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EXHIBIT 1.1
TEAM AMERICA CORPORATION
1,250,000 Shares
Common Stock
UNDERWRITING AGREEMENT
___________________, 1996
THE OHIO COMPANY
▇▇▇▇▇ & CO.
As Representatives of the several Underwriters
named in Schedule A hereto
c/o The Ohio Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
TEAM America Corporation, an Ohio corporation (the "Company"), and the
stockholders of the Company named in Schedule B hereto (the "Selling
Stockholders") hereby confirm their agreement with you and the other
underwriters named in Schedule A annexed hereto as follows:
SECTION 1. UNDERWRITERS AND REPRESENTATIVES. The term "Underwriters," as used
herein, will mean and refer collectively to you and the other underwriters named
in Schedule A annexed hereto and the term "Representatives" will refer to both
of you in your capacity as the representatives of the Underwriters. Except as
may be expressly set forth below, any reference to you in this Agreement shall
be solely in your capacity as the Representatives.
SECTION 2. SHARES OFFERED. The Company proposes to issue and sell to the
Underwriters an aggregate of 1,250,000 shares of its authorized and unissued
common shares, without par value (the "Common Stock"). The above-referenced
shares of Common Stock to be sold by the Company are hereinafter called the
"Firm Shares." The Company and the Selling Stockholders also propose to
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grant to the Underwriters an Option (as hereinafter defined) to purchase from
the Company up to an additional aggregate of 187,500 shares (the "Option
Shares") of Common Stock on the terms and for the purposes set forth in Section
5(b) hereof. The Firm Shares and the Option Shares are hereinafter sometimes
together called the "Shares."
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter that:
(a) A registration statement on Form S-1 (File No. ________) relating
to the Shares, including a preliminary prospectus, has been prepared by the
Company in conformity with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the rules, regulations and instructions (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder and has been filed by the Company with the Commission. One or more
amendments to such registration statement, including in each case a revised
preliminary prospectus, have been so prepared and filed. If such registration
statement has not become effective as of the execution and delivery of this
Agreement, and the filing of a further amendment (the "Final Amendment") to such
registration statement is necessary to permit such registration statement to
become effective, such amendment will promptly be filed by the Company with the
Commission. If such registration statement has become effective and any
post-effective amendment has been filed with the Commission prior to the
execution and delivery of this Agreement, the most recent post-effective
amendment has been declared effective by the Commission. If such registration
statement has become effective and the prospectus included as part of the
registration statement at the time it became effective omitted information
permitted to be omitted by Rule 430A of the Rules and Regulations ("Rule 430A
Information"), a final prospectus (the "Rule 430A Prospectus") containing all
required Rule 430A Information will promptly be filed by the Company pursuant to
Rule 424(b) of the Rules and Regulations. The term "preliminary prospectus" as
used herein means any form of prospectus (as referred to in Rule 430 of the
Rules and Regulations) with respect to the Shares included at any time as part
of such registration statement or filed with the Commission pursuant to Rule
424(a) of the Rules and Regulations prior to such registration statement being
declared effective. The registration statement referred to in this Section 3(a)
as amended at the time that it becomes or became effective, or, if applicable,
as amended at the time the most recent post-effective amendment to such
registration statement filed with the Commission prior to the execution and
delivery of this Agreement became effective, including financial statements and
all exhibits and other information (whether filed or incorporated by reference)
deemed to be a part thereof at such time pursuant to Rule 430A of the Rules and
Regulations is herein called the "Registration Statement;" and the final
prospectus relating to the Shares in the form first filed with the Commission
pursuant to Rule 424(b)(1) or (4) of the Rules and Regulations or, if no such
filing is required, the form of final prospectus included in the Registration
Statement at the Effective Date (as hereinafter defined) is herein called the
"Prospectus." The date on which the Registration Statement becomes effective is
hereinafter called the "Effective Date."
(b) When the Registration Statement becomes effective, and at all
subsequent times to and including the Closing Time (as hereinafter defined) and
at the Option Exercise Time (as
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hereinafter defined), or for such longer period as the Prospectus may be
required, by the Act or the Rules and Regulations or the Exchange Act (as
hereinafter defined) or the rules and regulations promulgated thereunder, to be
delivered in connection with sales of the Shares by the Underwriters or a
dealer, the Registration Statement and the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
thereof or supplement thereto; provided that no amendment or supplement to the
Registration Statement or the Prospectus shall be made without prior
consultation with you) will comply with the requirements of the Act and the
Rules and Regulations, will contain all statements required to be stated therein
in accordance with the Act and the Rules and Regulations, will not contain an
untrue statement of a material fact and will not omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the representations and warranties in this
subsection (b) do not apply to statements or omissions in the Registration
Statement or the Prospectus based upon and made in conformity with written
information furnished to the Company through the Representatives by or on behalf
of any Underwriter specifically for inclusion therein.
(c) The Commission has not issued an order preventing or suspending the
use of any preliminary prospectus with respect to the Shares and has not
instituted or, to the Company's knowledge, threatened to institute any
proceedings with respect to such an order. Each preliminary prospectus, when
filed with the Commission, conformed in all material respects with the
requirements of the Act and the Rules and Regulations and, as of its date, did
not include any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided, however that the
representations and warranties in this sentence do not apply to statements or
omissions in each such preliminary prospectus based upon and made in conformity
with written information furnished to the Company through the Representatives by
or on behalf of any Underwriter specifically for inclusion in such preliminary
prospectus.
(d) The Company is, and at the Closing Time and at the Option Exercise
Time will be, a corporation duly organized, validly existing and in good
standing under the laws of the State of Ohio. The Company has, and at the
Closing Time and at the Option Exercise Time will have, the power and authority
(corporate, governmental, regulatory and otherwise) and has or will have all
necessary approvals, orders, licenses, certificates, permits and other
governmental authorizations (collectively the "Authorizations") to own or lease
all of the assets owned or leased by it and to conduct its business as described
in the Registration Statement and the Prospectus, except where the failure to
have any Authorization would not have a material adverse effect on the business,
condition (financial or otherwise), results of operations or assets of the
Company (a "Material Adverse Effect"). The Company is, and at the Closing Time
and at the Option Exercise Time will be, duly licensed or qualified to do
business and in good standing as a foreign corporation in all jurisdictions (i)
in which the nature of the activities conducted by it requires such
qualification and (ii) in which the Company owns or leases real property, except
where the failure to be so qualified would not have a Material Adverse Effect.
The Company does not own, and at the Closing Time and at the Option Exercise
Time the Company will not own, any shares of stock or any other equity
securities of any
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corporation or have any equity interest in any firm, partnership, association or
other entity other than as set forth in the Registration Statement. A complete
and correct copy of the Articles of Incorporation and the Code of Regulations of
the Company, in each case as amended and as currently in effect, have been
delivered or made available to you or your counsel and no changes therein will
be made subsequent to the date hereof and prior to the expiration of the Option.
(e) At the Closing Time and at the Option Exercise Time the Company
will be authorized to issue only 10,000,000 shares of Common Stock, 500,000
Voting Preferred Shares and 500,000 Non-Voting Preferred Shares, each without
par value, and at the Closing Time will have outstanding, fully paid and
nonassessable, 2,085,088 shares of Common Stock and no Voting Preferred Shares
or Non-Voting Preferred Shares, without giving effect to the issuance of shares
of Common Stock by the Company pursuant to this Agreement. At the Closing Time
and at the Option Exercise Time the Company will have authorized and reserved
for issuance 350,000 shares of Common Stock under the Company's Incentive Stock
Plan (the "Incentive Plan"), of which options to purchase ___ shares will be
outstanding. Subsequent to the date hereof and prior to the Closing Time and the
Option Exercise Time the Company will not issue any securities. Except as
contemplated by this Agreement and as set forth in the Registration Statement
and the Prospectus, the Company does not have outstanding, and at the Closing
Time and at the Option Exercise Time the Company will not have outstanding, any
options to purchase, or any rights or warrants to subscribe for, or any
securities or obligations convertible into, or any contracts or commitments to
issue or sell shares of capital stock or any warrants, convertible securities or
obligations.
(f) The audited financial statements of the Company (including the
footnotes thereto) filed with and as part of the Registration Statement and the
Prospectus present fairly the financial position of the Company as of the dates
thereof, and the audited statements of income and cash flows of the Company for
the periods covered thereby have been prepared in conformity with generally
accepted accounting principles applied on a basis consistent with prior periods
(except as otherwise described in the footnotes thereto). ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
(the "Company's accountants"), who have reported on such audited financial
statements, are independent accountants with respect to the Company as required
by the Act and the Rules and Regulations. No financial statements or schedules
are required to be included in the Registration Statement or the Prospectus
which are not included therein.
