<PAGE>
As filed with the Securities and Exchange Commission on April 26, 2000
Registration No. 333-34390
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
LEADERSONLINE, INC.
(Exact name of registrant as specified in its charter)
---------------
<TABLE>
<S> <C> <C>
Delaware 7361 36-4319361
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
18401 Von Karman, Suite 500
Irvine, California 92612
949.752.1000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------
Carole F. Owen
Chief Financial Officer
18401 Von Karman, Suite 500
Irvine, California 92612
949.752.1000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
<TABLE>
<S> <C>
Ronald S. Beard, Esq. John B. Ayer, Esq.
John M. Williams, Esq. Christopher J. Austin, Esq.
Gibson, Dunn & Crutcher LLP Ropes & Gray
4 Park Plaza One International Place
Irvine, California 92614 Boston, Massachusetts 02110
949.451.3800 617.951.7000
(Facsimile) 949.451.4220 (Facsimile) 617.951.7050
</TABLE>
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement is declared effective.
---------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, LeadersOnline,
Inc. has duly caused this Amendment No. 1 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Irvine, State of
California, on April 26, 2000.
LEADERSONLINE, INC.,
a Delaware corporation
*
By: _________________________________
Michael T. Christy
President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 has been signed by the following persons in the capacities and on the
date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Director April 26, 2000
____________________________________ (Principal Executive Officer)
Michael T. Christy
/s/ Carole F. Owen Vice President and Chief April 26, 2000
____________________________________ Financial Officer (Principal
Carole F. Owen Financial and Accounting
Officer)
* Chairman April 26, 2000
____________________________________
Patrick S. Pittard
____________________________________
/s/ Carole F. Owen
* By: ______________________________
Carole F. Owen
Attorney-in-fact
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description
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<C> <S>
1.1 Form of Underwriting Agreement
3.1 Form of Amended and Restated Certificate of Incorporation of
LeadersOnline
3.2 Bylaws of LeadersOnline
4.1 Specimen Certificate for LeadersOnline Class A common stock (1)
5.1 Opinion of Gibson, Dunn & Crutcher LLP, counsel to LeadersOnline (1)
10.1 LeadersOnline 2000 Stock Option Plan (2)
10.2 Intercompany Agreement, dated April 4, 2000, between Heidrick &
Struggles and LeadersOnline (3)
10.3 Agreement, dated April 1, 2000, between LeadersOnline and The McGraw-
Hill Companies, Inc. (1)
10.4 Exclusive Sales & Marketing Agreement, dated March 1, 2000, between
LeadersOnline and ITworld.com, Inc. (3)
10.5 Sublease Agreement, dated November 9, 1999, between Hershey
Communications, Inc. and LeadersOnline as amended by Amendment No. 1
thereto (2)
10.6 Employment Letter, dated October 12, 1999, between LeadersOnline and
James R. Quandt (2)
10.7 Engagement Letter, dated December 27, 1999, between LeadersOnline and
E*Trade (3)
10.8 Co-Branding Agreement, dated March 15, 2000, between LeadersOnline and
VerticalNet, Inc. (3)
10.9 Master Services Agreement, dated March 23, 2000, between Leadersonline
and Gartner Group, Inc. (3)
10.10 Rights Agreement, dated April 5, 2000, among LeadersOnline and certain
investors thereto (1)
23.1 Consent of Arthur Andersen LLP (2)
23.2 Consent of Gibson, Dunn & Crutcher LLP (included in Exhibit 5.1) (1)
24.1 Power of Attorney (2)
27.1 Financial Data Schedule (2)
</TABLE>
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(1) To be filed by amendment.
(2) Previously filed with this Registration Statement on April 7, 2000.
(3) Certain portions of this exhibit have been omitted pursuant to a
confidential treatment request filed separately with the Securities and
Exchange Commission.
<PAGE>
Exhibit 1.1
Form of
LEADERSONLINE, INC.
Class A Common Stock
(par value $0.001 per share)
Underwriting Agreement
----------------------
, 2000
Goldman, Sachs & Co.
Lehman Brothers Inc.
Wit SoundView Corporation
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
LeadersOnline, Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
........ shares (the "Firm Shares") and, at the election of the Underwriters, up
to ........ additional shares (the "Optional Shares") of Class A Common Stock
("Stock") of the Company (the Firm Shares and the Optional Shares that the
Underwriters elect to purchase pursuant to Section 2 hereof being collectively
called the "Shares").
1. The Company and Heidrick & Struggles International, Inc. ("HSI")
represent and warrant to, and agree with, each of the Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-34390) (as amended
by all pre-effective amendments and supplements thereto, the "Initial
Registration Statement") in respect of the Shares has been filed with the
Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in the
form heretofore delivered to you, and, excluding exhibits thereto, to you for
each of the other Underwriters, have been declared effective by the Commission
in such form; other than a registration statement, if any, increasing the size
of the offering (a "Rule 462(b) Registration Statement"), filed pursuant to
Rule 462(b) under the Securities Act of 1933, as amended (the "Act"), which
became effective upon filing, no other document with respect to the Initial
Registration Statement has heretofore been filed with the Commission; and no
stop order suspending the effectiveness of the Initial Registration Statement,
any post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission (any preliminary prospectus included
in the Initial Registration Statement or filed with the Commission pursuant to
Rule 424(a) of the rules and regulations of the Commission under the
<PAGE>
Act is hereinafter called a "Preliminary Prospectus"; the various parts of the
Initial Registration Statement and the Rule 462(b) Registration Statement, if
any, including all exhibits thereto and including the information contained in
the form of final prospectus filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 5(a) hereof and deemed by virtue of
Rule 430A under the Act to be part of the Initial Registration Statement at
the time it was declared effective, each as amended at the time such part of
the Initial Registration Statement became effective or such part of the Rule
462(b) Registration Statement, if any, became or hereafter becomes effective,
are hereinafter collectively called the "Registration Statement"; and such
final prospectus, in the form first filed pursuant to Rule 424(b) under the
Act, is hereinafter called the "Prospectus");
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary Prospectus,
at the time of filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder, and did 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, in the light of the circumstances under which they
were made, not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company by an
Underwriter through or with the consent of Goldman, Sachs & Co. expressly for
use therein;
(c) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the
Act and the rules and regulations of the Commission thereunder and do not and
will not, as of the applicable effective date as to the Registration Statement
and any amendment thereto, and as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through or
with the consent of Goldman, Sachs & Co. expressly for use therein;
(d) The Company has not sustained since the date of the latest audited
financial statements included in the Prospectus any loss or interference with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus or other than any loss or interference which does not have a
material adverse effect on the business, financial condition, stockholders'
equity, results of operations and prospects of the Company (a "Material
Adverse Effect"); and, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been any
change in the capital stock or long-term debt of the Company which would have
a Material Adverse Effect or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company which
would have a Material Adverse Effect, otherwise than as set forth or
contemplated in the Prospectus;
(e) The Company has good and marketable title to all personal property
owned by it free and clear of all liens, encumbrances and defects except such
as are described in the Prospectus or
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<PAGE>
such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company; and any real property and buildings held under lease by the Company
are held by it under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company;
(f) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
power and authority (corporate and other) to own its properties and conduct
its business as described in the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such qualification,
except where the failure to be so qualified in any such jurisdiction would not
have a Material Adverse Effect;
(g) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and conform to the description of the Stock contained in the Prospectus;
(h) The Shares have been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein, will be duly and
validly issued and fully paid and non-assessable and will conform to the
description of the Stock contained in the Prospectus;
(i) The issue and sale of the Shares by the Company and the compliance by
the Company with all of the provisions of this Agreement and the consummation
of the transactions herein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company is a party or by which the
Company is bound or to which any of the property or assets of the Company is
subject, nor will such action result in any violation of (i) the provisions of
the Certificate of Incorporation or By-laws of the Company or (ii) any statute
or any order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its properties, except in the
case of clause (ii) above, for such violations as will not have a Material
Adverse Effect; and no consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Shares or the consummation by the
Company of the transactions contemplated by this Agreement, except the
registration under the Act of the Shares and such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution
of the Shares by the Underwriters;
(j) The Company is not (i) in violation of its Certificate of
Incorporation or By-laws or (ii) in default in the performance or observance
of any material obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement
or instrument to which it is a party or by which it or any of its properties
may be bound, except in the case of clause (ii) above, for such defaults as
will not have a Material Adverse Effect;
(k) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Stock, are accurate, complete and fair in all
material respects;
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<PAGE>
(l) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company is a party or of which
any property of the Company is the subject which, if determined adversely to
the Company, would individually or in the aggregate have a Material Adverse
Effect; and, to the Company's knowledge, no such proceedings are threatened by
governmental authorities or others;
(m) The Company is not and, after giving effect to the offering and sale
of the Shares, will not be an "investment company", as such term is defined in
the Investment Company Act of 1940, as amended (the "Investment Company Act");
(n) Neither the Company nor any of its affiliates does business with the
government of Cuba or with any person or affiliate located in Cuba within the
meaning of Section 517.075, Florida Statutes;
(o) Arthur Andersen LLP, who have certified certain financial statements
of the Company, are independent public accountants as required by the Act and
the rules and regulations of the Commission thereunder;
(p) Other than as set forth in the Prospectus, the Company: (a) has
sufficient interests in all patents, trademarks, service marks, trade names,
copyrights, trade secrets, information, proprietary rights and processes
("Intellectual Property") necessary for the conduct of its business as
described in the Prospectus, without, to the Company's knowledge, after due
inquiry, any conflict with or infringement of the interests of others; (b) has
taken all reasonable steps necessary to secure interests in such Intellectual
Property from its contractors; (c) except as set forth in the Prospectus, the
Company is not aware of outstanding options, licenses or agreements of any
kind relating to the Intellectual Property of the Company which are required
to be set forth in the Prospectus; and (d) except as set forth in the
Prospectus, the Company is not a party to or bound by any options, licenses or
agreements with respect to the Intellectual Property of any other person or
entity which are required to be set forth in the Prospectus.
To the Company's knowledge, after due inquiry, none of the technology
employed by the Company has been obtained or is being used by the Company in
violation of any contractual fiduciary obligation binding on the Company or any
of its directors or executive officers or any of its employees or otherwise in
violation of the rights of any persons; and, to the Company's knowledge, after
due inquiry, except as disclosed in the Prospectus, the Company has not received
any written or oral communications alleging that the Company has violated,
infringed or conflicted with, or, by conducting its business as set forth in the
Prospectus, would violate, infringe or conflict with any of the Intellectual
Property of any other person or entity. To the Company's knowledge, after due
inquiry, neither the execution nor delivery of this Agreement, nor the operation
of the Company's business by the employees of the Company, nor the conduct of
the Company's business as described in the Prospectus will result in any breach
or violation of the terms, conditions or provisions of, constitute a default
under, any material contract, covenant or instrument under which any of such
employees is now obligated. The Company has taken and will maintain reasonable
measures to prevent the unauthorized dissemination or publication of its
confidential information;
(q) The Company has reviewed its operations and that of any third parties
with which the Company has a material relationship to evaluate the extent to
which the business or operations of the Company will be affected by the Year
2000 Problem. As a result of such review, the Company has no reason to
believe, and does not believe, that the Year 2000 Problem has had or will
have a
4
<PAGE>
Material Adverse Effect or has resulted in or will result in any material loss
or interference with the Company's business or operations. The "Year 2000
Problem" as used herein means any significant risk that computer hardware or
software used in the receipt, transmission, processing, manipulation, storage,
retrieval, retransmission or other utilization of data or in the operation of
mechanical or electrical systems of any kind is not functioning or will not
function, in the case of dates or time periods occurring after December 31,
1999, at least as effectively as in the case of dates or time periods
occurring prior to January 1, 2000.
2. Subject to the terms and conditions herein set forth, (a) the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price per share of $................, the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule I hereto and (b) in the
event and to the extent that the Underwriters shall exercise the election to
purchase Optional Shares as provided below, the Company agrees to issue and sell
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company, at the purchase price per share set
forth in clause (a) of this Section 2, that portion of the number of Optional
Shares as to which such election shall have been exercised (to be adjusted by
you so as to eliminate fractional shares) determined by multiplying such number
of Optional Shares by a fraction, the numerator of which is the maximum number
of Optional Shares which such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I hereto and the denominator
of which is the maximum number of Optional Shares that all of the Underwriters
are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to ................... Optional Shares, at the purchase price
per share set forth in the paragraph above, for the sole purpose of covering
sales of shares in excess of the number of Firm Shares. Any such election to
purchase Optional Shares may be exercised only by written notice from you to the
Company, given within a period of 30 calendar days after the date of this
Agreement, setting forth the aggregate number of Optional Shares to be purchased
and the date on which such Optional Shares are to be delivered, as determined by
you but in no event earlier than the First Time of Delivery (as defined in
Section 4 hereof) or, unless you and the Company otherwise agree in writing,
earlier than two or later than ten business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Goldman, Sachs & Co. may request upon at least forty-eight hours' prior
notice to the Company shall be delivered by or on behalf of the Company to
Goldman, Sachs & Co., through the facilities of the Depository Trust Company
("DTC"), for the account of such Underwriter, against payment by or on behalf of
such Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified by the Company to Goldman, Sachs & Co.
at least forty-eight hours in advance. The Company will cause the certificates
representing the Shares to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery (as defined below) with respect
thereto at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be,
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with respect to the Firm Shares, 9:30 a.m., New York City time, on
............., 2000 or such other time and date as Goldman, Sachs & Co. and the
Company may agree upon in writing, and, with respect to the Optional Shares,
9:30 a.m., New York time, on the date specified by Goldman, Sachs & Co. in the
written notice given by Goldman, Sachs & Co. of the Underwriters' election to
purchase such Optional Shares, or such other time and date as Goldman, Sachs &
Co. and the Company may agree upon in writing. Such time and date for delivery
of the Firm Shares is herein called the "First Time of Delivery", such time and
date for delivery of the Optional Shares, if not the First Time of Delivery, is
herein called the "Second Time of Delivery", and each such time and date for
delivery is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross
receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 7(j) hereof, will be delivered at the offices
of Ropes & Gray, One International Place, Boston, MA 02110 (the "Closing
Location"), and the Shares will be delivered at the Designated Office, all at
such Time of Delivery. A meeting will be held at the Closing Location at
.......p.m., New York City time, on the New York Business Day next preceding
such Time of Delivery, at which meeting the final drafts of the documents to
be delivered pursuant to the preceding sentence will be available for review
by the parties hereto. For the purposes of this Section 4, "New York Business
Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in New York are generally authorized
or obligated by law or executive order to close.
5. The Company and HSI agree with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or Prospectus which
shall be disapproved by you promptly after reasonable notice thereof; to
advise you, promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes effective or
any supplement to the Prospectus or any amended Prospectus has been filed and
to furnish you with copies thereof; to advise you, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or
prospectus, of the suspension of the qualification of the Shares for offering
or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any stop order or
of any order preventing or suspending the use of any Preliminary Prospectus or
prospectus or suspending any such qualification, promptly to use its best
efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Shares 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 sales and
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<PAGE>
dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Shares, provided that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to
furnish the Underwriters with copies of the Prospectus in New York City in
such quantities as you may reasonably request, and, if the delivery of a
prospectus is required at any time prior to the expiration of nine months
after the time of issue of the Prospectus in connection with the offering
or sale of the Shares and if at such time any event shall have occurred as
a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be
necessary during such period to amend or supplement the Prospectus in order
to comply with the Act, to notify you and upon your request to prepare and
furnish without charge to each Underwriter and to any dealer in securities
as many copies as you may from time to time reasonably request of an
amended Prospectus or a supplement to the Prospectus which will correct
such statement or omission or effect such compliance, and in case any
Underwriter is required to deliver a prospectus in connection with sales of
any of the Shares at any time nine months or more after the time of issue
of the Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many copies as
you may request of an amended or supplemented Prospectus complying with
Section 10(a)(3) of the Act;
(d) To make generally available to the Company's securityholders as soon
as practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations thereunder (including, at the option of the Company,
Rule 158);
(e) During the period beginning from the date hereof and continuing to
and including the date 180 days after the date of the Prospectus, not to
offer, sell, contract to sell or otherwise dispose of, except as provided
hereunder any securities of the Company that are substantially similar to
the Shares, including but not limited to any securities that are
convertible into or exchangeable for, or that represent the right to
receive, Stock or any such substantially similar securities (other than
pursuant to director or employee stock option plans existing on, or upon
the conversion or exchange of convertible or exchangeable securities
outstanding as of, the date of this Agreement), without your prior written
consent;
(f) To furnish or make available to the Company's stockholders as soon
as practicable after the end of each fiscal year an annual report
(including a balance sheet and statements of income, stockholders' equity
and cash flows of the Company and its consolidated subsidiaries certified
by independent public accountants) and, as soon as practicable after the
end of each of the first three quarters of each fiscal year (beginning with
the fiscal quarter ending after the effective date of the Registration
Statement), consolidated summary financial information of the Company and
its subsidiaries for such quarter in reasonable detail;
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<PAGE>
(g) (i) During a period of five years from the effective date of the
Registration Statement, to furnish or make available to you copies of all
reports or other communications (financial or other) furnished to
stockholders, and to deliver to you as soon as they are available, copies
of any reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which any class of
securities of the Company is listed; and (ii) during a period of one year
from the effective date of the Registration Statement, to furnish or make
available to you such additional information concerning the business and
financial condition of the Company as you may from time to time reasonably
request;
(h) To use the net proceeds received by the Company from the sale of the
Shares pursuant to this Agreement in the manner specified in the Prospectus
under the caption "Use of Proceeds";
(i) To use its best efforts to list for quotation, subject to notice of
issuance, the Shares on the National Association of Securities Dealers
Automated Quotations National Market System ("NASDAQ");
(j) To file with the Commission such information on Form 10-Q or Form
10-K as may be required by Rule 463 under the Act; and
(k) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or
give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act.
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Shares under the Act and all other expenses in connection
with the preparation, printing and filing of the Registration Statement, any
Preliminary Prospectus and the Prospectus and amendments and supplements thereto
and the mailing and delivering of copies thereof to the Underwriters and
dealers; (ii) the cost of printing or producing any Agreement among
Underwriters, this Agreement, the Blue Sky Memorandum, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Shares; (iii) all expenses in
connection with the qualification of the Shares for offering and sale under
state securities laws as provided in Section 5(b) hereof, including the
reasonable fees and disbursements of counsel for the Underwriters in connection
with such qualification and in connection with the Blue Sky survey (iv) all fees
and expenses in connection with listing the Shares on NASDAQ; (v) the filing
fees incident to, and the reasonable fees and disbursements of counsel for the
Underwriters in connection with, securing any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the Shares;
(vi) the cost of preparing stock certificates; (vii) the cost and charges of any
transfer agent or registrar; and (viii) all other costs and expenses incident to
the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, stock transfer taxes on resale of any of the Shares by them,
costs or expenses incurred by them in connection with the roadshow and marketing
of the shares and any advertising expenses connected with any offers they may
make.
8
<PAGE>
7. The obligations of the Underwriters hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company herein are, at and as of such Time of Delivery, true and correct,
the condition that the Company shall have performed all of its obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to your reasonable satisfaction;
(b) Ropes & Gray, counsel for the Underwriters, shall have furnished to
you such written opinion or opinions (a draft of each such opinion is
attached as Annex II(a) hereto), dated such Time of Delivery, with respect
to the matters covered in paragraphs (i), (ii), (vii), (xi) and (xii) of
subsection (c) below as well as such other related matters as you may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(c) Gibson, Dunn & Crutcher, LLP, counsel for the Company, shall have
furnished to you their written opinion (a draft of such opinion is attached
as Annex II(b) hereto), dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware, has the corporate power and authority to own and lease its
property and to conduct its business as described in the Prospectus
and is duly qualified to transact business and is in good standing in
the jurisdictions set forth on Schedule II hereto;
(ii) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under the caption
"Capitalization" as of the date stated therein, and the issued and
outstanding shares of capital stock of the Company have been duly and
validly authorized and issued and are fully paid and non-assessable;
(iii) The Shares to be issued by the Company pursuant to the
terms of this Agreement have been duly authorized and, upon issuance
and delivery against payment therefor in accordance with the terms of
this Agreement, will be duly and validly issued and fully paid and
non-assessable; and the Shares conform to the description of the
Stock contained in the Prospectus;
(iv) To such counsel's knowledge, there are no legal or
governmental proceedings before any court or before or by any public
body or board pending or threatened against the Company of a
character required to be disclosed in the Registration Statement or
the Prospectus by the Act or the applicable rules and regulations of
the Commission thereunder, other than those described therein;
9
<PAGE>
(v) This Agreement has been duly authorized, executed and
delivered by the Company;
(vi) The performance by the Company of its obligations under
this Agreement and the consummation by the Company of the
transactions herein contemplated (other than performance of the
Company's indemnification or contribution obligations hereunder,
concerning which no opinion is expressed) will not (a) result in any
violation of the Company's Certificate of Incorporation or By-laws or
(b) to such counsel's knowledge, result in a material breach or
violation of any of the terms and provisions of, or constitute a
material default under any of the material agreements or obligations
included in the exhibits to the Registration Statement, or any
applicable statute, rule or regulation of the State of California,
the Delaware General Corporation Law (the "DGCL"), or the United
States of America known to such counsel or, to such counsel's
knowledge, any material order, writ or decree of any court,
government or governmental agency or body known to such counsel
having jurisdiction over the Company or any of their properties or
operations;
(vii) To such counsel's knowledge, no consent, approval,
authorization or order of or qualification with any governmental
agency or body of California or the United States of America having
jurisdiction over the Company, or over any of its properties or
operations in the office of the Delaware Secretary of State pursuant
to the DGCL, is required for the consummation by the Company of the
transactions herein contemplated, except (a) such as have been
obtained under the Act, (b) such as may be required under state or
other securities or Blue Sky laws in connection with the purchase and
the distribution of the Shares by the Underwriters, (c) such as may
be required by NASDAQ or the NASD, (d) such as may be required under
the federal or provincial laws of Canada, or (e) such as, if not
obtained, would not result in a Material Adverse Effect;
(viii) The statements in the Prospectus under the caption
"Description of Capital Stock", to the extent that such statements
constitute summaries of the legal matters referred to therein, have
been reviewed by such counsel and are fair summaries of the material
provisions of such matters;
(ix) The Company is not an "investment company", as such term is
defined in the Investment Company Act;
(x) The Registration Statement and the Prospectus (other than
the financial statements and notes thereto and related schedules and
other financial data contained therein, as to which such counsel need
express no opinion), as of the time of filing with the Commission,
appeared on their face to be appropriately responsive as to form in
all material respects with the requirements of the Act and the
applicable rules and regulations of the Commission thereunder; and
(xi) Such counsel has participated in conferences with officers
and other representatives of the Company, the Representatives,
Underwriters' Counsel and the independent certified public
accountants of the Company, at which such conferences the contents of
the Registration Statement and Prospectus and related matters were
discussed, and because the scope of such counsel's professional
10
<PAGE>
engagement was not to establish or confirm factual matters and
because the scope of such counsel's examination of the affairs of the
Company did not permit such counsel to verify the accuracy,
completeness or fairness of the statements set forth in the
Registration Statement or Prospectus, such counsel is not passing
upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or Prospectus, except for those referred to in
the opinion in subsection (viii) of this section 7(c), and such
counsel can give no assurance that such examination, knowledge and
participation in such conferences would necessarily reveal matters of
significance with respect to the items discussed in the remainder of
this paragraph. On the basis of the foregoing, and except for the
financial statements and schedules and the other financial and
accounting data included therein, as to which such counsel expresses
no opinion or belief, no facts have come to their attention that lead
them to believe that, at the time the Registration Statement became
effective it contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
Prospectus, as of its date or as of the Time of Delivery, contained
any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and
they do not know of any amendment to the Registration Statement
required to be filed or of any contracts or other documents of a
character required to be filed as an exhibit to the Registration
Statement or required to be described in the Registration Statement
or the Prospectus which are not filed or described as required.
