UNDERWRITING AGREEMENT 600,000 Shares of Common Stock, par value $0.01 per share NATIONAL INTERSTATE CORPORATION, THE SELLING SHAREHOLDER and KEYBANC CAPITAL MARKETS INC. September 6, 2007
Exhibit 1.1
600,000 Shares of Common Stock, par value $0.01 per share
NATIONAL INTERSTATE CORPORATION,
THE SELLING SHAREHOLDER
and
KEYBANC CAPITAL MARKETS INC.
September
6, 2007
September
6, 2007
KeyBanc Capital Markets Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Ladies and Gentlemen:
1. Introductory. The shareholder of National Interstate Corporation, an Ohio
corporation (the “Company”), named in Schedule A hereto (the “Selling Shareholder”) proposes to
sell 600,000 shares of his Common Stock, par value $0.01 per share (the “Common Stock”), upon the
terms hereinafter set forth in this Underwriting Agreement (the “Agreement”) to the public through
you. The 600,000 shares of Common Stock to be purchased in aggregate from the Selling Shareholder
are hereinafter referred to as the “Stock.” The Company and Selling
Shareholder hereby confirm their several agreements with you concerning the purchase of Stock by
you from the Selling Shareholder. As used in this Agreement:
“Act” shall mean the Securities Act of 1933, as amended;
“Applicable
Time” shall mean 6:30 p.m. Eastern Time on the date that this
Agreement is executed and delivered by the parties thereto;
“Base Prospectus” shall mean the base prospectus contained in the Registration Statement at
the Applicable Time, as amended and previously supplemented, and as it may be further supplemented
in accordance with Rule 424 of the Rules and Regulations of the Commission, promulgated pursuant to
the Act (the “Rules and Regulations”);
“Business Day” means any day when the Commission’s office in Washington, D.C. is open for
business;
“Commission” shall mean the Securities and Exchange Commission;
“Disclosure Package” shall mean (i) the Base Prospectus, (ii) the Preliminary Prospectus used
most recently prior to the Applicable Time, (iii) the Issuer Free Writing Prospectuses, if any,
identified in Schedule B hereto, and (iv) any other Free Writing Prospectus that the parties hereto
shall hereafter expressly agree in writing to treat as part of the Disclosure Package;
“Effective Date” shall mean each date and time that the Registration Statement and any
post-effective amendment or amendments thereto became or becomes effective;
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended;
“Final Prospectus” shall mean the prospectus supplement relating to the Stock that was first
filed pursuant to Rule 424(b) after the Applicable Time, together with the Base Prospectus;
“Free Writing Prospectus” shall mean a free writing prospectus, as defined in Rule 405;
“Issuer Free Writing Prospectus” shall mean each Free Writing Prospectus prepared by or on
behalf of the Company or used or referred to by the Company in connection with the offering of the
Stock;
“Material Adverse Effect” means any change or effect that, individually or in the aggregate,
is or is reasonably expected to be materially adverse to the business, assets, results of
operations or condition (financial or other) of the Company and its Subsidiaries taken as a whole;
“Preliminary Prospectus” shall mean any preliminary prospectus supplement to the Base
Prospectus which is used prior to the filing of the Final Prospectus, together with the Base
Prospectus; and
“Registration Statement” shall mean the registration statement on Form S-3 (File No.
333-132657) filed by the Company on March 23, 2006 with the Commission, including exhibits and
financial statements and any prospectus supplement relating to the Stock that is filed with the
Commission pursuant to Rule 424(b) and deemed part of such registration statement pursuant to Rule
430B, as amended on the Effective Date and, in the event any post-effective amendment thereto
becomes effective prior to the Closing Date, shall also mean such registration statement as so
amended.
“Rule 164”, “Rule 172”, “Rule 405”, “Rule 415”, “Rule 424”, “Rule 430B”, “Rule 433” and “Rule
436” refer to such rules under the Act.
Any reference herein to the Registration Statement, the Base Prospectus, any Preliminary Prospectus
or the Final Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 which were filed under the Exchange Act on or
before the Effective Date of the Registration Statement or the issue date of the Base Prospectus,
any Preliminary Prospectus or the Final Prospectus, as the case may be; and any reference herein to
the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement, the Base
Prospectus, any Preliminary Prospectus or the Final Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act after the Effective Date of the
Registration Statement or the issue date of the Base Prospectus, any Preliminary Prospectus or the
Final Prospectus, as the case may be, deemed to be incorporated therein by reference.
2. Representations and Warranties of the Company. The Company represents and warrants
to, and agrees with, you that:
(a) The Company meets the requirements for use of Form S-3 under the Act and has prepared and
filed with the Commission a registration statement (File No. 333-132657) on Form S-3, including a
related Base Prospectus, for registration under the Act of the offering and sale of the Stock.
Such Registration Statement, including any amendments thereto filed prior to the Applicable Time,
has become effective. The Company may have filed with the Commission, as part of an amendment to
the Registration Statement, one or more preliminary prospectus supplements relating to the Stock,
each of which has previously been furnished to you. The Company will file with the Commission a
final prospectus supplement relating to the
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Stock in accordance with Rule 424(b). As filed, such final prospectus supplement shall
contain all information required by the Act and the Rules and Regulations, and, except to the
extent you shall agree in writing to a modification, shall be in all substantive respects in the
form furnished to you prior to the Applicable Time or, to the extent not completed at the
Applicable Time, shall contain only such specific additional information and other changes (beyond
that contained in the Base Prospectus and any Preliminary Prospectus) as the Company has advised
you, prior to the Applicable Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did, and when the Final Prospectus is
first filed in accordance with Rule 424(b) and on the Closing Date (as defined herein),
the Final Prospectus (and any supplement thereto) will, comply in all material respects with the
applicable requirements of the Act and the Rules and Regulations and the Exchange Act and the rules
and regulations of the Commission thereunder (the “Exchange Act Rules and Regulations”); on the
Effective Date and at the Applicable Time, the Registration Statement did not and will not contain
any untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading; and on the date of any
filing pursuant to Rule 424(b) and on the Closing Date, the Final Prospectus (together
with any supplement thereto) will not include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however, that
the Company makes no representations or warranties as to the information contained in or omitted
from the Registration Statement or the Final Prospectus (or any supplement thereto) in reliance
upon and in conformity with information furnished in writing to the Company by or on behalf of you
specifically for inclusion in the Registration Statement or the Final Prospectus (or any supplement
thereto), it being understood and agreed that the only such information furnished by you or on you
behalf consists of the information described as such in Section 9 hereof.
(c) At the Applicable Time, the Disclosure Package and the price to the public, the number of
shares of Stock to be included on the cover page of the Final Prospectus, when taken together as a
whole, does not contain any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The preceding sentence does not apply to statements in or
omissions from the Disclosure Package based upon and in conformity with written information
furnished to the Company by you specifically for use therein, it being understood and agreed that
the only such information furnished by you or on your behalf consists of the information described
as such in Section 9 hereof.
(d) (i) at the earliest time after the filing of the Registration Statement that the Company
or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2)) of
the Stock, and (ii) as of the Applicable Time (with such date being used as the determination date
for purposes of this clause (ii)), the Company was not and is not an Ineligible Issuer (as defined
in Rule 405), without taking account of any determination by the Commission pursuant to Rule 405
that it is not necessary that the Company be considered an Ineligible Issuer.
(e) Each Issuer Free Writing Prospectus does not include any information that conflicts with
the information contained in the Registration Statement, including any document
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incorporated therein by reference and any prospectus supplement deemed to be a part thereof
that has not been superseded or modified. The foregoing sentence does not apply to statements in
or omissions from any Issuer Free Writing Prospectus based upon and in conformity with written
information furnished to the Company by you specifically for use therein, it being understood and
agreed that the only such information furnished by you or on your behalf consists of the
information described as such in Section 9 hereof.
(f) Schedule C hereto sets forth each corporation, association or other entity that is
directly or indirectly owned or controlled by the Company which is a “significant subsidiary” as
defined under Rule 1-02 of Regulation S-X (individually a “Subsidiary” and collectively, the
“Subsidiaries”). Each of the Company and the Subsidiaries has been duly incorporated (or otherwise
formed, as appropriate) and is validly existing as a corporation (or other entity, as appropriate)
in good standing under the laws of the state of its formation, with power and authority (corporate
and other) to conduct its business as described in the Disclosure Package and the Final Prospectus.
Each of the Company and the Subsidiaries is duly qualified to do business as a foreign corporation
and is in good standing in all jurisdictions in which the nature of the business as presently
conducted by it requires such qualification (except for those jurisdictions in which the failure to
so qualify or be in good standing will not result in a Material Adverse Effect. The Company,
directly or indirectly, owns 100% of the capital stock of the Subsidiaries.
(g) This Agreement has been duly and validly authorized, executed and delivered by the Company
and constitutes a legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms.
(h) No order preventing or suspending the use of any of the Registration Statement, the
Preliminary Prospectus or the Final Prospectus has been issued by the Commission.
(i) All of the shares of Stock have been duly authorized and validly issued, are fully paid
and nonassessable and none of the shares of Stock were issued in violation of the preemptive or
other similar rights of any securityholder of the Company, were issued and sold in compliance with
applicable federal and state securities laws and conform to the description thereof contained in
the Disclosure Package and the Final Prospectus, and any certificates for the Stock are in due and
legal form under Ohio law. Except as described in the Disclosure Package and the Final Prospectus,
there are no outstanding options, warrants or other rights calling for the issuance of any shares
of capital stock of the Company or any security convertible or exchangeable or exercisable for
capital stock of the Company.