(g) The Company has a duly authorized equity capitalization as set
forth in the Prospectus. Based on the assumptions set forth in the Prospectus,
the Company will have the adjusted capitalization set forth in the Prospectus in
the table and the footnotes thereto under the caption "Capitalization" at the
Closing Time. The financial and statistical information and data set forth in
the Prospectus under the captions "Prospectus Summary," "Risk Factors," "Use of
Proceeds," "Capitalization," "Selected Financial Data," "Management's Discussion
and Analysis of Financial Condition and Results of Operations," "Business,"
"Management," "Certain Transactions," "Principal and Selling Shareholders,"
"Shares Eligible for Future Sale" and "Description of Capital Stock" are true
and correct in all material respects and as to the financial information is
prepared on a basis consistent with the audited financial statements of the
Company.
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(h) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus and at all times prior to the
expiration of the Option, except as set forth in or contemplated by the
Registration Statement and the Prospectus, (i) the Company has and will have
conducted its business in substantially the same manner as on June 30, 1996;
(ii) the Company has not incurred and will not have incurred any material
liabilities or obligations, direct or contingent, or entered into any material
transactions not in the ordinary course of business; (iii) the Company has not
paid or declared and will not pay or declare any dividends or other
distributions on its capital stock; and (iv) there has not been and will not
have been any change in the capitalization of the Company (except for payments
required by debt agreements) or any other change which would have a Material
Adverse Effect.
(i) Except as set forth in or contemplated by the Registration
Statement and the Prospectus, the Company does not have, and at the Closing Time
and the Option Exercise Time will not have, any material contingent obligations.
(j) There are no actions, suits or proceedings at law or in equity
pending, or to the knowledge of the Company threatened, against the Company, any
of its assets or any of its officers or directors, which have not been disclosed
in writing to you, before or by any federal, state, county or local commission,
regulatory body, administrative agency or other governmental body, domestic or
foreign, wherein an unfavorable ruling, decision or finding would have a
Material Adverse Effect. The Company is not involved in any labor dispute nor,
to its knowledge, is any such dispute threatened, which dispute would have a
Material Adverse Effect.
(k) The Company has, and at the Closing Time and at the Option Exercise
Time will have, complied in all material respects, except as described in the
Prospectus, with all laws, regulations, ordinances and orders applicable to it
or its business (including without limitation all laws, regulations, ordinances
and orders relating to releases, discharges, emissions or disposals to air,
water, land or groundwater, to the withdrawal or use of groundwater, to the use,
handling or disposal of polychlorinated biphenyls (PCBs), asbestos or urea
formaldehyde, to the treatment, storage, disposal or management of hazardous
substances, pollutants or contaminants, or to exposure to toxic, hazardous or
other controlled, prohibited or regulated substances) the violation of which
would have a Material Adverse Effect. In addition, and irrespective of such
compliance, the Company is not subject to any liabilities for environmental
remediation or clean-up, including any liability or class of liability of the
lessee under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, or the Resource Conservation and Recovery Act
of 1976, as amended, which liability would have a Material Adverse Effect. The
Company has, and at the Closing Time and at the Option Exercise Time will have,
in all respects performed all of the obligations required to be performed by it,
and is not, and at the Closing Time and at the Option Exercise Time will not be,
in default under and there exists no state of facts which with notice or lapse
of time or both would constitute a default under any indenture, mortgage, deed
of trust, voting trust agreement, loan agreement, letter of credit agreement,
bond, debenture, note agreement or other evidence of indebtedness, lease,
contract or other agreement or instrument to which it is a party or by which it
or any of its property is bound, and, to the knowledge of the Company, no other
party
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under any such agreement or instrument to which the Company is a party is in
default in any respect thereunder, except, in each case, where such failure to
perform or default would not have a Material Adverse Effect.
(l) The Company (i) keeps books, records and accounts that, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Company, and (ii) maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(A) transactions are executed in accordance with management's general or
specific authorization, (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (C) access to
assets is permitted only in accordance with management's general or specific
authorization and (D) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company has not made any payment to any state,
federal or foreign governmental officer or official or other person charged with
public or quasi-public duties (other than payments required or permitted by the
laws of the United States or any jurisdiction thereof).
(m) The Company is not in violation of its Articles of Incorporation or
Code of Regulations, in each case as amended as of the date hereof.
(n) The outstanding shares of Common Stock have been and, upon issuance
and payment therefor, all of the Shares to be sold by the Company will be, duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights. The holders of shares of Common Stock will not be subject to
personal liability for the obligations of the Company solely by reason of being
such holders. The Common Stock and the Shares conform, and when the Registration
Statement becomes effective and at the Closing Time and at the Option Exercise
Time will conform, to all statements with regard thereto contained in the
Registration Statement and the Prospectus; and the issuance and sale of the
Shares to be issued and sold by the Company have been duly and validly
authorized by all necessary corporate action on the part of the Company.
(o) This Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding agreement of the Company
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles and except as rights to indemnity and contribution hereunder may be
limited by applicable law; the performance of this Agreement and the
consummation of the transactions contemplated hereby will not result in a breach
or violation of any of the terms and provisions of, or constitute a default (and
there exists no state of facts which with notice or lapse of time or both would
constitute a default) under or result in the creation or imposition of any lien,
charge or encumbrance upon the assets or properties of the Company, pursuant to
any indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
letter of credit agreement, bond, debenture, note agreement or other evidence of
indebtedness, lease, contract or other agreement or instrument to which the
Company is a party or by which the Company or any of its properties are bound,
and will not result in a breach
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or violation of the Articles of Incorporation or Code of Regulations of the
Company or any statute or any regulation, ordinance or order applicable to the
Company or its business or properties or of any court or other governmental
body; and no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the Company of
the transactions on its part herein contemplated, except such as may be required
under the Act, the Exchange Act or under state securities or blue sky laws or
such as have been obtained.
(p) The Company has good and marketable title to all properties and
assets described in the Prospectus as owned by it, free and clear of all liens,
charges, encumbrances or restrictions, except such as are described in or
referred to in the Prospectus or such as would not have a Material Adverse
Effect. The Company has valid, subsisting and enforceable leases for the
properties reflected in the Prospectus as leased by it, except as enforceability
may be limited by general equitable principles, bankruptcy, insolvency,
moratorium, reorganization or other laws affecting creditors' rights generally.
(q) There is no document or contract of a character required to be
described in the Prospectus or to be filed as an exhibit to the Registration
Statement which is not described or filed as required; and no statement,
representation, warranty or covenant made by the Company in this Agreement or in
any certificate or document required by this Agreement to be delivered to you
is, was when made, or as of the Closing Time and the Option Exercise Time will
be, inaccurate, untrue or incorrect. No transaction has occurred between or
among the Company and any of its officers, directors or stockholders or any
affiliate of any such officer, director or stockholder that is required by the
Act or the Rules and Regulations to be described in and is not described in the
Registration Statement and the Prospectus.
(r) The Company owns or possesses all patents, patent rights, licenses,
inventions, copyrights, knowhow (including trade secrets, applications and other
unpatented or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names (collectively,
"Proprietary Rights") used in or necessary for the conduct of the business of
the Company as now conducted and as proposed to be conducted as described in the
Prospectus, except where the failure to own such Proprietary Rights would not
have a Material Adverse Effect. The Company has the right to use all Proprietary
Rights used in or necessary for the conduct of its business without infringing
the rights of any person or violating the terms of any licensing or other
agreement to which the Company is a party and, to the Company's knowledge, no
person is infringing upon any of the Proprietary Rights except where the
infringement or lack of a right to use would not have a Material Adverse Effect.
No charges, claims or litigation have been asserted or, to the Company's
knowledge, threatened against the Company contesting the right of the Company to
use, or the validity of, any of the Proprietary Rights or challenging or
questioning the validity or effectiveness of any license or agreement pertaining
thereto or asserting the misuse thereof, and, to the Company's knowledge, no
valid basis exists for the assertion of any such charge, claim or litigation.
All licenses and other agreements to which the Company is a party relating to
Proprietary Rights are in full force and effect and constitute valid, binding
and enforceable obligations of the Company and, to the Company's knowledge, the
other parties thereto, subject in each case to
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bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles, as the case may be, and there have not been
and there currently are not any defaults, and no event has occurred which
(whether by notice or lapse of time or both) would constitute a default by the
Company under any license or other agreement affecting Proprietary Rights used
in or necessary for the conduct of the business of the Company except for
defaults, if any, which would not have a Material Adverse Effect. The validity,
continuation and effectiveness of all licenses and other agreements relating to
the Proprietary Rights and the current terms thereof will not be affected by the
transactions contemplated by this Agreement.
(s) The Company intends to apply its proceeds from the sale of the
Shares for the purposes set forth in the Prospectus under "Use of Proceeds."
(t) The Company is not, and does not intend to conduct its business in
a manner which would cause it to become, an "investment company" as defined in
Section 3(a) of the Investment Company Act of 1940, as amended.