(d) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of
any post-effective amendment to the Registration Statement filed subsequent
to the date of this Agreement and also at each Time of Delivery, Arthur
Andersen LLP shall have furnished to you a letter or letters, dated the
respective dates of delivery thereof, in form and substance satisfactory to
you, to the effect set forth in Annex I hereto (the executed copy of the
letter delivered prior to the execution of this Agreement is attached as
Annex I(a) hereto and a draft of the form of letter to be delivered on the
effective date of any post-effective amendment to the Registration
Statement and as of each Time of Delivery is attached as Annex I(b)
hereto);
(e) (i) The Company shall not have sustained since the date of the
latest audited financial statements included in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus, and (ii) since the respective dates as
of which information is given in the Prospectus there shall not have been
any change in the capital stock (other than pursuant to the grant of
options described in the Prospectus) or long-term debt of the Company or
any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company, otherwise
than as set forth or contemplated in the Prospectus, the effect of which,
in any such case described in clause (i) or (ii), is in the reasonable
judgment of the Representatives so material and adverse as to make it
impracticable or
11
<PAGE>
inadvisable to proceed with the public offering or the delivery of the
Shares being delivered at such Time of Delivery on the terms and in the
manner contemplated in the Prospectus;
(f) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange or on NASDAQ; (ii) a suspension or
material limitation in trading in the Company's securities on NASDAQ; (iii)
a general moratorium on commercial banking activities declared by either
Federal or New York or California State authorities; or (iv) the outbreak
or escalation of hostilities involving the United States or the declaration
by the United States of a national emergency or war, if the effect of any
such event specified in this clause (iv) in the reasonable judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares being delivered at such Time
of Delivery on the terms and in the manner contemplated in the Prospectus;
(g) The Shares to be sold at such Time of Delivery shall have been duly
listed for quotation, subject to notice of issuance, on NASDAQ;
(h) The Company has obtained and delivered to the Underwriters executed
copies of agreements from the stockholders of the Company holding in
aggregate more than 98% of the shares outstanding as of the date hereof and
each director and executive officer, substantially to the effect set forth
in Subsection 5(e) hereof, except that the duration shall be for 18 months
rather than 180 days for all stockholders other than HSI, in form and
substance satisfactory to you;
(i) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement; and
(j) The Company shall have furnished or caused to be furnished to you at
such Time of Delivery certificates of officers of the Company satisfactory
to you as to the accuracy of the representations and warranties of the
Company herein at and as of such Time of Delivery, as to the performance by
the Company of all of its obligations hereunder to be performed at or prior
to such Time of Delivery, as to the matters set forth in subsections (a)
and (e) of this Section and as to such other matters as you may reasonably
request.
8. (a) The Company and HSI will jointly and severally indemnify and hold
harmless each Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter 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 an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company and HSI shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or the Prospectus or any such amendment or supplement
in reliance upon and in
12
<PAGE>
conformity with written information furnished to the Company by any Underwriter
through or with the consent of Goldman, Sachs & Co. expressly for use therein;
provided, that HSI's obligations shall be limited to the net proceeds received
- --------
by the Company from the sale of the Shares.
(b) Each Underwriter will indemnify and hold harmless the Company, HSI or
their respective officers and directors against any losses, claims, damages or
liabilities to which the Company, HSI and their respective officers and
directors 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 an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case 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 Registration Statement or
the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through or with the consent of Goldman, Sachs & Co. expressly for use therein;
and will reimburse the Company, HSI or their respective officers and directors
for any legal or other expenses reasonably incurred by the Company, HSI and
their respective officers and directors in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action or 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 this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses,
13
<PAGE>
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other from the offering of
the Shares. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party failed
to give the notice required under subsection (c) above, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company on the one hand and the Underwriters
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand or the Underwriters on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this subsection (d) were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Shares underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company (including any
person who, with his or her consent, is named in the Registration Statement as
about to become a director of the Company) and to each person, if any, who
controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder at a Time of Delivery, you may
in your discretion arrange for you or another party or other parties to purchase
such Shares on the terms contained herein. If within
14
<PAGE>
thirty-six hours after such default by any Underwriter you do not arrange for
the purchase of such Shares, then the Company shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to you to purchase such Shares on such terms. In the event
that, within the respective prescribed periods, you notify the Company that you
have so arranged for the purchase of such Shares, or the Company notifies you
that it has so arranged for the purchase of such Shares, you or the Company
shall have the right to postpone such Time of Delivery for a period of not more
than seven days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your opinion
may thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to this Agreement with respect to such
Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of all
the Shares to be purchased at such Time of Delivery, then the Company shall have
the right to require each non-defaulting Underwriter to purchase the number of
shares which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased exceeds one-eleventh of the aggregate number of all the
Shares to be purchased at such Time of Delivery, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Shares of a defaulting Underwriter or Underwriters,
then this Agreement (or, with respect to the Second Time of Delivery, the
obligations of the Underwriters to purchase and of the Company to sell the
Optional Shares) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company, except for the expenses to be borne
by the Company and the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Section 8 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Underwriter except as
provided in Sections 6 and 8 hereof; but, if for any other reason, any Shares
are not delivered by or on behalf of the Company as provided
15
<PAGE>
herein, the Company will reimburse the Underwriters through you for all out-of-
pocket expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares not so delivered, but the Company
shall then be under no further liability to any Underwriter except as provided
in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Goldman, Sachs & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Goldman, Sachs &
Co., 32 Old Slip, 21st Floor, New York, New York 10005, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail to the
address of the Company set forth in the Registration Statement, Attention:
Secretary; provided, however, that any notice to an Underwriter pursuant to
Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Company by you upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and, to the extent provided in Sections 8 and
10 hereof, the officers and directors of the Company and each person who
controls the Company or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Shares from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
16. 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
<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us eight (8) counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement between each of the Underwriters and
the Company. It is understood that your acceptance of this letter on behalf of
each of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
LeadersOnline, Inc.
By:
-------------------------------------
Name:
Title:
Heidrick & Struggles International, Inc.
By:
-------------------------------------
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
Lehman Brothers Inc.
Wit SoundView Corporation
By:
-----------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
17
<PAGE>
SCHEDULE I
<TABLE>
Number of Optional
Shares to be
Total Number of Purchased if
Firm Shares Maximum Option
Underwriter to be Purchased Exercised
----------- ---------------- ------------------
<S> <C> <C>
Goldman, Sachs & Co.............................................
Lehman Brothers Inc.............................................
Wit SoundView Corporation.......................................
[Names of other Underwriters]...................................
---------------- ------------------
================ ==================
</TABLE>
<PAGE>
ANNEX I
DESCRIPTION OF COMFORT LETTER
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included in the Prospectus or the Registration Statement comply as to form
in all material respects with the applicable accounting requirements of the
Act and the related published rules and regulations thereunder; and, if
applicable, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited consolidated interim financial statements, selected financial
data, pro forma financial information, financial forecasts and/or condensed
financial statements derived from audited financial statements of the
Company for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been separately furnished to the
representatives of the Underwriters (the "Representatives").
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the Prospectus as
indicated in their reports thereon copies of which have been separately
furnished to the Representatives and on the basis of specified procedures
including inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i) below
comply as to form in all material respects with the applicable accounting
requirements of the Act and the related published rules and regulations,
nothing came to their attention that cause them to believe that the
unaudited condensed consolidated financial statements do not comply as to
form in all material respects with the applicable accounting requirements
of the Act and the related published rules and regulations;
(iv) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the
basis of limited procedures specified in such letter nothing came to their
attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(v) On the basis of limited procedures, not constituting an examination
in accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of the latest
audited financial statements included in the Prospectus, inquiries of
officials of the Company and its subsidiaries
ii
<PAGE>
responsible for financial and accounting matters and such other inquiries
and procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) (i) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act and
the related published rules and regulations, or (ii) any material
modifications should be made to the unaudited condensed consolidated
statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with
the basis for the corresponding amounts in the audited consolidated
financial statements included in the Prospectus;
(C) the unaudited financial statements which were not included in
the Prospectus but from which were derived any unaudited condensed
financial statements referred to in clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in clause (B) were not determined on a
basis substantially consistent with the basis for the audited
consolidated financial statements included in the Prospectus;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the published rules and regulations thereunder or the pro
forma adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest financial statements
included in the Prospectus) or any increase in the consolidated long-
term debt of the Company and its subsidiaries, or any decreases in
consolidated net current assets or stockholders' equity or other
items specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with
amounts shown in the latest balance sheet included in the Prospectus,
except in each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred
to in clause (E) there were any
iii
<PAGE>
decreases in consolidated net revenues or operating profit or the
total or per share amounts of consolidated net income or other items
specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with the
comparable period of the preceding year and with any other period of
corresponding length specified by the Representatives, except in each
case for decreases or increases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(vi) In addition to the examination referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in paragraphs (iii) and
(vi) above, they have carried out certain specified procedures, not
constituting an examination in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Representatives, which are derived from the
general accounting records of the Company and its subsidiaries, which
appear in the Prospectus, or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and have
found them to be in agreement.
iv
<PAGE>
EXHIBIT 3.1
Form of
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
LEADERSONLINE, INC.,
a Delaware corporation
LeadersOnline, Inc., a Delaware corporation, hereby certifies that:
1. The name of this corporation is LeadersOnline, Inc. This corporation's
original Certificate of Incorporation was filed with the Secretary of State of
the State of Delaware on January 29, 1999. Amended and Restated Certificates of
Incorporation were filed with the Secretary of State of the State of Delaware on
February 2, 2000 and April 5, 2000.
2. This Amended and Restated Certificate of Incorporation (this "Restated
--------
Certificate") has been duly approved and adopted by the board of directors of
- -----------
this corporation in accordance with the provisions of Sections 242 and 245 of
the Delaware General Corporation Law.
3. In accordance with Section 242 of the Delaware General Corporation
Law, this Restated Certificate has been duly approved by the written consent,
under Section 228 of the Delaware General Corporation Law, of the holders of all
of the outstanding stock entitled to vote hereon.
4. The Amended and Restated Certificate of Incorporation of this
corporation is hereby amended and restated in its entirety to read as follows:
ARTICLE I
Name of Corporation
The name of this corporation is LeadersOnline, Inc.
ARTICLE II
Registered Agent
The address of the registered office of this corporation in the State of
Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle.
The name of the registered agent at that address is The Corporation Trust
Company.
ARTICLE III
Corporate Purpose
The nature of the business or purposes of this corporation to be conducted
or promoted is to engage in any lawful act or activity for which corporations
may be organized under the Delaware General Corporation Law.
<PAGE>
ARTICLE IV
Authorized Capital Stock
A. Number of Authorized Shares. This corporation is authorized to issue
---------------------------
two classes of stock to be designated, respectively, "Common Stock" and
------------
"Preferred Stock." The total number of shares which this corporation is
- ----------------
authorized to issue is One Hundred Ten Million (110,000,000) shares. One
Hundred Million (100,000,000) shares are designated as Common Stock and Ten
Million (10,000,000) shares are designated as Preferred Stock, and each such
share of Common Stock and Preferred Stock has a par value of one-tenth of one
cent ($0.001).
B. Common Stock.
------------
1. Classes of Common Stock. The shares of Common Stock will consist
-----------------------
solely of two classes. Seventy-Five Million (75,000,000) shares are designated
as "Class A Common Stock" and Twenty-Five Million (25,000,000) shares are
designated as "Class B Common Stock." The board of directors of this
corporation may authorize the issuance of shares of Class A Common Stock and
shares of Class B Common Stock from time to time, subject to the foregoing. In
case shares of Common Stock are redeemed, purchased or otherwise acquired by
this corporation, the shares so acquired will resume the status of authorized
but unissued Common Stock of the same class.
2. Voting Rights. The holders of shares of Common Stock will have
-------------
the following voting rights:
(a) Class A Common Stock. Each share of Class A Common Stock
--------------------
will entitle the holder thereof to one (1) vote on all matters submitted to a
vote of the stockholders of this corporation.
(b) Class B Common Stock. Each share of Class B Common Stock
--------------------
will entitle the holder thereof to ten (10) votes on all matters submitted to a
vote of the stockholders of this corporation.
(c) Single Class Voting. The holders of shares of Class A Common
-------------------
Stock and the holders of shares of Class B Common Stock will vote together as
one class on all matters submitted to a vote of the stockholders of this
corporation, except:
(i) as otherwise required by applicable law; and
(ii) in the case of a proposed issuance of shares of Class B
Common Stock, which issuance will require only the affirmative vote of the
holders of at least a majority of the outstanding shares of Class B Common
Stock.
3. Conversion and Exchange of Class B Common Stock.
-----------------------------------------------
(a) Voluntary Conversion. Each share of Class B Common Stock,
--------------------
at the option of its holder, may at any time be converted into one (1) fully
paid and nonassessable share of Class A Common Stock, for no additional
consideration. In order to exercise this conversion right, the holder of the
shares of Class B Common Stock to be converted shall
2
<PAGE>
deliver: (i) to the office of this corporation or any transfer agent for the
Common Stock, the certificates representing the shares of Class B Common Stock
to be converted, duly endorsed in blank or accompanied by duly executed, proper
instruments of transfer and (ii) written notice to this corporation stating that
such holder elects to convert such shares of Class B Common Stock and stating
the name and address in which the certificate for the shares of Class A Common
Stock is to be issued. The conversion will be deemed to have been made
immediately prior to the close of business on the date that the certificates and
the written notice have been properly delivered by the converting holder.
(b) Issuance of Conversion Shares. As promptly as practicable
-----------------------------
following any holder's conversion of shares of Class B Common Stock, this
corporation shall issue and deliver to the order of the converting holder (i)
one or more certificates evidencing the shares of Class A Common Stock issuable
in respect of the applicable conversion and (ii) if the certificate surrendered
by the converting holder evidences more shares of Class B Common Stock than the
holder has elected to convert or that have been converted automatically, as the
case may be, one or more certificates evidencing the shares of Class B Common
Stock which have not been converted.
(c) Dividends on Converted Shares. Any dividends declared and
-----------------------------
not paid on shares of Class B Common Stock prior to their conversion will be
paid, on the payment date, to the holder or holders entitled thereto on the
record date for such dividend payment, notwithstanding such conversion;
provided, however, that such holder or holders will not be entitled to receive
corresponding dividends declared but not paid on the shares of Class A Common
Stock issuable upon such conversion.
4. Reservation of Shares. This corporation shall at all times
---------------------
reserve and keep available out of its authorized but unissued shares of Class A
Common Stock, solely for the purpose of effecting the conversion of shares of
Class B Common Stock provided for herein, such number of shares of Class A
Common Stock as will be sufficient to effect the conversion of all issued and
outstanding shares of Class B Common Stock. Further, this corporation shall
take all necessary corporate action to ensure that such shares of Class A Common
Stock will be validly issued, fully paid and nonassessable upon conversion of
any shares of Class B Common Stock. If at any time the number of authorized but
unissued shares of Class A Common Stock is not sufficient to effect the
conversions provided for herein, this corporation shall take all necessary
corporate action to increase its authorized but unissued shares of Class A
Common Stock to such number of shares as will be sufficient for such purpose.
5. Dividends and Distributions. Subject to the preferences
---------------------------
applicable to the shares of Preferred Stock outstanding at any time, the holders
of shares of Common Stock will be entitled to participate ratably, on a share-
for-share basis as if all shares were of a single class, in any dividends or
distributions, whether in cash, stock or otherwise, that may be declared by the
board of directors from time to time out of funds of this corporation legally
available therefor; provided, however, that any dividends payable in shares of
Common Stock (or payable in rights to subscribe for or purchase shares of Common
Stock) must be declared and paid at the same rate on each class of Common Stock
and only in shares of Class A Common Stock (or rights to subscribe for or to
purchase shares of Class A Common Stock or securities or indebtedness
convertible into or exchangeable for shares of Class A Common Stock) to holders
3
<PAGE>
of shares of Class A Common Stock and only in shares of Class B Common Stock (or
rights to subscribe for or to purchase shares of Class B Common Stock or
securities or indebtedness convertible into or exchangeable for shares of Class
B Common Stock) to holders of shares of Class B Common Stock. This corporation
shall treat all the shares of Common Stock identically in respect of any
subdivisions or combinations (for example, if this corporation effects a two-
for-one stock split with respect to the shares of Class A Common Stock, it shall
concurrently effect a two-for-one stock split with respect to the shares of
Class B Common Stock).
6. Liquidation. In the event of any voluntary or involuntary
-----------
liquidation, dissolution or winding-up of this corporation, after all creditors
of this corporation have been paid in full and subject to the preferences
applicable to the shares of Preferred Stock outstanding at the time, the holders
of shares of Common Stock will be entitled to participate ratably, on a share-
for-share basis as if all shares were of a single class, in all distributions of
assets pursuant to such voluntary or involuntary liquidation, dissolution or
winding-up.
C. Preferred Stock. The shares of Preferred Stock may be issued from time
---------------
to time in one or more series. The board of directors of this corporation is
hereby vested with the authority to fix by resolution or resolutions the
designations and the powers, preferences, privileges and relative,
participating, optional or other special rights, qualifications, limitations or
restrictions thereof, including without limitation the dividend rate, conversion
rights, redemption price and liquidation preference, of any series of Preferred
Stock, and to fix the number of shares constituting any such series, and to
increase or decrease the number of shares of any such series (but not below the
number of shares thereof then outstanding). In case the number of shares of any
such series are so decreased, the shares constituting such decrease will resume
the status of authorized but unissued Preferred Stock.
ARTICLE V
Amendment of Corporate Documents
A. Certificate of Incorporation. This corporation reserves the right to
----------------------------
amend, alter, change or repeal any provision contained in this Restated
Certificate, in the manner now or hereafter prescribed by statute, and all
rights conferred on stockholders herein are granted subject to this reservation.
This Article V may not be amended, except by an affirmative vote of not less
---------
than sixty-six and two-thirds percent (66-2/3%) of the total voting power of all
outstanding shares of voting stock of this corporation.
B. Bylaws. In furtherance and not in limitation of the powers conferred
------
by statute, the board of directors is expressly authorized to make, repeal,
alter, amend and rescind the bylaws of this corporation. Bylaws may not be
made, repealed, altered, amended or rescinded by the stockholders of this
corporation, except by an affirmative vote of not less than sixty-six and two-
thirds percent (66-2/3%) of the total voting power of all outstanding shares of
voting stock of this corporation.
4
<PAGE>
ARTICLE VI
Meetings of Stockholders
Meetings of stockholders may be held within or without the State of
Delaware, as the bylaws may provide. The books of this corporation may be kept
(subject to any provision contained in the Delaware General Corporation Law)
outside the State of Delaware at such place or places as may be designated from
time to time by the board of directors or in the bylaws of this corporation.
ARTICLE VII
Election of Directors
Elections of directors need not be by written ballot unless the bylaws of
this corporation so provide.
ARTICLE VIII
No Stockholder Action by Written Consent
No action, which has not been previously approved by the board of
directors, may be taken by the stockholders, except at an annual or a special
meeting of the stockholders called in accordance with the bylaws of this
corporation and no action, which has not been previously approved by the board
of directors, may be taken by the stockholders by written consent.
ARTICLE IX
Limitation of Director Liability
To the fullest extent permitted by the Delaware General Corporation Law as
the same exists or may hereafter be amended, a director of this corporation will
not be liable to this corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, except (i) for any breach of the
director's duty of loyalty to this corporation or its stockholders; (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) under Section 174 of the Delaware General
Corporation Law; or (iv) for any transaction from which the director derived any
improper personal benefit. If the Delaware General Corporation Law is amended
after the date of the filing of this Restated Certificate to authorize corporate
action further eliminating or limiting the personal liability of directors, then
the liability of a director of this corporation will be eliminated or limited to
the fullest extent permitted by the Delaware General Corporation Law, as so
amended from time to time. No repeal or modification of this Article IX by the
----------
stockholders will adversely affect any right or protection of a director of this
corporation existing by virtue of this Article IX at the time of such repeal or
----------
modification.
ARTICLE X
Indemnification of Directors
To the fullest extent permitted by applicable law, this corporation is also
authorized to provide indemnification of (and advancement of expenses to) such
agents (and any other persons to which Delaware law permits this corporation to
provide indemnification) through bylaw provisions, agreements with such agents
or other persons, vote of stockholders or disinterested
5
<PAGE>
directors or otherwise, in excess of the indemnification and advancement of
expenses otherwise permitted by Section 145 of the Delaware General Corporation
Law, subject only to limits imposed by applicable Delaware law (statutory or
non-statutory), with respect to actions for breach of duty to this corporation,
its stockholders or others. No repeal or modification of this Article X by the
---------
stockholders will adversely affect any right or protection of a director of this
corporation existing by virtue of this Article X at the time of such repeal or
---------
modification.
