of all liens,
encumbrances, equities and claims and has duly endorsed such Securities in
blank, and, assuming that each Underwriter acquires its interest in the
Securities it has purchased from such Selling Shareholder without notice
of any adverse claim (within the meaning of Section 8-105 of the New York
Uniform Commercial Code ("UCC")), each Underwriter that has purchased such
Securities delivered on the Closing Date or settlement date, if
applicable, to The Depository Trust Company or other securities
intermediary by making payment therefor as provided herein, and that has
had such Securities credited to the securities account or accounts of such
Underwriters maintained with The Depository Trust Company or such other
securities intermediary will have acquired a security entitlement (within
the meaning of Section 8-102(a)(17) of the UCC) to such Securities
purchased by such Underwriter, and no action based on an adverse claim
(within the meaning of Section 8-105 of the UCC) may be asserted against
such Underwriter with respect to such Securities.
(b) Such Selling Shareholder has not taken, directly or indirectly,
any action designed to or that would constitute or that might reasonably
be expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities.
(c) Certificates in negotiable form for such Selling Shareholder's
Securities have been placed in custody, for delivery pursuant to the terms
of this Agreement, under a Custody Agreement and Power of Attorney duly
authorized (if applicable) executed and delivered by such Selling
Shareholder, in the form heretofore furnished to you (the "Custody
Agreement") with National City Bank, as Custodian (the "Custodian"); the
Securities represented by the certificates so held in custody for each
Selling Shareholder are subject to the interests hereunder of the
Underwriters; the arrangements for custody and delivery of such
certificates, made by such Selling Shareholder hereunder and under the
Custody Agreement, are not subject to termination by any acts of such
Selling Shareholder, or by operation of law, whether by the death or
incapacity of such Selling Shareholder or the occurrence of any other
event; and if any such death, incapacity or any other such event shall
occur before the delivery of such Securities hereunder, certificates for
the Securities will be delivered by the Custodian in accordance with the
terms and conditions of this Agreement and the Custody Agreement as if
such death, incapacity or other event had not occurred, regardless of
whether or not the Custodian shall have received notice of such death,
incapacity or other event.
(d) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by such
Selling Shareholder of the transactions contemplated herein, except such
as may have been obtained under the Act and such as may be required under
the blue sky laws
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of any jurisdiction in connection with the purchase and distribution of
the Securities by the Underwriters and such other approvals as have been
obtained.
(e) Neither the sale of the Securities being sold by such Selling
Shareholder nor the consummation of any other of the transactions herein
contemplated by such Selling Shareholder or the fulfillment of the terms
hereof by such Selling Shareholder will conflict with, result in a breach
or violation of, or constitute a default under, any law or the charter or
by-laws of such Selling Shareholder, if applicable, or the terms of any
indenture or other agreement or instrument to which such Selling
Shareholder or any of its subsidiaries is a party or bound, or any
judgment, order or decree applicable to such Selling Shareholder or any of
its subsidiaries of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over such Selling
Shareholder or any of its subsidiaries.
(f) Such Selling Shareholder has no reason to believe that the
representations and warranties of the Company contained in this Section 1
are not true and correct, is familiar with the Registration Statement and
has no knowledge of any material fact, condition or information not
disclosed in the Prospectus or any supplement thereto which has adversely
affected or may adversely affect the business of the Company or its
subsidiary; and the sale of Securities by such Selling Shareholder
pursuant hereto is not prompted by any information concerning the Company
or its subsidiary which is not set forth in the Prospectus or any
supplement thereto.
(g) In respect of any statements in or omissions from the
Registration Statement or the Prospectus or any supplements thereto made
in reliance upon and in conformity with information furnished in writing
to the Company by any Selling Shareholder specifically for use in
connection with the preparation thereof, such Selling Shareholder hereby
makes the same representations and warranties to each Underwriter as the
Company makes to such Underwriter under paragraph (i)(b) of this Section.
Any certificate signed by any Selling Shareholder or any officer of
any Selling Shareholder and delivered to the Representatives or counsel for the
Underwriters in connection with the offering of the Securities shall be deemed a
representation and warranty by such Selling Shareholder, as to matters covered
thereby, to each Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
and the Selling Shareholders agree, severally and not jointly, to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Company and the Selling Shareholders, at a purchase price of $ per
share, the amount of the Underwritten Securities set forth opposite such
Underwriter's name in Schedule I hereto.
13
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, each of the Selling
Shareholders hereby grants an option to the several Underwriters to purchase,
severally and not jointly, up to Option Securities at the same purchase price
per share as the Underwriters shall pay for the Underwritten Securities. Said
option may be exercised only to cover over-allotments in the sale of the
Underwritten Securities by the Underwriters. Said option may be exercised in
whole or in part at any time on or before the 30th day after the date of the
Prospectus upon written or telegraphic notice by the Representatives to the
Company setting forth the number of shares of the Option Securities as to which
the several Underwriters are exercising the option and the settlement date. The
number of Option Securities to be purchased by each Underwriter shall be the
same percentage of the total number of shares of the Option Securities to be
purchased by the several Underwriters as such Underwriter is purchasing of the
Underwritten Securities, subject to such adjustments as you in your absolute
discretion shall make to eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 2(b) hereof shall have been exercised on or before the third Business
Day prior to the Closing Date) shall be made at 10:00 AM, New York City time,
on , 2004, or at such time on such later date not more than three
Business Days after the foregoing date as the Representatives shall designate,
which date and time may be postponed by agreement among the Representatives, the
Company and the Selling Shareholders or as provided in Section 9 hereof (such
date and time of delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Securities shall be made to the Representatives
for the respective accounts of the several Underwriters against payment by the
several Underwriters through the Representatives of the respective aggregate
purchase prices of the Securities being sold by the Company and each of the
Selling Shareholders to or upon the order of the Company and the Selling
Shareholders by wire transfer payable in same-day funds to the accounts
specified by the Company and the Selling Shareholders. Delivery of the
Underwritten Securities and the Option Securities shall be made through the
facilities of The Depository Trust Company unless the Representatives shall
otherwise instruct.