(j) Subsequent to the respective dates as of which information is given in the Registration
Statement, the Disclosure Package and the Final Prospectus, except as set forth or contemplated in
the Disclosure Package and the Final Prospectus, (i) neither the Company nor any Subsidiary has
incurred any material liability or obligation, direct or contingent, or entered into any material
contract or transaction; (ii) there has not been any material change (on a pro forma basis or
otherwise) in the capital stock or long-term debt of the Company or any Subsidiary, or any material
adverse change, in or affecting the business, assets, results of operations or condition (financial
or other) of the Company and its Subsidiaries taken as a whole;
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(iii) there has not been any dividend of any kind declared, paid or made by the Company on its
capital stock other than dividends declared, paid or made in the ordinary course and in accordance
with past practices; and (iv) neither the Company nor any Subsidiary has sustained any loss or
interference with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action, order or decree or
other event or occurrence that could result in a Material Adverse Effect.
(k) The execution, delivery and performance of this Agreement by the Company, the consummation
by the Company of the transactions herein contemplated, and the compliance by the Company with all
the provisions of this Agreement will not conflict with or result in a breach or violation of any
of the terms or provisions of, or constitute a default under, or result in the creation or
imposition of any lien, encumbrance or claim upon any of the assets of the Company pursuant to any
indenture, mortgage, deed of trust, loan agreement, lease, contract or other agreement or
instrument to which the Company is a party or by which the Company is bound or to which any of the
assets of the Company are subject, nor will such action result in any violation of the provisions
of the Articles of Incorporation or the Code of Regulations or other organizational documents, in
each case as amended to the date hereof, of the Company, or any statute or any order, ruling,
judgment, decree, rule or regulation applicable to the Company or any Subsidiary of any court or
governmental agency or body having jurisdiction over the Company or its Subsidiaries or its
business or assets, except as could not reasonably be expected to result in a Material Adverse
Effect.
(l) The audited financial statements, including the notes and schedules thereto, of the
Company included or incorporated by reference in the Preliminary Prospectus, the Final Prospectus
and the Registration Statement fairly present in all material respects the financial condition of
the Company as of the dates indicated and the results of operations and cash flows for the periods
therein specified, in conformity with generally accepted accounting principles consistently applied
throughout the periods involved except to the extent disclosed therein. The selected financial and
statistical data included or incorporated by reference in the Preliminary Prospectus, the Final
Prospectus and the Registration Statement are accurate in all material respects and fairly present
the information shown therein and have been compiled on a basis consistent with that of the audited
financial statements included in the Preliminary Prospectus, the Final Prospectus and the
Registration Statement.
(m) Ernst & Young LLP has certified certain financial statements of the Company and has
delivered its report with respect to the audited financial statements, notes and schedules included
or incorporated by reference in the Disclosure Package and the Final Prospectus. To the Company’s
knowledge, Ernst & Young LLP is an independent public accounting firm within the meaning of the Act
and the Rules and Regulations, Regulation S-X promulgated by the Commission, the Code of
Professional Ethics of the American Institute of Certified Public Accountants and the rules and
regulations of the Public Company Accounting Oversight Board (United States).
(n) Each of the Company and the Subsidiaries possesses all material authorizations, approvals,
orders, licenses, certificates, consents and permits of and from all governmental or regulatory
officials and bodies (collectively, the “Licenses”) as are necessary under applicable law to
conduct its business as presently conducted and as described in the
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Disclosure Package and the Final Prospectus except to the extent such failure to obtain such
Licenses would not reasonably be expected to have a Material Adverse Effect. Neither the Company
nor any Subsidiary has received any notice of proceedings relating to the revocation or
modification of any License that, if determined adversely to the Company or any of its Subsidiaries
would reasonably be expected to have a Material Adverse Effect.
(o) Except as disclosed in the Disclosure Package and the Final Prospectus, neither the
Company nor any of its Subsidiaries is in violation of any statute, rule, regulation, decision or
order of any governmental agency or body or any court, domestic or foreign, relating to the use,
disposal or release of hazardous or toxic substances or relating to the protection or restoration
of the environment or human exposure to hazardous or toxic substances (collectively, “environmental
laws”), owns or operates any real property contaminated with any substance that is subject to any
environmental laws, is liable for any off-site disposal or contamination pursuant to any
environmental laws, or is subject to any claim relating to any environmental laws, which violation,
contamination, liability or claim would individually or in the aggregate have a Material Adverse
Effect; and the Company is not aware of any pending or threatened investigation that might lead to
such a claim.
(p) Except as set forth in the Disclosure Package and the Final Prospectus, there are no legal
or governmental actions, suits, proceedings or investigations pending or, to the knowledge of the
Company, threatened or contemplated to which the Company or any of its Subsidiaries is a party, or
of which the business or assets (including, without limitation, any of the Licenses) of the Company
or any of its Subsidiaries is the subject that is required to be described in the Disclosure
Package or Final Prospectus or that, individually or in the aggregate, could result in a Material
Adverse Effect. Neither the Company nor any Subsidiary is subject to any outstanding order,
ruling, judgment, award or decree that could result in a Material Adverse Effect.
(q) Neither the Company nor any Subsidiary is in violation of its Articles of Incorporation,
Code of Regulations or other organizational documents, in each case as amended to the date hereof,
and no default exists, and no event has occurred that, with notice or lapse of time, or both, would
constitute an event of default by the Company or any Subsidiary in the due performance and
observance of any term, covenant or condition of any indenture, mortgage, deed of trust, loan
agreement, lease, contract or other agreement or instrument material to the Company or any
Subsidiary, to which the Company or such Subsidiary is a party or by which the Company or such
Subsidiary or its business, properties or assets are bound except as would not reasonably be
expected to, individually or in the aggregate, result in a Material Adverse Effect. Neither the
Company nor any Subsidiary is in violation of any applicable statute or any applicable order,
ruling, judgment, decree, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or such Subsidiary or its business, properties or assets that could
result in a Material Adverse Effect.
(r) The Company and each Subsidiary has good and marketable title to all real property and
good and marketable title to all personal property owned by it, in each case free and clear of all
liens, charges, encumbrances, restrictions and defects, except those that are described in the
Final Prospectus or those that do not materially affect the value of such property and do not
interfere with the use currently made and proposed to be made of such property by the
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Company or such Subsidiary. Any real property and buildings held under lease or sublease by
the Company or any Subsidiary is held by it under valid, subsisting and enforceable leases or
subleases, as the case may be, with such exceptions as are not material and do not interfere with
the use currently made and proposed to be made of such real property and buildings by the Company
or such Subsidiary.
(s) Other than as set forth in the Disclosure Package and Final Prospectus, the Company and
each Subsidiary owns or possesses all material patents, patent rights, licenses, inventions,
copyrights, technology, know-how (including trade secrets, applications and other unpatented or
unpatentable proprietary or confidential information, systems or procedures), trademarks, service
marks, trade names, trademark registrations and service xxxx registrations (collectively,
“Proprietary Rights”) used in or necessary for the conduct of their respective businesses as now
conducted and as proposed to be conducted as described in the Disclosure Package or the Final
Prospectus except where failure to own or possess would not have a Material Adverse Effect. The
Company and its Subsidiaries own or have adequate rights to use all patents, trademarks, service
marks, trade names, service marks, copyrights, inventions, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information, systems or
procedures) and licenses necessary for the conduct of their respective businesses, except where the
failure to own or have adequate rights to use would not have a Material Adverse Effect, and have no
reason to believe that the conduct of their respective businesses will conflict with, and have not
received any notice of infringement of or conflict with, asserted rights of others with respect to
any of such intellectual property that, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would reasonably be expected to have a Material Adverse
Effect.
(t) The Company is in compliance in all material respects with all applicable provisions of
the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations thereunder (collectively, the
“Xxxxxxxx-Xxxxx Act”).
(u) The Company and each of its Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in accordance with
management’s authorizations; (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles and to maintain
asset accountability; (iii) access to assets is permitted only in accordance with management’s
authorization; and (iv) the recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any differences. The
Company and its Subsidiaries’ internal controls over financial reporting are effective and the
Company and its Subsidiaries are not aware of any material weakness in their internal controls over
financial reporting.
(v) The Company and its Subsidiaries maintain “disclosure controls and procedures” (as such
term is defined in Rule 13a-15(e) under the Exchange Act); such disclosure controls and procedures
are effective.
(w) No consent, approval, authorization, order, license, certificate, permit, registration or
qualification of or with any court or governmental agency or body is required of the Company for
the sale of the Stock or the
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consummation by the Company of the transactions herein contemplated, except: (i) as required
under the Act or the Rules and Regulations with respect to the Stock; (ii) as may be required under the Exchange Act or the Exchange Act Rules and
Regulations with respect to the Stock; and (iii) for
such consents, approvals, authorizations, orders, licenses, certificates, permits, registrations or
qualifications as may be required under securities or Blue Sky laws of any jurisdiction in
connection with the purchase and distribution of the Stock.
(x) The Stock has been registered under Section 12(g) of the Exchange Act and has been
authorized for trading on the Nasdaq Global System (“Nasdaq”).