ARTICLE XI
Creditor Compromise or Arrangement
Whenever a compromise or arrangement is proposed between this corporation
and its creditors or any class of them and/or between this corporation and its
stockholders or any class of them, any court of equitable jurisdiction within
the State of Delaware may, on the application in a summary way of this
corporation or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for this corporation under the provisions of
Section 291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for this corporation under
the provisions of Section 279 of Title 8 of the Delaware Code, order a meeting
of the creditors or class of creditors, and/or of the stockholders or class of
stockholders of this corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing three-
fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this corporation, as the case may be, and also on this
corporation.
IN WITNESS WHEREOF, this corporation has caused this Restated Certificate
to be signed by its duly authorized officer, as of the _____ day of
_______________, 2000.
LeadersOnline, Inc.,
a Delaware corporation
By:______________________________________
6
<PAGE>
EXHIBIT 3.2
Bylaws
of
LeadersOnline, Inc.,
a Delaware corporation
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I OFFICES............................................................................ 1
SECTION 1.1 Registered Office.............................................................. 1
SECTION 1.2 Principal Office............................................................... 1
SECTION 1.3 Other Offices.................................................................. 1
ARTICLE II MEETINGS OF STOCKHOLDERS.......................................................... 1
SECTION 2.1 Place of Meetings.............................................................. 1
SECTION 2.2 Annual Meetings................................................................ 1
SECTION 2.3 Special Meetings............................................................... 1
SECTION 2.4 Advance Notice of Stockholder Proposals and Stockholder Nominations............ 1
SECTION 2.5 Notice of Stockholders' Meetings............................................... 3
SECTION 2.6 Conduct of Meetings............................................................ 3
SECTION 2.7 Manner of Giving Notice; Affidavit of Notice................................... 4
SECTION 2.8 Quorum......................................................................... 4
SECTION 2.9 Adjourned Meeting; Notice...................................................... 4
SECTION 2.10 Voting........................................................................ 4
SECTION 2.11 Waiver of Notice.............................................................. 5
SECTION 2.12 Record Date for Stockholder Notice; Voting.................................... 5
SECTION 2.13 Proxies....................................................................... 5
SECTION 2.14 List of Stockholders Entitled to Vote......................................... 5
ARTICLE III BOARD............................................................................ 6
SECTION 3.1 Number......................................................................... 6
SECTION 3.2 Vacancies...................................................................... 6
SECTION 3.3 Place of Meeting............................................................... 6
SECTION 3.4 First Meeting.................................................................. 6
SECTION 3.5 Regular Meetings............................................................... 6
SECTION 3.6 Special Meetings............................................................... 6
SECTION 3.7 Fees and Compensation of Directors............................................. 7
SECTION 3.8 Chairman of the Board.......................................................... 7
SECTION 3.9 Quorum and Manner of Acting.................................................... 7
SECTION 3.10 Committees.................................................................... 7
SECTION 3.11 Board Action by Written Consent Without a Meeting............................. 8
ARTICLE IV OFFICERS.......................................................................... 8
SECTION 4.1 Officers....................................................................... 8
SECTION 4.2 Election....................................................................... 8
SECTION 4.3 Other Officers................................................................. 8
SECTION 4.4 Removal and Resignation........................................................ 8
SECTION 4.5 Vacancies...................................................................... 8
SECTION 4.6 President...................................................................... 8
SECTION 4.7 Vice Presidents................................................................ 9
SECTION 4.8 Secretary...................................................................... 9
SECTION 4.9 Chief Financial Officer........................................................ 9
ARTICLE V CORPORATE ACTIONS.................................................................. 10
SECTION 5.1 Voting Securities Held by the Corporation...................................... 10
SECTION 5.2 Corporate Contracts and Instruments............................................ 10
</TABLE>
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<TABLE>
<S> <C>
ARTICLE VII INDEMNIFICATION.................................................................. 10
SECTION 6.1 Indemnification of Directors and Officers...................................... 10
SECTION 6.2 Indemnification of Employees and Agents........................................ 11
SECTION 6.3 Enforcement of Indemnification................................................. 11
SECTION 6.4 Insurance...................................................................... 11
SECTION 6.5 No Duplication of Payment...................................................... 12
ARTICLE VIII MISCELLANEOUS................................................................... 12
SECTION 7.1 Amendments..................................................................... 12
SECTION 7.2 Record Date for Purposes Other than Notice and Voting.......................... 12
SECTION 7.3 Certificates for Stock......................................................... 12
SECTION 7.4 Transfers of Stock............................................................. 13
SECTION 7.5 Lost Certificates.............................................................. 13
SECTION 7.6 Transfer Agents and Registrars................................................. 13
SECTION 7.7 Construction; Definitions...................................................... 13
</TABLE>
ii
<PAGE>
LEADERSONLINE, INC.,
a Delaware Corporation
BYLAWS
ARTICLE I
OFFICES
SECTION 1.1 Registered Office. The registered office of
-----------------
LeadersOnline, Inc. (the "Corporation") shall be fixed in the certificate of
incorporation.
SECTION 1.2 Principal Office. The principal office for the
----------------
transaction of the business of the Corporation shall be as set forth in a
resolution adopted by the board of directors of the Corporation (the "Board").
SECTION 1.3 Other Offices. The Corporation may also have an office
-------------
or offices at such other place or places, either within or without the State of
Delaware, as the Board may from time to time determine or as the business of the
Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 2.1 Place of Meetings. All annual meetings of stockholders
-----------------
and all other meetings of stockholders shall be held either at the principal
office of the Corporation or at such other place within or without the State of
Delaware that may be designated by the Board.
SECTION 2.2 Annual Meetings. Annual meetings of stockholders of
---------------
the Corporation for the purpose of electing directors and for the transaction of
such other business as may properly come before such meetings may be held at
such time and place and on such date as the Board shall determine.
SECTION 2.3 Special Meetings. A special meeting of the stockholders
----------------
for the transaction of any proper business may be called at any time by the
Board, the chairman, the chief executive officer or the president and may be
held at such time and place and on such date as the person or persons calling
the meeting shall designate. No other persons are permitted to call a special
meeting.
SECTION 2.4 Advance Notice of Stockholder Proposals and Stockholder
-------------------------------------------------------
Nominations.
- -----------
(A) At any meeting of the stockholders, only such business shall be
conducted, and only such proposals shall be acted upon, as shall have been
brought before the meeting (i) by or at the direction of the Board, or (ii) by
any stockholder of the Corporation entitled to vote on such business who
complies with the notice procedures set forth in this Section 2.4(A). For
--------------
business to be properly brought before any meeting of the stockholders by a
stockholder, the stockholder must have given notice thereof in writing which is
received by the secretary of the
1
<PAGE>
Corporation not less than ninety (90) days nor more than one hundred twenty
(120) days in advance of such meeting, regardless of any postponements,
deferrals or adjournments of that meeting to a later date; provided, however,
that if less than ninety-five (95) days' notice or prior public disclosure of
the date of the scheduled meeting is given or made, notice by the stockholder,
to be timely, must be so delivered or received not later than the close of
business on the seventh day following the earlier of the date of the first
public announcement of the date of such meeting and the date on which such
notice of the scheduled meeting was mailed. A stockholder's notice to the
secretary shall set forth as to each matter the stockholder proposes to bring
before the meeting (1) a brief description of the business desired to be brought
before the meeting and the reasons for conducting such business at the meeting,
(2) the name and address, as they appear on the Corporation's books, of the
stockholder proposing such business and any stockholders known by such
stockholder to be supporting such proposal, (3) the class and number of shares
of the Corporation that are beneficially owned by the stockholder and by any
other stockholder known by such stockholder to be supporting such matter on the
date of such stockholder notice, and (4) any material interest of such
stockholders in such business. In addition, the stockholder making such proposal
shall promptly provide any other information reasonably requested by the
Corporation. Notwithstanding anything in these bylaws to the contrary, no
business shall be conducted at any meeting of the stockholders except in
accordance with the procedures set forth in this Section 2.4(A). The presiding
--------------
officer of the meeting shall determine and declare at the meeting whether the
stockholder proposal was made in accordance with the terms of this Section
-------
2.4(A). If the presiding officer determines that a stockholder proposal was not
- ------
made in accordance with the terms of this Section 2.4(A), he or she shall so
--------------
declare at the meeting and any such proposal shall not be acted upon at the
meeting. This provision shall not prevent the consideration and approval or
disapproval at the meeting of reports of officers, directors and committees of
the Board, but, in connection with such reports, no new business shall be acted
upon at such meeting unless stated, filed and received as herein provided.
(B) Nominations for the election of directors may be made by the
Board, any nominating committee or person appointed by the Board, or by any
stockholder entitled to vote in the election of directors who complies with the
notice procedures set forth in this Section 2.4(B). Subject to the rights, if
--------------
any, of the holders of shares of preferred stock then outstanding, a stockholder
may nominate a person for election as a director at a meeting only if written
notice of such stockholder's intent to make such nomination has been received by
the secretary of the Corporation not less than ninety (90) days nor more than
one hundred twenty (120) days in advance of such meeting regardless of any
postponements, deferrals or adjournments of that meeting to a later date;
provided, however, that if less than ninety-five (95) days' notice or prior
public disclosure of the date of the scheduled meeting is given or made, notice
by the stockholder, to be timely, must be so delivered or received not later
than the close of business on the seventh day following the earlier of the date
of the first public announcement of the date of such meeting and the date on
which such notice of the scheduled meeting was mailed. Each such notice shall
set forth: (i) the name and address of the stockholder who intends to make the
nomination and of the person or persons to be nominated; (ii) the class and
number of shares of the Corporation's stock which are beneficially owned by the
stockholder and a representation that such stockholder intends to appear in
person or by proxy at the meeting and nominate the person or persons specified
in the notice; (iii) a description of all arrangements or understandings between
the stockholder and each nominee and any other person or persons
2
<PAGE>
(naming such person or persons) pursuant to which the nomination or nominations
are to be made by the stockholder; (iv) such other information regarding each
nominee proposed by such stockholder as would be required to be included in a
proxy statement filed pursuant to the proxy rules of the Securities and Exchange
Commission had the nominee been nominated, or intended to be nominated, by the
Board; and (v) the consent of each nominee to serve as a director of the
Corporation if so elected. In addition, the stockholder making such nomination
shall promptly provide any other information reasonably requested by the
Corporation. Notwithstanding anything in these bylaws to the contrary, no person
shall be eligible for election as a director of the Corporation unless nominated
in accordance with the procedures set forth in this Section 2.4(B). The
--------------
presiding officer of the meeting shall determine and declare at the meeting
whether the nomination was made in accordance with the terms of this Section
-------
2.4(B). If the presiding officer determines that a nomination was not made in
- -------
accordance with the terms of this Section 2.4(B), he or she shall so declare
--------------
at the meeting and any such defective nomination shall be disregarded. No
stockholder may nominate any person for election as a director to any class for
which such stockholder is not entitled to vote.
(C) Nothing herein is intended or shall be construed to limit
requirements imposed by applicable laws or regulations upon stockholder
proposals, opposition thereto by the Corporation, or inclusion thereof in the
Corporation's proxy materials.
SECTION 2.5 Notice of Stockholders' Meetings. Except as otherwise
--------------------------------
required by law, all notices of meetings of stockholders shall be sent or
otherwise given in accordance with Section 2.7 of these bylaws not less than ten
-----------
(10) nor more than sixty (60) days before the date of the meeting. The notice
shall specify the place, date and hour of the meeting and (i) in the case of a
special meeting, the purpose or purposes for which the meeting is called (no
business other than that specified in the notice may be transacted) or (ii) in
the case of the annual meeting, those matters which the Board, at the time of
giving the notice, intends to present for action by the stockholders (but any
proper matter may be presented at the meeting for such action). The notice of
any meeting at which directors are to be elected shall include the name of any
nominee or nominees who, at the time of the notice, the Board intends to present
for election.
SECTION 2.6 Conduct of Meetings. The Board may adopt such rules and
-------------------
regulations for the conduct of the meeting of stockholders as it shall deem
appropriate. Except to the extent inconsistent with such rules and regulations
as adopted by the Board, the chairman of any meeting of stockholders shall have
the right and authority to prescribe such rules, regulations and procedures and
to do all such acts as, in the judgment of such chairman, are appropriate for
the proper conduct of the meeting. Such rules, regulations or procedures,
whether adopted by the Board or prescribed by the chairman of the meeting, may
include, without limitation, the following: (i) the establishment of an agenda
or order of business for the meeting; (ii) rules and procedures for maintaining
order at the meeting and the safety of those present; (iii) limitations on
attendance at or participation in the meeting to stockholders of record of the
Corporation, their duly authorized and constituted proxies or such other persons
as the chairman of the meeting shall determine; (iv) restrictions on entry to
the meeting after the time fixed for the commencement thereof; and (v)
limitations on the time allotted to questions or comments by participants.
Unless and to the extent determined by the Board or the chairman of the meeting,
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meetings of stockholders shall not be required to be held in accordance with the
rules of parliamentary procedure.
SECTION 2.7 Manner of Giving Notice; Affidavit of Notice. Written
--------------------------------------------
notice of any meeting of stockholders shall be given either personally or by
first-class mail or by facsimile or other written communication. Notices not
personally delivered shall be sent charges prepaid and shall be addressed to the
stockholder at the address of that stockholder appearing on the books of the
Corporation or given by the stockholder to the Corporation for the purpose of
notice. Notice shall be deemed to have been given at the time when delivered
personally or deposited in the mail or sent by facsimile or other means of
written communication. An affidavit of the mailing or other means of giving any
notice of any stockholders' meeting, executed by the secretary, assistant
secretary or any transfer agent of the Corporation giving the notice, shall be
prima facie evidence of the giving of such notice.
SECTION 2.8 Quorum. The holders of a majority in voting power of
------
the stock issued and outstanding and entitled to vote thereat, present in person
or represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business except as otherwise provided by
statute or by the certificate of incorporation. If, however, such quorum is not
present or represented at any meeting of the stockholders, then either (i) the
chairman of the meeting, or (ii) the stockholders entitled to vote thereat,
present in person or represented by proxy, shall have power to adjourn the
meeting in accordance with this Section 2.8 and Section 2.9.
----------- -----------
When a quorum is present at any meeting, the vote of the holders of a
majority of the stock having voting power present in person or represented by
proxy shall decide any question validly brought before such meeting, unless the
question is one upon which, by express provision of the laws of the State of
Delaware or of the certificate of incorporation or these bylaws, a different
vote is required, in which case such express provision shall govern and control
the decision of the question.
If a quorum be initially present, the stockholders may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum, if any action taken is approved by a
majority of the stockholders initially constituting the quorum.
SECTION 2.9 Adjourned Meeting; Notice. When a meeting is adjourned
-------------------------
to another time and place, unless these bylaws otherwise require, notice need
not be given of the adjourned meeting if the time and place thereof are
announced at the meeting at which the adjournment is taken. At the adjourned
meeting the Corporation may transact any business that might have been
transacted at the original meeting. If the adjournment is for more than thirty
(30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
SECTION 2.10 Voting. The stockholders entitled to vote at any
------
meeting of stockholders shall be determined in accordance with the provisions of
Section 2.12 of these bylaws, subject to the provisions of Sections 217 and 218
- ------------
of the General Corporation Law of
4
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Delaware (relating to voting rights of fiduciaries, pledgors and joint owners,
and to voting trusts and other voting agreements). Except as may be otherwise
provided in the certificate of incorporation or these bylaws, each stockholder
shall be entitled to one vote for each share of capital stock held by such
stockholder.
SECTION 2.11 Waiver of Notice. Whenever notice is required to be
----------------
given under any provision of the General Corporation Law of Delaware or of the
certificate of incorporation or these bylaws, a written waiver thereof, signed
by the person entitled to notice, whether before or after the time stated
therein, shall be deemed equivalent to notice. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting, except when the
person attends a meeting for the express purpose of objecting, at the beginning
of the meeting, to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the stockholders need be specified
in any written waiver of notice unless so required by the certificate of
incorporation or these bylaws.
SECTION 2.12 Record Date for Stockholder Notice; Voting. For
------------------------------------------
purposes of determining the stockholders entitled to notice of any meeting or to
vote thereat or any adjournment thereof, the Board may fix a record date, which
shall not precede the date upon which the resolution fixing the record date is
adopted by the Board and which shall not be more than sixty (60) days nor less
than ten (10) days before the date of any such meeting, and only stockholders of
record on the date so fixed are entitled to notice and to vote, notwithstanding
any transfer of any shares on the books of the Corporation after the record
date.
If the Board does not so fix a record date, the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the business day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the business day next preceding the day on which the
meeting is held.
The record date for any other purpose shall be as provided in Section
-------
7.2 of these bylaws.
- ---
SECTION 2.13 Proxies. Every person entitled to vote for directors,
-------
or on any other matter, shall have the right to do so either in person or by one
or more agents authorized by a written proxy signed by the person and filed with
the secretary of the Corporation, but no such proxy shall be voted or acted upon
after three (3) years from its date unless the proxy provides for a longer
period. A proxy shall be deemed signed if the stockholder's name is placed on
the proxy (whether by manual signature, typewriting, facsimile or otherwise) by
the stockholder, the stockholder's authorizing officer, or the stockholder's
attorney- in-fact. The revocability of a proxy that states on its face that it
is irrevocable shall be governed by the provisions of Section 212(e) of the
General Corporation Law of Delaware.
SECTION 2.14 List of Stockholders Entitled to Vote. The officer
-------------------------------------
who has charge of the stock ledger of the Corporation shall prepare and make, at
least ten (10) days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical order,
and showing the address of each stockholder and the
5
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number of shares registered in the name of each stockholder. Such list shall be
open to the examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least ten (10) days
prior to the meeting, either at a place within the city where the meeting is to
be held, which place shall be specified in the notice of the meeting, or, if not
so specified, at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
ARTICLE III
BOARD
SECTION 3.1 Number. The total number of directors shall be between
------
two (2) and seven (7), with the actual total number of directors set from time
to time exclusively by resolution of the Board.
SECTION 3.2 Vacancies. Any director may resign effective on giving
---------
written notice to the chairman of the board, the chief executive officer, the
president, the secretary or the Board, unless the notice specifies a later time
for that resignation to become effective. If the resignation of a director is
effective at a future time, the Board may elect a successor to take office when
the resignation becomes effective. All vacancies in the Board may be filled by
a majority of the remaining directors, even if less than a quorum, or by a sole
remaining director; provided, that whenever the holders of any class or classes
of stock or series thereof are entitled to elect one or more directors by the
provisions of the certificate of incorporation, vacancies and newly created
directorships of such class or classes or series may be filled by a majority of
the directors elected by such class or classes or series thereof then in office,
or by a sole remaining director so elected.
SECTION 3.3 Place of Meeting. The Board or any committee thereof
----------------
may hold any of its meetings at such place or places within or without the State
of Delaware as the Board or such committee may from time to time designate or as
shall be designated by the person or persons calling the meeting or in the
notice or a waiver of notice of any such meeting.
SECTION 3.4 First Meeting. The Board shall meet as soon as
-------------
practicable after each annual election of directors and notice of such first
meeting shall not be required.
SECTION 3.5 Regular Meetings. Regular meetings of the Board may be
----------------
held at such times as the Board shall from time to time by resolution determine.
SECTION 3.6 Special Meetings. Special meetings of the Board for
----------------
any purpose or purposes shall be called at any time by the chairman of the board
and may also be called by any two (2) members of the Board. Except as otherwise
provided by law or by these bylaws, notice of the time and place of special
meetings shall be delivered personally or by telephone or facsimile to each
director, or sent to each director by mail or by other form of written
communication, charges prepaid, addressed to such director at such director's
address as it is shown upon the records of the Corporation, or, if it is not so
shown on such records and is not readily ascertainable, at the place in which
the meetings of the directors are regularly held. In case such notice is mailed,
it shall be deposited in the United States mail in the county in
6
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which the principal office for the transaction of the business of the
Corporation is located at least four (4) business days prior to the time of the
holding of the meeting. In case such notice is delivered personally or by
telephone or facsimile as above provided, it shall be delivered at least two (2)
business days prior to the time of the holding of the meeting. Such mailing,
delivery, telephone call, or facsimile transmission as above provided shall be
due, legal and personal notice to such director. Except where otherwise required
by law or by these bylaws, notice of the purpose of a special meeting need not
be given. Notice of any meeting of the Board shall not be required to be given
to any director who (i) signs a waiver of notice or a consent to holding the
meeting or an approval of the minutes thereof, whether before or after the
meeting, or (ii) is present at such meeting, unless the director shall attend
such meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened.
SECTION 3.7 Fees and Compensation of Directors. Directors and
----------------------------------
members of committees may receive such compensation, if any, for their services
and such reimbursement of expenses as may be fixed or determined by resolution
of the Board. This Section 3.7 shall not be construed to preclude any director
-----------
from serving the Corporation in any other capacity as an officer, agent,
employee or otherwise and receiving compensation for those services.
SECTION 3.8 Chairman of the Board. The chairman of the board, if
---------------------
such an officer be elected, shall, if present, preside at meetings of the Board
and exercise and perform such other powers and duties as may from time to time
be assigned by the Board or as may be prescribed by these bylaws. If there is no
president and no other person designated as chief executive officer, then the
chairman of the board shall also be the chief executive officer of the
Corporation and shall have the powers and duties prescribed in Section 4.6 of
-----------
these bylaws.
SECTION 3.9 Quorum and Manner of Acting. A meeting at which a
---------------------------
quorum is initially present may continue to transact business notwithstanding
the withdrawal of directors, provided any action taken is approved by at least a
majority of the required quorum for such meeting. In the absence of a quorum, a
majority of directors present at any meeting may adjourn the same from time to
time until a quorum shall be present. Notice of any adjourned meeting need not
be given. The directors shall act only as a Board, and the individual directors
shall have no power as such.