Each Selling Shareholder will pay all applicable state transfer
taxes, if any, involved in the transfer to the several Underwriters of the
Securities to be purchased by them from such Selling Shareholder and the
respective Underwriters will pay any additional stock transfer taxes involved in
further transfers.
If the option provided for in Section 2(b) hereof is exercised after
the third Business Day prior to the Closing Date, the Selling Shareholders will
deliver the Option Securities (at the expense of the Selling Shareholders) to
the Representatives, at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ the date
specified by the Representatives (which shall be within three Business Days
after exercise of said option) for the respective accounts of the several
Underwriters, against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified
14
by the Company. If settlement for the Option Securities occurs after the Closing
Date, the Company will deliver to the Representatives on the settlement date for
the Option Securities, and the obligation of the Underwriters to purchase the
Option Securities shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Agreements. (i) The Company agrees with the several Underwriters
that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering of
the Securities, the Company will not file any amendment of the
Registration Statement or supplement to the Prospectus or any Rule 462(b)
Registration Statement unless the Company has furnished you a copy for
your review prior to filing and will not file any such proposed amendment
or supplement to which you reasonably object. Subject to the foregoing
sentence, if the Registration Statement has become or becomes effective
pursuant to Rule 430A, or filing of the Prospectus is otherwise required
under Rule 424(b), the Company will cause the Prospectus, properly
completed, and any supplement thereto to be filed in a form approved by
the Representatives with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to the Representatives of such timely
filing. The Company will promptly advise the Representatives (1) when the
Registration Statement, if not effective at the Execution Time, shall have
become effective, (2) when the Prospectus, and any supplement thereto,
shall have been filed (if required) with the Commission pursuant to Rule
424(b) or when any Rule 462(b) Registration Statement shall have been
filed with the Commission, (3) when, prior to termination of the offering
of the Securities, any amendment to the Registration Statement shall have
been filed or become effective, (4) of any request by the Commission or
its staff for any amendment of the Registration Statement, or any Rule
462(b) Registration Statement, or for any supplement to the Prospectus or
for any additional information, (5) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or the institution or threatening of any proceeding for that purpose and
(6) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of
any such stop order or the suspension of any such qualification and, if
issued, to obtain as soon as possible the withdrawal thereof.
15
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Prospectus to comply with the
Act or the rules thereunder, the Company promptly will (1) notify the
Representatives of any such event, (2) prepare and file with the
Commission, subject to the second sentence of paragraph (i)(a) of this
Section 5, an amendment or supplement which will correct such statement or
omission or effect such compliance; and (3) supply any supplemented
Prospectus to you in such quantities as you may reasonably request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an earnings
statement or statements of the Company and its subsidiary which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under the
Act.
(d) The Company will furnish to the Representatives and counsel for
the Underwriters signed copies of the Registration Statement (including
exhibits thereto) and to each other Underwriter a copy of the Registration
Statement (without exhibits thereto) and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Act, as many
copies of each Preliminary Prospectus and the Prospectus and any
supplement thereto as the Representatives may reasonably request.
(e) The Company will arrange, if necessary, for the qualification of
the Securities for sale under the laws of such jurisdictions as the
Representatives may designate and will maintain such qualifications in
effect so long as required for the distribution of the Securities;
provided that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take
any action that would subject it to service of process in suits, other
than those arising out of the offering or sale of the Securities, in any
jurisdiction where it is not now so subject.
(f) The Company will not, without the prior written consent of
Citigroup Global Markets Inc., offer, sell, contract to sell, pledge, or
otherwise dispose of, (or enter into any transaction which is designed to,
or might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash
settlement or otherwise) by the Company or any affiliate of the Company or
any person in privity with the Company or any affiliate of the Company),
or file (or participate in the filing of) a registration statement with
the Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act with respect to, any shares of
capital stock of the Company or any securities convertible into, or
exercisable, or exchangeable for such capital stock; or publicly announce
an intention to effect
16
any such transaction, for a period of 180 days after the date of this
Agreement. In the event that either (x) during the last 17 days of the
180-day period referred to above, the Company issues an earnings release
or (y) prior to the expiration of such 180-day period, the Company
announces that it will release earnings results during the 17-day period
beginning on the last day of such 180-day period, the restrictions
described above shall continue to apply until the expiration of the 17-day
period beginning on the date of the earnings release; provided, however,
that the Company may issue and sell Common Shares pursuant to any employee
stock option plan, stock ownership plan or dividend reinvestment plan of
the Company in effect at the Execution Time and the Company may issue
Common Shares issuable upon the conversion of securities or the exercise
of warrants outstanding at the Execution Time.