(u) All issuances and sales by the Company of its securities prior to
the date hereof were either (i) registered under the Act, or (ii) exempt from
registration under the Act and complied in all respects with the provisions of
all applicable federal and state securities laws. Except as set forth in or
contemplated by the Prospectus, no holder of any securities of the Company has
the right to require registration of any shares of Common Stock or other
securities of the Company because of the filing or effectiveness of the
Registration Statement.
(v) Neither the Company nor any of its officers or directors or
affiliates (as defined in the Rules and Regulations) has taken or will take,
directly or indirectly, any action designed to stabilize or manipulate the price
of any security of the Company, or which has constituted or which might
reasonably be expected to cause or result in stabilization or manipulation of
the price of any security of the Company, to facilitate the sale or resale of
any of the Shares.
(w) The Company has not, and at the Closing Time and at the Option
Exercise Time will not have, incurred any liability for financial advisory,
finder's or brokerage fees or agent's commissions in connection with the offer
and sale of the Shares, this Agreement or the transactions hereby contemplated,
except for the Underwriters' discounts and commissions provided for in this
Agreement.
(x) The Company has filed all federal, state and local income,
employment, withholding, franchise and other tax returns required to be filed
through the date hereof and has paid all taxes shown as due thereon. Except as
set forth in the Registration Statement or the Prospectus, no tax deficiency has
been, nor does the Company have any knowledge of any tax deficiency which might
be, asserted against the Company which would have a Material Adverse Effect.
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(y) The Company has, and at the Closing Time and at the Option Exercise
Time will have, made all filings required to be made by it under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the applicable rules
of the National Association of Securities Dealers, Inc. ("the "NASD").
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each
Selling Stockholder severally represents and warrants that:
(a) The Selling Stockholder has, and immediately prior to the Closing
Time and at the Option Exercise Time the Selling Stockholder will have, good and
valid title to the Option Shares to be sold by the Selling Stockholder on such
date, free and clear of all liens, encumbrances, equities or claims; and upon
delivery of such shares and payment therefor pursuant hereto and thereto, good
and valid title to such shares, free and clear of all liens, encumbrances,
equities or claims, will pass to the several Underwriters.
(b) The Selling Stockholder has placed in custody under a custody
agreement (the "Custody Agreement" and, together with the similar agreement
executed by the other Selling Stockholder, the "Custody Agreements") with
Squire, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, as custodian (the "Custodian"), for delivery under
this Agreement, certificates in negotiable form (with signature guaranteed by a
commercial bank or trust company having an office or correspondent in the United
States or a member firm of the New York or American Stock Exchanges)
representing the Option Shares to be sold by the Selling Stockholder hereunder.
(c) The Selling Stockholder has duly and irrevocably executed and
delivered a power of attorney (the "Power of Attorney" and, together with the
similar power of attorney executed by the other Selling Stockholder, the "Powers
of Attorney") appointing the Custodian and one or more other persons, as
attorneys-in-fact, with full power of substitution, and with full authority
(exercisable by any one or more of them) to execute and deliver this Agreement
and to take such other action as may be necessary or desirable to carry out the
provisions hereof on behalf of the Selling Stockholder.
(d) The Selling Stockholder has full right, power and authority to
enter into this Agreement, the Power of Attorney and the Custody Agreement; the
execution, delivery and performance of this Agreement, the Power of Attorney and
the Custody Agreement by the Selling Stockholder and the consummation by the
Selling Stockholder of the transactions contemplated hereby and thereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Selling
Stockholder is a party or by which the Selling Stockholder is bound or to which
any of the property or assets of the Selling Stockholder is subject, nor will
such actions result in any violation of the provisions of any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Selling Stockholder or the property or assets of the
Selling Stockholder; and, except for the registration of the Option Shares under
the Securities Act and such consents, approvals, authorizations, registrations
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or qualifications as may be required under the Exchange Act and applicable state
securities laws in connection with the purchase and distribution of the Option
Shares by the Underwriters, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement, the
Power of Attorney or the Custody Agreement by the Selling Stockholder and the
consummation by the Selling Stockholder of the transactions contemplated hereby
and thereby.
(e) The Registration Statement and the Prospectus do not and will not,
as of the applicable effective date (as to the Registration Statement and any
amendment thereto) and as of the applicable filing date (as to the Prospectus
and any amendment or supplement thereto) contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided that no
representation or warranty is made as to information contained in or omitted
from the Registration Statement or the Prospectus in reliance upon and in
conformity with written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for inclusion
therein.
(f) The Selling Stockholder has no reason to believe that the
representations and warranties of the Company contained in Section 2 hereof are
not materially true and correct, is familiar with the Registration Statement and
the Prospectus (as amended or supplemented) and has no knowledge of any material
fact, condition or information not disclosed in the Registration Statement, as
of the effective date, or the Prospectus (or any amendment or supplement
thereto), as of the applicable filing date, which has adversely affected or may
adversely affect the business of the Company and is not prompted to sell shares
of Common Stock by any information concerning the Company which is not set forth
in the Registration Statement and the Prospectus.
(g) The Selling Stockholder has not taken and will not take, directly
or indirectly, any action which is designed to or which has constituted or which
might reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares.
(h) Such Selling Stockholder has not distributed and will not
distribute any prospectus or other offering material in connection with the
offering and sale of the Shares.
SECTION 5. PURCHASE, SALE AND DELIVERY OF THE SHARES; CLOSING; DISTRIBUTION.
(a) (i) On the basis of the representations and warranties set forth in
this Agreement and subject to the terms and conditions herein set
forth, the Company agrees, to sell to the Underwriters 1,250,000 Firm
Shares, and each Underwriter agrees, severally and not jointly, to
purchase from the Company, at and for a price of $_____ per Share the
number of Firm Shares determined as hereinafter provided. The
obligation of each Underwriter to the Company shall be to purchase from
the Company that number of whole Firm Shares which (as nearly as
practicable, as determined by you) represents the same proportion of
the number of Firm Shares to be sold by the Company as the number of
Firm Shares set forth opposite
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the name of such Underwriter in Schedule A hereto represents of the
total number of Firm Shares to be purchased by all the Underwriters
under this Agreement (subject to adjustment as provided in Section 13).
(ii) Delivery of the Firm Shares shall be made to you for the
accounts of the respective Underwriters, at the offices of The Ohio
Company, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇, or such other location
as you and the Company shall agree, against payment by you on behalf of
the several Underwriters of the purchase price therefor by delivery of
certified or bank cashier's checks payable in next day funds to the
order of the Company at 10:00 a.m., Columbus time, on _____________,
1996, or on such other business day (Saturdays, Sundays and legal
holidays in the City of Columbus not being considered business days for
the purposes of this Agreement), not later than the fourth full
business day following the date of this Agreement as you shall
determine and advise the Company by at least two full business days'
notice in writing, which time and date are herein called the "Closing
Time." Delivery of the Firm Shares shall be made in registered form in
such name or names and in such denominations as you shall request by at
least two full business days' notice in writing. The cost of original
issue tax stamps and transfer stamps, if any, in connection with the
issuance and delivery or sale of the Firm Shares by the Company to the
respective Underwriters shall be borne by the Company. The Company will
pay and save each Underwriter or its nominees, and any subsequent
holder of the Firm Shares, harmless from any and all liabilities with
respect to or resulting from any failure or delay in paying federal or
state stamp and other transfer taxes, if any, which may be payable or
determined to be payable in connection with the sale by the Company to
such Underwriter of the Firm Shares or any portion thereof.
(iii) The Company will make the certificates for the Firm
Shares available to you for examination at such offices as you shall
designate, not later than 2:00 p.m., on the business day preceding the
Closing Time.
(iv) The obligations of the several Underwriters to purchase
and pay for the Firm Shares shall be subject to compliance as of such
date with all of the conditions specified in Section 10 hereof and to
the absence of any termination of this Agreement pursuant to Section
12.
(b) (i) The Company and the Selling Stockholders hereby grant to the
several Underwriters an option (the "Option") to purchase from the
Company and the Selling Stockholders up to 187,500 Option Shares
(87,500 of such Option Shares to be sold by the Company and 100,000 of
such Option Shares to be sold by the Selling Stockholders), in the same
proportion as each Underwriter has agreed to purchase the Firm Shares,
at and for a price of $_____ for each Option Share; provided, however,
that the Option may be exercised only for the purpose of covering any
over-allotments which may be made by you in connection with the
distribution and sale of the Firm Shares.
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12
(ii) The Option is exercisable by you in whole or in part at
any time within 30 days after the date of the Prospectus, by giving
notice to the Company and the Selling Stockholders in the manner
provided in Section 14 hereof, setting forth the number of Option
Shares as to which the Option is being exercised, the name or names in
which the certificates for such Option Shares are to be registered, the
denominations of such certificates and the date of delivery of such
Option Shares, which date, if not the Closing Time, shall not be less
than two nor more than fourth full business days after such notice.