(y) The outstanding debt and the business, assets, results of operations and condition
(financial or other) of the Company and its Subsidiaries taken as a whole conform in all material
respects to the descriptions thereof contained in the Registration Statement, the Disclosure
Package and the Final Prospectus.
(z) The Company and each Subsidiary has filed all federal, state, county, local and foreign
income, franchise or other tax returns required to be filed through the date hereof other than such
returns for which the failure to file would not individually or in the aggregate result in a
Material Adverse Effect, and has paid all taxes that have become due, whether pursuant to any
assessments or otherwise. There is no further liability (whether or not disclosed on such returns)
or assessments for any such taxes, and no interest or penalties have accrued or are accruing with
respect thereto, except for such taxes, interest and penalties being contested in good faith, as
may be set forth or adequately reserved for in the financial statements included in the
Registration Statement, the Preliminary Prospectus and the Final Prospectus or as such would not
result in a Material Adverse Effect. Since June 1, 2007, no tax deficiency has been asserted
against the Company or any Subsidiary that if determined adversely could result in a Material
Adverse Effect.
(aa) Each Subsidiary engaged in the business of insurance and reinsurance is in compliance, in
all material respects, with all applicable insurance laws and regulations governing such
Subsidiaries and their respective businesses, and each has made all necessary filings in connection
therewith. None of these Subsidiaries has received during the past 12 months a notice of
noncompliance or inquiry related thereto from any insurance regulatory agency, commissioner,
authority or other body, and any such notices received or inquiries begun more than 12 months prior
to the date hereof have been closed except in either case that would not result in a Material
Adverse Effect.
(bb) The Company and each Subsidiary maintains insurance of the types and in the amounts
generally deemed adequate for the conduct of its business, the value of its business and assets,
and consistent with insurance coverage maintained by similar companies in similar businesses.
(cc) No labor disturbance by the employees of the Company or any Subsidiary exists or, to the
knowledge of the Company, is threatened or imminent that could result in a Material Adverse Effect.
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(dd) Neither the Company nor any Subsidiary is in violation of, nor has received any
outstanding notice of a violation of, any provisions of the Employee Retirement Income Security Act
of 1974, as amended (“ERISA”), including the rules, regulations and published interpretations
thereunder, where such violation could result in a Material Adverse Effect. No “reportable event”
(as defined in ERISA) has occurred with respect to any “employee benefit plan” (as defined in
ERISA) for which the Company or any Subsidiary would have any liability except as would not
individually or in the aggregate result in a Material Adverse Effect. Neither the Company nor any
Subsidiary has incurred or might reasonably be expected to incur liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any “employee beneift plan” (as defined
in ERISA) or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including
the rules, regulations and published interpretations thereunder (the “Code”). Each “employee
benefit plan” (as defined in ERISA) for which the Company or any Subsidiary would have liability
that is intended to be qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or failure to act, that would cause the loss
of such qualification except as would not individually or in the aggregate result in a Material
Adverse Effect.
(ee) The Company has obtained, or will obtain prior to the Closing Date, the agreement
of the Selling Shareholder that, for a period of time set forth in the form of Lock Up Agreement
attached as Schedule D hereto, the Selling Shareholder will not, without your prior written
consent, directly or indirectly, sell, offer to sell, contract to sell, solicit an offer to buy,
grant any option, right or warrant for the purchase or sale of, assign, pledge, hypothecate,
distribute or otherwise transfer, dispose of, encumber or reduce any risk of ownership by any means
(or publicly announce any intention to do the foregoing) of any Common Stock (including, without
limitation, Common Stock that may be deemed to be beneficially owned by such persons in accordance
with the applicable Exchange Act Rules and Regulations) or any securities convertible into or
exchangeable or exercisable for Common Stock or evidencing any right to purchase or subscribe for
Common Stock that such Selling Shareholder has or will have the right to acquire through options,
warrants, subscriptions or other rights. Nothing in this subsection (ee) shall restrict
the ability of the Selling Shareholder to enter into any transactions
with the Company,
receive grants or awards under any of the Company’s plans or
arrangements or engage in certain other activities as described in
the form of Lock Up Agreement attached hereto.
(ff) Neither the Company nor any of its Subsidiaries has taken, directly or indirectly, any
action designed to stabilize or manipulate, or that has constituted, or might reasonably be
expected to cause or result in, the stabilization or manipulation of the price of any security of
the Company in order to facilitate the sale or resale of the Stock or otherwise.
(gg) The Company and each Subsidiary (i) makes and keeps accurate books and records 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 the 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 specific or general
authorization; and (D) the recorded accountability for
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assets is compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(hh) The Company does not conduct its business in a manner in which it would become and, after
giving effect to the offering and sale of the Stock, will not be an “investment company” or an
entity “controlled” by an “investment company,” as such terms are defined in the Investment Company
Act of 1940, as amended (the “1940 Act”) and the rules and regulations of the Commission
thereunder.
(ii) Except as described in the Disclosure Package or the Final Prospectus or filed as
exhibits to the Registration Statement, there are no statutes, regulations or legends or any
contracts, treaties or other documents that are required to be described in the Disclosure Package
or the Final Prospectus, incorporated by reference therein or filed as exhibits to the Registration
Statement by the Act or the Rules and Regulations. All such material contracts to which the
Company or any Subsidiary is a party (i) are in full force and effect, (ii) have been duly
authorized, executed and delivered by the Company or such Subsidiary, (iii) constitute legal valid
and binding agreements of the Company or such Subsidiary and the other parties to such contract,
(iv) have been performed and/or are being performed by each party thereto in all material respects,
(v) are not in default by the Company or such Subsidiary and, to the knowledge of the Company, are
not in default and have not been repudiated by the other parties to such contract, and (vi) are
enforceable against the Company or such Subsidiary and all other parties thereto, in each case, in
accordance with the terms thereof.
Any certificate executed by an authorized officer of the Company and delivered to you or your
pursuant to this Agreement shall be deemed a representation and warranty by the Company to you as
to the matters covered thereby.
3. Representations and Warranties of the Selling Shareholder. The Selling Shareholder
represents and warrants to and agrees with you that:
(a) This Agreement has been duly authorized, executed and delivered by or on behalf of the
Selling Shareholder.
(b) The Power of Attorney and the Custody Agreement relating to outstanding shares in the form
heretofore furnished to the Representatives (the “Power of Attorney” and “Custody Agreement”,
respectively), has been duly authorized, executed and delivered by such Selling Shareholder and is
the valid and binding agreement of the Selling Shareholder.
(c) The execution and delivery by the Selling Shareholder of, and the performance by the
Selling Shareholder of its obligations under, this Agreement, the Power of Attorney and, if
applicable, the Custody Agreement, will not contravene any provision of applicable law, or any
agreement or other instrument binding upon the Selling Shareholder or any judgment, order or decree
of any governmental body, agency or court having jurisdiction over the Selling Shareholder, and no
consent, approval, authorization or order of, or qualification with, any governmental body or
agency is required for the performance by such Selling Shareholder of its obligations under this
Agreement, the Power of Attorney or the Custody Agreement, if applicable, or the Selling
Shareholder, except such as have already been obtained
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or as may be required under the Act and by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Stock.
(d) The Selling Shareholder has, and on the Closing Date will have, valid title to, or a valid
“security entitlement” within the meaning of
Section 8-501 of the Uniform Commercial Code as adopted in the
State of Ohio (“UCC”) in
respect of the Stock to be sold by the Selling Shareholder free and clear of all security
interests, claims, liens, equities or other encumbrances and the legal right and power, and all
authorization and approval required by applicable law, to enter into this Agreement, and to sell,
transfer and deliver the Stock to be sold by the Selling Shareholder or a security entitlement in
respect of such Stock.
(e) The information provided by the Selling Shareholder to the Company in writing for
inclusion in the “Selling Shareholder” section of the Preliminary Prospectus and the Final
Prospectus is true and correct; it being understood and agreed that the only such information
furnished to the Company by such Selling Shareholder consists of the name of the Selling
Shareholder, the number of shares of Stock beneficially owned by and to be offered by the
Selling Shareholder and other information with respect to the Selling Shareholder (excluding any
percentage) which appears under the caption “Selling Shareholder” in the Preliminary Prospectus and
the Final Prospectus (such information so furnished in writing being hereinafter called,
collectively, the “Selling Shareholder Information”).
4. Sale, Purchase and Delivery of Stock. On the basis of the representations,
warranties and agreements herein contained, but subject to the terms and conditions set forth
herein, the Selling Shareholder hereby agrees to sell to you, and you agree to purchase from the
Selling Shareholder the shares of Stock at a price of $28.50 per share. The Selling
Shareholder will deliver the Stock to you at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000 at 10:00
a.m., Eastern Time, or to your designee at a specified place at the same time, against payment of
the purchase price by wire transfer in immediately available funds to the account designated by the
Selling Shareholder on the third full Business Day after the date of this Agreement (or, if the
Stock is priced after 4:30 p.m., Eastern Time, on the date of this Agreement, the fourth full
Business Day after the date of this Agreement), such time and place being herein referred to as the
“Closing Date.” Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of your obligation. The certificates
representing the shares of the Stock to be so delivered will be in such denominations and
registered in such names as you may specify to the Selling Shareholder at or before 3:00 p.m.,
Eastern Time, on the second full Business Day prior to the Closing Date. Such certificates
will be made available for checking and packaging at least twenty-four (24) hours prior to the
Closing Date.