(g) Until two years after the later of the Closing Date and the
settlement date, the Company will comply with all applicable securities
and other applicable laws, rules and regulations, including, without
limitation, the Sarbanes Oxley Act, and to use its best efforts to cause
the Company's directors and officers, in their capacities as such, to
comply with such laws, rules and regulations, including, without
limitation, the provisions of the Sarbanes Oxley Act.
(h) The Company will not take, directly or indirectly, any action
designed to or that would constitute or that might reasonably be expected
to cause or result in, under the Exchange Act or otherwise, stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities by the Underwriters.
(i) The Company agrees to pay the costs and expenses relating to the
following matters: (i) the preparation, printing or reproduction and
filing with the Commission of the Registration Statement (including
financial statements and exhibits thereto), each Preliminary Prospectus,
the Prospectus, and each amendment or supplement to any of them; (ii) the
printing (or reproduction) and delivery (including postage, air freight
charges and charges for counting and packaging) of such copies of the
Registration Statement, each Preliminary Prospectus, the Prospectus, and
all amendments or supplements to any of them, as may, in each case, be
reasonably requested for use in connection with the offering and sale of
the Securities; (iii) the preparation, printing, authentication, issuance
and delivery of certificates for the Securities, including any stamp or
transfer taxes in connection with the original issuance and sale of the
Securities; (iv) the printing (or reproduction) and delivery of this
Agreement, any blue sky memorandum and all other agreements or documents
printed (or reproduced) and delivered in connection with the offering of
the Securities; (v) the registration of the Securities under the Exchange
Act and the listing of the Securities on the New York Stock Exchange; (vi)
any registration or qualification of the Securities for offer and sale
under the securities or blue sky laws of the several states (including
filing fees and the reasonable fees and expenses of counsel for the
Underwriters relating to such registration and qualification); (vii) any
filings required to be made with the NASD (including filing fees and the
reasonable fees and expenses
17
of counsel for the Underwriters relating to such filings); (viii) the
transportation and other expenses incurred by or on behalf of Company
representatives in connection with presentations to prospective purchasers
of the Securities; (ix) the fees and expenses of the Company's accountants
and the fees and expenses of counsel (including local and special counsel)
for the Company and the Selling Shareholders; and (x) all other costs and
expenses incident to the performance by the Company and the Selling
Shareholders of their obligations hereunder.
(j) In connection with the Directed Share Program, the Company will
ensure that the Directed Shares will be restricted to the extent required
by the NASD or the NASD rules from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of the
effectiveness of the Registration Statement. Citigroup Global Markets Inc.
will notify the Company as to which Participants will need to be so
restricted. The Company will direct the removal of such transfer
restrictions upon the expiration of such period of time.
(k) The Company agrees to pay (1) all fees and disbursements of
counsel incurred by the Underwriters in connection with the Directed Share
Program, (2) all costs and expenses incurred by the Underwriters in
connection with the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of
copies of the Directed Share Program material and (3) all stamp duties,
similar taxes or duties or other taxes, if any, incurred by the
Underwriters in connection with the Directed Share Program. The Company
acknowledges that the Underwriters will not offer the Directed Shares in
connection with the Directed Share Program in any jurisdiction outside of
the United States.
(ii) Each Selling Shareholder agrees with the several Underwriters
that:
(a) Such Selling Shareholder will not, without the prior written
consent of Citigroup Global Markets Inc., offer, sell, contract to sell,
pledge or otherwise dispose of, (or enter into any transaction which is
designed to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to
cash settlement or otherwise) by such Selling Shareholder or any affiliate
of such Selling Shareholder or any person in privity with such Selling
Shareholder or any affiliate of such Selling Shareholder) directly or
indirectly, or file (or participate in the filing of) a registration
statement with the Commission in respect of, or establish or increase a
put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Exchange Act with respect
to, any shares of capital stock of the Company or any securities
convertible into or exercisable or exchangeable for such capital stock, or
publicly announce an intention to effect any such transaction, for a
period of 180 days after the date of this Agreement, other than Common
Shares disposed of as bona fide gifts approved by Citigroup Global Markets
Inc. In the event that either (x) during the last 17 days of the 180-day
period referred to above, the Company issues an earnings release or (y)
prior to
18
the expiration of such 180-day period, the Company announces that it will
release earnings results during the 17-day period beginning on the last
day of such 180-day period, the restrictions described above shall
continue to apply until the expiration of the 17-day period beginning on
the date of the earnings release.
(b) Such Selling Shareholder will not take, directly or indirectly,
any action designed to or that would constitute or that might reasonably
be expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities by the Underwriters.
(c) Such Selling Shareholder will advise you promptly, and if
requested by you, will confirm such advice in writing, so long as delivery
of a prospectus relating to the Securities by an underwriter or dealer may
be required under the Act, of (i) any material change in the Company's
condition (financial or otherwise), prospects, earnings, business or
properties, (ii) any change in information in the Registration Statement
or the Prospectus relating to such Selling Shareholder or (iii) any new
material information relating to the Company or relating to any matter
stated in the Prospectus which comes to the attention of such Selling
Shareholder.