(iii) Upon the exercise of the Option, the Company and the
Selling Stockholders shall sell to the several Underwriters the
aggregate number of Option Shares specified in the notice exercising
the Option and the Underwriters, on the basis of the representations
and warranties of the Company contained herein and in each certificate
and document contemplated under this Agreement to be delivered to you,
but subject to the terms and conditions of this Agreement, shall
purchase from the Company the aggregate number of Option Shares
specified in such notice. If the Underwriters shall exercise the Option
as to less than all of the Option Shares, Option Shares shall first be
sold and delivered pro rata by the Selling Stockholders and the
balance, if any, shall be sold and delivered by the Company.
(iv) Delivery of the Option Shares with respect to which the
Option shall have been exercised shall be made to you, for the account
of the several Underwriters, at the offices of The Ohio Company, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ or such other location, including New
York, New York, as you and the Company shall agree, against payment by
you, on behalf of the respective Underwriters, of the purchase price
therefor to the Company and the Selling Stockholders by certified or
bank cashier's check or checks payable in next-day funds to the order
of the Company and the Selling Stockholders in the amounts to which
they are respectively entitled, at 10:00 a.m., Columbus time, on the
date and in the place designated in the notice given by you as above
provided for, unless some other place, time and date is mutually agreed
upon (such time and date being herein called the "Option Exercise
Time"). The cost of original issue tax stamps or transfer stamps, if
any, in connection with each issuance and delivery of Option Shares by
the Company to the respective Underwriters shall be borne by the
Company. The Company will pay and save each Underwriter, and any
subsequent holder of Option Shares, harmless from any and all
liabilities with respect to or resulting from any failure or delay in
paying federal and state stamp taxes, if any, which may be payable or
determined to be payable as a result of the sale by the Company to such
Underwriter of Option Shares or any portion thereof.
(v) The Company and the Selling Stockholders will make the
certificates for the Option Shares to be purchased at the Option
Exercise Time available to you for examination at such offices as you
shall designate, not later than 2:00 p.m., on the business day next
preceding such Option Exercise Time.
(vi) The obligation of the several Underwriters to purchase
and pay for the Option Shares at the Option Exercise Time shall be
subject to compliance as of such date with all
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13
the conditions specified in Section 10 hereof and to the absence of any
termination of this Agreement pursuant to Section 12 hereof.
(c) Subject to the terms and conditions hereof, the several
Underwriters agree that (i) they will offer the Shares to the public as set
forth in the Prospectus as soon after the Registration Statement becomes
effective as may be practicable, and (ii) they will offer and sell the Shares to
the public only in those jurisdictions where, and in such amounts as to which,
due qualification and/or registration has been effected or an exemption from
such qualification and/or registration is available under the applicable
securities or blue sky laws; it being understood, however, that such agreement
only covers the initial sale of the Shares by the Underwriters and not any
subsequent sale of such Shares in any trading market.
SECTION 6. REGISTRATION STATEMENT AND PROSPECTUS.
(a) The Company will deliver to each of you, without charge, two fully
signed copies of the Registration Statement and of each amendment thereto,
including all financial statements and exhibits, and to each Underwriter the
number of conformed copies of the Registration Statement and of each amendment
thereto, including all financial statements, but excluding exhibits, as each
Underwriter may reasonably request.
(b) The Company has delivered to each Underwriter, and each of the
dealers selected by you in connection with the distribution of the Shares
(hereafter sometimes referred to individually as a "Selected Dealer" and
collectively as "Selected Dealers"), without charge, as many copies as you have
requested of each preliminary prospectus heretofore filed with the Commission
and will deliver to each Underwriter and to any Selected Dealer, without charge,
on the Effective Date, and thereafter from time to time during the period in
which the Prospectus is required by law to be delivered in connection with sales
of Shares by an Underwriter or a dealer, as many copies of the Prospectus (and,
in the event of any amendment of or supplement to the Prospectus, of such
amended or supplemented Prospectus) as you may reasonably request.
(c) The Company has authorized the Underwriters to use, and make
available for use by prospective dealers, the preliminary prospectuses, and
authorizes each Underwriter, all Selected Dealers and all dealers to whom any of
such Shares may be sold by the Underwriters or by any Selected Dealer, to use
the Prospectus, as from time to time amended or supplemented, in connection with
the sale of the Shares in accordance with the applicable provisions of the Act,
the applicable Rules and Regulations and applicable state law until completion
of the public offering of the Shares and for such longer period as you may
request if the Prospectus is required to be delivered in connection with sales
of the Shares by an Underwriter or a dealer.
SECTION 7. COVENANTS OF THE COMPANY. The Company covenants and agrees with
each Underwriter that:
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14
(a) After the execution and delivery of this Agreement, the Company
will not, at any time, whether before or after the Effective Date, file any
amendment of or supplement to the Registration Statement or the Prospectus of
which you shall not previously have been advised and furnished with a copy, or
which you or Porter, Wright, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ ("counsel for the Underwriters")
shall not have approved (which approval shall not be unreasonably withheld or
delayed) or which is not in compliance with the Act or the Rules and
Regulations.
(b) If the Registration Statement has not become effective, the Company
will promptly file the Final Amendment with the Commission and will use its best
efforts to cause the Registration Statement to become effective. If the
Registration Statement has become effective, the Company will file the Rule 430A
Prospectus or other Prospectus with the Commission as promptly as practicable,
but in no event later than is permitted by Rule 424(b). The Company will
promptly advise you (i) when the Registration Statement, or any post-effective
amendment thereto, shall hereafter become effective, or any amendments or
supplements to the Prospectus shall have been filed with the Commission; (ii) of
any request of the Commission or any state or other regulatory body for any
amendment or supplement of the Registration Statement or the Prospectus or for
additional information and the nature and substance thereof; (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus or prohibiting the offer or sale of any of the Shares or
of the initiation of any proceedings for such purpose; (iv) of any receipt by
the Company of any notification with respect to the suspension of qualification
of the Shares for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose; and (v) of the happening of any event during
the periods in which the Prospectus is to be used in conjunction with the offer
or sale of Shares which makes any statement made in the Registration Statement
or the Prospectus untrue in any material respect or which requires the making of
any changes in the Registration Statement or the Prospectus in order to make the
statements therein not misleading. The Company will use its best efforts to
prevent the issuance of any stop order or any order preventing or suspending the
use of the Registration Statement or Prospectus and, if such order is issued, to
obtain the lifting thereof as promptly as possible.
(c) The Company will prepare and file with the Commission, upon your
request, any such amendments of or supplements to the Registration Statement or
the Prospectus, in form satisfactory to Squire, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ("counsel for
the Company"), as in the opinion of counsel for the Underwriters may be
necessary or advisable in connection with the distribution of the Shares or any
change in the price at which, or the terms upon which, the Shares may be offered
by you, and will use its best efforts to cause the same to become effective as
promptly as possible.
(d) The Company will comply with the Act and the Rules and Regulations
and the Exchange Act and the rules and regulations thereunder so as to permit
the continuance of sales of and dealings in the Shares under the Act and the
Exchange Act. If at any time when a prospectus is required to be delivered under
the Act an event shall have occurred as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements therein not
untrue or not misleading in any material respect or to make the Prospectus
comply with the Act and the
- 14 -
15
Rules and Regulations, the Company will notify you promptly thereof and will,
subject to the provisions of Section 7(a) hereof, file with the Commission an
amendment or supplement which will correct such statement in accordance with the
requirements of Section 10 of the Act.
(e) The Company will comply with all of the provisions of any
undertakings contained in the Registration Statement.
(f) The Company will take all reasonable actions to furnish to whomever
you direct, when and as requested by you, all necessary documents, exhibits,
information, applications, instruments and papers as may be required or, in the
opinion of counsel for the Underwriters, desirable in order to permit or
facilitate the sale of the Shares. The Company will use its best efforts to
qualify or register the Shares for sale under the so-called blue sky laws of
such jurisdictions as you shall request, to make such applications, file such
documents and furnish such information as may be required for such purpose and
to comply with such laws so as to continue such qualification in effect so long
as required for the purposes of the distribution of the Shares; provided,
however, that the Company shall not be required to qualify as a foreign
corporation in any jurisdiction; and provided further that the Company shall not
be required to file a consent to service of process in any jurisdiction in any
action other than one arising out of the offering or sale of the Shares.