SECTION 3.10 Committees. The Board may, by resolution passed by a
----------
majority of the whole Board, designate one or more committees, each committee to
consist of one or more of the directors of the Corporation. Any such committee,
to the extent provided in the resolution of the Board and except as otherwise
limited by law, shall have and may exercise all the powers and authority of the
Board in the management of the business and affairs of the Corporation. Any
such committee shall keep written minutes of its meetings and report the same
to the Board at the next regular meeting of the Board. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
she or they constitute a quorum, may unanimously appoint another member of the
Board to act at the meeting in the place of any such absent or disqualified
member.
7
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SECTION 3.11 Board Action by Written Consent Without a Meeting.
-------------------------------------------------
Any action required or permitted to be taken by the Board may be taken without a
meeting, provided that all members of the Board individually or collectively
consent in writing to that action. Such action by written consent shall have the
same force and effect as a unanimous vote of the Board. Such written consent
and any counterparts thereof shall be filed with the minutes of the proceedings
of the Board.
ARTICLE IV
OFFICERS
SECTION 4.1 Officers. The executive officers of the Corporation
--------
shall be the chairman of the board, a chief executive officer or president or
both, a secretary, a chief financial officer, and such other officers as may be
appointed at the discretion of the Board, the chief executive officer or the
president in accordance with the provisions of Section 4.3 hereof.
-----------
SECTION 4.2 Election. The officers of the Corporation, except such
--------
officers as may be appointed or elected in accordance with the provisions of
Section 4.3 hereof, shall be chosen annually by the Board at the first meeting
- -----------
thereof after the annual meeting of stockholders, and each officer shall hold
office until such officer shall resign or shall be removed or otherwise
disqualified to serve, or until such officer's successor shall be elected and
qualified.
SECTION 4.3 Other Officers. In addition to the officers chosen
--------------
annually by the Board at its first meeting, the Board, the chief executive
officer or the president also may appoint or elect such other officers as the
business of the Corporation may require, each of whom shall have such authority
and perform such duties as are provided in these bylaws or as the Board, the
chief executive or the president may from time to time specify, and shall hold
office until such officer shall resign or shall be removed or otherwise
disqualified to serve, or until such officer's successor shall be elected and
qualified.
SECTION 4.4 Removal and Resignation. Any officer may be removed,
-----------------------
either with or without cause, by the Board, at any regular or special meeting of
the Board or by unanimous written consent, or except in case of an officer
chosen by the Board, by any officer upon whom such power of appointment or
removal may be conferred by the Board or these bylaws. Any officer may resign
at any time by giving written notice of his or her resignation to the chief
executive officer, the president, the Board or the secretary of the Corporation.
Any such resignation shall take effect at the time specified therein, or, if the
time is not specified, upon receipt thereof by the chief executive officer, the
president, the Board or the secretary, as the case may be; and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
SECTION 4.5 Vacancies. A vacancy in any office because of death,
---------
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in these bylaws for regular appointments to such office.
SECTION 4.6 President. The president shall preside at all meetings
---------
of the stockholders and at all meetings of the Board, unless the chairman of the
board has been appointed and is present or, in the absence of the chairman of
the board, the chief executive
8
<PAGE>
officer has been appointed and is present. Subject to the provisions of these
bylaws and to the direction of the Board, the president shall have the
responsibility for the general management and control of the business and
affairs of the Corporation and shall perform all duties and have all powers
which are commonly incident to the office of president or which are delegated to
him or her by the Board or these bylaws.
SECTION 4.7 Vice Presidents. In the absence or disability of the
---------------
president, the vice presidents, if any, in order of their rank as fixed by the
Board or, if not ranked, a vice president designated by the Board, shall perform
all the duties of the president and when so acting shall have all the powers of,
and be subject to all the restrictions upon, the president. The vice presidents
shall have such other powers and perform such other duties as from time to time
may be prescribed for them respectively by the Board, these bylaws, the
president, the chief executive officer or the chairman of the board.
SECTION 4.8 Secretary.
---------
(A) The secretary shall attend all meetings of the stockholders and
of the Board and shall record all acts and proceedings thereof in the minute
book of the Corporation. The secretary shall give notice in conformity with
these bylaws of all meetings of the stockholders and of all meetings of the
Board and any committee thereof requiring notice. The secretary shall perform
all other duties given him or her in these bylaws and other duties commonly
incident to his or her office and shall also perform such other duties and have
such other powers as the Board shall designate from time to time.
(B) The secretary shall keep, or cause to be kept, at the principal
office of the Corporation or such other place as the Board may order, a book of
minutes of all meetings of directors and stockholders, with the time and place
of holding, whether regular or special, and if special, how authorized and the
notice thereof given, the names of those present at meetings of directors, the
number of shares present or represented at meetings of stockholders, and the
proceedings thereof.
(C) The secretary shall keep, or cause to be kept, at the principal
office of the Corporation's transfer agent, a share register, or a duplicate
share register, showing the name and address of each stockholder, the number of
shares of each class held by such stockholder, the number and date of
certificates issued for such shares, and the number and date of cancellation of
every certificate surrendered for cancellation.
SECTION 4.9 Chief Financial Officer. The chief financial officer
-----------------------
shall keep or cause to be kept the books of account of the Corporation in a
thorough and proper manner and shall render statements of the financial affairs
of the Corporation in such form and as often as required by the Board, the chief
executive officer or the president. The chief financial officer, subject to the
order of the Board, shall have the custody of all funds and securities of the
Corporation. The chief financial officer shall perform other duties commonly
incident to his or her office and shall also perform such other duties and have
such other powers as the Board, the chief executive officer or the president
shall designate from time to time.
9
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ARTICLE V
CORPORATE ACTIONS
SECTION 5.1 Voting Securities Held by the Corporation. The
-----------------------------------------
chairman of the board, if any, the chief executive officer, the president, any
vice president, the chief financial officer, the secretary or any assistant
secretary of this Corporation, or any other person authorized by the Board, the
chief executive officer, or the president or a vice president, is authorized to
vote, represent and exercise on behalf of this Corporation all rights incident
to any and all shares of the stock of any other corporation or corporations
standing in the name of this Corporation. The authority herein granted may be
exercised either by such person directly or by any other person authorized to do
so by proxy or power of attorney duly executed by such person having the
authority.
SECTION 5.2 Corporate Contracts and Instruments. The Board, except
-----------------------------------
as otherwise provided in these bylaws, may authorize any officer or officers, or
agent or agents, to enter into any contract or execute any instrument in the
name of and on behalf of the Corporation; such authority may be general or
confined to specific instances. Unless so authorized or ratified by the Board or
within the agency power of an officer, no officer, agent or employee shall have
any power or authority to bind the Corporation by any contract or engagement or
to pledge its credit or to render it liable for any purpose or for any amount.
ARTICLE VI
LIMITATION OF LIABILITY AND INDEMNIFICATION
SECTION 6.1 Indemnification of Directors and Officers. The
-----------------------------------------
Corporation shall indemnify, in the manner and to the fullest extent permitted
by law, any person against expenses (including attorneys' fees), judgments,
fines, and amounts paid in settlement actually and reasonably incurred in
connection with any threatened, pending or completed action, suit or proceeding,
whether or not by or in the right of the Corporation, and whether civil,
criminal, administrative, investigative or otherwise, in which such person was
or is a party or is threatened to be made a party by reason of the fact that
such person is or was a director or officer of the Corporation, or is or was
serving at the request of the Corporation as a director or officer of another
corporation, partnership, joint venture, trust or other enterprise. Any
director or officer of the Corporation serving as director or officer for (i)
another corporation of which a majority of the shares entitled to vote in the
election of its directors is held, directly or indirectly, by the Corporation,
or (ii) any employee benefit plan of the Corporation or any corporation referred
to in clause (i), shall be deemed to be doing so at the request of the
Corporation. The Corporation shall be required to indemnify a director or
officer in connection with an action, suit, or proceeding (or part thereof)
initiated by such director or officer only if the initiation of such action,
suit, or proceeding (or part thereof) by the director or officer was authorized
by the Board. The Corporation may create a trust fund, grant a security interest
or use other means (including without limitation a letter of credit) to ensure
the payment of such sums as may become necessary or desirable to effect the
indemnification as provided herein.
To the fullest extent permitted by law, the indemnification provided
herein shall include expenses as incurred (including attorneys' fees),
judgments, fines and amounts paid in settlement and any such expenses shall be
paid by the Corporation in advance of the final
10
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disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of the person seeking indemnification to repay such amounts if it
is ultimately determined that he or she is not entitled to be indemnified.
Notwithstanding the foregoing or any other provision of this Section 6.1, no
-----------
advance shall be made by the Corporation if a determination is reasonably and
promptly made by the Board by a majority vote of a quorum of disinterested
directors, or (if such a quorum is not obtainable or, even if obtainable, a
quorum of disinterested directors so directs) by independent legal counsel to
the Corporation, that, based upon the facts known to the Board or such counsel
at the time such determination is made, (a) the party seeking an advance acted
in bad faith or deliberately breached his or her duty to the Corporation or its
stockholders, and (b) as a result of such actions by the party seeking an
advance, it is more likely than not that it will ultimately be determined that
such party is not entitled to indemnification pursuant to the provisions of this
Section 6.1.
- -----------
The indemnification provided herein shall not be deemed to limit the
right of the Corporation to indemnify any other person for any such expenses to
the fullest extent permitted by law, nor shall it be deemed exclusive of any
other rights to which any person seeking indemnification from the Corporation
may be entitled under any agreement, these bylaws, any vote of stockholders or
disinterested directors, or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office.
SECTION 6.2 Indemnification of Employees and Agents. Subject to
---------------------------------------
Section 6.1, and to the extent permitted by law, the Board may (but shall not be
- -----------
obligated to) authorize from time to time rights to indemnification and to the
advancement of expenses to any employee or agent of the Corporation to the
fullest extent of the provisions of this Article VI as they apply to the
indemnification and advancement of expenses of directors and officers of the
Corporation.
SECTION 6.3 Enforcement of Indemnification. The rights to
------------------------------
indemnification and the advancement of expenses conferred above shall be
contract rights. No repeal or modification of this Article VI or any portion
thereof shall affect any rights or obligations with respect to any state of
facts then or theretofore existing or any action, suit or proceeding theretofore
or thereafter brought or threatened based in whole or in part upon any such
state of facts. If a claim under this Article VI is not paid in full by the
Corporation within sixty (60) days after written claim has been received by the
Corporation, except in the case of a claim for an advancement of expenses, in
which case the applicable period shall be twenty (20) days, the indemnitee may
at any time thereafter bring suit against the Corporation to recover the unpaid
amount of such claim. If successful in whole or in part in any such suit, or in
a suit brought by the Corporation to recover an advancement of expenses pursuant
to the terms of an undertaking, the indemnitee shall be entitled to be paid also
the expenses of prosecuting or defending such suit. In any suit brought by the
indemnitee to enforce a right to indemnification or to an advancement of
expenses hereunder, or by the Corporation to recover an advancement of expenses
pursuant to the terms of an undertaking, the burden of proving that the
indemnitee is not entitled to be indemnified, or to such advancement of
expenses, under this Article VI or otherwise shall be on the Corporation.
SECTION 6.4 Insurance. The Corporation may purchase and maintain
---------
insurance on behalf of any person who is or was a director, officer, employee or
agent of the
11
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Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him or
her and incurred by him or her in any such capacity, or arising out of his or
her status as such, whether or not the Corporation would have the power to
indemnify him or her against such liability under the provisions of this Article
VI.
SECTION 6.5 No Duplication of Payment. The Corporation shall not
-------------------------
be liable under this Article VI to make any payments in connection with any
claim made against a person described in Section 6.1 to the extent such person
-----------
has otherwise received payment (under any insurance policy, or otherwise) of the
amounts indemnifiable hereunder.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 Amendments. Except as otherwise provided herein or in
----------
the certificate of incorporation of the Corporation, these bylaws or any of them
may be altered, amended, repealed or rescinded and new bylaws may be adopted by
the Board or by the affirmative vote of the holders of eighty percent (80%) or
more of the total voting power of all outstanding shares of voting stock of the
Corporation.
SECTION 7.2 Record Date for Purposes Other than Notice and Voting.
-----------------------------------------------------
For purposes of determining the stockholders entitled to receive payment of any
dividend or other distribution or allotment of any rights or the stockholders
entitled to exercise any rights in respect of any other lawful action, the Board
may fix, in advance, a record date, which shall not be more than sixty (60) days
before any such action. In that case, only stockholders of record at the close
of business on the date so fixed are entitled to receive the dividend,
distribution or allotment of rights, or to exercise such rights, as the case may
be, notwithstanding any transfer of any shares on the books of the Corporation
after the record date so fixed, except as otherwise provided in the General
Corporation Law of Delaware.
If the Board does not so fix a record date, then the record date for
determining stockholders for any such purpose shall be at the close of business
on the day on which the Board adopts the applicable resolution.
SECTION 7.3 Certificates for Stock. Every owner of stock of the
----------------------
Corporation shall be entitled to have a certificate or certificates, to be in
such form as the Board shall prescribe, certifying the number and class of
shares of the stock of the Corporation owned by him or her. The certificates
representing shares of such stock shall be numbered in the order in which they
shall be issued and shall be signed in the name of the Corporation by the
president or a vice president, and by the secretary or an assistant secretary or
by the treasurer or an assistant treasurer. Any or all of the signatures on the
certificates may be a facsimile. In case any officer, transfer agent or
registrar who has signed, or whose facsimile signature has been placed upon, any
such certificate, shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, such certificate may nevertheless
be issued by the Corporation with the same effect as though the person who
signed such certificate, or whose facsimile signature shall have been placed
thereupon, were such officer, transfer agent or registrar at the date of issue.
Every certificate surrendered to the Corporation for exchange or transfer shall
be
12
<PAGE>
canceled, and no new certificate or certificates shall be issued in exchange
for any existing certificate until such existing certificate shall have been so
canceled, except in cases provided for in Section 7.5.
-----------
SECTION 7.4 Transfers of Stock. Transfers of shares of stock of
------------------
the Corporation shall be made only on the books of the Corporation by the
registered holder thereof, or by his or her attorney thereunto authorized by
power of attorney duly executed and filed with the secretary, or with a transfer
clerk or a transfer agent appointed as provided in Section 7.6, and upon
-----------
surrender of the certificate or certificates for such shares properly endorsed
and the payment of all taxes thereon. The person in whose name shares of stock
stand on the books of the Corporation shall be deemed the owner thereof for all
purposes as regards the Corporation. Whenever any transfer of shares shall be
made for collateral security, and not absolutely, such fact shall be so
expressed in the entry of transfer if, when the certificate or certificates
shall be presented to the Corporation for transfer, both the transferor and the
transferee request the Corporation to do so.
SECTION 7.5 Lost Certificates. Except as provided in this Section
----------------- -------
7.5, no new certificates for shares shall be issued to replace a previously
- ---
issued certificate unless the latter is surrendered to the Corporation and
canceled at the same time. The Board may, in case any share certificate or
certificate for any other security is lost, stolen or destroyed, authorize the
issuance of replacement certificates on such terms and conditions as the Board
may require; and the Board may require indemnification of the Corporation
secured by a bond or other adequate security sufficient to protect the
Corporation against any claim that may be made against it, including any expense
or liability, on account of the alleged loss, theft or destruction of the
certificate or the issuance of the replacement certificate.
SECTION 7.6 Transfer Agents and Registrars. The Board may appoint
------------------------------
one or more transfer agents or transfer clerks, and one or more registrars, each
of which shall be an incorporated bank or trust company -- either domestic or
foreign, who shall be appointed at such times and places as the requirements of
the Corporation may necessitate and the Board may designate.
SECTION 7.7 Construction; Definitions. Unless the context requires
-------------------------
otherwise, the general provisions, rules of construction, and definitions in the
General Corporation Law of Delaware shall govern the construction of these
bylaws. Without limiting the generality of this provision, the singular number
includes the plural, the plural number includes the singular, and the term
"person" includes both a corporation and a natural person.
13
<PAGE>
EXHIBIT 10.2
[Certain confidential information has been omitted from this Exhibit 10.2
------------
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "***" at each place in this Exhibit 10.2 where the omitted information
------------
appeared in the original.]
INTERCOMPANY AGREEMENT
This Intercompany Agreement (the "Agreement") is entered into this 4th day
of April, 2000 between Heidrick & Struggles International, Inc., a Delaware
corporation, and its subsidiaries ("Heidrick"), and LeadersOnline, Inc., a
Delaware corporation ("Leaders").
RECITALS
A. Heidrick is one of the leading executive search firms in the world and
renders such services in essentially all major commercial and financial centers.
B. Leaders is a search firm that operates an Internet-based recruiting
service through which it identifies applicants suitable to fill positions at
companies and other organizations, at levels below those for which Heidrick
provides its services (the "Leaders Business").
C. Leaders is currently a wholly-owned subsidiary of Heidrick.
Nonetheless, both parties desire that Leaders operate as an independent entity.
AGREEMENT
---------
It is hereby agreed as follows:
1. Definitions. As used herein, the following terms shall have the
-----------
following meanings:
1.1 "Confidential Information" shall be as defined in Section 10.
1.2 "Heidrick Account" shall mean any entity with which Heidrick has
an agreement to refer candidates in order to fill specified positions within
that entity.
1.3 "Leaders Account" shall mean any entity with which Leaders has
an agreement to refer candidates in order to fill specified positions within
that entity.
1.4 "Minimum Fee Amounts" shall be as defined in Section 2.
1.5 "Referred Heidrick Account" shall mean a Heidrick Account which
is obtained by Heidrick as a direct result of a marketing lead provided by
Leaders.
1.6 "Referred Leaders Account" shall mean a Leaders Account which is
obtained by Leaders as a direct result of a marketing lead provided by Heidrick.
1.7 "Search Fees" shall mean amounts actually received by Leaders
from a Referred Leaders Account or by Heidrick from a Referred Heidrick Account
for the placement of candidates.
2. Access to Heidrick's Resources. Heidrick hereby grants to Leaders
------------------------------
reasonable access to all of Heidrick's marketing resources including, without
limitation, client lists, contact points with clients, and Heidrick's database
of candidates, all as the same may be updated and
<PAGE>
changed from time to time. Such access must be directly related to Leaders'
business objectives and can be denied by Heidrick in those situations where
Heidrick reasonably believes it appropriate to do so. Heidrick will establish
minimum fee amounts ("Minimum Fee Amounts") for each search assignment within a
given country, region, area or office initially as set forth on Exhibit A
hereto. Heidrick will, and will cause each of its subsidiaries and affiliates
(other than Leaders) to use reasonable commercial efforts to, refer Leaders any
search assignment where the reasonably expected search fee is less than the
Minimum Fee Amount. Minimum Fee Amounts shall be reviewed at least annually with
a view to adjusting them to be in line with then current market conditions.
Minimum Fee Amounts can be different within a given country, region, area or
office again based primarily upon market conditions. Leaders shall not accept
any search assignment for which the expected search fee is greater than the
Minimum Fee Amount for such country, region, area or office without the approval
of the appropriate Heidrick regional president or his or her designee, which
approval will not be unreasonably delayed or withheld.
3. Access to Leaders' Resources. Leaders hereby grants to Heidrick
----------------------------
reasonable access to all of Leaders' marketing resources including, without
limitation, client lists, contact points with clients, and Leaders' database of
candidates, all as the same may be updated and changed from time to time. Such
access must be directly related to Heidrick's business objectives and can be
denied by Leaders in those situations where Leaders reasonably believes it
appropriate to do so.
4. Fees Related to Referred Leader Accounts. In exchange for the access
----------------------------------------
referred to in Section 2, above, Leaders shall pay to Heidrick, on an annual
basis within thirty (30) days after the close of each calendar year, an amount
equal to a percentage of the aggregate amount of Search Fees received and
retained by Leaders from each Referred Leaders Account during such calendar year
as follows:
Annual Search Fees Fee
------------------ ---
*** ***
To the extent any such Search Fees are later refunded to a Referred Leaders
Account, such amount(s) shall be deducted from Search Fees received in the year
in which the refund occurred.
5. Fees Related to Referred Heidrick Accounts. In exchange for the access
------------------------------------------
referred to in Section 3, above, Heidrick shall pay to Leaders , on an annual
basis within thirty (30) days after the close of each calendar year, an amount
equal to a percentage of the aggregate amount of Search Fees received and
retained by Heidrick from each Referred Heidrick Account during such calendar
year as follows:
Annual Search Fees Fee
------------------ ---
*** ***
- ----------------
*** Omitted pursuant to a confidential treatment request filed separately.
2
<PAGE>
To the extent any such Search Fees are later refunded to a Referred Heidrick
Account, such amount(s) shall be deducted from Search Fees received in the year
in which the refund occurred.
6. Other Services to be Provided by Heidrick to Leaders.
----------------------------------------------------
6.1 Space. Heidrick hereby grants to Leaders the right to use
-----
certain portions of Heidrick's facilities which are identified on Exhibit B
---------
attached hereto and made a part hereof (the "Facilities"), and the common areas
associated therewith, upon the terms and conditions hereinafter set forth, to be
used and occupied by Leaders solely for the purpose of office space and for no
other purpose. Heidrick reserves the right to move Leaders to comparable office
space within any Facility, in Heidrick's reasonable discretion.
6.1.1 Leaders' right to use the Facilities shall commence on the date
of this Agreement and shall terminate on the date upon which the particular
prime lease for each respective Facility is terminated. In the event a new
Facility is added to Exhibit B, and Leaders specifically requests that Heidrick
---------
lease additional space in that Facility for Leaders' operations, Leaders shall
have no right to terminate its use and occupancy of such additional space and
Leaders shall remain obligated to Heidrick under this Section 6 until the prime
lease for that additional space is terminated.
6.1.2 In consideration for the use of the Facilities, Leaders shall
pay to Heidrick any and all costs and expenses attributable to Leaders' use and
occupancy of the Facilities including, but not limited to, rent (including its
share of all items of additional rent), common area maintenance charges,
insurance, office supplies, telephone services, office equipment, furniture,
leasehold improvements and related costs and expenses thereto. Leaders also
shall pay to Heidrick all other amounts payable by Heidrick under the prime
leases which are attributable to Leaders' use of the Facilities or attributable
to its agents, employees, customers or invitees. Leaders shall reimburse
Heidrick for all fixed costs, in advance, on or before the first day of each
calendar month of the term hereof. Each other amount due pursuant to this
Section 6 shall be due and payable on the fifteenth (15th) business day
following the date on which Heidrick has given notice to Leaders of the amount
thereof. Any payments required hereunder shall be paid without setoff or
deduction whatsoever.