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Shareholders contained herein as of the Execution Time, the Closing Date and any
settlement date pursuant to Section 3 hereof, to the accuracy of the statements
of the Company and the Selling Shareholders made in any certificates pursuant to
the provisions hereof, to the performance by the Company and the Selling
Shareholders of their respective obligations hereunder and to the following
additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 PM New York City time on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 9:30 AM on the Business Day following
the day on which the public offering price was determined, if such
determination occurred after 3:00 PM New York City time on such date; if
filing of the Prospectus, or any supplement thereto, is required pursuant
to Rule 424(b), the Prospectus, and any such supplement, will be filed in
the manner and within the time period required by Rule 424(b); and no stop
order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Company shall have requested and caused ▇▇▇▇▇▇, Halter &
▇▇▇▇▇▇▇▇ LLP, counsel for the Company, to have furnished to the
Representatives
19
their opinion, dated the Closing Date and settlement date, if applicable,
and addressed to the Representatives, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full
corporate power and authority to own or lease, as the case may be,
and to operate its properties and conduct its business as described
in the Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction listed on Annex A hereto;
(ii) the Company's authorized equity capitalization is as set
forth in the Prospectus; the capital stock of the Company conforms
in all material respects to the description thereof contained in the
Prospectus under the caption, "Description of Capital Stock"; the
outstanding shares of Common Shares (including the Securities being
sold hereunder by the Selling Shareholders) have been duly and
validly authorized and issued and are fully paid and nonassessable;
the Securities being sold hereunder by the Company have been duly
and validly authorized, and, when issued and delivered to and paid
for by the Underwriters pursuant to this Agreement, will be fully
paid and nonassessable; the Securities being sold hereunder by the
Company and the Selling Shareholders are duly listed, and admitted
and authorized for trading, subject to official notice of issuance
and evidence of satisfactory distribution, on the New York Stock
Exchange; the certificates for the Securities are in valid and
sufficient form under the Ohio General Corporation Law; and the
holders of outstanding shares of capital stock of the Company are
not entitled to statutory preemptive or, to the knowledge of such
counsel, other similar contractual rights to subscribe for the
Securities; and, except as set forth in the Prospectus, no options,
warrants or other rights to purchase, agreements or other
obligations to issue, or rights to convert any obligations into or
exchange any securities for, shares of capital stock of or ownership
interests in the Company are outstanding;
(iii) to the knowledge of such counsel and other than as set
forth in the Prospectus, (a) there is no pending or threatened
action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or
its subsidiary or its or their property of a character required to
be disclosed in the Registration Statement pursuant to Item 103 of
Regulation S-K which is not adequately disclosed in the Prospectus,
and (b) there is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required; and the statements in the Prospectus
under the headings "Business - Legal Proceedings", "Description of
Capital Stock", "Shares Eligible for Future Sale" and "Material U.S.
Federal Tax Considerations for Non-U.S. Holders of Common Shares",
insofar as such
20
statements summarize legal matters, agreements, documents or
proceedings discussed therein, are accurate and, in all material
respects, fair summaries of such legal matters, agreements,
documents or proceedings;
(iv) the Registration Statement has become effective under the
Act; any required filing of the Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to the knowledge of
such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that
purpose have been instituted or threatened and the Registration
Statement and the Prospectus (other than the financial statements,
including the notes and schedules thereto, and other financial and
statistical information contained therein, as to which such counsel
need express no opinion) appear on their face to be responsive in
all material respects with the applicable requirements of the Act
and the rules thereunder;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) the Company is not and, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Prospectus, will not be, an
"investment company" as defined in the Investment Company Act of
1940, as amended;
(vii) no consent, approval, authorization, filing with or
order of any court or governmental agency or body is required in
connection with the transactions contemplated herein, except such as
have been obtained under the Act, the Exchange Act and such as may
be required by the NASD or under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriters in the manner contemplated in this
Agreement and in the Prospectus and such other approvals (specified
in such opinion) as have been obtained;
(viii) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions herein contemplated
nor the fulfillment of the terms hereof will conflict with, result
in a breach or violation of, or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or its
subsidiary pursuant to, (i) the articles of incorporation or code of
regulations of the Company, (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or
instrument to which the Company is a party or bound or to which its
property is subject and which is filed as an exhibit to the
Registration Statement, or (iii) any United States federal or Ohio
statute, law, rule, regulation, judgment, order or decree applicable
to the Company
21
or its subsidiary or, to the knowledge of such counsel, of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company
or its subsidiary or any of its or their properties; and
(ix) to the knowledge of such counsel, after due inquiry, no
holders of securities of the Company have rights to the registration
of such securities under the Registration Statement, except for
Recall Total Information Management, Inc., which has waived its
rights to registration with respect to the remainder of its
securities of the Company with respect to the offering of
Securities.
In addition, such counsel shall state that, in the course of the
preparation by the Company of the Registration Statement and the
Prospectus, they have participated in conferences with officers and other
representatives of the Company, counsel for the Company, representatives
of the Selling Shareholders, counsel for the Selling Shareholders,
representatives of the independent public accountants for the Company and
representatives of the Underwriters, at which the contents of the
Registration Statement, the Prospectus included therein and related
matters were discussed. Such counsel shall state that given the
limitations inherent in the independent verification of factual matters
and the character of determinations involved in the registration process
(except as otherwise expressly set forth in their opinion), they are not
passing upon or assuming responsibility for the accuracy or completeness
of the statements contained in the Registration Statement and have not
independently checked the accuracy or completeness of, or otherwise
verified, any statements of fact contained in the Registration Statement
or the Prospectus. Such counsel shall also state that on the basis of the
information gained during the course of performing the services referred
to above, nothing has come to their attention that would lead them to
believe that either the Registration Statement or the Prospectus, as of
the date of the Prospectus or as of the date of such opinion (except as to
the financial statements and the notes and schedules thereto, and other
financial and statistical data included therein or omitted therefrom, as
to all of which such counsel need express no belief) contained or contains
an untrue statement of material fact or omitted or omits to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of Ohio or the Federal laws of the United States, to the extent they deem
proper and specified in such opinion, upon the opinion of other counsel of
good standing whom they believe to be reliable and who are satisfactory to
counsel for the Underwriters and (B) as to matters of fact, to the extent
they deem proper, on certificates of responsible officers of the Company
and public officials. References to the Prospectus in this paragraph (b)
shall also include any supplements thereto at the Closing Date or
settlement date, if applicable.