(g) During the period of two years commencing on the Effective Date,
the Company will furnish to each Underwriter, in such number of copies as such
Underwriter may reasonably request, (i) within 90 days after the end of each
fiscal year of the Company, either (A) a consolidated balance sheet of the
Company and its then consolidated subsidiaries, and a separate balance sheet of
each subsidiary, if any, of the Company the accounts of which are not included
in such consolidated balance sheet, as of the end of such fiscal year, and
consolidated statements of income and retained earnings of the Company and its
then consolidated subsidiaries, and separate statements of income and retained
earnings of each of the subsidiaries, if any, of the Company the accounts of
which are not included in such consolidated statements, for the fiscal year then
ended, all in reasonable detail, prepared in accordance with generally accepted
accounting principles, consistently applied, and all certified by independent
accountants (within the meaning of the Act and the Rules and Regulations), or
(B) the Company's Form 10-K for such fiscal year as filed with the Commission in
accordance with the Exchange Act; (ii) within 45 days after the end of each of
the first three fiscal quarters of each fiscal year, either (A) similar balance
sheets as of the end of such fiscal quarter and similar statements of income and
retained earnings for the fiscal quarter then ended, all in reasonable detail,
and all certified by the Company's principal financial officer or the Company's
principal accounting officer as having been prepared in accordance with
generally accepted accounting principles, consistently applied, or (B) the
Company's Form 10-Q for such fiscal quarter as filed with the Commission in
accordance with the Exchange Act; (iii) as soon as available, each report and
each proxy or information statement furnished to or filed with the Commission or
any securities exchange and each report and financial statement furnished to the
Company's stockholders generally; and (iv) any material reports filed by the
Company in connection with the quotation of its Common Stock in the Nasdaq
National Market ("Nasdaq/NM") or any listing on any stock exchange.
- 15 -
16
(h) Counsel for the Company, the Company's accountants and the officers
of the Company will respectively furnish the opinions, the letters and the
certificates referred to in subsections (e), (g), (h) and (i) of Section 10
hereof, and, in the event that the Company shall file any amendment to the
Registration Statement relating to the offering of the Shares or any amendment
or supplement to the Prospectus relating to the offering of the Shares
subsequent to the Effective Date, whether pursuant to subsection (c) of this
Section 7 or otherwise, such counsel, such accountants and such officers will,
at the time of such filing or at such subsequent time as you shall specify,
respectively, furnish to you such opinions, letters and certificates, each dated
the date of its delivery, of the same nature as the opinions, letters and
certificates referred to in said subsections (e), (g), (h) and (i),
respectively, as you may reasonably request, or, if any such opinion, letter or
certificate cannot be furnished by reason of the fact that such counsel or such
accountants or any such officer believes that the same would be inaccurate, such
counsel or such accountants or any such officer will furnish an accurate
opinion, letter or certificate with respect to the same subject matter.
(i) Prior to the expiration of the Option, the Company will not issue,
directly or indirectly, without first consulting with you and counsel for the
Underwriters, any press release or other communication or hold any press
conference with respect to the Company or its activities or the offering
contemplated hereby.
(j) Except as described in the Prospectus or as contemplated by this
Agreement, the Company shall not, without your prior written consent, sell,
contract to sell or otherwise dispose of any shares of Common Stock, or any
securities convertible into shares of Common Stock, for a period of 180 days
after the Effective Date.
(k) The Company will apply the net proceeds from the sale of the Shares
in the manner set forth under "Use of Proceeds" in the Prospectus and will
deliver promptly to the Representatives a signed copy of each Form SR filed by
it with the Commission.
(l) The Company has applied, or will, prior to the Effective Date,
apply for the listing of the Shares on Nasdaq/NM and will use its best efforts
to complete that listing, subject only to official notice of issuance and
evidence of satisfactory distribution, prior to the Closing Date.
(m) The Company will file with the NASD all documents and notices
required of companies that have issued securities that are traded in the
over-the-counter market and quotations for which are reported on the Nasdaq/NM.
(n) After the Closing Time and the Option Exercise Time, the Company
will be in compliance with the financial record-keeping requirements and
internal accounting control requirements of Section 13(b)(2) of the Exchange
Act.
(o) As soon as practicable after the Effective Date, the Company will
make generally available to its security holders and deliver to you an earnings
statement (which need not be audited)
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17
covering a period of at least 12 months beginning not earlier than the Effective
Date which shall satisfy the provisions of Section 11(a) of the Act and/or Rule
158 promulgated under the Act.
SECTION 8. COVENANTS OF THE SELLING STOCKHOLDERS. Each Selling Stockholder
covenants and agrees with each Underwriter that:
(a) For a period of 180 days after the Effective Date, he will not
offer, directly or indirectly, for sale, sell or otherwise dispose of (or enter
into any transaction or device which is designed to, or could be expected to,
result in the disposition by any person at any time in the future of), any
shares of Common Stock without the prior written consent of the Representatives.
(b) The Option Shares to be sold by the Selling Stockholder hereunder,
which are represented by the certificates held in custody for the Selling
Stockholder, are subject to the interest of the Underwriters and the other
Selling Stockholder hereunder, the arrangements made by the Selling Stockholder
for such custody are to that extent irrevocable, and the obligations of the
Selling Stockholder hereunder shall not be terminated by any act of the Selling
Stockholder, by operation of law, by the death or incapacity of any Selling
Stockholder or by the occurrence of any other event.
(c) The Selling Stockholder will deliver to the Representatives prior
to the Option Exercise Time a properly completed and executed United States
Treasury Department Form W-9.
SECTION 9. EXPENSES. The Company will pay and bear all costs, fees, taxes and
expenses incident to the performance of the obligations of the Company and the
Selling Stockholders under this Agreement, including, but not limited to: (a)
the costs incident to the issuance, sale and delivery to the Underwriters of the
Shares; (b) the costs incident to the preparation, printing and filing under the
Act of each preliminary prospectus, the Prospectus, the Registration Statement
and any amendments or supplements thereof and exhibits thereto; (c) the costs of
printing and distributing to the Representatives, the other Underwriters and any
Selected Dealers copies of any preliminary prospectus, the Prospectus, the
Registration Statement and any amendment or supplement to the Prospectus or
Registration Statement required by this Agreement or the Act; (d) the costs of
preparation, printing, mailing, delivery, filing and distribution of preliminary
and final blue sky memoranda, Underwriter's Questionnaires and Powers of
Attorney, letters to prospective Underwriters, the Agreement Among Underwriters,
the Selected Dealer Agreement, this Agreement and all documents related thereto;
(e) the filing fees of the Commission; (f) the costs of qualification or
registration of the Shares in the jurisdictions referred to in Section 7(f)
hereof, including the legal fees and expenses of counsel for the Underwriters in
connection therewith, and all filing fees in connection therewith; (g) the cost
of preparation of all filings with the NASD incident to securing any required
review of the terms of sale of the Shares and all filing fees in connection
therewith; (h) fees and expenses of counsel for the Company and the Selling
Stockholders, the Company's accountants and the Company's consultants; (i) fees
in connection with the qualification of the Shares for quotation in Nasdaq/NM;
(j) the costs of delivering and distributing the Custody Agreements and the
Powers of Attorney; and (k) all other costs and expenses incurred or to be
incurred by the Company and the Selling Stockholders incident to the performance
of their
- 17 -
18
obligations under this Agreement; provided that the Selling Stockholders shall
pay the fees and expenses of their counsel if they shall retain counsel other
than Squire, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ and shall pay any transfer taxes payable in
connection with their sale of Option Shares to the Underwriters. If the Firm
Shares are not sold to the Underwriters by reason of any failure, refusal or
inability on the part of the Company to perform any agreement on its part to be
performed hereunder or to fulfill any condition of the Underwriters' obligations
hereunder, or if you shall terminate this Agreement pursuant to Section 12(a)
hereof, the Company shall reimburse you for all of the actual out-of-pocket
expenses reasonably incurred in connection with this Agreement and the proposed
purchase of the Shares including without limitation all reasonable fees and
disbursements of counsel for the Underwriters in connection therewith. The
Company shall have no obligation to reimburse the Underwriters for any such
out-of-pocket expenses referred to in the immediately preceding sentence if the
Underwriters shall terminate this Agreement pursuant to Section 13 hereof.
SECTION 10. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The Underwriters'
obligations hereunder to purchase and pay for the Shares are subject (as of the
date hereof, the Closing Time and the Option Exercise Time) to the following
conditions:
(a) (i) The Registration Statement shall have become effective not
later than 5:00 p.m., Columbus time, on the date of this Agreement, or
at such later time or on such later date as you may agree to in
writing; (ii) if required, the Prospectus shall have been filed with
the Commission pursuant to Rule 424(b)(1) or (4) of the Rules and
Regulations within the applicable time period prescribed for such
filing thereunder and in accordance with the provisions of Section 7(b)
hereof; (iii) at or prior to the Closing Time or the Option Exercise
Time, as the case may be, no stop order suspending the effectiveness of
the Registration Statement or the qualification or registration of the
Shares under the blue sky laws of any jurisdiction shall have been
issued and no proceeding for that purpose shall have been initiated or
shall be threatened or contemplated by the Commission or the
authorities of any such jurisdiction; (iv) any request for additional
information on the part of the Commission or any such authorities shall
have been complied with to the satisfaction of the Commission or such
authorities and to the reasonable satisfaction of counsel for the
Underwriters; (v) the NASD, upon review of the terms of the public
offering of Shares, shall not have objected to such offering, such
terms, or the Underwriters' participation in the same; and (vi) after
the date hereof, no amendment or supplement to the Registration
Statement or the Prospectus shall have been filed without your prior
consent.