6.1.3 Upon the expiration of the term hereof, or upon any earlier
termination of the term or of Leaders' right to possession of any of the
Facilities, Leaders shall surrender the Facilities in at least as good condition
as at the date of this Agreement, ordinary wear and tear excepted.
6.1.4 All rights of Leaders hereunder and with respect to the
Facilities are subject to the terms, conditions and provisions of the prime
leases for the Facilities. Leaders hereby assumes and agrees to perform
faithfully and be bound by, with respect to the portion of the Facilities used
by Leaders, all of Heidrick's obligations, covenants, agreements and liabilities
under the prime leases and all terms, conditions, provisions and restrictions
contained in the prime leases.
6.1.5 Leaders shall not make any changes, alterations or additions in
or to the Facilities. Leaders shall maintain casualty insurance with respect to
any of Leaders' property
3
<PAGE>
located at the Facilities and worker's compensation insurance for all employees
working at the Facilities in the amounts set forth in Exhibit C. All policies of
---------
liability insurance shall name Heidrick as an additional insured, along with
their respective officers, directors or partners, and the respective agents and
employees of each of them. Leaders shall not do anything or suffer or permit
anything to be done which could result in a default under the prime leases or
permit the prime leases to be canceled or terminated.
6.1.6 In the event Leaders fails to pay any amount hereunder on the
date it is due or causes an event of default under the prime leases, Heidrick
may terminate Leaders' rights to any or all of the Facilities if, and only if,
Leaders has not cured such failure to pay or event of default within thirty (30)
days after written notice of the same has been received by Leaders from
Heidrick.
6.1.7 Leaders hereby releases and waives any and all claims against
Heidrick and its officers, directors, partners, agents and employees for injury
or damage to person, property or business sustained in or about the Facilities
by Leaders, its employees, contractors and agents other than by reason of gross
negligence or willful misconduct of Heidrick and except in any case which would
render this release and waiver void under law.
6.1.8 Leaders agrees to indemnify, defend and hold harmless Heidrick
and its officers, directors, shareholders, partners, agents and employees, from
and against any and all claims, demands, liabilities, costs and expenses of
every kind and nature, including attorneys' fees and litigation expenses,
arising from Leader's occupancy of the Facilities or from any breach or default
on the part of Leaders in the performance of any agreement or covenant of
Leaders to be performed under this Section 6.1, or from any act or neglect of
Leaders or its agents, officers, employees, guests, servants, invitees or
customers in or about the Facilities. In case any such proceeding is brought
against any of said indemnified parties, Leaders covenants, if requested by
Heidrick, to defend such proceeding at its sole cost and expense by legal
counsel reasonably satisfactory to Heidrick.
6.1.9 Leaders shall not assign any of its rights or interests
hereunder nor permit its interest to be vested in any third party by operation
of law or otherwise.
6.2. Information Systems. Heidrick and Leaders will work together to form a
-------------------
research and technology alliance for the purpose of testing new technologies for
use in these respective businesses, which alliance will be governed by a
separate agreement to be negotiated between the parties.
6.3. Transfer of Name.
----------------
6.3.1 Heidrick hereby transfers to Leaders, and Leaders hereby
accepts, all right, title and interest in and to the name, trademark and service
mark "LeadersOnline" (collectively, the "Mark") From and after the date hereof,
Leaders will be the owner of the Mark.
6.3.2 In consideration of the transfer of the Mark, Leaders shall pay
to Heidrick a continuing royalty fee (the "Royalty") equal to 3% of the gross
revenues of Leaders and its affiliates from any and all sources during the term
of this Agreement and
4
<PAGE>
thereafter for so long as Leaders is using the Mark. Gross revenues shall be
computed in accordance with generally accepted accounting principles
consistently applied. The Royalty shall be payable by Leaders to Heidrick
quarterly, within 30 days after the end of each calendar quarter during the term
of this Agreement. Each payment shall be accompanied by a statement of Leaders'
gross revenues, certified by the President or Chief Financial Officer of
Leaders. Heidrick shall have the right during normal business hours, upon
reasonable notice to Leaders and without interfering with Leaders' business
operations, to inspect and audit, or cause to be inspected and audited, the
business records of Leaders to confirm the gross revenues of Leaders. If the
inspection or audit discloses an understatement of gross revenues by five
percent (5%) or more, Leaders shall reimburse Heidrick for the reasonable costs
of such inspection or audit, in addition to the understated amount, within 30
days after completion of such inspection or audit.
6.3.3 Leaders hereby agrees to defend, indemnify and hold harmless
Heidrick from and against any and all claims, damages, liabilities, costs and
expenses, including reasonable attorneys' fees, arising out of Leaders' use of
the Mark.
6.4. Support. Heidrick shall provide certain corporate support to
-------
Leaders, including human resources, accounting, investor relations, access to
the following technology elements: Network (LAN/WAN); Email; PeopleSoft;
Knowledge Orbiter (Intranet); CD Mounter/Dow Jones/Lexis-Nexis; remote access
software and support; systems purchasing and set-up support (using standard
Heidrick image for desktop computers, laptop computers and servers), Heidrick
corporate library (service); and support hotline (service), and such other
services agreed upon by the parties from time to time ("Support Services"). In
consideration for such Support Services, Leaders shall pay to Heidrick a
"Support Fee" in an amount equal to 115% of all actual costs and expenses
incurred by Heidrick in providing such services, including, but not limited to
personnel, travel, outside professionals and out-of-pocket expenses. The amount
of the Support Fee will be reviewed and agreed upon annually by Heidrick and
Leaders. Heidrick and Leaders shall from time to time make a reasonable
estimate of the amount of the Support Fee and Leaders shall pay one-twelfth
(1/12) of such amount to Heidrick on the first day of each month during the term
of this Agreement. Within sixty days following the end of each calendar year,
Leaders and Heidrick shall calculate the actual amount of the Support Fee and
Leaders shall pay to Heidrick any shortfall. If the estimated payments of the
Support Fee exceed the actual Support Fee, Heidrick shall credit the excess
against future estimated amounts.
7. Participation in Management. Senior management of each party shall
---------------------------
have the right to serve as non-voting members on various committees of the other
party, to be mutually agreed on a reasonable basis from time to time. Members
who participate on such committees shall have the right to receive materials in
advance of, and to attend, all meetings of such committees but shall not have
the right to vote.
8. Term. Except as otherwise set forth above, the initial term of this
----
Agreement shall be seven (7) years and shall be extended automatically on an
annual basis unless either party gives the other party written notice of
termination at least six (6) months prior to an anniversary date of this
Agreement. Sections 6.3.2 and 6.3.3 shall survive any termination of this
Agreement and continue in full force and effect for so long as Leaders is using
the Mark.
5
<PAGE>
9. Access to Information. From and after the date of this Agreement, each
---------------------
party hereto shall afford the other party and its authorized accountants,
counsel and other designated representatives (collectively, "Representatives")
reasonable access (including using reasonable efforts to give access to third
parties possessing information) and duplicating rights during normal business
hours to all business records (except the marketing resources of the parties
which are governed by Sections 2 and 3 of this Agreement), books, contracts,
instruments, accounting and financial information, employee and payroll
information, computer data, and other data and information (collectively,
"Information") within such party's possession relating to such other party or
any subsidiary or affiliate of such other party, insofar as such access is
reasonably required by such other party for the purposes of audit, accounting,
claims, litigation and tax purposes, as well as for purposes of fulfilling
disclosure and reporting obligations required by applicable law.
10. Confidentiality.
---------------
10.1 Each party acknowledges that it or its employees may, in the
course of performing its responsibilities under this Agreement, be exposed to or
acquire information which is proprietary or confidential to the other party or
its affiliates or clients or to third parties to whom such other party owes a
duty of confidentiality. Any and all non-public information of any form obtained
by either party or its employees in the performance of this Agreement shall be
deemed to be confidential and proprietary information (singularly or
collectively, "Confidential Information"). Each party agrees to hold all
Confidential Information in strict confidence and not to copy, reproduce, sell,
assign, license, market, transfer or otherwise dispose of, give, or disclose
such Confidential Information to third parties or to use such Confidential
Information for any purposes whatsoever other than as contemplated by this
Agreement and to advise each of its employees who may be exposed to such
Confidential Information of their obligations to keep such information
confidential.
10.2 Confidential Information shall not include information which is
(i) in or becomes part of the public domain other than by disclosure by either
party in violation of this Agreement, (ii) demonstrably known to the other party
previously, (iii) independently developed by the other party outside of this
Agreement, or (iv) rightfully obtained by the other party from third parties
that are not under an obligation of confidentiality to the disclosing party.
11. Data Protection and Privacy. Each party shall ensure that all
---------------------------
information with respect to candidates in its respective database is treated as
"private" and not released to clients or other third parties without the
permission of the candidate.
12. Indemnification.
---------------
12.1 Except with respect to any matter otherwise specifically provided
for under this Agreement, Leaders shall indemnify, defend and hold harmless
Heidrick and all of Heidrick's subsidiaries and their directors, officers,
employees and agents from and against any and all Losses (as hereinafter
defined) of Heidrick and Heidrick's subsidiaries (i) arising out of or relating
to the Leaders Business, whether such Losses relate to events occurring, or
asserted before, on or after, the date of this Agreement; or (ii) arising out of
any breach by Leaders of any representation, warranty or covenant contained in
this Agreement.
6
<PAGE>
12.2 Except with respect to any matter otherwise specifically
provided for under this Agreement, Heidrick shall indemnify, defend and hold
harmless Leaders and all of Leaders' subsidiaries and their directors, officers,
employees and agents from and against any and all Losses of Leaders and Leaders'
subsidiaries (i) arising out of or relating to the business of Heidrick, whether
such Losses relate to events occurring, or asserted before, on or after the date
of this Agreement; or (ii) arising out of any breach by Heidrick of any
representation, warranty or covenant contained in this Agreement.
12.3 For purposes of this Section 12, the term "Loss" or "Losses"
means all losses, liabilities, damages, claims, demands, judgments or
settlements of any kind or nature, known or unknown, fixed, accrued, absolute or
contingent, liquidated, or unliquidated, including reasonable attorneys' fees
and other reasonable costs and expenses relating thereto, provided, however,
that the amount of any Losses shall be reduced by any insurance proceeds
recovered by or on behalf of the person or entity incurring the Losses.
12.4 The party entitled to be indemnified hereunder shall provide
prompt written notice of any Loss to the indemnifying party. The indemnifying
party shall have the right, at its expense, to control the defense of any action
or proceeding related to a Loss.
13. General.
-------
13.1 Neither party may assign, sublicense, subcontract or otherwise
transfer or encumber any of its rights or obligations under this Agreement
without the prior written consent of the other party.
13.2 No amendment of or supplement to this Agreement or any of its
terms shall be effective unless made in writing and signed by or on behalf of
each party hereto.
13.3 Each party shall reimburse the other party for any and all
costs and expenses, including reasonable attorneys' fees, suffered or incurred
by the other party in connection with interpretation or enforcement of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed as of the date first above written.
HEIDRICK & STRUGGLES INTERNATIONAL, INC.
By: /s/ Donald M. Kilinski
-------------------------------------
7
<PAGE>
LEADERSONLINE, INC.
By: /s/ Michael T. Christy
-------------------------------------
8
<PAGE>
EXHIBIT 10.4
[Certain confidential information has been omitted from this Exhibit 10.4
------------
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "***" at each place in this Exhibit 10.4 where the omitted information
------------
appeared in the original.]
[ITWORLD.COM LOGO]
Exclusive Sales & Marketing Agreement between ITworld.com,
Jobs.cio.com and the ITcareers
Print Network and Leaders!Online
March 1, 2000
This agreement (the "Agreement") is made this 1st day of March 2000 ("the
effective date") between Leaders!Online, Inc. ("Leaders!Online") with a
principal place of business at 18401 Von Karman Avenue, Suite 500, Irvine, CA
92612 and ITworld.com Inc. ("ITworld") with a principal place of business at 118
Turnpike Road, Southborough, Massachusetts 01772. Leaders!Online and ITworld
may also be referred to as "Party" or collectively as "Parties" throughout this
agreement.
WHEREAS, Leaders!Online is in the business of providing information technology
for online recruitment products and services;
WHEREAS, IT world was consolidated its online IT audience in ITworld.com; IDG's
new IT problem-solving network which provides print and online recruitment
advertising and other recruitment services for IT professionals and customers;
WHEREAS, Leaders!Online and ITworld mutually desire to provide ITworld's
customers and readers with easy access to the products or services offered by
Leaders!Online.
NOW, therefore, for and in consideration of the mutual promises, benefits and
covenants contained herein and for other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged,
Leaders!Online and ITworld hereby agree as follows:
1. Definitions
a) ITworld.com: is a new website under development by ITworld.com, Inc.
-----------
which will incorporate content from IDG's Enterprise IT publications, as
well as other original content and resources focused on the Enterprise IT
professional.
b) ITworld Network: ITworld.com will be a stand-alone site, and after
---------------
February 15, 2000 the ITworld.com Universal Navigation bar will appear on
all pages of Infoworld.com, Computerworld.com, CIO.com, NWFusion.com
(Network World's site), Javaworld.com, Sunworld.com and Linuxworld.com.
Advertising placed on ITworld.com can appear across ITworld.com on
ITworld.com's Navigation bar; anywhere within the Javaworld.com,
Sunworld.com and, Linuxowrld.com and SolutionsIntegrator.com as well as in
email newsletters produced and distributed by ITworld.com. This does not
include banner inventory or email newsletters produced by Computerworld,
Network World, Infoworld and CIO.
c) ITcareers.com: is the exclusive jobs and career development service of
-------------
ITworld.com and the ole online career service for IDG's new ITcareers
Network. A link to Itcareers.com will appear on ITworld.com's Universal
Navigation bar and from multiple points within the ITworld.com network of
sites.
501 second street
san francisco, ca 94107
415.243.4188
fax 415.267.1732
an IDG company
<PAGE>
d) The ITcareers Print Network: (the Network) is the careers section of
---------------------------
IDG's Enterprise IT Print Publications: Computerworld, Network World, CIO
Magazine and InfoWorld. CIO (IDG's "Enterprise IT Print Publications") is
also part of the Network, although it does not maintain a dedicated print
career section. The ITcareers Print Network formally launched on
January 1, 2000, and customers are able to run ads across the network in
any combination of national, regional or single book buys. Except in the
case of CIO Magazine, Network ads will appear in the dedicated Career
sections of the Enterprise books. Ads placed outside of the Careers
section qualify for ROP rates and must be placed outside of the Careers
section qualify for ROP rates and must be placed in accordance with IDG's
policies for ROP advertising, (which are not covered under this
agreement).
e) Jobs.cio.com: (www.jobs.cio.com) is the online recruiting resource from
------------ ----------------
CIO magazine that reaches 52,000 director-level and above professionals
who have registered as active job seekers via email twice a month and
attracts 150,000 visitors monthly.
f) Qualified Candidate: Qualified candidate is defined as any visitor to
-------------------
ITcareers.com or ITworld.com who clicks through to Leaders!Online.
g) "Leaders Account" will mean any entity with which Leaders has an
-----------------
agreement to refer candidates in order to fill specified positions within
that entity.
h) "Referred Leaders Account" will mean a Leaders Account which is obtained
--------------------------
by Leaders as a direct result of a marketing lead provided by ITworld.
2. Term, Termination.
The term of this Agreement (the "term") shall commence upon the effective date
(March 1, 2000) and shall continue in full force and effect for two (2) years
and terminating on February 28, 2002. Either party may, in addition to other
relief, terminate this Agreement if the other party breaches any material
provision hereof and fails within thirty (30 days after receipt of notice of
default to correct such default or to commence corrective action reasonably
acceptable to the aggrieved party and proceed with due diligence to completion -
Either party shall be in default hereof if it becomes insolvent, makes an
assignment for the benefit of its creditors, a receiver is appointed or a
petition in Bankruptcy is filed with respect to the party and is not dismissed
within thirty (30) days. Termination shall have no effect on the parties'
rights or obligations under Section 10 ("confidential Information"), Section 11
("Non-solicitation"), Section 12 ("Injunctive Relief"), Section 14
("Warranties") and section 15 ("Limitation of Remedies & Liabilities").
3. Advertising Fees
a) Leaders!Online will pay ITworld an Advertising Fee in the amount of $***
in ITworld.com, Jobs.cio.com and the ITcareers Network. Specifically,
during each 12 month period beginning on March 1, 2000, Leaders!Online
will divide the advertising Fee in the following manner:
. ITcareers Print Network - $***
. Jobs.cio.com - $***
. ITworld.com - $***
b) In addition, ITworld.com will receive a fee for each Qualified Candidate
that finds a new position through Leaders!Online provided the candidate
registered an email address with Leaders!Online within the preceding 18
months. The fees are detailed in Appendix B. qualified candidates will be
tracked by these mechanisms:
1. Cookies placed on candidate browsers while on ITworld and CIO.com
__________
*** Omitted pursuant to a confidential treatment request filed separately.
Page 2
<PAGE>
2. Clicking through to Leaders!Online from ITworld, CIO.com and
Leaders!Online visitors who select IDG IT titles/websites as the source
of referral during registration
3. Leaders!Online visitors who select IDG IT titles/websites as the source
of referral during registration
4. Traffic to custom URLs
5. Traffic to webcasts
6. Other traffic as designated by ITworld.com, CIO.com and Leaders!Online
jointly
c) ITworld.com will receive a fee for each Referred Leaders Account in
accordance with Appendix B.
d) Payments of Advertising Fees and Commissions
--------------------------------------------
(i) Upon execution of Agreement Leaders!Online will pay ITworld the sum
of $*** as the first payment for the Advertising Fee due under
paragraph 3 (a) above. The remaining balance (Advertising Fee -
minus $***) of the Advertising Fee for the first year of this
Agreement will be invoiced monthly, based on advertising placed
during the prior month. Leaders!Online agree to settle all invoices
within 30 days of receipt.
(ii) ITworld.com will pay Leaders!Online a ***% commission ("the
Commission") for all qualifying leads ("Qualifying Leads") given in
writing to ITworld by Leaders!Online that result in sales and
collection of either ITcareers.com membership packages or webcasts.
The Commission will be due and payable upon receipt of payment of
the Net Revenue billing that resulted from the Qualifying Lead. The
Commission will be calculated by multiplying the Net Revenue billed
by ***%. The Net Revenue billed is Gross Revenue less agency
commission and cash discounts. Ass Commissions will be paid on the
15th day of the month following the month the New Revenue billed as
collected.
(iii) ITworld.com rates are gross except webcasting and Jobs.cio.com.
which are quoted net of agency commission. The ***% agency
commission on space and color charges is only available to
accredited agencies that submit an insertion order and digital
materials. Agency commissions will not be paid on invoices that are
outstanding 90 days or more.
4. Marketing
a) Online
(i) Leaders!Online will receive premier placement on the ITcareers pages
of ITworld.com
(ii) In addition, Leaders!Online may participate in a series of up to ***
custom, ***webcasts using ITworld.com's e-broadcast technology
platform in the first 12 months of our agreement. ($*** each/total
program cost for 12 months $***). Each webcast will be supported by
a minimum of *** outbound email messages; *** banner impressions in
general rotation on ITworld.com; and *** impressions in
ITworld.com's email newsletters ***. ITworld.com may also, at its
discretion, add additional ITworld and CNN.com inventory ***. (To
access a demo of this program surf to the "Recruiters Office on
www.itcareers.com.)
-----------------
The remaining budget will be allocated towards email newsletter
sponsorship, banner advertising and ITcareers.com Marquee
Membership.
b) ITworld offers to Leaders!Online the following discounted promotional
rates for the purposes of promoting this service.
__________
*** Omitted pursuant to a confidential treatment request filed separately.
Page 3
<PAGE>
<TABLE>
<CAPTION>
Item Retail Discount Partner Rate
-----------------------------------------------------------------------
<S> <C> <C> <C>
468 x 60 Banners $125 CPM ***% $*** CPM
125 x125 Banners $90 CPM ***% $*** CPM
120 x 90 Banners $65 CPM ***% $*** CPM
88 x 31 Banners $25 CPM ***% $*** CPM
Custom Webcasts $90,000 ***% $***
Marquee membership $30,000 ***% $***
Email newsletters $75 CPM ***% $*** CPM
Total ITworld.com online budget $***
</TABLE>
CIO.com
As our premier marketing partner Cio.com offers Leaders!Online a 2 year
sponsorship of Jobs.cio.com. The exact details are outlined in Appendix C.
Offline
Leaders!Online will also qualify for discounted advertising rates on the
ITcareers Network. The rates and schedule are detailed in Appendix A.
5. Exclusivity and Co-branding
a) The parties agree to work together to integrate links with Leaders!Online
into ITworld's "look and feel" where appropriate. The intent of the
parties is to provide a tightly integrated feature for ITworld and,
allowing users to gain access to, and be able to register with
Leaders!Online and either manage their career using Leaders!Online's
services or use Leaders!Online to hire new employees.
b) Any co-branded sites will enforce the ITworld privacy policy or have a
privacy policy that is consistent with ITworld.com's.
c) During the term of this agreement or until such time as it is terminated,
Leaders!Online will be the exclusive ITcareers.com online provider of
full-time employees to hiring corporations through any means. This does
not in any way prevent ITworld.com, the ITcareers Print Network or CIO
from accepting advertising in the form of webcasts, banners, email and
print advertising from similar services.
d) ITworld's ITcareers service agrees to 1) Not endorse any other company and
or website that provides full-time employees to hiring corporations
through any means without Leaders!Online's written consent and 2) Not
offer special positions to any other company and or website that provides
full-time employees to hiring corporations through any means without
Leaders!Online's written consent. 3) ITworld's ITcareers service will not
establish a co-branded site with any other company and or website that
provides full-time employees to hiring corporations through any means.
e) Leaders!Online agrees to notify ITworld.com in writing within 90 days, of
any possible conflicts that arise during the term of our agreement. This
exclusivity does not apply to ITworld do-marketing agreements and services
currently known as ITrfp and located at http://www.ITworld.newmediary.com,
---------------------------------
and SkillsVillage.com, located at http://www.skillsvillage.com, and
----------------------------
Careerbuilder.com, located at http://www.careerbuilder.com, and
----------------------------
ITworld.com's existing agreement with CareerCentral.com.