22
(c) The Selling Shareholders shall have requested and caused ▇▇▇▇▇▇,
Halter & ▇▇▇▇▇▇▇▇ LLP, counsel for the Selling Shareholders, to have
furnished to the Representatives their opinion dated the Closing Date and
settlement date, if applicable, and addressed to the Representatives, to
the effect that:
(i) this Agreement and the Custody Agreement and Power of
Attorney have been duly authorized, executed and delivered by the
Selling Shareholders, the Custody Agreement is valid and binding on
the Selling Shareholders and each Selling Shareholder has full legal
right and authority to sell, transfer and deliver in the manner
provided in this Agreement and the Custody Agreement the Securities
being sold by such Selling Shareholder hereunder;
(ii) assuming that each Underwriter acquires its interest in
the Securities it has purchased from such Selling Shareholder
without notice of any adverse claim (within the meaning of Section
8-105 of the UCC), each Underwriter that has purchased such
Securities delivered on the Closing Date or settlement date, if
applicable, to The Depository Trust Company or other securities
intermediary by making payment therefor as provided herein, and that
has had such Securities credited to the securities account or
accounts of such Underwriters maintained with The Depository Trust
Company or such other securities intermediary will have acquired a
security entitlement (within the meaning of Section 8-102(a)(17) of
the UCC) to such Securities purchased by such Underwriter, and no
action based on an adverse claim (within the meaning of Section
8-105 of the UCC) may be asserted against such Underwriter with
respect to such Securities;
(iii) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
consummation by any Selling Shareholder of the transactions
contemplated herein, except such as may have been obtained under the
Act, the Exchange Act and such as may be required by the NASD or
under the blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the Underwriters and
such other approvals (specified in such opinion) as have been
obtained; and
(iv) neither the sale of the Securities being sold by any
Selling Shareholder nor the consummation of any other of the
transactions herein contemplated by any Selling Shareholder or the
fulfillment of the terms hereof by any Selling Shareholder will
conflict with, result in a breach or violation of, or constitute a
default under any United States federal or Ohio law or the charter
or By-laws of any Selling Shareholder, if applicable, or the terms
of any indenture or other agreement or instrument known to such
counsel and to which any Selling Shareholder or any of its
subsidiaries is a party or bound, or any judgment, order or decree
known to such counsel to be applicable to any Selling Shareholder or
any of its
23
subsidiaries of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over any Selling
Shareholder or any of its subsidiaries.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of or the Federal laws of the United States, to the extent
they deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters, and (B) as to matters of
fact, to the extent they deem proper, on certificates of the Selling
Shareholders or the responsible officers of the Selling Shareholders and
public officials. In rendering such opinion, such counsel also may assume
and rely upon, without independent investigation, the accuracy of all
representations and warranties made by the Selling Shareholders in the
Custody Agreement.
(d) The Representatives shall have received from Shearman & Sterling
LLP, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date and settlement date, if applicable, and addressed to the
Representatives, with respect to the issuance and sale of the Securities,
the Registration Statement, the Prospectus (together with any supplement
thereto) and other related matters as the Representatives may reasonably
require, and the Company and each Selling Shareholder shall have furnished
to such counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(e) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date and settlement date, if applicable, to the
effect that the signers of such certificate have carefully examined the
Registration Statement, the Prospectus, any supplements to the Prospectus
and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct on and as of the Closing Date or
settlement date, if applicable, with the same effect as if made on
the Closing Date or settlement date, if applicable, and the Company
has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to
the Closing Date or settlement date, if applicable;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto),
there has been no material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or
properties of the Company and its
24
subsidiary, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth
in or contemplated in the Prospectus (exclusive of any supplement
thereto).
(f) Each Selling Shareholder shall have furnished to the
Representatives a certificate, signed by such Selling Shareholder or by
the Chairman of the Board or the President and the principal financial or
accounting officer of such Selling Shareholder, dated the Closing Date and
settlement date, if applicable,, to the effect that the signer or signers
of such certificate have carefully examined the Registration Statement,
the Prospectus, any supplement to the Prospectus and this Agreement and
that the representations and warranties of such Selling Shareholder in
this Agreement are true and correct in all material respects on and as of
the Closing Date or settlement date, if applicable, to the same effect as
if made on the Closing Date or settlement date, if applicable.
(g) The Company shall have requested and caused Ernst & Young LLP to
have furnished to the Representatives letters, at the Execution Time and
at the Closing Date and settlement date, if applicable, dated respectively
as of the Execution Time and as of the Closing Date and settlement date,
if applicable, in form and substance satisfactory to the Representatives,
confirming that they are independent accountants within the meaning of the
Act and the applicable rules and regulations adopted by the Commission
thereunder and containing statements and information of the type
ordinarily included in accountant's comfort letters delivered in
accordance with Statement of Auditing Standards Nos. 72, 76 and 86 (or any
successor bulletins), with respect to the audited and unaudited financial
statements and certain financial information contained in the Registration
Statement, including any supplement thereto at the date of such letter.