(b) You shall not have advised the Company that the Registration
Statement or the Prospectus or any amendment thereof or supplement thereto, in
your reasonable judgment after conferring with counsel for the Underwriters,
contains an untrue statement of a fact which is material, or omits to state a
fact which is material and is required to be stated therein or is necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
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19
(c) Between the time of the execution and delivery of this Agreement
and the Closing Time or the Option Exercise Time, as the case may be, there
shall be no litigation instituted against the Company or any of its officers or
directors, as such, and between such dates there shall be no proceeding
instituted or threatened against the Company or any of its officers or
directors, as such, before or by any federal, state, county or local commission,
regulatory body, administrative agency or other governmental body, domestic or
foreign, in which litigation or proceeding an unfavorable ruling, decision or
finding would have a Material Adverse Effect or would materially and adversely
affect the ability of the Company or the Selling Stockholders to perform their
obligations under this Agreement.
(d) Each of the representations and warranties of the Company contained
herein and in each certificate and document contemplated under this Agreement to
be delivered shall be true and correct at the Closing Time and the Option
Exercise Time as if made at the Closing Time or the Option Exercise Time, as the
case may be, and all covenants and agreements contained herein, and in each such
certificate and document, to be performed on the part of the Company and all
conditions contained herein and in each such certificate and document to be
fulfilled or complied with by the Company and the Selling Stockholders at or
prior to the Closing Time or the Option Exercise Time, as the case may be, shall
have been duly performed, fulfilled or complied with.
(e) At the Closing Time and the Option Exercise Time, counsel for the
Company shall furnish to you an opinion, in form and substance reasonably
satisfactory to you and your counsel, dated as of the date of its delivery, 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 State
of Ohio, has the corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus, and is duly qualified to do business and is in good
standing in each jurisdiction in which the ownership or leasing of its
properties or the conduct of its business requires such qualification,
except where the failure so to qualify would not have a material
adverse effect on the financial condition, earnings, operations or
business of the Company.
(ii) The Company has the corporate power and authority to
enter into this Agreement and to issue, sell and deliver to the
Underwriters the Shares to be issued and sold by it hereunder.
(iii) This Agreement and the issuance of the Shares pursuant
hereto have been duly authorized by all necessary corporate action on
the part of the Company. This Agreement has been duly executed and
delivered by the Company, and assuming due authorization, execution and
delivery by you, is a valid and binding agreement of the Company,
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights and to general equity principles and except as rights to
indemnity and contribution hereunder may be limited by applicable law.
- 19 -
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(iv) The authorized capital stock of the Company is as set
forth in the Prospectus, and the issued and outstanding shares of
Common Stock have been duly and validly authorized and issued, are
fully paid and nonassessable, and have not been issued in violation of
any preemptive right.
(v) The Firm Shares or the Option Shares, as the case may be,
to be issued by the Company pursuant to the terms of this Agreement
will be, upon issuance and delivery against payment therefor in
accordance with the terms hereof, duly authorized and validly issued
and fully paid and nonassessable, and not issued in violation of any
preemptive right.
(vi) To such counsel's knowledge, except as set forth in or
contemplated by the Prospectus no holders of Common Stock or other
securities of the Company have registration rights with respect to
securities of the Company because of the filing or effectiveness of the
Registration Statement.
(vii) The terms and provisions of the Common Stock and the
Shares conform in all material respects to the description thereof
contained in the Registration Statement and Prospectus; and the forms
of certificates evidencing the Common Stock and the Shares comply with
the Ohio General Corporation Law.
(viii) The execution and delivery of this Agreement by the
Company, and the consummation by it of the transactions herein
contemplated did not and will not (x) result in any violation of the
Company's Articles of Incorporation or Code of Regulations, or (y) to
such counsel's knowledge, result in the material breach or violation of
any of the terms and provisions of, or constitute a material default
under, any material indenture, mortgage or other agreement or
instrument known to such counsel to which the Company is a party or by
which its properties are bound, or any applicable statute, rule or
regulation or any order, writ or decree known to such counsel of any
court or governmental agency or body having jurisdiction over the
Company or any of its properties; provided, however, that no opinion
need be rendered concerning state securities or blue sky laws.
(ix) No authorization, approval or consent of any governmental
authority or agency is necessary in connection with the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, except such as have been obtained
under the Act, the Exchange Act or other applicable laws, or such as
may be required under state or other securities or blue sky laws in
connection with the purchase and the distribution of the Shares by the
Underwriters.
(x) The Registration Statement has become effective under the
Act and, to such counsel's knowledge, (a) no stop order suspending the
effectiveness of the Registration Statement has been issued and (b) no
proceedings for that purpose have been instituted or are pending or
threatened under the Act. The opinion delivered at the Closing Time
shall
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21
confirm that all filings required by Rule 424 and, if applicable, Rule
430A of the Rules and Regulations have been made.
(xi) Each of the Registration Statement and the Prospectus,
and each amendment or supplement thereto (other than the financial
statements, financial data and supporting schedules included in such
Registration Statement or Prospectus, as to which such counsel need
express no opinion) as of the effective date of the Registration
Statement, complied as to form with the requirements of the Act and the
applicable Rules and Regulations.
(xii) The description in the Registration Statement and the
Prospectus of contracts are accurate in all material respects and
fairly present the information required by the Act or the Rules and
Regulations to be presented; and to such counsel's knowledge, there are
no contracts or documents of a character required to be described or
referred to in the Registration Statement or Prospectus or to be filed
as an exhibit to the Registration Statement that are not described or
referred to therein and filed as required.
(xiii) The Company is not an "investment company" as defined
in Section 3(a) of the Investment Company Act and, if the Company
conducts its business as set forth in the Registration Statement and
the Prospectus, will not become an "investment company" and will not be
required to register under the Investment Company Act.
In addition, such counsel shall confirm that although they have not
verified the accuracy or completeness of the statements contained in the
Registration Statement or the Prospectus, based upon their participation in the
preparation of the Registration Statement and Prospectus and any amendments or
supplements thereto and upon their discussions with officers and representatives
of and the independent public accountants for the Company, nothing has come to
the attention of such counsel which caused them to believe that, at the time the
Registration Statement became effective, the Registration Statement (except as
to financial statements, financial data and supporting schedules contained in
such Registration Statement and Prospectus, as to which such counsel need
express no belief) contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or the Prospectus (except as aforesaid), as
of the date of the Prospectus and as of the Closing Time or the Option Exercise
Time, as the case may be, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
(f) The [respective] counsel for [each of] the Selling Stockholders
shall [each] have furnished to you its opinion, as counsel to [each of] the
Selling Stockholders for whom [they][it] [is][are] acting as counsel, dated the
Option Exercise Date, in form and substance reasonably satisfactory to you, to
the effect that:
(i) Each Selling Stockholder has full right, power and
authority to enter into this Agreement, the Power of Attorney and the
Custody Agreement; the execution, delivery and
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22
performance of this Agreement, the Power of Attorney and the Custody
Agreement by each Selling Stockholder and the consummation by each
Selling Stockholder of the transactions contemplated hereby and thereby
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any statute, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument known to such counsel to which any Selling Stockholder is
a party or by which any Selling Stockholder is bound or to which any of
the property or assets of any Selling Stockholder is subject, nor will
such actions result in any violation of the provisions of any statute
or any order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over any Selling
Stockholder or the property or assets of any Selling Stockholder; and,
except for the registration of the Stock under the Securities Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable
state securities laws in connection with the purchase and distribution
of the Stock by the Underwriters, no consent, approval, authorization
or order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement, the Power of Attorney or the Custody
Agreement by any Selling Stockholder and the consummation by any
Selling Stockholder of the transactions contemplated hereby and
thereby;
(ii) This Agreement has been duly executed and delivered by or
on behalf of each Selling Stockholder;
(iii) A Power of Attorney and a Custody Agreement have been
duly executed and delivered by each Selling Stockholder and constitute
valid and binding agreements of each Selling Stockholder, enforceable
in accordance with their respective terms;
(iv) Immediately prior to the Option Exercise Date, each
Selling Stockholder was the record and beneficial owner of the Option
Shares to be sold by such Selling Stockholder under this Agreement,
free and clear of all liens, encumbrances, equities or claims, and had
full right, power and authority to sell, assign, transfer and deliver
such Option Shares hereunder; and
(v) Assuming that the Underwriters are bona fide purchasers
purchasing in good faith without notice of any adverse claim within the
meaning of the Uniform Commercial Code, upon the delivery of and
payment for the Option Shares to be sold by the Selling Stockholders as
contemplated by this Agreement, each of the Underwriters will receive
valid title to the Option Shares purchased by it from such Selling
Stockholders, free and clear of any pledge, lien, security interest,
voting trust, encumbrance, claim or equitable interest, except any
claim arising as a result of any action or inaction of any Underwriter.