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5. Offering. Subject to the terms and conditions hereof, you agree that you will (i)
offer the Stock to the public as set forth in the Final Prospectus as soon after the
Closing Date as may be practicable, but in no event later than 5:00 p.m., Eastern Time, on the 15th
Business Day subsequent to the Closing Date and (ii) offer and sell the Stock to the
public only in those jurisdictions, and in such amounts, where 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 of such jurisdiction; it being
understood, however, that such agreement only covers the initial sale of the Stock by you and not
any subsequent sale of such Stock in any trading market that may develop after the public offering.
6. Covenants of the Company. The Company covenants and agrees with you that:
(a) The Company will prepare the Final Prospectus in a form approved by you and will file such
Final Prospectus with the Commission pursuant to Rule 424(b) not later than the Commission’s close
of business on the second Business Day following the execution and delivery of this Agreement or,
if applicable, such earlier time as may be required by the Act. The Company will make no further
amendment to the Registration Statement or supplement to the Final Prospectus of which you and your
counsel shall not previously have been advised and furnished a copy or to which your or your
counsel shall object. The Company will advise you promptly, after the Company receives notice
thereof, of the time when the Final Prospectus has been filed and will furnish you and your counsel
with copies thereof. The Company will advise you, promptly after it receives notice thereof, 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 the Final Prospectus, of the
suspension of the qualification of the Stock for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose or of any request by the
Commission to amend or supplement the Registration Statement
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or the Final Prospectus or for additional information. In the event of the issuance of any
stop order suspending the effectiveness of the Registration Statement or of any order preventing or
suspending the use of the Final Prospectus or suspending the qualification of the Stock for
offering or sale in any jurisdiction, the Company will promptly use its best efforts to obtain as
soon as possible the withdrawal of such order, and the Company will use its best efforts to prevent
the issuance of any such stop order or of any such order preventing or suspending the use of the
Final Prospectus or suspending the qualification of the Stock for offering or sale in any
jurisdiction.
(b) The Company will comply with the Act and the Rules and Regulations so as to permit the
continuance of offerings, sales and dealings in the Stock under the Act for such period as may be
required by the Act. Promptly from time to time, the Company will take such action as you may
request to register and qualify the Stock for offering and sale under the securities laws of such
jurisdictions as you may request and to comply with such laws so as to permit the continuance of
offerings, sales and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Stock, provided that in connection therewith the Company shall not
be required to qualify as a foreign corporation or to file a general consent to service of process
in any jurisdiction. The Company consents to use of the Registration Statement, Disclosure Package
and the Final Prospectus, in accordance with the provisions of the Act and with the securities or
Blue Sky laws of the jurisdictions in which the Stock is offered by you and any dealers.
(c) Upon your request, the Company will furnish you and your counsel, without charge, two
signed and conformed copies of the Registration Statement as originally filed with respect to the
Stock and each amendment thereto (in each case including all consents and exhibits filed therewith)
and, so long as a prospectus relating to the Stock is required to be delivered under the Act or the
Rules and Regulations, such number of copies of each Preliminary Prospectus, the Final Prospectus
and each Issuer Free Writing Prospectus and all amendments or supplements thereto as you may from
time to time reasonably request. If at any time when the delivery of a prospectus relating to the
Stock is required under the Act or the Rules and Regulations (including in circumstances where such
requirement may be satisfied pursuant to Rule 172), an event shall have occurred the result of
which would cause the Final Prospectus as then amended or supplemented to include an untrue
statement of a material fact or omit to state any material fact necessary in order to make
statements therein, in the light of the circumstances under which they were made when such Final
Prospectus was or is delivered, not misleading, or if for any other reason it shall be necessary to
amend or supplement the Final Prospectus in order to comply with the Act or the Rules and
Regulations, the Company will forthwith prepare and, subject to the provisions of Section 6(a)
hereof, file with the Commission an appropriate supplement or amendment thereto, and will furnish
to you and to any dealer in securities, without charge, such number of copies as you may from time
to time reasonably request of an amended Final Prospectus that will correct such statement or
omission or effect such compliance in accordance with the requirements of Section 10 of the Act.
The Company consents to use of the Final Prospectus (and of any amendments or supplements thereto),
in accordance with the provisions of the Act and with the securities or Blue Sky laws of the
jurisdictions in which the Stock is offered by you and any dealers, both in connection with the
offering or sale of the Stock and for such period of time thereafter as the Final Prospectus is
required to be delivered in connection therewith.
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(d) The Company will promptly file with the Commission any amendment to the Registration
Statement or Final Prospectus that may, in the judgment of you or the Company, be required by the
Act or requested by the Commission.
(e) The Company will, subsequent to the Closing Date and during any period when the
Final Prospectus is required to be delivered under the Act (including in circumstances where such
requirement may be satisfied pursuant to Rule 172), promptly file all documents required to be
filed with the Commission pursuant to Section 13, 14 or 15 of the Exchange Act within the time
periods required by the Exchange Act and the Exchange Act Rules and Regulations.
(f) For a period of two (2) years from the Closing Date, the Company will furnish to its
shareholders as soon as practicable after the end of each fiscal year, an annual report (including
a balance sheet, statement of income, statement of cash flow and statement of changes in
shareholders’ equity of the Company and its consolidated subsidiaries certified by independent
public accountants).
(g) For a period of two (2) years from the Closing Date, the Company will deliver to you
such additional information concerning the business and financial condition of the Company as you
may from time to time reasonably request, provided, however that the Company shall not be required
to furnish to you any such information that has otherwise been filed with the Commission and is
available on the Commission’s Electronic Data Gathering Analysis and Retrieval (XXXXX) System.
(h) The Company will not take, directly or indirectly, any action designed to stabilize or
manipulate or that constitutes, or might reasonably be expected to cause or result in, the
stabilization or manipulation of the price of any security of the Company in order to facilitate
the sale or resale of the Stock or otherwise.
(i) Prior to the Closing Date, except as set forth in the Final Prospectus (i)
there will not be any material change (on a pro forma basis or otherwise) in the capital stock or
long-term debt of the Company, or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the business, assets, results of operations or
condition (financial or other) of the Company, (ii) neither the Company nor any Subsidiary will
incur any material liability or obligation, direct or contingent, or enter into any material
transaction, and (iii) there will not be any dividend of any kind declared, paid or made by the
Company on its capital stock other than dividends declared, paid or made in accordance with past
practices.
(j) The Company will file with the NASD and Nasdaq all documents and notices required by NASD
or Nasdaq of companies that have issued securities that are traded on Nasdaq.
(k) For a period of thirty (30) days from the date of the Final Prospectus, the Company will
not, without your prior written consent, directly or indirectly, sell, offer to sell, contract to
sell, solicit an offer to buy, grant any option, right or warrant for the purchase or sale of,
assign, pledge, hypothecate, distribute or otherwise transfer or dispose of, encumber or reduce
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any risk of ownership by any means (or publicly announce any intention to do the foregoing) of
any Common Stock or any securities convertible into or exchangeable or exercisable for Common Stock
or evidencing any right to purchase or subscribe for Common Stock that the Company has or will have
the right to issue and sell through options, warrants, subscription or other rights; provided,
however, that the Company may, within such thirty (30) day period, issue awards to participants
pursuant to its plans filed as exhibits with the Commission and issue Common Stock upon the
exercise of options held by its employees. Nothing in this subsection shall restrict the ability
of such affiliates from entering into any transactions with the Company or receiving grants or
awards under any of the Company’s plans or arrangements.
(l) The Company agrees that, unless it has or shall have obtained your prior written consent,
and you agree with the Company that, unless it has or shall have obtained the prior written consent
of the Company, it has not made and will not make any offer relating to the Stock that would
constitute an Issuer Free Writing Prospectus or that would otherwise constitute a Free Writing
Prospectus required to be filed by the Company with the Commission or retained by the Company under
Rule 433; provided that the prior written consent of the parties hereto shall be deemed to have
been given in respect of the Free Writing Prospectuses included in Schedule B hereto. Any such
Free Writing Prospectus consented to by you or the Company is hereinafter referred to as a
“Permitted Free Writing Prospectus.” The Company agrees that (x) it has treated and will treat, as
the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and
(y) it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433
applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the
Commission, legending and record keeping.
(m) The Company will comply with all applicable securities and other applicable laws, rules
and regulations, including, without limitation, the Xxxxxxxx-Xxxxx Act, and to use its best efforts
to cause the Company’s directors and officers, in their capacities as such, to comply with such
laws, rules and regulations, including, without limitation, the provisions of the Xxxxxxxx-Xxxxx
Act.
7. Payment of Expenses. The Company will pay or cause to be paid all costs and
expenses incident to the performance of the obligations of the Company hereunder, including, but
not limited to, the fees, disbursements and expenses of its counsel; the fees, costs and expenses
of preparing, printing and delivering the certificates for the Stock; the fees, disbursements and
expenses of its accountants; all fees and expenses in connection with the listing and quotation of
the Stock on Nasdaq; the costs and expenses in connection with the preparation, printing and filing
of the Registration Statement (including the exhibits thereto) as originally filed and as amended,
all amendments thereto, each Preliminary Prospectus, the Final Prospectus and each Issuer Free
Writing Prospectus and any amendments or supplements thereto and the furnishing to you of copies
thereof, including charges for mailing, air freight and delivery, counting and packaging thereof;
and the costs and expenses in connection with the printing of this Agreement.