(h) Prior to the Closing Date, the Company shall have received from
Ernst & Young LLP (and furnished to the Representatives) a report with
respect to a review of unaudited interim financial information of the
Company for the eight quarters ending March 31, 2004, in accordance with
Statement on Auditing Standards No. 100.
(i) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified
in the letter or letters referred to in paragraph (g) of this Section 6 or
(ii) any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), earnings, business or
properties of the Company and its subsidiary taken as a whole, whether or
not arising from transactions in the ordinary course of business, except
as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto) the effect of which, in any case referred to in clause
(i) or (ii) above, is, in the sole judgment of the Representatives, so
material and adverse as to make it impractical or inadvisable to proceed
with the offering or delivery of
25
the Securities as contemplated by the Registration Statement (exclusive of
any amendment thereof) and the Prospectus (exclusive of any supplement
thereto).
(j) Prior to the Closing Date and settlement date, if applicable,
the Company and the Selling Shareholders shall have furnished to the
Representatives such further information, certificates and documents as
the Representatives may reasonably request.
(k) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any intended
or potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible change.
(l) The Securities shall have been listed and admitted and
authorized for trading on the New York Stock Exchange, and satisfactory
evidence of such actions shall have been provided to the Representatives.
(m) At or prior to the Execution Time, the Company shall have
furnished to the Representatives a letter substantially in the form of
Exhibit A hereto from the Officers, Directors and other shareholders of
the Company that are not Selling Shareholders, as listed on Schedule II
hereto, addressed to the Representatives, which hold in the aggregate at
least 95% of the outstanding Common Shares of the Company.
(n) At or prior to the Execution Time, the Shareholders' Agreement,
dated as of January 31, 2001, among the Company, Recall and the other
shareholders party thereto, shall have been amended to remove the
preemptive rights pursuant to Section 5.7 of such agreement.
(o) At or prior to the Execution Time, Ernst & Young LLP shall have
provided to the Commission sworn declarations by both its Chief Executive
Officer and its Vice Chair for Quality and Risk Management, certifying
that it is independent under the rules and regulations adopted by the
Commission, standards adopted by the Public Company Accounting Oversight
Board, generally accepted auditing standards and all other applicable
standards, with respect to the Company, a copy of which shall have been
provided to the Representatives.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as provided in this Agreement, or if any of the opinions
and certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Representatives and counsel
for the Underwriters, this Agreement and all obligations of the Underwriters
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company and
each Selling Shareholder in writing or by telephone or facsimile confirmed in
writing.
26
The documents required to be delivered by this Section 6 shall be
delivered at the office of Shearman & Sterling LLP, counsel for the
Underwriters, at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, on the Closing
Date or settlement date, if applicable.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company or any Selling
Shareholder to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Underwriters, the Company will
reimburse the Underwriters severally through Citigroup Global Markets Inc. on
demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities. If the Company is
required to make any payments to the Underwriters under this Section 7 because
of any Selling Shareholder's refusal, inability or failure to satisfy any
condition to the obligations of the Underwriters set forth in Section 6, the
Selling Shareholders pro rata in proportion to the percentage of Securities to
be sold by each shall reimburse the Company on demand for all amounts so paid.
8. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless each Underwriter, the directors, officers, employees and
agents of each Underwriter and each person who controls any Underwriter within
the meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the registration statement for the registration of the
Securities as originally filed or in any amendment thereof, or in any
Preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion therein. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
(b) Each Selling Shareholder severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who signs the
Registration Statement, each Underwriter, the directors, officers, employees and
agents of each Underwriter and
27
each person who controls the Company or any Underwriter within the meaning of
either the Act or the Exchange Act and each other Selling Shareholder, if any,
to the same extent as the foregoing indemnity from the Company to each
Underwriter, but only with reference to written information furnished to the
Company by or on behalf of such Selling Shareholder specifically for inclusion
in the documents referred to in the foregoing indemnity. This indemnity
agreement will be in addition to any liability which any Selling Shareholder may
otherwise have.
(c) Each Underwriter severally and not jointly agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who signs
the Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act and each Selling Shareholder, to
the same extent as the foregoing indemnity to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company and each Selling Shareholder
acknowledge that the statements set forth in the last paragraph of the cover
page regarding delivery of the Securities and, under the heading "Underwriting",
(i) the list of Underwriters and their respective participation in the sale of
the Securities, (ii) the sentences related to concessions and reallowances,
(iii) the paragraphs related to stabilization, syndicate covering transactions,
short sales and penalty bids, and (iv) the paragraph related to electronic
distribution of the prospectus and allocation for electronic distribution of the
Securities in any Preliminary Prospectus and the Prospectus constitute the only
information furnished in writing by or on behalf of the several Underwriters for
inclusion in any Preliminary Prospectus or the Prospectus.