__________
*** Omitted pursuant to a confidential treatment request filed separately.
Page 4
<PAGE>
6. Editorial content
a) Leaders!Online and ITworld.com will exchange editorial content.
ITworld.com will allow Leaders!Online to display headlines and abstracts
of relevant ITworld.com articles on its site and email at least ***
extracts a month to Leaders!Online members. Additionally, Leaders!Online
IT candidates will be able to register to receive ITworld.com content via
email. All ITworld.com content will be correctly attributed to
ITworld.com and readers who click on articles will pass directly to the
content which will be hosted on ITworld.com. Although ITworld content
includes articles produced by ITworld.com and our fully-owned properties
Javaworld, Linuxworld, Sunworld and Solutions Integrator, content from
our independent sister companies Computerworld, Infoworld, Network Work
and CIO is not covered under this agreement.
b) Leaders!Online will follow the ASME guidelines at all times.
7. Co-marketing
a) Both parties will use their best efforts to market Leaders!Online and
ITworld.com together to the United States IT audience. At a minimum,
Leaders!Online agrees to monthly marketing meetings during the first 12
months of the relationship.
b) Leaders!Online shall have the right of first refusal to sponsor
ITworld.com events that involve recruiting full-time IT professionals or
other directly appropriate events. There may be additional fees
associated with these events. Terms and conditions of these events
including acceptance and refusal are at the sole discretion of ITworld.
c) Leaders!Online and ITworld will release a joint press release in support
of this co-marketing agreement. Contents of marketing releases will be
mutually agreed upon, if at all possible, recognizing that each party may
have disclosure obligations as a matter of law. Other co-marketing
programs will be created and mutually agreed upon.
8. Systems Infrastructure and Support
Leaders!Online will buy and/or build the Leaders!Online software and hardware
needed to operate the Leaders!Online database and Leaders!Online frames and
gateway and master gateway at Leaders!Online's sole cost and expense.
Specifically:
a) The Leaders!Online database and Leaders!Online Products will operate on
the ITworld website using Leaders!Online's proprietary software which
will run on Leaders!Online owned and managed hardware. Leaders!Online
will buy, develop, set-up and maintain the hardware and software needed
to run the Leaders!Online products frames, gateways database and
associated Leaders!Online products software.
b) Leaders!Online will operate and maintain this software and hardware to
the same standards and performance levels as for its own website.
c) Leaders!Online will on a daily basis make and store in a safe offsite
place archival copies of the Leaders!Online software and the
Leaders!Online database.
d) Any original graphics or graphic elements needed for ITworld to operate
Leaders!Online services will be supplied by or paid for by
Leaders!Online.
__________
*** Omitted pursuant to a confidential treatment request filed separately.
Page 5
<PAGE>
9. Proprietary Rights.
a) Leaders!Online (or its licensors) owns and shall own all right, title and
interest to the Leaders!Online products software, Leaders!Online
products, Leaders!Online software, the Leaders!Online database, all other
Leaders!Online intellectual property, and its structure to the extent
that this does not conflict with any third party copyright. ITworld
expressly acknowledges and agrees that none of the Leaders!Online
products, Leaders!Online software, the Leaders!Online database or the
content shall be deemed to constitute work made for hire under the
Federal copyright laws (27 U.S.C. Sec. 101) and, alternatively, ITworld
hereby irrevocably assigns to Leaders!Online all ownership rights and
irrevocably waives all other rights it might have in these properties.
b) In addition, ITworld acknowledges and agrees that, nothing herein shall
be deemed to grant any ownership, license or other proprietary rights
with respect to the Leaders!Online products, Leaders!Online frames,
Leaders!Online software, the Leaders!Online database and the
Leaders!Online database content and its structure.
c) Except as otherwise set forth herein, or in a separate agreement between
the parties, ITworld acknowledges and agrees that any modifications,
enhancements, updates, error corrections, translations or other changes
to the Leaders!Online database and the content and its structure or other
Leaders!Online software or accompanying documentation performed by
Leaders!Online shall belong exclusively to Leaders!Online.
d) Unless otherwise agreed by ITworld in writing, all original sales and
marketing research, records and information of any kind created hereunder
by ITworld shall be owned exclusively by ITworld.
e) During the Term of the Agreement, ITworld hereby grants Leaders!Online a
royalty free, non-exclusive right to use and reproduce ITworld's
trademarks, logos and other graphical elements (ITworld "Intellectual
Property") in connection with the creation, operation, marketing and
promotion of ITworld and other activities contemplated herein. ITworld
indemnifies and holds harmless Leaders!Online for any trademark
infringement claims that may arise from the use of ITworld's Intellectual
Property. Leaders!Online agrees to cease using the ITworld Intellectual
Property upon termination of this Agreement and agrees that
Leaders!Online and its officers, directors, employees, consultants,
affiliates or subsidiaries, and parent companies will not challenge
ITworld's right to the ITworld Intellectual Property.
f) During the Term of this Agreement, Leaders!Online hereby grants ITworld a
royalty free, non-exclusive right to use and reproduce Leaders!Online's
trademarks, logos and other graphical elements (Leaders!Online
Intellectual Property) ion connection with the creation, operation,
marketing and promotion of Leaders!Online and other activities
contemplated herein. Leaders!Online indemnifies and holds harmless
ITworld for any trademark infringement claims that may arise from the use
of Leaders!Online Intellectual Property. ITworld agrees to cease using
the Leaders!Online Intellectual Property upon termination of this
Agreement and agrees that ITworld and its officers, directors, employees,
consultants, affiliates or subsidiaries, and parent companies will not
challenge Leaders!Online right to the Leaders!Online Intellectual
Property.
g) Due to the nature of the Agreement, both parties agree to waive all fees
associated with licensing and maintenance.
Page 6
<PAGE>
10. Confidential Information.
a) Acknowledgement of Confidentiality. Each party hereby acknowledges that
----------------------------------
it may be exposed to confidential and proprietary information belonging
to or supplied by the other party or relating to its affairs including,
without limitation, proprietary software, and other technical
information (including any functional design, technical design,
drawings, analysis, research, processes, computer programs, methods,
ideas, "know how" and the like), business information (sales and
marketing research, materials, customer lists, plans, accounting and
financial information, personnel records and the like) and other
information designated as confidential expressly or by the circumstances
in which it is provided ("Confidential Information"). Confidential
Information does not include (i) information already known or
independently developed by tile recipient outside the scope of this
Agreement by personnel not having access to confidential Information;
(ii) information in the public domain through no wrongful act of the
recipient, or (iii) information received by the recipient from a third
party who was free to disclose it.
b) Covenant Not to Disclose. With respect to the other party's Confidential
------------------------
Information, and except as expressly authorized herein, the recipient
hereby agrees that during the Term hereof and at all times thereafter it
shall not use, commercialize or disclose such Confidential Information
to any person or entity, except to its own employees having a "need to
know" (and who are themselves bound by similar nondisclosure
restrictions), and to such other recipients as the other party may
approve in writing. Neither party nor any recipient may: (i) alter or
remove from any software or associated documentation owned or provided
by the other party any proprietary, copyright, trademark or trade secret
legend, or (ii) attempt to decompile, disassemble or reverse engineer
the other party's Confidential Information (and any information derived
in violation of such covenant shall automatically be deemed Confidential
Information owned exclusively by the owner of the original source
materials). Each party shall use at least the same degree of care in
safeguarding the other party's Confidential Information as it uses in
safeguarding its own Confidential Information, but in no event shall
less than due diligence and care be exercised.
11. Non-solicitation.
During the Term of this Agreement or its successor agreements and for a period
of one (1) year thereafter, both parties agree not to hire, solicit, nor attempt
to solicit, the services of any employee of the other party without the prior
written consent of the other party.
12. Injunctive Relief.
The parties acknowledge that violation by one party of the provisions of Section
9 ("Proprietary Rights"), Section 10 ("Confidential Information") or Section 11
("Non-solicitation") would cause irreparable harm to the other party not
adequately compensable by monetary damages. In addition to other relief, it is
agreed that temporary and permanent injunctive relief should be available
without necessity of posting bond to prevent any actual or threatened violation
of such provisions.
13. Books and Records.
Each party shall maintain in a professional and workmanlike manner such books
and records as are reasonably needed to comply with its responsibilities
hereunder, including, without limitation, accurate data and reports of all
sales, expenditures and activities, prices, payments, terms and conditions under
all sales, data supporting the calculation and payment of all applicable revenue
shares, taxes or other amounts due or payable hereunder. The other party (or
its designated agent) shall be entitled at its own expense to audit and inspect
such books and records at least annually and upon termination of this Agreement
during normal business hours after giving reasonable advance notice in
accordance with Section 16 ("Notices").
Page 7
<PAGE>
14. Warranties.
Each party represents and warrants to the bet of its knowledge and belief that
its frames, software, products software and the database or any other
intellectual property licensed to the other party hereto, will not infringe or
misappropriate any United States copyright, trademark, patent, or the trade
secrets of any third persons, and each party agrees at its own expense to
defend, indemnify and hold harmless the other party from any liability arising
out of a claim for infringement of any such rights.
15. Limitation of Remedies & Liabilities.
Except for sections 9, 10, 11 and 14 NEITHER PARTY SHALL BE LIABLE TO THE OTHER
- -------------------------------------------------------------------------------
FOR ANY CLAIM ARISING OUT OF THIS AGREEMENT IN AN AMOUNT EXCEEDING THE TOTAL
- ----------------------------------------------------------------------------
AMOUNT OF FEES ACTUALLY RECEIVED BY THE PARTY HEREUNDER. IN NO EVENT SHALL
- ---------------------------------------------------------------------
EITHER PARTY BE LIABLE, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE) OR
OTHERWISE, FOR ANY INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING LOST
SAVINGS, LOST PROFIT OR BUSINESS INTERRUPTION EVEN IF NOTIFIED IN ADVANCE OF
SUCH POSSIBILITY) ARISING OUT OF OR PERTAINING TO THE SUBJECT MATTER OF THIS
AGREEMENT. BOTH PARTIES HEREBY EXPRESSLY ACKNOWLEDGES THAT THE FOREGOING
LIMITATION HAS BEEN NEGOTIATED BY THE PARTIES AND REFLECTS A FAIR ALLOCATION OF
RISK.
16. Notices.
Notices sent to either party shall be effective when delivered in person or
transmitted by telecopier ("fax") machine, one (1) day after being sent by
overnight courier, or two (2) days after being sent by first class mail postage
prepaid. A facsimile of this Agreement and notices generated in good form by a
fax machine (as well as a photocopy thereof) shall be treated as "original"
documents admissible into evidence unless a document's authenticity is genuinely
placed in question. Notices to Leaders!Online should be sent to the address
above and be marked for the attention of The President of Leaders! Online.
Notices to ITworld should be sent to the address above and be marked for the
attention of Bill Reinstein and to:
Kevin Krull Bill Reinstein
Vice President of Legal Affairs CEO
International Data Group ITworld.com, Inc.
5 Speen Street PO BOX 9107, 3rd Floor
Framingham, MA 01701 Southborough, MA 01772
17. Disputes, Choice of Law.
Except for certain emergency judicial relief authorized under Section 12
("Injunctive Relief") which may be brought at any time, the parties agree that
all disputes between them shall be submitted for informal resolution to their
respective chief operating officers. Any remaining dispute shall be submitted
to a panel of three (3) arbitrators, with each party choosing one (1) panel
member and the third member chosen by the first two (2) panel members. The
proceedings shall be conducted in accordance with the Commercial Arbitration
Rules of the American Arbitration Association. The award of the arbitrators
shall include a written explanation of their decision, shall be limited to
remedies otherwise available in court and shall be binding upon the parties and
enforceable in any court of competent jurisdiction THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE UNITED
STATES AND MASSACHUSETTS, AND ANY ACTION SHALL BE INITIATED AND MAINTAINED IN A
FORUM OF COMPETENT JURISDICTION IN SUCH DESIGNATED STATE.
Page 8
<PAGE>
18. Independent Contractor Status.
Each party and its people are independent contractors in relation to the other
party with respect to all matters arising under this Agreement. Nothing herein
shall be deemed to establish a partnership, joint venture, association or
employment relationship between the parties. Each party shall remain
responsible, and shall indemnify and hold harmless the other party, for the
withholding and payment of all Federal, state and local personal income, wage,
earnings, occupation, social security, worker's compensation, unemployment,
sickness and disability insurance taxes, payroll levies or employee benefit
requirements (under ERISA, state law or otherwise) now existing or hereafter
enacted and attributable to themselves and their respective people.
19. Insurance and Indemnity.
Each party shall maintain adequate insurance protection covering its respective
activities hereunder, including coverage for statutory worker's compensation,
comprehensive general liability for bodily injury and tangible property damage,
as well as adequate coverage for vehicles. Each party shall indemnify and hold
the other harmless from liability for bodily injury, death and tangible property
damage resulting from the acts or omissions of its officers, agents, employees
or representatives acting within the scope of their work.
20. Miscellaneous.
This document constitutes the entire agreement between the parties with respect
to the subject matter hereof and supersedes all other communications, whether
written or oral. This Agreement may only be modified or amended in wilting and
signed by the parties. Except as specifically permitted herein, neither this
Agreement nor any rights or obligations hereunder may be transferred or assigned
by either party without the prior
21. Change in Company Ownership.
The Agreement will survive change in ownership of either company. However, each
party agrees that purchase, merger or other change of ownership resulting in
substantial (51%) influence by a company deemed to be a competitor of the other
party will allow the other party to cancel the Agreement.
IN WITNESS WHEREOF, for adequate consideration and intenting to be legally
bound, the parties hereto have caused this Agreement to be executed by their
duly authorized representatives.
Leaders!Online, INC. ITworld.com, Inc.
By: /s/ Michael T. Christy By: /s/ William Reinstein
Name: MICHAEL T. CHRISTY Name: Bill Reinstein
Title: CEO Title: President / CEO
Date: MAR. 27, 2000 Date: 3/22/00
Page 9
<PAGE>
Appendix A:
Leaders!Online
&
ITcareers Print Network
(ComputerWorld, InfoWorld, Network World, and CIO)
A Partnership for Successful IT Recruiting
Year 2000
<TABLE>
<CAPTION>
Publication Frequency Size ITcareers Total
Leaders!Online
Open Card Rate
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Part A 3 Book 22 Full page, $813,472.00 $***
National 4-color
--------------------------------------------------------------------
Part B CIO 12 Full page, $283,080.00 $***
National 4-color
--------------------------------------------------------------------
</TABLE>
. All rates are gross. ***% commission on space and color changes is only
available to accredited agencies that submit an insertion order and digital
materials. Agency commissions will not be paid on invoices that are
outstanding 90 days or more. If Leaders!Online employs an accredited
advertising agency (acceptable to ITcareers) then the installment payment
provisions will be waived.
. Payments for the 3 Book buy is based on insertions every other week from
start date. Payments for CIO are based on one insertion per month. A change
in the insertion schedules would result in a change of the installment
payments.
. 3 book buy = InfoWorld, Network World & ComputerWorld with a national
circulation of 777,096 subscribers and weekly readership of 2.4 million
(unduplicated).
. If Leaders!Online does not fulfill their 2000 frequency package by February
28, 2001, they will be billed at the ITcareers Open Rate Card amount.
. Fulfillment of the ITcareers print partnership is also contingent upon
fulfillment of the ITcareers.com on-line partnership.
. Leaders!Online will be eligible to change their media plan with a 4 week
notice to ITcareers. The revenue commitment will stay the same.
Year 2001
<TABLE>
<CAPTION>
Publication Frequency Size Total Leaders!Online
2001 Rate
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
Part A 3 Book 22 Full page, $***
National 4-color
-------------------------------------------------------------------
Part B CIO 12 Full page, $***
National 4-color
-------------------------------------------------------------------
</TABLE>
. The 2001 Leaders Online/ITcareers print partnership will be renewed and the
2000 partnership rates will be protected upon completion.
. The 2001 contract must be executed by February 28, 2002.
. Payments for the 3 Book buy is based on insertions every other week from
start date. Payments for CIO are based on one insertion per month. A change
in the insertion schedules would result in a change of the installment
payments.
. Leaders Online will be eligible to change their media plan with a 4-week
notice to ITcareers. The revenue commitment will stay the same.
. If Leaders Online does not fulfill their 2001 frequency package by February
28, 2002, they will be billed at the ITcareers Open Rate Card amount.
___________
*** Omitted pursuant to a confidential treatment request filed separately.
Page 10
<PAGE>
Appendix B ITcareers Hiring Fee
Appendix B
ITworld Hiring Fees
Leaders shall calculate the aggregate amount of Hiring Fees received (and no
longer subject to forfeiture) from each Referred Leaders Account for each
twelve-month period beginning on the date of the agreement between Leaders and
the Referred Leaders Account.
Leaders shall pay *** percent (***%) of such aggregate Hiring Fees up to $***,
*** percent (***%) of such aggregate Hiring Fees to the extent they exceed $***
but are $*** or less, and *** percent (***%) of such aggregate Hiring Fees in
excess of $***. Amounts due shall be paid within thirty (30) days after the end
of each twelve-month period. As an example, if the Hiring Fees received by
Leaders are $***, the amount owed will be $*** ($*** for the first $*** of
Hiring Fees, $*** for the next $*** of Hiring Fees and $*** for the amount of
Hiring Fees in excess of $***).
"Hiring Fees" shall mean amounts (a) actually received by Leaders from a
Referred Leaders Account for the successful placement of candidates and (b)
which are no longer subject to forfeiture (for example, if a candidate resigns
or is terminated within a specified period following the hire date).
Fees for Placements
If a Qualified Candidate is placed by Leaders with a Leader Account, ITworld
shall receive from Leaders a fee calculated as follows:
. If the First Year Total Compensation of a Qualified Candidate is less
than $***, the fee to ITworld shall be $***.
. If the First Year Total Compensation of a Qualified Candidate is at
least $*** but not more than $***, the fee to ITworld shall be $***.
. If the First Year Total Compensation of a Qualified Candidate is greater
than $***, the fee to ITworld shall be $***.
"First Year Total Compensation" shall mean, with respect to each Qualified
Candidate placed by Leaders with a Leaders Account, that Candidate's first year
base salary plus guaranteed bonus, if any, but excluding benefits, stock
options, commissions, profit sharing, saving plans and any and all other
elements of compensation.
___________
*** Omitted pursuant to a confidential treatment request filed separately.
Page 11
<PAGE>
Appendix C -- CIO.com Sponsorship
Size 220 x 800 button on right hand side of the following areas of 222.CIO.com:
. CIO Wanted
. Web Jobs
. IT Professional
. IS Staffing
. Button will mimic look and feel of CIO.com, but have much the same permanent
appearance as Wall Street Journals affiliation with Futurestep, ensuring
Leaders receives full benefit of CIO's endorsement.
. Cost: $*** CPM (market value $*** CPM)
. Theses pages currently receive 200,000 impressions monthly.
. In addition, CIO will provide Leaders with the opportunity to advertise ***
openings on CIO.wanted.com ***. (market value $***)
. Any other advertising with CIO.com will be discounted at ***% off ratecard
. Leaders to receive same measure of exclusivity as provided by ITworld.com
(see Section 5 of original Agreement)
. All jobs listed with CIO are emailed to interested visitors once a month.
Leaders will receive a *** word sponsorship of the CIO Wanted Email List once
a month ***. Note CIO only mails opportunities to qualified and interested
visitors who have expressed an interest in receiving opportunities via email.
. 12 month package price: $***
-----------------------------
. Note: rates are net and do not include agency commission.
___________
*** Omitted pursuant to a confidential treatment request filed separately.
Page 12
<PAGE>
EXHIBIT 10.7
[Certain confidential information has been omitted from this Exhibit 10.7
------------
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "***" at each place in this Exhibit 10.7 where the omitted information
------------
appeared in the original.]
[LEADERSONLINE LOGO]
December 27, 1999
Mr. Jerry Dark
Chief People Officer
E*Trade
4500 Bohannon Drive
Menlo Park, California 94025
Dear Jerry,
Thank you and your E*trade team for inviting Jim, Alice and me to present a
LeadersOnline solution for your e*Cruiting needs for ***.
Our presentation and discussions on December 16 focused on:
. Our end-to-end e*Cruiting solution based by the global expertise of
Heidrick & Struggles.
. Developing a customized, proactive, researching, sourcing and recruitment
campaign. Our system will be used for candidate tracking, workflow and
background verification.
. The necessity of quickly delivering a constant flow of quality DFM (Digital
Financial Media) marketing and IT candidates.
This afternoon, 12/27/1999, your call was timely because the senior staff had
just decided in principle, to accept E*Trades terms. I hope to fine tune a few
details in our meeting on Tuesday morning, and ensure we get final agreement so
our team can begin work immediately on Wednesday, 12/28.
The points I would like to reiterate from our conversation this afternoon
include: 1) We understand the goal is to provide E*Trade quality candidates so
you get ten (10) hires in the first 60 days to ensure a fast start 2) It's
imperative we get agreement and signatures by 12/28/99, so we can begin our
background and project foundation work immediately. Although we will begin
building our dedicated team, research, etc. upon signing of this document, the
recruiting clock will officially begin January 14, 2000. This means you will
begin seeing candidates in the latter part of January.
Assignment
- ----------
*** initially calls for the sourcing and recruiting of:
<TABLE>
<CAPTION>
<S> <C> <C>
Lead Web Producer estimate = ***
Senior Software Engineer estimate = ***
Senior Product Manager estimate = ***
Web content Specialist estimate = ***
Web designer estimate = ***
- -----------------------------------------------------------------
Total ***
</TABLE>
___________
*** Omitted pursuant to a confidential treatment request filed separately.
<PAGE>
LeadersOnline
December 20, 1999
Page 2
Professional Retainer
- ---------------------
Our fee is ***% of the first year's projected total salary/bonus compensation of
each candidate employed, as described in a letter of employment or by the
approved position specification. Projected total salary/bonus compensation
includes base salary, target and sign-on bonuses and other incentive
compensation. In working with E*Trade, we have agreed to customize a solution
that will deliver high quality services at a fee that illustrates our commitment
to a long-term partnership with E*Trade.