8. Conditions of Your Obligations. Your obligations to purchase and pay for the
Stock on the Closing Date shall be subject to
the condition that the representations and warranties of the Company and the Selling Shareholder
contained herein shall be true and correct in all respects as of the Applicable Time
-15-
and as of the Closing Date, to the condition that the written statements of an
authorized officer of the Company made and delivered pursuant to the provisions hereof shall be
true and correct in all respects, to the performance by the Company of its obligations hereunder
and to the following additional conditions:
(a) All corporate proceedings and related legal and other matters in connection with the
organization of the Company and the registration, authorization, issue, sale and delivery of the
Stock shall have been reasonably satisfactory to your counsel, Squire, Xxxxxxx & Xxxxxxx L.L.P.,
and Squire, Xxxxxxx & Xxxxxxx L.L.P. shall have been timely furnished with such documents,
certificates and opinions as they may have requested to enable them to pass upon the issuance and
sale of the Stock as contemplated by this Agreement, and in order to evidence the accuracy and
completeness of any of the representations, warranties or statements of the Company, the
performance of any of the covenants of the Company or the fulfillment of any of the conditions
herein contained.
(b) You shall not have advised the Company that subsequent to the Applicable Time, the
Registration Statement, Disclosure Package or the Final Prospectus or any amendment thereof or
supplement thereto contains an untrue statement of fact that, in the opinion of your counsel,
Squire, Xxxxxxx & Xxxxxxx L.L.P., is material, or omits to state a fact which, in the opinion of
such counsel, is material and is required to be stated therein or is necessary to make the
statements therein not misleading. Subsequent to the Applicable Time or, if earlier, the dates on
which information is given in the Registration Statement and the Final Prospectus, (i) there shall
not have been any change, or any development involving a prospective material adverse change, in or
affecting the business, assets, results of operations or condition (financial or other) of the
Company not described in the Disclosure Package or the Final Prospectus, that, in your reasonable
opinion, would materially and adversely affect the market for the Stock or make it impracticable or
inadvisable to proceed with the offering, sale or delivery of the Stock and (ii) the business,
assets, results of operations or condition (financial or other) of the Company shall not have been
materially interfered with by any fire, explosion, flood or other calamity, whether or not covered
by insurance, or by any labor dispute or court or governmental action, order or decree.
(c) You
shall have received as of the Closing Date (or prior thereto as indicated) the
following:
(i) Such opinion or opinions of Xxxxxxxx Xxxx LLP, counsel for the Company, addressed
to you and dated as of the Closing Date, in form and substance satisfactory to you, to
the effect that:
(A) Each of the Company and its Subsidiaries has been duly incorporated (or otherwise
formed, as appropriate) and is validly existing as a corporation (or other entity, as
appropriate) in good standing under the laws of the state of its formation, with power and
authority (corporate and other) to conduct its business as described in the Disclosure
Package and the Final Prospectus. Each of the Company and its Subsidiaries is duly
qualified to do business as a foreign corporation and is in good standing in all
jurisdictions in which the nature of the business as presently conducted by
-16-
it requires such qualification, except for those jurisdictions in which the failure to
so qualify or be in good standing will not result in a Material Adverse Effect.
(B) The issuance of the Common Stock is not subject to any statutory preemptive rights
arising under Ohio law or under the Company’s organizational documents or, to the best of
such counsel’s knowledge, contractual or other similar rights of any securityholder of the
Company. The shares of Common Stock to be sold by the Selling Shareholder were issued and
sold in compliance with applicable federal and state securities laws and conform to the
description thereof contained in the Disclosure Package and the Final Prospectus, and any
certificates for the Common Stock are in due and legal form under Ohio law. Except as
described in the Final Prospectus, to the best of such counsel’s knowledge, there are no
outstanding options, warrants or other rights calling for the issuance of any shares of
capital stock of the Company or any security convertible, exchangeable or exercisable for
capital stock of the Company.
(C) The Registration Statement has become effective under the Act; the Base Prospectus
and Final Prospectus have been filed with the Commission pursuant to the subparagraph of
Rule 424(b), on the date specified in such opinion; any required filing of each Issuer Free
Writing Prospectus pursuant to Rule 433 has been made in the manner and within the time
period required by Rule 433(d); and no stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and not withdrawn, and no
proceedings for that purpose have been instituted, are pending or, to such counsel’s
knowledge, are contemplated by the Commission. The Registration Statement, the Base
Prospectus and the Final Prospectus, and each amendment thereof or supplement thereto
(except for the financial statements, notes and schedules and other financial data included
therein as to which such counsel need express no opinion), as of their respective effective
or issue dates, complied as to form in all material respects with the requirements of the
Act and the Rules and Regulations; to such counsel’s knowledge, all descriptions in the
Registration Statement, the Base Prospectus and the Final Prospectus of contracts or other
documents are accurate and fairly present the information required to be shown with respect
to such matters, all such contracts and other documents conform in all material respects to
the descriptions thereof contained therein, and to the extent such contracts or other
documents are required under the Act or the Rules and Regulations to be filed, as exhibits
to the Registration Statement, they are so filed; to such counsel’s knowledge, there are no
contracts or other documents that are required to be described in the Registration
Statement, the Base Prospectus and the Final Prospectus, incorporated by reference therein
or filed as exhibits to the Registration Statement by the Act or the Rules and Regulations
that are not so described, incorporated by reference or filed; and to such counsel’s
knowledge all descriptions in the Registration Statement, the Base Prospectus and the Final
Prospectus of statutes, regulations or legal or governmental actions, suits, proceedings or
investigations are accurate and fairly present the information required to be shown with
respect to such matters and there are no statutes, regulations or legal or governmental
actions, suits, proceedings or investigations that are required to be described in the
Registration Statement or the Final Prospectus by the Act or the Rules and Regulations that
are not so described.
-17-
(D) The execution, delivery and performance of this Agreement by the Company, the
consummation by the Company of the transactions herein contemplated, and the compliance by
the Company with all the provisions of this Agreement will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, encumbrance or claim upon any of the
assets of the Company pursuant to, any indenture, mortgage, deed of trust, loan agreement,
lease, contract or other agreement or instrument to which the Company is a party or by which
the Company is bound or to which any of the assets of the Company are subject and of which
such counsel has knowledge after reasonable investigation, nor will such action result in
any violation of the provisions of the Articles of Incorporation or the Code of Regulations
or other organizational documents, in each case as amended to the date of such opinion, of
the Company, or, to the knowledge of such counsel, any statute or any order, ruling,
judgment, decree, rule or regulation applicable to the Company or any Subsidiary of any
court or governmental agency or body having jurisdiction over the Company or its
Subsidiaries or its business or assets, except as could not reasonably be expect to result
in a Material Adverse Effect.
(E) No consent, approval, authorization, order, license, certificate, permit,
registration or qualification of or with any court or governmental agency or body is
required of the Company for the sale of the Stock or the consummation by the Company of the transactions herein contemplated, except: (i) as
required under the Act or the Rules and Regulations with respect to the Stock; (ii) as may be required under the Exchange Act or the
Exchange Act Rules and Regulations with respect to the Stock; and (iii) for such consents, approvals, authorizations, orders, licenses,
certificates, permits, registrations or qualifications as may be required under securities
or Blue Sky laws of any jurisdiction in connection with the purchase and distribution of the
Stock by you.
(F) Except as set forth in the Final Prospectus, to such counsel’s knowledge, there are
no legal or governmental actions, suits, proceedings or investigations pending or, to such
counsel’s knowledge, threatened or contemplated to which the Company or any of its
Subsidiaries is a party, or of which the business or assets (including, without limitation,
any of the Licenses) of the Company or any of its Subsidiaries is the subject that is
required to be described in the Base Prospectus or the Final Prospectus or that,
individually or in the aggregate, could result in a Material Adverse Effect or that might
materially and adversely affect the consummation of the transactions contemplated in this
Agreement.
(G) Neither the Company nor any Subsidiary is in violation of its Articles of
Incorporation, Code of Regulations or other organizational documents, in each case as
amended to the date of such opinion, and no default exists, and no event has occurred that,
with notice or lapse of time, or both, would constitute an event of default by the Company
or any Subsidiary in the due performance and observance of any term, covenant or condition
of any indenture, mortgage, deed of trust, loan agreement, lease,
-18-
contract or other agreement or instrument material to the Company or any Subsidiary, to
which the Company or such Subsidiary is a party or by which the Company or such Subsidiary
or its business or assets are bound and of which such counsel has knowledge after reasonable
investigation. To the knowledge of such counsel, neither the Company nor any Subsidiary is
in violation of, in any material respect, any applicable statute or any applicable order,
ruling, judgment, decree, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or such Subsidiary or its business, properties or
assets.
(H) The Company is not and, after giving effect to the offering and sale of the Stock,
will not be, an “investment company” or an entity “controlled” by an “investment company,”
as such terms are defined in the 1940 Act and the rules and regulations of the Commission
thereunder.