In rendering the opinion in Section 10(f)(iv) above, such counsel may
rely upon a certificate of each Selling Stockholder in respect of matters of
fact as to ownership of and liens, encumbrances, equities or claims on the
shares of Stock sold by each Selling Stockholder, provided that such
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23
counsel shall furnish copies thereof to the Representatives and state that it
believes that both the Underwriters and it are justified in relying upon such
certificate. Such counsel shall also have furnished to the Representatives a
written statement, addressed to the Underwriters and dated the Option Exercise
Date, in form and substance satisfactory to the Representatives, to the effect
that (x) such counsel has acted as counsel to each Selling Stockholder in
connection with the preparation of the Registration Statement, and (y) based on
the foregoing, no facts have come to the attention of such counsel which lead it
to believe that the Registration Statement, as of the Effective Date, contained
any untrue statement of a material fact relating to any Selling Stockholder or
omitted to state such a material fact required to be stated therein or necessary
in order to make the statements therein not misleading, or that the Prospectus
contains any untrue statement of a material fact relating to any Selling
Stockholder or omits to state such a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The foregoing opinion
and statement may be qualified by a statement to the effect that such counsel
does not assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement or the Prospectus.
(g) Concurrently with the execution and delivery of this Agreement, the
Company's accountants shall have furnished to you a letter, dated the date
hereof, addressed to the Underwriters and in form and substance satisfactory to
you (i) confirming that such accountants are independent public accountants
within the meaning of the Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, and (ii) stating, as of the date hereof (or,
with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Prospectus, as
of a date not more than five days prior to the date hereof), the conclusions and
findings of such firm with respect to the financial information and other
matters ordinarily covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings.
With respect to the letter of the Company's Accountants referred to in
the preceding paragraph and delivered to the you concurrently with the execution
of this Agreement (the "initial letter"), the Company shall have furnished to
you a letter (the "bring-down letter") of such accountants, addressed to the
Underwriters and dated the Closing Date and the Option Exercise Date (i)
confirming that they are independent public accountants within the meaning of
the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Prospectus, as
of a date not more than five days prior to the date of the bring-down letter),
the conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii) confirming
in all material respects the conclusions and findings set forth in the initial
letter.
(h) At the Closing Time, and at the Option Exercise Time, there shall
be furnished to you, on behalf of the Company, a certificate, dated the date of
its delivery, signed by both the chief
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24
executive officer and the chief financial officer of the Company, in form and
substance reasonably satisfactory to you, to the effect that:
(i) Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus and (A) to his knowledge, as
of the date of such certificate and as of the Effective Date, the
statements in the Registration Statement and the Prospectus are and
were true and correct in all material respects and neither the
Registration Statement nor the Prospectus omits to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading; (B) since the Effective Date, no event has
occurred of which he has knowledge and which was required by the Act or
the Rules and Regulations to be set forth in a supplement to or
amendment of the Prospectus but which has not been so set forth; and
(C) since the dates as of which and the periods for which information
is given in the Registration Statement and the Prospectus, there has
not been to his knowledge any change which would have a Material
Adverse Effect, other than changes which the Registration Statement and
the Prospectus specifically disclose have occurred or may occur
subsequent to the Effective Date.
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for such
purpose have been commenced or are, to the knowledge of each signer of
such certificate, threatened or contemplated by the Commission.
(iii) The Company has not received notice that any stop order
suspending the qualification or registration of any of the Shares under
the blue sky laws of any jurisdiction has been issued, or that any
proceedings for such purpose have been commenced, and, to the knowledge
of each signer of such certificate, no such proceedings are threatened
or contemplated by any jurisdiction.
(iv) Each of the representations and warranties of the Company
contained in this Agreement and in each certificate and document
contemplated under this Agreement to be delivered to you was, when
originally made and is, at the time such certificate is dated, true and
correct.
(v) Each of the covenants required herein to be performed by
the Company on or prior to the date of such certificate has been duly,
timely and fully performed and each condition herein required to be
complied with by the Company on or prior to the date of such
certificate has been duly, timely and fully complied with by the
Company.
(i) The Company shall have furnished to you such certificates, in
addition to those specifically mentioned herein, as you may have reasonably
requested in a timely manner as to the accuracy and completeness, at the Closing
Time and the Option Exercise Time, of any statement in the Registration
Statement or the Prospectus; as to the accuracy, at the Closing Time and the
Option Exercise Time, of the representations and warranties of the Company
herein and in each certificate
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25
and document contemplated under this Agreement to be delivered to you; as to the
performance by the Company of its obligations hereunder and under each such
certificate and document; and as to the fulfillment of the conditions concurrent
and precedent to your obligations hereunder.
(j) Except as contemplated by the Registration Statement and the
Prospectus, since the date hereof, there shall not have been any change in the
capitalization of the Company or any change which would have a Material Adverse
Effect, arising for any reason whatsoever.
(k) All corporate proceedings and other legal matters relating to the
sale and transfer of the Shares, this Agreement, the Registration Statement, the
Prospectus and other related matters shall be reasonably satisfactory in all
material respects to counsel for the Underwriters, who shall have furnished to
you at the Closing Time and Option Exercise Time such opinion, in form and
substance reasonably satisfactory to you, with respect to the sufficiency of the
aforementioned corporate proceedings and other legal matters as you may
reasonably require; and the Company shall have furnished to such counsel such
records and documents as such counsel may have reasonably requested in a timely
manner for the purpose of enabling them to pass upon such matters.
(l) The Shares shall be authorized for quotation in Nasdaq/NM and/or
approved for listing in Nasdaq/NM upon notice of issuance which notice shall
have been given.
All of the opinions, letters, evidence and certificates mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters. You reserve the right to waive any condition
hereinabove set forth.
SECTION 11. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company and each of the Selling Stockholders, jointly and
severally, shall indemnify and hold harmless each Underwriter, its officers and
employees and each person, if any, who controls any Underwriter within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of Shares), to which that Underwriter, officer, employee or
controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained (A) in any preliminary prospectus, the Registration Statement or
the Prospectus or in any amendment or supplement thereto or (B) in any blue sky
application or other document prepared or executed by the Company (or based upon
any written information furnished by the Company) specifically for the purpose
of qualifying any or all of the Shares under the securities laws of any state or
other jurisdiction (any such application, document or information being
hereinafter called a "Blue Sky
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26
Application"), (ii) the omission or alleged omission to state in any preliminary
prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading or
(iii) any act or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the Shares or the
offering contemplated hereby, and which is included as part of or referred to in
any loss, claim, damage, liability or action arising out of or based upon
matters covered by clause (i) or (ii) above (provided that the Company and the
Selling Stockholders shall not be liable under this clause (iii) to the extent
that it is determined in a final judgment by a court of competent jurisdiction
that such loss, claim, damage, liability or action resulted directly from any
such acts or failures to act undertaken or omitted to be taken by such
Underwriter through its gross negligence or willful misconduct), and shall
reimburse each Underwriter and each such officer, employee or controlling person
promptly upon demand for any legal or other expenses reasonably incurred by that
Underwriter, officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred; and provided,
further, that the aggregate liability of any Selling Stockholder under this
Section 11(a) shall not exceed the proceeds (net of underwriting discount)
received by such Selling Stockholder from the sale of Shares under this
Agreement; and provided, further, that the Company and the Selling Stockholders
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
any preliminary prospectus, the Registration Statement or the Prospectus, or in
any such amendment or supplement, or in any Blue Sky Application, in reliance
upon and in conformity with written information concerning such Underwriter
furnished to the Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein. The foregoing indemnity
agreement is in addition to any liability which the Company and the Selling
Stockholders may otherwise have to any Underwriter or to any officer, employee
or controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, the Selling Stockholders, and the Company's officers
and employees, each of the Company's directors (including any person who, with
his or her consent, is named in the Registration Statement as about to become a
director of the Company), and each person, if any, who controls the Company
within the meaning of the Securities Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof, to
which the Company or any such Selling Stockholder, director, officer or
controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained (A) in any preliminary prospectus, the Registration Statement or
the Prospectus or in any amendment or supplement thereto, or (B) in any Blue Sky
Application or (ii) the omission or alleged omission to state in any preliminary
prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading,
but in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was
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27
made in reliance upon and in conformity with written information concerning such
Underwriter furnished to the Company through the Representatives by or on behalf
of that Underwriter specifically for inclusion therein, and shall reimburse the
Company, the Selling Stockholders and any such director, officer or controlling
person for any legal or other expenses reasonably incurred by the Company, the
Selling Stockholders or any such director, officer or controlling person in
connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred. The
foregoing indemnity agreement is in addition to any liability which any
Underwriter may otherwise have to the Company, the Selling Stockholders or any
such director, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this Section
11 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 11, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 11 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 11.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 11 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representatives shall have the right to employ counsel to represent jointly
the Representatives and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Underwriters
against the Company or any Selling Stockholder under this Section 11 if, in the
reasonable judgment of the Representatives, it is advisable for the
Representatives and those Underwriters, officers, employees and controlling
persons to be jointly represented by separate counsel, and in that event the
fees and expenses of such separate counsel shall be paid by the Company or
Selling Stockholders. No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding, or (ii) be liable for any settlement
of any such action effected without its written consent (which consent shall not
be unreasonably withheld), but if settled with the consent of the indemnifying
party or if there be a final judgment of the plaintiff in any such
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28
action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 11 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 11(a) or 11(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Selling Stockholders on the one hand and the Underwriters on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Stockholders on the one hand and the Underwriters on the other with
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Shares purchased under this
Agreement (before deducting expenses) received by the Company and the Selling
Stockholders, on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the Shares purchased
under this Agreement, on the other hand, bear to the total gross proceeds from
the offering of the Shares under this Agreement, in each case as set forth in
the table on the cover page of the Prospectus. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company, the Selling Stockholders or the
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholders and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this Section were to be
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim, damage
or liability, or action in respect thereof, referred to above in this Section
shall be deemed to include, for purposes of this Section 11(d), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 11(d), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public was offered to the public
exceeds the amount of any damages which such Underwriter has otherwise paid or
become liable to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided
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in this Section 11(d) are several in proportion to their respective underwriting
obligations and not joint.