Term of Payment: Performance Based
- -----------------------------------
Our LeadersOnline customized performance base service will initially be focused
on talent with a potential compensation of $*** and a $*** signing bonus. This
performance based service requires a Commencement Fee that will allow for
customer Opportunity Page creation and assignment of a dedicated Client Service
Executives (CSE) team. Our Commencement Fee will be due upon execution of this
contract. Our earned performance fees will be invoiced on a monthly basis. A
performance fee is considered earned upon issuance of an offer letter.
It is acknowledged that E*Trade and LeadersOnline enter into this agreement for
a period of six (6) months. If this project is cancelled within the thirty (30)
days, we will charge our Commencement Fee and for any offer letters issued.
The Performance Fee schedule is as follows:
Commencement fee: $***
***
At the above figures, the potential value of this agreement over the six (6)
months is $***. Both parties acknowledge that there may be fluctuations in
candidate compensation, the number of placements and types of positions which
may result in a change to the total value.
___________
*** Omitted pursuant to a confidential treatment request filed separately.
<PAGE>
LeadersOnline
December 20, 1999
Page 3
Expenses
- --------
Should the client ask LeadersOnline to become directly involved in the candidate
evaluation, i.e., interviewing, etc., the following may apply: LeadersOnline is
reimbursed for direct expenses. These expenses include the direct costs of
travel, meals, hotel, etc., associated with the interviewing and selection
process and with visits to the client location. Other expenses may include
customized marketing campaigns.
Methodology and Processes
- -------------------------
Alice White, Senior Recruiter, and a dedicated team, will have overall execution
responsibility for this assignment. Alice may be reached at (213) 237-6296 or a
voice mail message can be left at (800) 925-2312. Alice and I will make the
introduction of our team at your earliest convenience.
Adjustments
- -----------
In the course of executing this search, our fulfillment team may learn that
market conditions indicate the need to make adjustments in some area. If this
need arises, E*Trade agrees to work with LeadersOnline in determining acceptable
solutions. Any adjustments affecting contract terms, including fees, must be
mutually agreed upon in writing.
***
Diligence
- ---------
Because we focus on identifying high quality, passive job seekers, it is
imperative that identified candidates be contacted promptly. Therefore, in
order to maintain high candidate interest levels, it will be necessary for
E*Trade to agree to make initial contact with all identified candidates within
two business days of the initial presentation.
Press Release
- -------------
E*Trade agrees to allow LeadersOnline to release a mutually acceptable press
release announcing the formation of this partnership.
Acknowledgment
- --------------
Please indicate your acceptance of the terms and conditions set forth by signing
and returning the enclosed copy of this letter as soon as possible. Work will
initiate immediately upon receipt of this signed letter. This proposal expires
December 30, 1999.
We look forward to working with you.
Regards,
___________
*** Omitted pursuant to a confidential treatment request filed separately.
<PAGE>
LeadersOnline
December 20, 1999
Page 4
Linwood L. Little
Vice President, Sales and Marketing
Heidrick & Struggles/LeadersOnline
ACCEPTED:
/s/ Jerry Dark 12/29/99
- ----------------------- --------
Mr. Jerry Dark, Chief People Officer Date
E*Trade
Cc: A. Geshuri, E*Trade
M. Strong, E*Trade
J. Ballard, E*Trade
J. Quandt, LeadersOnline
A. White, LeadersOnline
<PAGE>
LeadersOnline
December 20, 1999
Page 5
ATTACHMENT A
Suggested Performance-Based Model
---------------------------------
Commencement Fee: $***
The Commencement fee will be broken down as follows:
. Web site set-up, opportunity page design, hosting, and support for *** =
$***
. Payment of the *** IT Recruiters @ $*** per *** for *** of support - total
initial payment = $***
. Payment of $*** one time fee for position assessments, incumbent and
recruiter interviews, development of filters, breakdown of required skills
vs desired skills, ID of research, etc.
***
Total earnings for up to *** hires will be = $***
- -------------------------------------------------
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Total potential earnings on the *** hire including commencement fee = $***
/s/ Jerry Dark 12/29/99
- ------------------------------------ --------
Mr. Jerry Dark, Chief People Officer Date
E*Trade
/s/ L. Little 12/29/99
- ------------------------------------ --------
Linwood L. Little Date
Vice President, Sales and Marketing
Heidrick & Struggles/LeadersOnline
- -------------
*** Omitted pursuant to a confidential treatment request filed separately.
<PAGE>
Addendum to E*Trade and LeadersOnline
Contract Dated December 27, 1999
March 3, 2000
Mr. Jerry Dark
Chief People Officer
E*Trade
4500 Bohannon Drive
Menlo Park, California 94025
Dear Jerry,
This memorandum sets forth our clarification of our December 27, 1999 engagement
letter and details the changes that we have mutually agreed upon.
There were two contract sessions, a consultative segment and a performance
segment. The consultative services included a needs assessment, position
evaluation, qualification/skills assessment, web site setup which details
business summary (opportunities, hiring manager, company benefits, introductions
to the CEO/CIO, and position location), opportunity page design including job
specifications, required and desirable skills, professional requirements, etc.
The consultative fee is $***. We agreed to provide these consultative services
prior to December 31st, 1999. These services were delivered to you on December
29th, and were documented in the opportunity pages and company overview. The
second contract section is the performance segment, for which specific fees are
billed upon offers being extended for placement.
We initially agreed to fulfill *** different types of positions for a total of
*** placements. In this, we agreed to timelines and a graduated fee scale
ranging from ***% of first year's total compensation in addition to a
consultative retainer of $***. Since then, E*Trade has requested to add ***
positions while keeping within the original *** placements. We need your input
on the position specifications to activate the opportunity pages for the
following:
. *** of the *** original positions
. *** of the *** new positions requests.
Currently, *** of the *** requested positions have active opportunity pages.
The December contract included a performance timeline and a graduated scale of
performance fees that ranged from *** percent to *** percent. We intend to
provide E*Trade with the flexibility to modify the position specifications as
needed.
We mutually agree to the same fee scale, with the start date based on the
activation of Opportunity pages by position type. Start dates are mutually
agreed upon by E*Trade and LeadersOnline.
Please indicate your acceptance of the terms and conditions set forth above by
signing and returning this letter as soon as possible. We thank you for your
continued partnership.
Best regards, ACCEPTED AND DATED:
Linwood L. Little /s/ Jerry Dark
Vice President, Client Development --------------
LeadersOnline Jerry Dark, Chief People Officer
E*Trade
- -------------
*** Omitted pursuant to a confidential treatment request filed separately.
<PAGE>
EXHIBIT 10.8
[Certain confidential information has been omitted from this Exhibit 10.8
------------
pursuant to a confidential treatment request filed with the Securities and
Exchange Commission. The omitted information is indicated by the symbol "***" at
each place in this Exhibit 10.8 where the omitted information appeared in the
------------
original.]
CO-BRANDING AGREEMENT
---------------------
This Co-Branding Agreement (this "Agreement") dated March 15, 2000 (the
"Effective Date") is entered into between VerticalNet, Inc., a Pennsylvania
corporation having a principal place of business at 700 Dresher Road, Suite 100,
Horsham, Pennsylvania, 19044 ("VerticalNet"), and LeadersOnline, Inc. a Delaware
corporation having a principal place of business at 18401 Von Karman Avenue,
Suite 500, Irvine, California, 92612 "(LeadersOnline") (each a "Party" and
together the "Parties").
BACKGROUND
WHEREAS, VerticalNet owns and operates a series of Online Communities (as
defined below) that are accessible via the World Wide Web, each of which is
designed to be an online gathering place for businesses of a certain type or
within a certain industry; and
WHEREAS, LeadersOnline desires to advertise its job placement services (the
"LeadersOnline Services") on certain of VerticalNet's Online Communities through
banner ads, newsletters and employer spotlights, to access VerticalNet's
proprietary resume bank and to display and maintain a Link (as defined below)
from the LeadersOnline Site (as defined below) to a VerticalNet Site (as defined
below) to enable users of the LeadersOnline Site to access and utilize the
VerticalNet Online Communities; and
WHEREAS, VerticalNet desires to permit LeadersOnline to advertise the
LeadersOnline Services on certain of VerticalNet's Online Communities through
banner ads, newsletters and employer spotlights, to allow LeadersOnline access
to VerticalNet's proprietary resume bank and to create a Link from the
LeadersOnline Site to a VerticalNet Site to enable users of the LeadersOnline
Site to access and utilize the VerticalNet Online Communities.
NOW, THEREFORE, in consideration of the mutual covenants herein, and
intending to be legally bound hereby, VerticalNet and LeadersOnline agree as
follows:
I. DEFINITIONS
1.1. Affiliate shall mean, when used with reference to a Party, any
individual or entity directly or indirectly controlling, controlled by or under
common control with such Party. For purposes of this definition, "control"
means the direct or indirect ownership of at least 50% of the outstanding voting
power of a Party, or the right to control the policy decisions of such Party.
1.2. Banner shall mean a graphical image advertising a Party's Site that is
posted on the other Party's Site in an area designated by the Party controlling
the Site on which the image is posted, and containing a Link to the Site of the
Party which purchased the Banner.
1.3. Career Center shall mean that area of the VerticalNet Online
Communities designated by VerticalNet in which VerticalNet offers various
employment related services to Users of the VerticalNet Sites, including resume
posting, career information and Employer Spotlights.
1
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1.4. Confidential Information shall mean, subject to the provisions of
Section 9.2, all proprietary and confidential information of a Party, including,
without limitation, trade secrets, technical information, business information,
sales information, customer and potential customer lists and identities, product
sales plans, sublicense agreements, inventions, developments, discoveries,
software, know-how, methods, techniques, formulae, data, processes and other
proprietary ideas, whether or not protectable under patent, trademark, copyright
or other areas of law, that the other Party has access to or receives. For
purposes of this Agreement, this Agreement shall be considered Confidential
Information.
1.5. Employer Spotlight shall mean a feature on the VeticialNet Sites
containing company listings that Link to full-page company descriptions of
employers actively recruiting candidates to fill open positions within their
companies that is framed by VerticalNet Proprietary Features.
1.6. Home Page shall mean the first page presented when a User selects a
Site or presence on the World Wide Web.
1.7. HR Site shall mean the VerticalNet Site located on the World Wide Web
at HRHub.com, or any successor Sites thereto.
1.8. Intellectual Property shall mean any and all trade secrets, patents,
copyrights, trademarks, service marks, URLs, trade dress, brand features, know-
how and similar rights of any type under the laws of any applicable governmental
authority, including, without limitation, all applications and registrations
relating to any of the foregoing.
1.9. Intellectual Property Rights shall mean all rights in and to
Intellectual Property, including, without limitation, all patent rights,
copyrights, trademarks, service marks, know-how and trade secrets.
1.10. LeadersOnline Mark shall mean any trademark, service mark, trade
name, domain name, design or logo of LeadersOnline or its Affiliates.
1.11. LeadersOnline Site shall mean the Site located at
www.LeadersOnline.com (and any successor Site thereto).
1.12. LeadersOnline-VerticalNet Revenue shall mean the total gross fees
received by LeadersOnline from VerticalNet-LeadersOnline Clients for the use of
LeadersOnline Services, exclusive of taxes and expense reimbursements.
1.13. Link shall mean a link, including but not limited to a hyperlink,
button or banner, that connects two Sites in a manner so that when a User clicks
on the link, the User is transferred directly from one Site to a second Site.
1.14. Listing Page shall mean a page on the VerticalNet Site that contains
a listing of all currently available VerticalNet Online Communities and Links to
each of such Online Communities.
2
<PAGE>
1.15. Newsletter Ads shall mean an advertising message comprised of text
describing LeadersOnline and its services that is placed in an email
transmission containing employment related information supplied by VerticalNet
that is transmitted to Users of the HR Site who have provided their email
addresses to VerticalNet along with permission to transmit such messages to the
email address.
1.16. Online Community shall mean a VerticalNet Site that acts as a
comprehensive source of information, dialogue and commerce for a particular
industry or service market.
1.17. Proprietary Feature shall mean any name, trademark, service mark,
trade name, domain name, navigational element, copyright, or logo which is
proprietary to LeadersOnline and/or VerticalNet, as appropriate.
1.18. Site shall mean a site located on the World Wide Web portion of the
Internet.
1.19. Resume Bank shall mean a collection of resumes stored in electronic
form that have been posted in Career Centers by Users of the VerticalNet Sites.
1.20. Term shall mean the Effective Date through June 15, 2001 and any
Renewal Term (as defined in paragraph 7.4 herein.)
1.21. URL shall mean a universal resource locator used for the purpose of
identifying a Site located on the Internet.
1.22. User shall mean a single person who accesses and views a Site whether
directly from a web browser or through a Link.
1.23. User Data shall mean all data generated by an Internet server that
relates to file requests, user identification, transaction logs, session times
and other information regarding the Users directed to the LeadersOnline Site
through the Banner Links or Employer Spotlight, generated or collected by or
through the LeadersOnline Site, but excluding any information that relates or
refers to a particular project of such User.
1.24. VerticalNet Branded Link shall mean a Link (including but not limited
to a hyperlink, button or banner) containing a VerticalNet Mark that will take
Users of the LeadersOnline Site to the Listing Page.
1.25. VerticalNet Mark shall mean any trademark, service mark, trade name,
domain name, design or logo of VerticalNet.
1.26. VerticalNet-LeadersOnline Clients shall mean the clients of
LeadersOnline that utilize the LeadersOnline Services and pay commissions or
other fees to LeadersOnline for the use of its Services, and make initial
contact with the LeadersOnline Site through a Link from a VerticalNet Site or
through direct access to the LeadersOnline Site if such access was prompted by
information presented in a Banner, Newsletter Ad or Employer Spotlight
containing information about the LeadersOnline Services.
3
<PAGE>
1.27. VerticalNet Site shall mean a Site owned and operated by VerticalNet
or a portion of such Site designated by VerticalNet.
2. VERTICALNET BRANDED LINK
2.1. Hosting and Maintenance. LeadersOnline shall be responsible for the
hosting, display and maintenance of the VerticalNet Branded Link on the
LeadersOnline Site. The VerticalNet Branded Link shall be located on the Home
Page of the LeadersOnline Site and on the first page of each section of the
Site, including the sections entitled "Becoming a Member", "Why You Should
Join", "How it Works", "About LeadersOnline" and "Recruiter Information". The
VerticalNet Branded Link shall be available on each of the foregoing pages as
soon as reasonably practicable after the Effective Date, and throughout the
Term. It shall be located in an area of the foregoing pages and in a size
mutually agreeable to the Parties.
2.2. Mark License. VerticalNet hereby grants LeadersOnline a non-exclusive,
nontransferable, royalty-free right and license for the Term of this Agreement
to utilize a VerticalNet Mark in a form approved by VerticalNet for the design
and display of the VerticalNet Branded Link.
2.3. Link License. VerticalNet hereby grants to LeadersOnline a non-
exclusive, non-transferable, royalty-free right and license to link to the
VerticalNet Site. The Link will access the Listing Page of the VerticalNet Site
located at www.verticalnet.com.
3. BANNER/NEWSLETTER PURCHASE COMMITMENT.
3.1. Purchase Commitment. During the Term of this Agreement, LeadersOnline
agrees to purchase from VerticalNet Banners and Newsletter Ads for a total price
of at least *** ($***). All prices for such Banners and Newsletter Ads shall be
offered to LeadersOnline at a ***% discount off of VerticalNet's then current
prices for similar Banners or Newsletters Ads. All purchases shall be subject
to VerticalNet's standard terms and conditions governing advertising on
VerticalNet Sites.
3.2. Purchase Requirements. LeadersOnline agrees to purchase at least ***
($***) of such Banners and Newsletter Ads in each calendar quarter after the
Effective Date (prorated for any partial quarters) until a total of $*** have
been purchased, provided, the total dollar amount purchased by LeadersOnline in
any calendar quarter shall not consist of greater than ***% (in dollars) of
either Banners or Newsletter Ads until a total of $*** has been purchased.
3.3. Advertisement Placement. VerticalNet shall use commercially reasonable
efforts to place a Banner purchased in accordance with Section 3.1 on the HR
Site Home Page for a period of 6 months on a rotating, rather than fixed, basis.
In addition, as part of the purchase commitment set forth in Section 3.1,
VerticalNet shall provide LeadersOnline up to $*** worth of Banner placements on
the Home Page of other VerticalNet Sites of LeadersOnline's choice. All Banner
and Newsletter Ad placements shall be in locations mutually agreeable to the
Parties, subject to space limitations and other contractual commitments of
VerticalNet.
___________
*** Omitted pursuant to a confidential treatment request filed separately filed
separately.
4
<PAGE>
4. EMPLOYER SPOTLIGHTS
4.1. Development. VerticalNet shall develop, host, display and maintain
Employer Spotlights in each of its Online Communities containing information
supplied by LeadersOnline. Each Employer Spotlight shall contain a
LeadersOnline Mark, text information describing LeadersOnline and a hypertext
Link to the LeadersOnline Site.
4.2. LeadersOnline Information. Upon execution of this Agreement,
LeadersOnline shall supply VerticalNet with a graphical image in electronic form
of its LeadersOnline Mark, a text file containing information describing
LeadersOnline and the URL to which the hypertext Link shall be directed.
VerticalNet shall use commercially reasonable efforts to launch the Employer
Spotlights as soon as practicable after the Effective Date of this Agreement.
VerticalNet may, in its sole discretion, reject or edit any text or other
materials supplied by LeadersOnline for the creation of the LeadersOnline
Employer Spotlights; provided that any edits will be subject to the prior
approval of LeadersOnline. The design and appearance of the Employer Spotlights
shall be determined by VerticalNet in its sole discretion.
4.3. Information License. LeadersOnline hereby grants VerticalNet a non-
exclusive, nontransferable, royalty-free right and license for the Term of this
Agreement to use, copy or modify the LeadersOnline Mark, text describing
LeadersOnline and the URL address of the LeadersOnline Site for the design and
display of the LeadersOnline Employer Spotlights, provided, VerticalNet shall
not alter the appearance of the LeadersOnline Mark without the consent of
LeadersOnline.
5. RESUME BANK
5.1. Access License. Subject to the limitations set forth in Section 5.2
hereof, VerticalNet hereby grants to LeadersOnline a non-exclusive,
nontransferable right and license to access the Resume Bank. The foregoing
license shall be for the limited purpose of contacting individuals posting
resumes on VerticalNet's Career Centers ("Candidates") to inquire about interest
in employment opportunities available through the LeadersOnline Services.
5.2. Restrictions. Any information concerning a Candidate contained in a
resume included in the Resume Bank shall not be provided to any third party by
LeadersOnline, including corporate Affiliates of LeadersOnline, without the
written consent of the individual whose information would be disclosed.
LeadersOnline shall limit contact with a Candidate to either one phone contact
or one e-mail contact per calendar quarter, unless expressly agreed to by the
Candidate. LeadersOnline shall immediately cease all contact upon the request
of the Candidate. All information concerning a Candidate, whether in paper or
electronic form, and whether originally contained in the Resume Bank or derived
from information contained in the Resume Bank, shall be immediately returned to
VerticalNet upon the termination of this Agreement. All information contained
in the Resume Bank shall be handled by LeadersOnline in accordance with
VerticalNet's standard Privacy Policy as it may be posted on the VerticalNet
Sites from time to time. The foregoing restrictions shall cease to apply from
and after the time that a Candidate registers through an online form or takes
other affirmative action to become a member of the LeadersOnline "Candidate
Community."
5
<PAGE>
6. THE COMMERCIAL TERMS
6.1. Fees. As set forth in Section 6.2, LeadersOnline shall pay to
VerticalNet the following:
6.1.1. Slotting fees for the Employer Spotlights of $***;
6.1.2. Banner and Newsletter Ad sponsorship fees of $*** as provided in
Section 3.1; and
6.1.3. A license fee of $*** for access to the Resume Bank.
6.2. Payment of Fees. LeadersOnline shall pay the fees set forth in
Section 6.1 to VerticalNet as follows:
6.2.1. $*** upon the Effective Date of this Agreement;
6.2.2. $*** within 90 days after the Effective Date;
6.2.3. $*** within 180 days after the Effective Date;
6.2.4. $*** within 270 days after the Effective Date; and
6.2.5. $*** within 360 days after the Effective Date.
6.3. Revenue Sharing.
6.3.1. LeadersOnline shall pay VerticalNet *** percent (***%) of
LeadersOnline- VerticalNet Revenue, payable to VerticalNet on or before the
fifteenth day of the calendar month immediately following the month in which
such revenue was received by LeadersOnline. Such payments shall be accompanied
by a statement containing reasonable detail of the number of VerticalNet-Leaders
Online Clients generated during the month, the type and number of transactions
from which the LeadersOnline VerticalNet Revenue was derived, the total
LeadersOnline VerticalNet Revenue for such period and the total fees payable to
VerticalNet pursuant to this Section 6.3.1.
6.3.2. LeadersOnline shall pay VerticalNet a one time fee for each
Candidate who is offered and accepts employment as a result of a contact made by
LeadersOnline (each a "Placement"). The fee shall be payable upon receipt by
LeadersOnline of its payment for the Placement, and shall be nonrefundable. Fees
shall be based upon the annual salary (or hourly rate multiplied by 2080) of the
Candidate accepting employment in the Placement in accordance with the following
schedule:
6.3.2.1. $*** for Placements involving annual salaries of less than
$***;
6.3.2.2. $*** for Placements involving annual salaries of $*** up
to and including $***; and
___________
*** Omitted pursuant to a confidential treatment request filed separately.
6
<PAGE>
6.3.2.3. $*** for Placements involving annual salaries of $*** or
greater.
6.3.3. VerticalNet shall institute procedures to track information of
Users of the VerticalNet Sites that utilize a Link to access the LeadersOnline
Site. LeadersOnline agrees to add a request in its standard registration form
to identify those Users who have accessed the LeadersOnline Site based upon
information contained in any promotional materials with respect to LeadersOnline
on a VerticalNet Site, including any Banner, Newsletter Ad or Employer Spotlight
identifying LeadersOnline, and to maintain such information in a form that can
be examined by VerticalNet pursuant to Section 6.6.