(I) To such counsel’s knowledge, each of the Company and the Subsidiaries possesses all
Licenses as are necessary under applicable law to operate its properties and to conduct its
business as presently conducted and as described in the Final Prospectus except to the
extent such failure to obtain such Licenses would not reasonably be expected to have a
Material Adverse Effect. Neither the Company nor any Subsidiary has received any notice of
any notice of proceedings relating to the revocation or modification of any such Licenses
that, if determined adversely to the company or any of its Subsidiaries, would reasonably be
expected to have a Material Adverse Effect.
(J) Nothing has come to the attention of such counsel, after reasonable investigation
and discussion with the Company, that would lead such counsel to believe that any of the
representations and warranties of the Company contained in this Agreement or in any
certificate or document contemplated under this Agreement to be delivered are not true or
correct or that any of the covenants and agreements herein contained to be performed on the
part of the Company or any of the conditions herein contained, or set forth in the
Registration Statement or the Final Prospectus, to be fulfilled or complied with by the
Company have not been or will not be duly and timely performed, fulfilled or complied with.
(K) Nothing has come to the attention of such counsel, after reasonable investigation,
that would lead such counsel to believe that either the Registration Statement or any
amendment thereof or supplement thereto at the time such Registration Statement or amendment
or supplement became effective (and each deemed effective date pursuant to Rule 430B(f)
under the Act) and at the Closing Date,
contains or contained an untrue statement of a material fact or omits or omitted to state
any material fact required to be stated therein or necessary to make the statements therein
not misleading, or that the Disclosure Package or the Final Prospectus or any amendment
thereof or supplement thereto as of the date of such Disclosure Package or Final Prospectus
or amendment thereof or supplement thereto and as of the Applicable
Time or the Closing Date, as the case may be, contains or contained an untrue
statement of a material fact or omits or omitted to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not
-19-
misleading (it being understood that such counsel need not express any belief or
opinion with respect to the financial statements, notes and schedules and other financial
data included therein).
(L) The statements incorporated by reference into the Registration Statement, insofar
as they constitute statements of law or legal conclusions, are correct in all material
respects and fairly present the information presented therein.
In rendering such opinion, such counsel may rely (A) as to matters involving the application of
laws other than the laws of the United States and the State of Ohio, to the extent specified in
such opinion, if at all, upon an opinion or opinions of other counsel, familiar with the applicable
laws (who shall be counsel satisfactory to your counsel), and (B) as to matters of fact contained
within the certificates and written statements of government officials, accountants and authorized
officers of the Company, upon such certificates and written statements. You shall have received a
copy of each of such opinion that shall be dated the Closing Date, addressed to you or
otherwise authorizing you to rely thereon. The opinion of such counsel for the Company shall state
that the opinion of any such other counsel is in form satisfactory to such counsel and, in their
opinion, you and they are justified in relying thereon.
(ii) Such opinion or opinions of Xxxxxxxx Xxxx LLP, or other counsel for the Selling
Shareholder, addressed to you and dated the Closing Date, in form and substance
satisfactory to you, to the effect that:
(A) Assuming that you acquired your interest in the Stock you purchased from the
Selling Shareholder without notice of any adverse claim (within the meaning of Section 8-105
of the UCC), you, having purchased such Stock delivered on the
Closing Date to The Depository Trust Company (“DTC”) or other securities intermediary
(within the meaning of Section 8-102(a)(14) of the UCC) by making payment therefor as
provided herein, and having had such Stock credited to your securities account maintained
with DTC or such other securities intermediary, will have acquired a security entitlement
(within the meaning of Section 8-102(a)(17) of the UCC) to such Stock, and no action based
on an adverse claim (within the meaning of Section 8-102(a)(1) of the UCC) may be asserted
against you with respect to such Stock.
(B) No consent, approval, authorization or order of, or filing with, any governmental
agency or body or any court is required to be obtained or made by the Selling Shareholder
for the consummation of the transactions contemplated by this Agreement in connection with
the sale of the Stock, except such as have been obtained and made under the Act and under
state securities laws.
(C) The execution, delivery and performance of this Agreement and the consummation of
the transactions herein contemplated will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any statute, any rule, regulation or
order of any governmental agency or body or any court having jurisdiction over the Selling
Shareholder or any of his properties or any agreement or instrument to which the Selling
Shareholder is a party or by which the
-20-
Selling Shareholder is bound or to which any of the properties of the Selling
Shareholder is subject.
(D) This Agreement and the Power of Attorney and Custody Agreement had been duly
authorized, executed and delivered by the Selling Shareholder.
In rendering such opinion, such counsel may rely (A) as to matters involving the application of
laws other than the laws of the United States and the State of Ohio, to the extent specified in
such opinion, if at all, upon an opinion or opinions of other counsel, familiar with the applicable
laws (who shall be counsel satisfactory to your counsel), and (B) as to matters of fact contained
within the certificates and written statements of government officials, accountants and authorized
officers of the Company and/or Selling Shareholder, upon such certificates and written statements.
You shall have received a copy of each of such opinion which shall be dated the Closing
Date, addressed to you or otherwise authorizing you to rely thereon. The opinion of such counsel
for the Selling Shareholder shall state that the opinion of any such other counsel is in form
satisfactory to such counsel and, in their opinion, you and they are justified in relying thereon.
(iii) Such opinion or opinions of your counsel, Squire, Xxxxxxx & Xxxxxxx L.L.P., dated
the Closing Date, with respect to the incorporation of the Company, the validity
of the Stock, the Registration Statement, the Disclosure Package and the Final Prospectus
and such other related matters as you may reasonably request, and the Company shall have
furnished to such counsel such documents, certificates and opinions as such counsel may
request for the purpose of enabling them to pass upon such matters. In connection with such
opinions, such counsel may rely on representations or matters of fact contained within the
certificates of the authorized officers of the Company.
(iv) A certificate of the Company executed by the principal executive officer and the
principal financial and accounting officer of the Company, dated the Closing
Date, to the effect that:
(A) The representations and warranties of the Company in Section 2 hereof are true and
correct as of the Closing Date, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be performed or satisfied at or
prior to the Closing Date.
(B) No stop order suspending the effectiveness of the Registration Statement has been
issued and not withdrawn, and no proceedings for that purpose have been instituted, are
pending or, to the knowledge of the respective signers of the certificate, contemplated by
the Commission.
(C) The signers of such certificate have carefully and completely examined the
Registration Statement, the Disclosure Package and the Final Prospectus, nothing has come to
their attention that would lead them to believe that the Registration Statement, at the time
it became effective (or any amendment thereof made prior to the Closing Date, as of the
-21-
date of such amendment), contained an untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make the statements
therein not misleading, or that the Disclosure Package or the Final Prospectus, as of the
date thereof (or any amendment thereof or supplement thereto made prior to the Closing
Date, as of the date of such amendment or
supplement), contained an untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; subsequent to the
respective dates as of which information is given in the Registration Statement, the
Disclosure Package and the Final Prospectus, except as set forth in the Final Prospectus,
(A) there has not been any material change (on a pro forma basis or otherwise) in the
capital stock or long-term debt of the Company, or any material adverse change, in or
affecting the business, assets, results of operations or condition (financial or other) of
the Company, (B) there has not been any dividend of any kind declared, paid or made by the
Company on its capital stock other than dividends declared, paid or made in accordance with
past practices or otherwise publicly disclosed, and (C) the Company has not sustained any
loss or interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or governmental
action, order or decree which could result in a Material Adverse Effect; and since the dates
as of which information is given in the Registration Statement, the Disclosure Package and
the Final Prospectus there has occurred no event required to be set forth in an amended or
supplemented prospectus that has not been so set forth in the Final Prospectus.
(D) Each of the Company and the Subsidiaries possesses all material authorizations,
approvals, orders, licenses, certificates, consents and permits of and from all governmental
or regulatory officials and bodies (collectively, the “Licenses”) as are necessary under
applicable law to operate its properties and to conduct its business as presently conducted
and as described in the Disclosure Package and the Final Prospectus except to the extent
such failure to obtain such Licenses would not reasonably be expected to have a Material
Adverse Effect. Neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any License that, if determined
adversely to the Company or any of its Subsidiaries would reasonably be expected to have a
Material Adverse Effect.
(v)
Letters from Ernst & Young furnished as of the Applicable Time
and the
Closing Date, addressed to you and in form and substance reasonably satisfactory to you,
with respect to the financial statements and certain financial information contained in the
Registration Statement, the Disclosure Package and the Final Prospectus.
(d) Prior
to the Closing Date, the Company shall have furnished to you such further
certificates and documents as you may reasonable request.
(e) Prior
to the Closing Date, no stop orders suspending the qualification of the Stock for
offering or sale under the securities or Blue Sky laws of the states in which the Stock is to be
offered and sold shall have been issued and not withdrawn, and no proceedings for
-22-
that purpose shall have been instituted or shall be pending or, to the knowledge of the
Company or you, contemplated by the applicable state securities administrators.
(f) The Selling Shareholder shall have delivered to you an agreement that, for a period of
time set forth in the form of Lock Up Agreement attached as
Schedule D hereto, the Selling
Shareholder will not, without your prior written consent, directly or indirectly, sell, offer to
sell, contract to sell, solicit an offer to buy, grant any option, right or warrant for the
purchase or sale of, assign, pledge, hypothecate, distribute or otherwise transfer or dispose of,
encumber or reduce any risk of ownership with any party other than the Company by any means (or
publicly announce any intention to do the foregoing) any shares of Common Stock (including, without
limitation, Common Stock that may be deemed to be beneficially owned by such persons in accordance
with the Exchange Act Rules and Regulations). Nothing in this subsection shall
restrict the ability of the Selling Shareholder to enter into any transactions with the Company or
receive grants or awards under any of the Company’s plans or
arrangements, or engage in certain specified activities as further
described in the form of Lock Up Agreement attached hereto.