(d) The Company agrees to indemnify and hold harmless Citigroup Global
Markets Inc., the directors, officers, employees and agents of Citigroup Global
Markets Inc. and each person, who controls Citigroup Global Markets Inc. within
the meaning of either the Act or the Exchange Act ("Citigroup Entities"), from
and against any and all losses, claims, damages and liabilities to which they
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim), insofar as such losses,
claims damages or liabilities (or actions in respect thereof) (i) arise out of
or are based upon any untrue statement or alleged untrue statement of a material
fact contained in the prospectus wrapper material prepared by or with the
consent of the Company for distribution in foreign jurisdictions in connection
with the Directed Share Program attached to the Prospectus or any preliminary
prospectus, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statement therein, when considered in conjunction with the Prospectus
or any applicable preliminary prospectus, not misleading; (ii) caused by the
failure of any Participant to pay for and accept delivery of the securities
which immediately following the Effective Date of the Registration Statement,
were subject to a properly confirmed agreement to purchase; or (iii) related to,
arising out of, or in connection with the Directed Share Program, except that
this clause (iii) shall not apply
28
to the extent that such loss, claim, damage or liability is finally judicially
determined to have resulted primarily from the gross negligence or willful
misconduct of the Citigroup Entities.
(e) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, 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 commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a), (b), (c) or (d) above unless and to the extent it
did not otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses and (ii)
will not, in any event, relieve the indemnifying party from any obligations to
any indemnified party other than the indemnification obligation provided in
paragraph (a), (b), (c) or (d) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the reasonable fees and expenses of any separate
counsel retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, 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.
Notwithstanding anything contained herein to the contrary, if indemnity
may be sought pursuant to Section 8(d) hereof in respect of such action or
proceeding, then in addition to such separate firm for the indemnified parties,
the indemnifying party shall be liable for the reasonable fees and expenses of
not more than one separate firm (in addition to any local counsel) for Citigroup
Global Markets Inc., the directors, officers, employees and agents of Citigroup
Global Markets Inc., and all persons, if any, who
29
control Citigroup Global Markets Inc. within the meaning of either the Act or
the Exchange Act for the defense of any losses, claims, damages and liabilities
arising out of the Directed Share Program.
(f) In the event that the indemnity provided in paragraph (a), (b), (c) or
(d) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company, the Selling Shareholders and the
Underwriters agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which the
Company, one or more of the Selling Shareholders and one or more of the
Underwriters may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Company, by the Selling Shareholders and by
the Underwriters from the offering of the Securities; provided, however, that in
no case shall any Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be responsible for any
amount in excess of the underwriting discount or commission applicable to the
Securities purchased by such Underwriter hereunder. If the allocation provided
by the immediately preceding sentence is unavailable for any reason, the
Company, the Selling Shareholders and the Underwriters shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company, of the Selling Shareholders and of the
Underwriters in connection with the statements or omissions which resulted in
such Losses as well as any other relevant equitable considerations. Benefits
received by the Company and by the Selling Shareholders shall be deemed to be
equal to the total net proceeds from the offering (before deducting expenses)
received by each of them, and benefits received by the Underwriters shall be
deemed to be equal to the total underwriting discounts and commissions, in each
case as set forth on the cover page of the Prospectus. Relative fault shall be
determined by reference to, among other things, whether any untrue or any
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information provided by the Company, the
Selling Shareholders on the one hand or the Underwriters on the other, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The
Company, the Selling Shareholders and the Underwriters agree that it would not
be just and equitable if contribution were determined by pro rata allocation or
any other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (f), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (f).
30
The liability of each Selling Shareholder under such Selling
Shareholder's representations and warranties contained in Section 1 hereof and
under the indemnity and contribution agreements contained in this Section 8
shall be limited to an amount equal to the initial public offering price of the
Securities sold by such Selling Shareholder to the Underwriters. The Company and
the Selling Shareholders may agree, as among themselves and without limiting the
rights of the Underwriters under this Agreement, as to the respective amounts of
such liability for which they each shall be responsible.
9. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter, the
Selling Shareholders or the Company. In the event of a default by any
Underwriter as set forth in this Section 9, the Closing Date shall be postponed
for such period, not exceeding five Business Days, as the Representatives shall
determine in order that the required changes in the Registration Statement and
the Prospectus or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Underwriter of
its liability, if any, to the Company, the Selling Shareholders and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Securities, if at any time prior to
such time subsequent to the execution hereof and (i) trading in the Company's
Common Shares shall have been suspended by the Commission or the New York Stock
Exchange or trading in securities generally on the New York Stock Exchange or
the Nasdaq National Market shall have been suspended or limited or minimum
prices shall have been established on either of the New York Stock Exchange or
the Nasdaq National Market, (ii) a banking moratorium shall have been declared
either by Federal or New York State authorities or (iii) there shall have
occurred any outbreak or escalation of hostilities, declaration by the United
States of a national emergency or war, or other calamity or crisis the effect of
which on financial markets is such as to make it, in the sole judgment of the
Representatives, impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Prospectus (exclusive of any
supplement thereto).