(e) The Underwriters severally confirm, and the Company and the Selling
Stockholders acknowledge, that the statements with respect to the public
offering of the Shares by the Underwriters set forth on the cover page, the
legend concerning over-allotments on the inside front cover page, the concession
and reallowance figures appearing under the caption "Underwriting" in the
Prospectus, and any additional information referred to in Section 15(b) hereof,
are correct and constitute the only information concerning such Underwriters
furnished in writing to the Company by or on behalf of the Underwriters
specifically for inclusion in the Registration Statement and the Prospectus.
SECTION 12. TERMINATION.
This Agreement (except for the provisions of Sections 9 and 11 hereof)
may be terminated by you, by notice to the Company on or after the Effective
Date and prior to the Closing Time, if at any time during that period any of the
following has occurred:
(a) Any of the conditions specified in Section 10 hereof shall not have
been fulfilled when and as required by this Agreement to be fulfilled or any of
the covenants, representations or warranties contained herein or in any
certificate or document contemplated under this Agreement to be delivered to you
shall not have been satisfied or fulfilled within the respective times herein
provided for, unless compliance therewith or performance or satisfaction thereof
shall have been expressly waived by you in writing;
(b) Any outbreak of hostilities or escalation in existing hostilities
anywhere in the world or other national or international calamity or crisis or
change in economic or political conditions, if the effect of such outbreak,
escalation, calamity, crisis or change on the financial markets in the United
States would, in your reasonable judgment, make it impracticable to offer for
sale or to enforce contracts made by the Underwriters for the resale of the
Shares agreed to be purchased hereunder;
(c) Any general suspension of trading in securities on the New York
Stock Exchange or the American Stock Exchange or the Nasdaq/NM or any general
limitation on prices for such trading or any general restrictions on the
distribution of securities, all to such a degree as would, in your reasonable
judgment, materially adversely affect the market for the Shares; or
(d) A banking moratorium shall have been declared by Federal, Ohio or
New York State authorities.
SECTION 13. DEFAULT OF UNDERWRITERS. If any Underwriter or Underwriters
default in their obligation to take and pay for Firm Shares or Option Shares and
the aggregate number of Firm Shares or Option Shares which such defaulting
Underwriter or Underwriters agreed but failed to
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purchase does not exceed 10% of the aggregate number of Firm Shares or Option
Shares, as the case may be, the other Underwriters shall be obligated severally
in proportion to their respective commitments hereunder to purchase the Firm
Shares or Option Shares which such defaulting Underwriter or Underwriters agreed
but failed to purchase. If any Underwriter or Underwriters so default and the
aggregate number of Firm Shares or Option Shares with respect to which such
default or defaults occur is more than 10% of the aggregate number of Firm
Shares or Option Shares, as the case may be, and arrangements satisfactory to
you and the Company for the purchase of such Firm Shares or Option Shares by
other persons (who may include one or more of the non-defaulting Underwriters
including you) are not made within 36 hours after such default, this Agreement
may be terminated by you. If such arrangements satisfactory to you and the
Company shall have been made within such 36-hour period as aforesaid, (a) the
Company shall have the right to postpone the time of delivery for a period of
not more than seven full business days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus, or in
any other documents or arrangements, and the Company agrees promptly to file any
amendments to the Registration Statement or supplements to the Prospectus which
may thereby be made necessary, and (b) the respective number of Firm Shares or
Option Shares, as the case may be, to be purchased by the remaining Underwriters
and substituted underwriters shall be taken as the basis of their underwriting
obligation.
In the event of any termination of this Agreement pursuant to this
Section 13, the Company shall not be liable to any Underwriter (except as
provided in Section 9 and Section 11 hereof) nor shall any Underwriter (other
than an Underwriter who shall have failed, otherwise than for some reason
permitted under this Agreement, to purchase the number of Firm Shares or Option
Shares agreed by such Underwriter to be purchased hereunder, which Underwriter
shall remain liable to the Company and the other Underwriters for damages, if
any, resulting from such default) be liable to the Company (except to the extent
provided in Section 11 hereof). As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 13. Nothing herein shall relieve a defaulting Underwriter from liability
for its default.
SECTION 14. NOTICE. Except as otherwise expressly provided in this Agreement,
(a) whenever advice or a notice, objection, designation, request or report is
given or is required by the provisions of this Agreement to be given to the
Company, such advice, notice, objection, designation, request or report shall be
in writing or by telegraph confirmed in writing, addressed to the Company and
delivered at TEAM America Corporation, ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman of the Board, with a copy to
Squire, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇. Summer, Esq., and (b) whenever advice or a notice, objection,
designation, request or report is given or is required by the provisions of this
Agreement to be given to you or the Underwriters, such advice, notice,
objection, designation, request or report shall be in writing, addressed to The
Ohio Company, and delivered at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice President and Manager, with a copy to
Porter, Wright, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., or at such other address of which a party
hereto may give notice in accordance herewith.
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SECTION 15. MISCELLANEOUS.
(a) This Agreement is made solely for the benefit of the Underwriters,
the Company, the Selling Stockholders, the Company's directors, the Company's
officers who shall have signed the Registration Statement and any controlling
person referred to in Section 11 hereof, and their respective successors and
assigns, and no other person, partnership, association or corporation shall
acquire or have any right under or by virtue of this Agreement. The term
"successor" or the term "successors and assigns" as used in this Agreement shall
not include any buyer, as such, of any of the Shares from the Underwriters. All
of the obligations of the Underwriters hereunder are several and not joint.
(b) The information in the Prospectus under the caption "Underwriting"
with respect to (i) the names of, and number of Shares to be purchased by, each
of the Underwriters, (ii) the amounts of the selling concession and reallowance
and (iii) the intention of the Underwriters with respect to sales to accounts
over which they exercise discretionary authority and with respect to their
consent to waive the lock-up shall constitute the only information furnished in
writing by or on behalf of the several Underwriters for use in connection with
the preparation of the Registration Statement as originally filed or in any
amendment thereto, any preliminary prospectus or the Prospectus as the case may
be.
(c) This Agreement shall supersede any agreement or understanding, oral
or in writing, express or implied, between the Company and you relating to the
sale of any of the Shares.
(d) No change, amendment or supplement to, or waiver of, this Agreement
or any term, provision or condition contained herein, shall be valid or of any
effect unless in writing and signed by the party against whom such is asserted.
(e) This Agreement shall be governed by and construed in accordance
with the law of the State of Ohio applicable to contracts made and to be
performed therein without giving effect to the principles of conflicts of law
thereof.
(f) This Agreement may be signed in two or more counterparts with the
same effect as if the signatures to each counterpart were upon a single
instrument, and all such counterparts together shall be deemed an original of
this Agreement.
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32
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed copy hereof, whereupon it
will be a binding agreement by and between the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
TEAM AMERICA CORPORATION
By:_________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman of the Board
The Selling Stockholders named in Schedule
B to this Agreement
By:____________________________________________
Attorney-in-Fact
Accepted as of the date first above written:
THE OHIO COMPANY
Acting on behalf of itself and as the
Representative of the other Underwriters
named in Schedule A attached hereto.
By:________________________________________
▇▇▇▇▇ & CO.
Acting on behalf of itself and as the
Representative of the other Underwriters
named in Schedule A attached hereto.
By:__________________________________________
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33
SCHEDULE A
NUMBER
NAME OF UNDERWRITER OF SHARES
The Ohio Company............................................................................... ---------
▇▇▇▇▇ & Co. ................................................................................... ---------
TOTAL............................ 1,250,000
=========
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34
SCHEDULE B
NUMBER OF
NAME AND ADDRESS OF SELLING STOCKHOLDER OPTION SHARES
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇....................................................................... 50,000
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇....................................................................... 50,000
-------
TOTAL......................... 100,000
=======
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