If
any condition of your obligations hereunder to be satisfied prior to
the Closing Date is
not so satisfied, this Agreement may be terminated by you prior to the Closing Date, upon writing
or telephonic (subsequently confirmed in writing) notice to the Company.
All opinions, certificates, letters and documents furnished to you pursuant to this Section 8
will be considered to be in compliance with the provisions hereof only if they are in all material
respects satisfactory to you and to your counsel, Squire, Xxxxxxx & Xxxxxxx L.L.P., as to which
both you and such counsel shall act reasonably. The Company will furnish you with such executed
and conformed copies of such opinions, certificates, letters and documents as you may request.
You may waive in writing the compliance by the Company of any one or more of the foregoing
conditions or extend the time for its performance.
9. Your Representations. You represent and warrant to the Company and the Selling
Shareholder that the information furnished to the Company and each of the Selling Shareholder in
writing by you expressly for use in the preparation of the Registration Statement, the Disclosure
Package or the Final Prospectus does not, and any amendments thereof or supplements thereto thus
furnished will not, 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. The
statements relating to the terms of the offering by you set forth under the caption “The Offering”
in the Final Prospectus shall constitute the only information furnished by you for use in the
Registration Statement or the Disclosure Package or the Final Prospectus.
10. Termination of Agreement. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto. This Agreement may be terminated by you by
written notice to the Company and the Selling Shareholder on or after the date of this Agreement
and prior to the Closing Date, if at any time during such period any of the following
has occurred: (i) except as set forth in the Registration Statement, the Disclosure Package and the
Final Prospectus, subsequent to the respective dates as of which information is
-23-
given in the Registration Statement and the Disclosure Package and the Final Prospectus, any
material adverse change in or affecting the business, assets, results of operation or condition
(financial or other) of the Company, whether or not arising in the ordinary course of business;
(ii) any material adverse change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation in existing hostilities or act of
terrorism anywhere in the world or other national or international calamity or crisis or change in
political, financial or economic conditions, in each case the effect of which is such as to make
it, in your reasonable judgment, impracticable to offer for sale or to enforce contracts made by
you for the resale of the Stock agreed to be purchased hereunder; (iii) any general suspension of
trading in securities on the New York Stock Exchange, the American Stock Exchange or Nasdaq Global
Market 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
and adversely affect the market for the Stock; or (iv) a banking moratorium shall have been
declared by any Federal, Ohio, or New York State authorities.
This Agreement may also be terminated as provided in Section 12 hereof.
If this Agreement shall be terminated by you because of any failure on the part of the Company
or the Selling Shareholder to comply with any of the terms or to fulfill any of the conditions of
this Agreement, or if for any reason the Company or the Selling Shareholder shall be unable to
perform its or their respective obligations under this Agreement, the Company shall pay, in
addition to the costs and expenses referred to in Section 7 hereof, all reasonable out-of-pocket
expenses incurred by you in contemplation of the performance by them of their obligations
hereunder, including but not limited to the reasonable fees, disbursements and expenses of your
counsel, your reasonable printing and traveling expenses and postage, facsimile and telephone
charges relating directly to the offering contemplated by the Final Prospectus, and also including
reasonable advertising expenses of the Representative incurred after the date of this Agreement and
so relating.
11. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless you, and each person, if any, who controls
you (within the meaning of the Act or the Exchange Act) against any losses, claims, damages or
liabilities, joint or several, to which you or such controlling person may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities, joint or several, (or
actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in (A) the Registration Statement or any amendments
thereof or arise out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements therein not
misleading or (B) any Preliminary Prospectus, the Final Prospectus or any Issuer Free Writing
Prospectus or any amendments thereof or supplements thereto or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading and, subject to the provisions of Section 11(c) hereof, will reimburse you and
each such controlling person for any legal or other expenses reasonably incurred by you or such
controlling person in connection with investigating, preparing to defend or defending any such
loss, claim, damage, liability or action; provided, however, that the
-24-
Company will not be liable in any 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 the Registration Statement, any Preliminary Prospectus, the
Final Prospectus or any Issuer Free Writing Prospectus, or any amendment thereof or supplement
thereto in reliance upon and in conformity with information furnished in writing to the Company by
or on your behalf through you expressly for use in the preparation thereof. The indemnity provided
for in this Section 11(a) shall be in addition to any liability that the Company may otherwise have
under this Agreement. Subject to the provisions of the immediately succeeding sentence, the Selling
Shareholder, severally and not jointly, will indemnify you and hold you harmless, and each person,
if any, who controls you (within the meaning of the Act or the Exchange Act) against any losses,
claims, damages or liabilities, joint or several, to which you or such controlling person may
become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities,
joint or several, (or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in (A) the Registration
Statement or any amendments thereof or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading or (B) any Preliminary Prospectus, the Final Prospectus or any
Issuer Free Writing Prospectus or any amendments thereof or supplements thereto or arise out of or
are based upon the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading and, subject to the provisions of Section 11(c). hereof, will
reimburse you and each such controlling person for any legal or other expenses reasonably incurred
by you or such controlling person in connection with investigating, preparing to defend or
defending any such loss, claim, damage, liability or action; provided, however, that the Selling
Shareholder will not be liable in any 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 the Registration Statement, any Preliminary Prospectus, the
Final Prospectus or any Issuer Free Writing Prospectus, or any amendment thereof or supplement
thereto in reliance upon and in conformity with information furnished in writing to the Company or
the Selling Shareholder by you expressly for use in the preparation thereof. The liability of the
Selling Shareholder under the indemnity agreement contained herein shall apply only with reference
to the Selling Shareholder Information furnished in writing by or on behalf of the Selling
Shareholder to the Company expressly for use in the Registration Statement, any Preliminary
Prospectus, the Final Prospectus or any Issuer Free Writing Prospectus and any amendments or
supplements thereto and shall be limited to an amount equal to the aggregate net proceeds received
by the Selling Shareholder from the sale of the Stock to you.
(b) You will indemnify and hold harmless the Company, the Selling Shareholder, each person, if
any, who controls the Company (within the meaning of the Act or the Exchange Act), each of the
Company’s directors and each of the Company’s officers who signed the Registration Statement
against any losses, claims, damages or liabilities to which the Company, the Selling Shareholder or
such controlling person or any such director or officer may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement of any material
fact contained in any Preliminary Prospectus, the Final Prospectus or any Issuer Free Writing
Supplement or any amendments thereof or arise out of or
-25-
are based upon the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, the Final Prospectus or any Issuer Free Writing
Supplement or any amendment thereof or supplement thereto in reliance upon and in conformity with
information furnished in writing to the Company by you expressly for use in the preparation
thereof, and, subject to the provisions of Section 11(c) hereof, will reimburse the Company, the
Selling Shareholder and each such controlling person and each such director or officer for any
legal or other expenses reasonably incurred by them in connection with investigating, preparing to
defend or defending any such loss, claim, damage, liability or action. The indemnity provided for
in this Section 11(b) shall be in addition to any liability that you may otherwise have.
(c) Each indemnified party shall give notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party
from any liability hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have otherwise than on account of
this indemnity agreement. In the case of parties indemnified pursuant to Section 11(a) above,
counsel to the indemnified parties shall be selected by you, and, in the case of parties
indemnified pursuant to Section 11(b) above, counsel to the indemnified parties shall be selected
by the Company. An indemnifying party may participate at its own expense in the defense of any
such action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the indemnified party. In
any such action, any indemnified party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the contrary; (ii) the
indemnifying party has failed within a reasonable time to retain counsel reasonably satisfactory to
the indemnified party; (iii) the indemnified party shall have reasonably concluded that there may
be legal defenses available to it that are different from or in addition to those available to the
indemnifying party; or (iv) the named parties in any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential differing interests
between them; provided, however, that an indemnifying party shall not, in connection with any one
such action or separate but similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the fees and expenses of more than one
separate firm of attorneys at any time for all indemnified parties, except to the extent that local
counsel, in addition to its regular counsel, is required in order to effectively defend against
such action. No indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or contribution could be
sought under this Section 11 hereof (whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent (i) includes an unconditional
release of each indemnified party from all liability arising out of such litigation, investigation,
proceeding or
-26-
claim and (ii) does not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.
(d) If the indemnification provided for in Section 11 hereof is for any reason unavailable to
or insufficient to hold harmless an indemnified party in respect of any losses, liabilities,
claims, damages or expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Shareholder on the one hand and you on the other
hand from the offering of the Common Stock pursuant to this Agreement or (ii) if the allocation
provided by clause (i) 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 Shareholder on the one hand and you on the other hand in connection
with the statements or omissions, which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling Shareholder on the one hand and
you on the other hand in connection with the offering of the Common Stock pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total net proceeds from
the offering of the Common Stock pursuant to this Agreement (before deducting expenses) received by
the Selling Shareholder and the total underwriting discount received by you, in each case as set
forth on the cover of the Final Prospectus bear to the aggregate offering price of the Common Stock
as set forth on the cover of the Final Prospectus.