31
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, of each Selling Shareholder and of the Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter,
any Selling Shareholder or the Company or any of the officers, directors,
employees, agents or controlling persons referred to in Section 8 hereof, and
will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Citigroup Global Markets Inc. General Counsel (fax
no.: (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to the General Counsel, Citigroup Global
Markets Inc., at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention:
General Counsel; or, if sent to the Company, will be mailed, delivered or
telefaxed to the Chief Financial Officer (fax no: (▇▇▇) ▇▇▇-▇▇▇▇ and confirmed
to the Chief Financial Officer and General Counsel at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: Chief Financial Officer and General Counsel; or
if sent to any Selling Shareholder, will be mailed, delivered or telefaxed and
confirmed to it at the address set forth in Schedule II hereto.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday or
a legal holiday or a day on which banking institutions or trust companies
are authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
32
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Intellectual Property" shall mean all patents, patent applications,
trade and service marks, trade and service ▇▇▇▇ registrations, trade
names, copyrights, licenses, inventions, trade secrets, technology,
know-how and other intellectual property.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(i)(a) above and any preliminary prospectus
included in the Registration Statement at the Effective Date that omits
Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the Securities
that is first filed pursuant to Rule 424(b) after the Execution Time or,
if no filing pursuant to Rule 424(b) is required, shall mean the form of
final prospectus relating to the Securities included in the Registration
Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(i)(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in
the event any post-effective amendment thereto or any Rule 462(b)
Registration Statement becomes effective prior to the Closing Date, shall
also mean such registration statement as so amended or such Rule 462(b)
Registration Statement, as the case may be. Such term shall include any
Rule 430A Information deemed to be included therein at the Effective Date
as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under the
Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred to
in Section 1(a) hereof.
33
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, the Selling Shareholder(s) and the several Underwriters.
Very truly yours,
▇▇▇▇▇▇ Software, Inc.
By:_____________________________
Name:
Title:
[NAME OF CUSTODIAN]
By:_____________________________
Name:
Title: Attorney-in-Fact
34
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Citigroup Global Markets Inc.
Wachovia Capital Markets, LLC
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co. Inc.
KeyBanc Capital Markets,
a division of McDonald Investments Inc.
By: Citigroup Global Markets Inc.
By:_______________________________________
Name:
Title:
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
35
SCHEDULE I
Number of Underwritten Securities
Underwriters to be Purchased
------------ ---------------
Citigroup Global Markets Inc. ...........................
Wachovia Capital Markets, LLC............................
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co. Inc.......................
KeyBanc Capital Markets,
a division of McDonald Investments Inc..............
................................................
................................................
................................................
................................................ ---------
Total........................................... =========
SCHEDULE II
NUMBER OF UNDERWRITTEN COMMON MAXIMUM NUMBER OF OPTIONAL
SELLING SHAREHOLDERS: SHARES TO BE SOLD COMMON SHARES TO BE SOLD
--------------------- ----------------- ------------------------
[name]
[address, fax no.]....................
.......................................
.......................................
.......................................
.......................................
------------- ---------------
Total ................
============= ===============
[FORM OF LOCK-UP AGREEMENT] EXHIBIT A
[LETTERHEAD OF OFFICER, DIRECTOR OR MAJOR STOCKHOLDER OF
CORPORATION]
Hyland Software, Inc.
Public Offering of Common Shares
__________, 2004
▇▇▇▇▇▇ Software, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), between ▇▇▇▇▇▇ Software,
Inc., an Ohio corporation (the "Company"), and the Underwriters to be named
therein (the "Underwriters"), relating to an underwritten public offering of
Common Shares, without par value (the "Common Shares"), of the Company.
In order to induce the Company and the Underwriters to enter into the
Underwriting Agreement, for a period of 180 days after the date of the
Underwriting Agreement, the undersigned will not, without the prior written
consent of the lead Underwriter named in the Underwriting Agreement, directly or
indirectly:
(a) offer, sell, contract to sell, pledge or otherwise dispose of any
shares of capital stock of the Company or any securities convertible into,
or exercisable or exchangeable for such capital stock;
(b) enter into any transaction which is designed to, or might reasonably
be expected to, result in the disposition (whether by actual disposition
or effective economic disposition due to cash settlement or otherwise) by
the undersigned or any affiliate of the undersigned or any person in
privity with the undersigned or any affiliate of the undersigned,
including the filing (or participation in the filing) of a registration
statement with the Securities and Exchange Commission in respect of any
shares of capital stock of the Company or any securities convertible into,
or exercisable or exchangeable for such capital stock;
(c) establish or increase a put equivalent position or liquidate or
decrease a call equivalent position within the meaning of Section 16 of
the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Securities and Exchange Commission promulgated
thereunder, with respect to any shares of capital stock of the Company or
any securities convertible into, or exercisable or exchangeable for such
capital stock; or
(d) publicly announce an intention to effect any transaction described in
(a), (b) or (c) with respect to any shares of capital stock of the Company
or any
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securities convertible into, or exercisable or exchangeable for such
capital stock.
In addition, in the event that either (x) during the last 17 days of the
180-day period referred to above, the Company issues an earnings release or (y)
prior to the expiration of such 180-day period, the Company announces that it
will release earnings results during the 17-day period beginning on the last day
of such 180-day period, the restrictions described above shall continue to apply
until the expiration of the 17-day period beginning on the date of the earnings
release.
Notwithstanding the foregoing, you agree that the undersigned may transfer
Common Shares to any of the undersigned's affiliates and may also make bona fide
gifts or other transfers not involving an exchange of value if, in either case,
the proposed transferee agrees to be bound by the terms hereof and delivers to
you an executed copy of this agreement prior to the proposed transfer.
The Underwriters shall be third party beneficiaries to the agreements made
hereunder between the undersigned and the Company and shall have the right to
enforce such agreements directly.
If for any reason the Underwriting Agreement shall be terminated prior to
the Closing Date (as defined in the Underwriting Agreement), the agreement set
forth above shall likewise be terminated.
Yours very truly,
______________________________________
Signature
______________________________________
Name (please print)
Signature (if held jointly or as Custodian or
Trustee)
______________________________________
Name (please print)