The relative fault of the Company and the Selling Shareholder on the one hand and you on the
other hand shall be determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Selling Shareholders or by the
Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company, the Selling Shareholders and you agree that it would not be just and equitable if
contribution pursuant to this Section 11 were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable considerations referred to above
in this Section 11. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 11 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 11, you shall not be required to contribute any
amount in excess of the amount by which the total price at which the Common Stock underwritten by
you and distributed to the public were offered to the public exceeds the amount of any damages that
you have otherwise been required to pay by reason of any such untrue or alleged untrue statement or
omission or alleged omission.
-27-
No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
For purposes of this Section 11, each person, if any, who controls you within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act and each of your affiliates and selling
agents shall have the same rights to contribution as you, and each director of the Company, each
officer of the Company who signed the Registration Statement, and each person, if any, who controls
the Company or the Selling Shareholder within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act shall have the same rights to contribution as the Company or the Selling
Shareholder, as the case may be.
The provisions of this Section shall not affect any agreement among the Company and the
Selling Shareholder with respect to contribution.
12. Representations, Warranties, Agreements and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations and warranties of the Company, the Selling
Shareholder and you, as set forth in this Agreement or made by or on behalf of them, pursuant to
this Agreement, will remain in full force and effect, regardless of any investigation (or any
statement as to the results thereof) made by or on behalf of you, the Selling Shareholder, the
Company or any of their respective officers, directors or any controlling person and will survive
the delivery of and payment for the Stock and, in the case of the agreements contained in Sections
7, 9 and 11 through 14 hereof, will survive any termination of this Agreement.
13. Notices. All statements, requests, notices and agreements hereunder, unless
otherwise specified in this Agreement, will be in writing and, if sent to you, will be delivered or
sent by mail, overnight courier or facsimile transmission (with receipt confirmed) to KeyBanc
Capital Markets Inc., at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, Attention: Xxxxxxxx Xxxxx (Fax:
000-000-0000), with a copy, which shall not constitute notice, to Squire, Xxxxxxx & Xxxxxxx L.L.P.,
at 0000 Xxx Xxxxx, 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, Attention: Xxxxxx X. Xxxxxx, Esq.
(Fax: 000-000-0000) or if sent to the Company or the Selling Shareholder, will be delivered or sent
by mail, overnight courier or facsimile transmission (with receipt confirmed) to National
Interstate Corporation, at 0000 Xxxxxxxxxx Xxxxx, Xxxxxxxxx, Xxxx 00000, Attention: Xxxx X. Xxxxxxx
(Fax: 000-000-0000), with a copy, which shall not constitute notice, to Xxxxxxxx Xxxx LLP, 0000 Xxx
Xxxxx, 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, Attention: Xxxxxx X. Xxxxx, Esq. (Fax:
000-000-0000). Any such statements, requests, notices or agreements shall take effect at the time
of receipt thereof.
14. Successors; Governing Law. This Agreement shall inure solely to the benefit of
and be binding upon the parties hereto, the officers and directors and controlling persons referred
to in Section 11 and their respective successors, assigns, heirs, executors and administrators, and
no other persons will acquire or have any right or obligation under or by virtue of this Agreement.
This Agreement will be governed by and construed in accordance with the laws of the State of Ohio,
without giving effect to the principles of conflicts of laws thereof.
-28-
15. Execution in Counterparts. This Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same instrument.
16. Headings. The headings herein are inserted for convenience of reference only and
are not intended to be a part of, or to affect the meaning or interpretation of, this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-29-
If the foregoing is in accordance with your understanding of our agreement, kindly sign and
return to us the enclosed copies hereof, whereupon it will become a binding agreement by and among
the Company, the Selling Shareholder and you, in accordance with its terms.
| Very truly yours, NATIONAL INTERSTATE CORPORATION |
||||
| By: | /s/ Xxxxx X. XxXxxx | |||
| Name: | Xxxxx X. XxXxxx | |||
| Title: | Chief Financial Officer | |||
| /s/ Xxxx X. Xxxxxxxx | ||||
| Xxxx Xxxxxxxx | ||||
| The foregoing Agreement is hereby confirmed and accepted by us in Cleveland, Ohio, as of the date first above written. | ||||
| KEYBANC CAPITAL MARKETS INC. | ||||
By: |
/s/ Xxxxxxxx X. Xxxxx | |||
Name:
|
Xxxxxxxx X. Xxxxx
|
|||
Title: |
Sr. Managing Director | |||
-SP-
SCHEDULE A
| Selling Shareholder | Shares to be Sold | |||
Xxxx Xxxxxxxx |
600,000 | |||
A-1
SCHEDULE B
ISSUER FREE WRITING PROSPECTUSES
NONE
B-1
SCHEDULE C
SIGNIFICANT SUBSIDIARIES OF THE COMPANY
National Interstate Insurance Company
C-1
SCHEDULE D
FORM OF LOCK UP AGREEMENT
National Interstate Corporation
Common Shares
(Par Value $0.01 per Share)
(Par Value $0.01 per Share)
, 2007
KeyBanc Capital Markets Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in connection with the proposed
Underwriting Agreement (the “Underwriting Agreement”) to be entered into by National
Interstate Corporation, an Ohio corporation (the “Company”), a selling shareholder of the
Company (the “Selling Shareholder”) and you, with respect to the public offering by the Selling
Shareholder (the “Offering”) of Common Stock, par value $0.01 per share, of the Company
(the “Common Stock”).
In order to induce you to enter into the Underwriting Agreement, the undersigned agrees that,
for a period of ninety (90) days after the date of the final prospectus relating to the Offering
(the “Lock-Up Period”), the undersigned will not, without the prior written consent of
KeyBanc Capital Markets Inc. (“KBCM”), (i) sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of,
directly or indirectly, or file (or participate in the filing of) a registration statement with the
Securities and Exchange Commission (the “Commission”) in respect of, or establish or
increase a put equivalent position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder with respect to, any Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock, or warrants or other
rights to purchase Common Stock, (ii) enter into any swap,
derivative transaction or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or warrants or other rights to purchase Common Stock,
whether any such transaction is to be settled by delivery of Common Stock or such other securities,
in cash or otherwise, or (iii) publicly announce an intention to effect any
transaction specified in clause (i) or (ii). The foregoing sentence shall not apply to
D-1
(a) bona fide gifts and transfers by will or intestacy, provided that, if the Common Stock
subject to such gift or transfer has a fair market value at the time of the gift more than $22,000,
the recipient thereof agrees in writing with KBCM to be bound by the terms of this Lock-Up Letter
Agreement, (b) dispositions to any trust for the direct or indirect benefit of the undersigned
and/or the immediate family of the undersigned or by action of law, provided that, in the case of
disposition to any trust, such trust agrees in writing with KBCM to be bound by the terms of this
Lock-Up Letter Agreement or (c) issuances to the undersigned of grants or awards under any of the
Company’s plans or arrangements and exercises thereof.
This agreement shall not prevent (A) any transaction solely between the undersigned and the
Company, including, but not limited to, the netting of securities awards for tax purposes, (B) the
exercise of options to purchase shares of Common Stock pursuant to Company employee stock option
plans or arrangements, (C) the exercise or conversion of securities that are outstanding on the
date of this Agreement, (D) the undersigned from executing a Form S-8 or Form S-3 Registration
Statement to be filed with the Commission in connection with any plan, program or arrangement with
respect to the sale or issuance of securities to any employee, associate or agent pursuant to any
such plan, program or arrangement approved by the Company’s shareholders or relating to any
associate discount stock purchase program or (E) the undersigned
from entering into any swap transaction or other arrangement
involving the disposition of no more than 200,000 shares of Common
Stock, provided such transaction does not involve the sale, contract
or agreement to sell or other disposition of Common Stock in an open
market sale transaction to a third party purchaser. The undersigned authorizes the Company during the Lock-Up Period to cause
the transfer agent to decline transfer and/or to note stop transfer restrictions on the transfer
books and records of the Company with respect any shares of Common Stock and any securities
convertible into, exercisable for or exchangeable for Common Stock for which the undersigned is the
record or beneficial holder.
In addition, for the duration of this agreement the undersigned hereby waives any
rights the undersigned may have to require registration of Common Stock in connection with the
filing of a registration statement relating to the Offering. The undersigned further agrees that,
during the Lock-Up Period, the undersigned will not, without the prior written consent of KBCM,
make any demand for, or exercise any right with respect to, the registration of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock, or warrants or other
rights to purchase Common Stock.
If (i) the Company notifies you in writing that it or the Selling Shareholder does not intend
to proceed with the Offering, (ii) the registration statement filed with the Commission with
respect to the Offering is withdrawn or (iii) for any reason the Underwriting Agreement shall be
terminated prior to the time of purchase in accordance with the terms of the Underwriting
Agreement, this Lock-Up Letter Agreement shall be terminated and the undersigned shall be released
from its obligations hereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
D-2
The undersigned hereby represents and warrants that the undersigned has full power and
authority to enter into the agreements set forth herein, and that, upon request, the undersigned
will execute additional documents necessary in connection with implementing the agreements,
authorizations and other terms hereof.
| Yours very truly, |
||||
| Xxxx X. Xxxxxxxx | ||||
D-3