6.3.4. If government regulations prevent LeadersOnline from sharing any
revenues associated with LeadersOnline Services, VerticalNet and LeadersOnline
shall negotiate in good faith a compensation structure that seeks to provide
VerticalNet with compensation equal to that set forth in Sections 6.3.1. and
6.3.2.
6.4. Taxes. All payments required under this Agreement are exclusive of
federal, state, local and foreign taxes, duties, tariffs, levies and similar
assessments. When applicable, such taxes shall appear as separate items on a
Party's invoice or statement to the other Party. Payment of such taxes or
charges shall be the responsibility of the Party whose obligation it is under
this Agreement to make the payment in respect of which such taxes are assessed,
excluding any taxes based upon the other Party's net income. In lieu thereof, a
Party shall provide the other Party with a tax or levy exemption certificate
acceptable to the taxing or levying authority.
6.5. Guaranteed Revenues. VerticalNet agrees to guarantee that, during the
initial Term of this Agreement, LeadersOnline shall earn LeadersOnline-
VerticalNet Revenue of at least *** Dollars ($***) (the "Guaranteed Amount"),
subject to the provisions of this Section 6.5. *** Within thirty (30) days after
the end of the initial Term, LeadersOnline shall submit a statement showing a
reasonably detailed accounting of the LeadersOnline-VerticalNet Revenue received
during the initial Term (or earned during the initial Term and paid within 30
days thereafter) along with payment of all such amounts up to the Guaranteed
Amount. In the event this Agreement is terminated in accordance with Section
7.1, LeadersOnline shall make a payment of all amounts of LeadersOnline-
VerticalNet Revenues received through the date of termination, up to the amount
of the Guaranteed Amount ***.
6.6. Audits. During the 12 month period following the payment of any
amount due under this Article 6, VerticalNet or its representative shall have
the right to audit LeadersOnline's financial and other pertinent records
relating to such payment in order to verify the amount of the payments owed
and/or paid. If the amount owed by LeadersOnline to VerticalNet was underpaid,
the additional amount owed shall be paid to VerticalNet within 15 days of notice
of such underpayment to LeadersOnline. If the amount owed by LeadersOnline to
VerticalNet was underpaid in excess of 10% of the amount owed, the fees of such
audit shall also be paid to VerticalNet within 15 days of notice of such to
LeadersOnline. If the amount owed by LeadersOnline to
___________
*** Omitted pursuant to a confidential treatment request filed separately.
7
<PAGE>
VerticalNet was overpaid, the excess amount paid shall be returned by
VerticalNet within 15 days of notice of such overpayment. VerticalNet shall give
reasonable advance notice to LeadersOnline of such audit and each audit shall be
conducted in a manner that does not cause unreasonable disruption to the conduct
of business by LeadersOnline. The results of any such audit shall be deemed to
be Confidential Information and may not be disclosed by either Party or its
certified public accountants except as may be necessary to enforce such Party's
rights. Any dispute as to the amount of an underpayment or overpayment shall be
resolved in accordance with Article 8, below.
6.7. Interest. All payments not paid by the date such payments are due shall
bear interest from the due date to the date payments are actually paid at the
lower of (a) 1% per month or (b) the maximum rate permitted by law.
7. TERMINATION AND RENEWAL.
7.1. Either Party may terminate this Agreement immediately upon written
notice to the other Party in the event of any material breach of a term of this
Agreement by such other Party that remains uncured 30 days after notice of such
breach was received by such other Party or, if the breach is not reasonably
capable of cure within 30 days, such longer period, not to exceed 60 days, so
long as the cure is commenced within the 30-day period and thereafter is
diligently prosecuted to completion as soon as possible and in any event within
60 days.
7.2. Upon termination or expiration of this Agreement, (i) LeadersOnline
shall no longer have the right to use any VerticalNet Mark, (ii) VerticalNet
shall no longer have the right to use any LeadersOnline Mark; (iii) all Links
between the VerticalNet Sites and the LeadersOnline Site shall be removed; (iv)
VerticalNet shall remove all LeadersOnline Employer Spotlights from its Sites;
(v) VerticalNet shall cease displaying or transmitting all Banners and
Newsletter Ads of LeadersOnline; and (vi) LeadersOnline shall return all
information concerning Candidates in accordance with Section 5.2 of this
Agreement.
7.3. Following expiration or termination of this Agreement, the terms and
provisions of Section 6 above shall continue to govern LeadersOnline's payment
obligations. Following termination, LeadersOnline shall provide VerticalNet
with a final accounting with respect to this Agreement and tender payment of
amounts due under Section 6 at the next scheduled payment date. LeadersOnline
shall be obligated to pay VerticalNet the fees set forth in Section 6.3.2 for
any Placement that occurs within six (6) months following termination of this
Agreement.
7.4. LeadersOnline shall have the option, subject to VerticalNet's approval
exercised in its sole and absolute discretion, to extend the Term of this
Agreement for an additional 12 months (a "Renewal Term") on such terms and
conditions as may be mutually agreed upon by the Parties. To exercise this
option, LeadersOnline must notify VerticalNet in writing of its election no
later than 90 days prior to the expiration of the initial Term. Unless
VerticalNet notifies LeadersOnline of its intention to extend the initial Term
of this Agreement for an additional year within 30 days of receiving such notice
the Agreement shall terminate in accordance with the terms hereof.
8
<PAGE>
8. DISPUTE RESOLUTION
8.1. Negotiation and Escalation. If any controversy or claim arises
relating to this Agreement, the Parties will attempt in good faith to negotiate
a solution to their differences, including progressively escalating any
controversy or claim through senior levels of management. If negotiation does
not result in a resolution within 30 days of the date one Party first notifies
the other of the controversy or claim, either Party may resort to arbitration
under Section 8.2.
8.2. Arbitration. Any controversy or claim between the Parties concerning
any breach or alleged breach of this Agreement or performance or nonperformance
of any obligation under this Agreement or otherwise with respect to this
Agreement which cannot be resolved by negotiation will be resolved by binding
arbitration under this Section 8.2 and the then-current Commercial Rules and
supervision of the American Arbitration Association (the "AAA"). If any part of
this Section 8.2 is held to be unenforceable, it will be severed and will not
affect either the duty to arbitrate or any other part of this Section 8.2. The
arbitration will be held in Philadelphia, Pennsylvania, before a sole
disinterested arbitrator who is knowledgeable in business information and the
Internet and experienced in handling commercial disputes. The arbitrator shall
be appointed jointly by the Parties hereto within 30 days following the date on
which the arbitration is instituted. If the Parties are unable to agree upon
the arbitrator within such 30-day period, the AAA shall be instructed to select
such arbitrator within 15 days thereafter. The arbitrator's award will be final
and binding and may be entered in any court having jurisdiction. The arbitrator
will not have the power to award punitive or exemplary damages, or any damages
excluded by, or in excess of, any damage limitations expressed in this
Agreement. Issues of arbitrability will be determined in accordance solely with
the federal substantive and procedural laws relating to arbitration; in all
other respects, the arbitrator will be obligated to apply and follow the
substantive law of the Commonwealth of Pennsylvania.
8.3. Equitable Relief. Notwithstanding anything to the contrary in this
Agreement, in the event of an alleged violation of Article 9 of this Agreement
by either Party, the Party alleging such a violation may seek temporary and
permanent injunctive or other appropriate equitable relief from any court of
competent jurisdiction pending appointment of an arbitrator. The Party
requesting such relief shall simultaneously file a demand for arbitration of the
dispute, and shall request that the AAA proceed under its rules for an expedited
hearing.
8.4. Costs. Unless the arbitrator, if any, determines otherwise, each Party
will bear its own attorneys' fees and other costs associated with the
negotiation and arbitration provided for by this Article 8, except that costs
and expenses of the arbitrator shall be shared equally. If court proceedings to
stay litigation or compel arbitration are necessary, the Party who
unsuccessfully initiates or opposes such proceedings will pay all associated
costs, expenses and attorneys' fees that are reasonably incurred by the other
Party. To the extent that any claim in arbitration relates to the collection of
amounts owed under Article 6, the Party entitled to collect such amounts shall
be entitled to recover all reasonable costs of collection, including expenses
and attorneys' fees that are reasonably incurred.
8.5. Two Year Limitation. Except for claims under Sections 11.4 and 11.5
hereof, neither Party may bring a claim or action regardless of form, arising
out of or related to
9
<PAGE>
this Agreement, including any claim of fraud or misrepresentation, more than two
years after the cause of action accrues or becomes known, whichever is later.
8.6. Confidentiality. In order to facilitate the resolution of
controversies or claims between the Parties with respect to each Party hereto,
such controversies or claims, including details regarding negotiations,
arbitration and settlement terms, shall be treated as Confidential Information
of the other Party hereto in accordance with Article 9.
8.7. Remedial Measures. In the event of (a) any material remediable breach
of this Agreement by the other Party which remains uncured 30 days after notice
of such breach (other than a breach of a payment obligation) was received by the
other Party or (b) any material breach which cannot be cured, the non-breaching
Party may take reasonable remediable measures upon prior written notice and at
the cost and expense of the breaching Party without prejudice and in addition to
any other rights arising from such breach. In addition, the non-breaching Party
shall take reasonable steps to mitigate damages arising out of such breach.
9. CONFIDENTIALITY
9.1. Confidentiality Obligations. Except as permitted elsewhere under this
Agreement, each Party agrees to take Reasonable Steps (as defined below) (a) to
receive and maintain the Confidential Information of the other Party in
confidence and (b) not to disclose such Confidential Information to any third
parties, provided, the receiving Party may disclose such Confidential
Information to its employees, representatives and agents who have a need to know
such information for purposes of carrying out the terms of this Agreement.
Neither Party hereto shall use all or any part of the Confidential Information
of the other Party for any purpose other than to perform its obligations under
this Agreement. The Parties will take Reasonable Steps (as defined below) to
ensure that their employees, representatives and agents comply with this
provision. As used herein, "Reasonable Steps" means at least the same degree of
care that the receiving Party uses to protect its own Confidential Information,
and, in any event, no less than reasonable care.
9.2. Exclusions. "Confidential Information" does not include information
that (a) is or becomes publicly available through no fault of the receiving
Party; (b) was already known to the receiving Party at the time it was disclosed
to the receiving Party, as evidenced by records of the receiving Party; (c) is
independently developed by employees of the receiving Party who had no knowledge
of or access to such information, as evidenced by records of the receiving
Party; (d) is received from a third party who is under no obligation of
confidentiality to the disclosing Party; or (e) must be disclosed pursuant to
applicable laws, rules or regulations; provided, however, that the receiving
Party first gives the disclosing Party notice and a reasonable opportunity to
secure confidential protection of such Confidential Information.
9.3. Termination. Subject to Section 12.12, upon termination of this
Agreement, all Confidential Information shall be returned to the disclosing
Party or, at the request of the disclosing Party, destroyed unless otherwise
specified or permitted elsewhere under this Agreement. The confidentiality
obligations contained in this Article 9 shall survive termination of this
Agreement for a period of three (3) years.
10
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9.4. Injunction. Each Party acknowledges and agrees that the provisions of
this Article 9 are reasonable and necessary to protect the other Party's
interests in its Confidential Information, that any breach of the provisions of
this Article 9 may result in irreparable harm to such other Party, and that the
remedy at law for such breach may be inadequate. Accordingly, in the event of
any breach or threatened breach of the provisions of this Article 9 by a Party
hereto, the other Party, in addition to any other relief available to it at law,
in equity or otherwise, shall be entitled to seek temporary and permanent
injunctive relief restraining the breaching Party from engaging in and/or
continuing any conduct that would constitute a breach of this Article 9, without
posting a bond or other security.
9.5. Publicity. Except as may be required by law in which case a party will
provide as much advance notice as reasonably possible, neither Party will
originate any press release concerning the relationship between the Parties or
the transactions described in this Agreement without the prior written consent
of the other Party, which consent shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, as soon as reasonably practicable following the
Effective Date, VerticalNet and LeadersOnline shall jointly issue a press
release with respect to entering into this Agreement.
9.6. User Data. LeadersOnline shall provide VerticalNet with User Data on
each User that enters the LeadersOnline Site through a Link from a VerticalNet
Site and submits information through the LeadersOnline Site by sending an email
with such information to an email address designated by VerticalNet at the time
the request occurs. User Data shall be maintained by each Party as Confidential
Information of the other Party during the Term and 5 years thereafter, provided
such User Data may be disclosed only as part of an aggregation or analysis of
all User Data but not as independent data. Upon termination of the Agreement,
VerticalNet and LeadersOnline shall jointly own all User Data. Neither Party
shall use the User Data other than in accordance with the VerticalNet privacy
policy and all applicable laws during the Term and thereafter.
10. REPRESENTATIONS AND WARRANTIES
10.1. Representations and Warranties. Each Party hereby represents,
covenants and warrants that:
10.1.1. It has the corporate power to enter into this Agreement
and to grant the rights and licenses granted herein and to otherwise
perform this Agreement;
10.1.2. It is not a Party to any agreement or understanding and
knows of no law or regulation that would prohibit it from entering into and
performing this Agreement or that would conflict with this Agreement;
10.1.3. When executed and delivered by it, this Agreement will
constitute a legal, valid and binding obligation of it, enforceable against
it in accordance with this Agreement's terms, except as enforcement may be
limited by laws or regulations relating to bankruptcy, insolvency and
creditors rights or by principles of equity; and
10.1.4. To the best of its knowledge, its own Site and any
information or materials supplied to the other Party hereunder does not and
will not (i) contain any
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known viruses, Trojan Horse, worm or harmful code the purpose of which is
to disable or interrupt the operating of a computer system or destroy,
erase or otherwise harm any data, software or hardware, (ii) contain any
false, misleading, libelous or defamatory statements, (iii) constitute an
invasion of the rights of privacy or publicity of any third party, (iv)
violate any applicable laws, rules and regulations or (v) infringe, violate
or misappropriate any Intellectual Property Rights of any third party.
11. DISCLAIMER OF WARRANTY, LIMITATION OF LIABILITY AND INDEMNIFICATION.
11.1. Disclaimer of Warranties by VerticalNet. EXCEPT AS EXPRESSELY SET
FORTH IN THIS AGREEMENT, VERTICALNET HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS,
IMPLIED OR STATUTORY, WITH RESPECT TO THE VERTICALNET SITES AND ALL MATERIALS
CONTAINED THEREIN OR PROVIDED HEREUNDER, INCLUDING BUT NOT LIMITED TO ANY
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
VERTICALNET EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES AS TO THE USER INTERFACE
OR USER EXPERIENCE ASSOCIATED WITH THE VERTICALNET SITES AND RESERVES THE RIGHT,
IN ITS SOLE DISCRETION, TO MODIFY THE PLACEMENT OF ALL LINKS, URLS AND
PROPRIETARY FEATURES; PROVIDED, HOWEVER, THAT IN THE EVENT VERTICALNET REDESIGNS
THE USER INTERFACE, SUCH LINKS, URLS AND PROPRIETARY FEATURES SHALL RECEIVE
PLACEMENT SUBSTANTIALLY SIMILAR TO THE ORIGINAL DESIGN.
11.2 Disclaimer of Warranties by LeadersOnline. EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT, LEADERSONLINE HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS,
IMPLIED OR STATUTORY, WITH RESPECT TO THE LEADERSONLINE SITE AND ALL MATERIALS
CONTAINED THEREIN OR PROVIDED HEREUNDER, INCLUDING BUT NOT LIMITED TO ANY
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
LEADERSONLINE EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES AS TO THE USER
INTERFACE OR USER EXPERIENCE ASSOCIATED WITH THE LEADERSONLINE SITE AND RESERVES
THE RIGHT, IN ITS SOLE DISCRETION, TO MODIFY THE PLACEMENT OF ALL LINKS, URLS
AND PROPRIETARY FEATURES; PROVIDED, HOWEVER, THAT IN THE EVENT LEADERSONLINE
REDESIGNS THE USER INTERFACE, SUCH LINKS, URLS AND PROPRIETARY FEATURES SHALL
RECEIVE PLACEMENT SUBSTANTIALLY SIMILAR TO THE ORIGINAL DESIGN.
11.3. Limitation of Liability. EXCEPT IN CONNECTION WITH A BREACH BY
EITHER PARTY OF ARTICLE 9 OR SECTION 10.1.4 (v) AND THE INDEMNIFICATION
OBLIGATIONS OF LEADERSONLINE UNDER SECTION 11.4(i)(c) AND THE INDEMNIFICATION
OBLIGATIONS OF VERTICALNET UNDER SECTION 11.5(i)(c), NEITHER PARTY WILL BE
LIABLE FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES
ARISING OUT OF OR RELATED TO THIS AGREEMENT, HOWEVER CAUSED AND UNDER ANY THEORY
12
<PAGE>
OF LIABILITY (INCLUDING NEGLIGENCE), EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
11.4. Indemnification by LeadersOnline. Subject to Section 11.6,
LeadersOnline shall (i) defend at its sole expense VerticalNet and its officers,
directors, employees and agents from and against any action, suit, proceeding or
investigation brought by a third party and caused by, relating to, based upon,
arising out of or in connection with (a) any breach by LeadersOnline of the
representations, warranties or agreements made by it under this Agreement, (b)
negligence, recklessness or intentional misconduct on the part of LeadersOnline
or its officers, directors, employees, agents or consultants, or (c) any claim
that any portion of the LeadersOnline Site or any materials provided to
VerticalNet pursuant to this Agreement violates, infringes or misappropriates
any Intellectual Property Right of any third party and (ii) pay all authorized
costs, expenses and disbursements incurred in such defense, and any damages,
liabilities, obligations, penalties or judgments awarded in any such action, or
any settlement amount agreed to by LeadersOnline.
11.5. Indemnification by VerticalNet. Subject to Section 11.6, VerticalNet
shall (i) defend at its sole expense LeadersOnline and its officers, directors,
employees and agents from and against any action, suit, proceeding or
investigation brought by a third party, caused by, relating to, based upon,
arising out of or in connection with (a) any breach by VerticalNet of the
representations, warranties or agreements made by it under this Agreement, (b)
negligence, recklessness or intentional misconduct on the part of VerticalNet or
its officers, directors, employees, agents or consultants, or (c) any claim that
any portion of the VerticalNet Site or any materials provided by VerticalNet to
LeadersOnline pursuant to this Agreement violates, infringes or misappropriates
any Intellectual Property Right of any third party and (ii) pay all authorized
costs, expenses and disbursements incurred in such defense, and any damages,
liabilities, obligations, penalties or judgments awarded in any such action, or
any settlement amount agreed to by VerticalNet.
11.6. Procedure. If any action shall be brought against a Party in respect
to which indemnity may be sought from the other Party pursuant to the provisions
of this Article 11, the Party seeking indemnity (the "Indemnitee") shall follow
the procedures in this Section. If an Indemnitee receives any notice of a claim
or other allegation with respect to which the other Party (the "Indemnitor") has
an obligation of indemnity hereunder, then the Indemnitee will, as soon as
reasonably possible after receipt of such notice, give the Indemnitor written
notice of such claim or allegation setting forth in reasonable detail the facts
and circumstances surrounding the claim. The Indemnitee will not make any
payment or incur any costs or expenses with respect to such claim, except as
requested by the Indemnitor or as necessary to comply with this procedure. The
Indemnitee will not make any admission of liability or take any other action
that limits the ability of the Indemnitor to defend the case. The Indemnitor
shall immediately assume the full control of the defense or settlement of such
claim or allegation, including the selection and employment of counsel, and
shall pay all authorized costs and expenses of such defense. The Indemnitee
will fully cooperate, at the expense of the Indemnitor, in the defense or
settlement of the claim. The Indemnitee shall have the right, at its own
expense, to employ separate counsel and participate in the defense or settlement
of the claim; provided that the Indemnitor shall have no liability for costs or
expenses incurred by the Indemnitee, except to the extent authorized by the
Indemnitor pursuant to this procedure. The
13
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Indemnitor will not agree to any settlement that does not include a complete
release of the Indemnitee.
11.7. Essential Part of Bargain. The Parties acknowledge that the
disclaimers and limitations set forth in this Article 11 are an essential
element of this Agreement between the Parties and that the Parties would not
have entered into this Agreement without such disclaimers and limitations.
12. MISCELLANEOUS
12.1. Intellectual Property.
12.1.1. Except for the express rights granted to LeadersOnline under
this Agreement, LeadersOnline acknowledges and agrees that the Intellectual
Property of VerticalNet is and shall remain the sole property of VerticalNet and
nothing in this Agreement shall confer in LeadersOnline any right of ownership
or license rights in VerticalNet's Intellectual Property, including all
Intellectual Property arising from or created as a result of VerticalNet's
performance of its obligations under this Agreement. In addition, LeadersOnline
shall not now or in the future contest the validity of VerticalNet's ownership
of its Intellectual Property; provided, however, that LeadersOnline may contest
the validity of VerticalNet's Intellectual Property in any proceeding brought
against LeadersOnline alleging infringement or misappropriation of VerticalNet's
Intellectual Property.
12.1.2. Except for the express rights granted to VerticalNet under this
Agreement, VerticalNet acknowledges and agrees that the Intellectual Property of
LeadersOnline is and shall remain the sole property of LeadersOnline and nothing
in this Agreement shall confer in VerticalNet any right of ownership or license
rights in LeadersOnline's Intellectual Property, including all Intellectual
Property arising from or created as a result of LeadersOnline's performance of
its obligations under this Agreement. In addition, VerticalNet shall not now or
in the future contest the validity of LeadersOnline's ownership of its
Intellectual Property; provided, however, that VerticalNet may contest the
validity of LeadersOnline's Intellectual Property in any proceeding brought
against VerticalNet alleging infringement or misappropriation of LeadersOnline's
Intellectual Property.
12.2. Parallel Agreement. VerticalNet agrees that during the term of this
Agreement, it shall not enter into an agreement with Futurestep, Inc. to provide
promotional opportunities to Futurestep throughout all of the VerticalNet Online
Communities, nor enter into any agreement with Futurestep, Inc. for the joint
marketing of each other's Sites or services.
12.3. Governing Law. This Agreement shall be governed by and interpreted
under the laws of the Commonwealth of Pennsylvania without regard to its
conflicts of law provisions. Subject to the provisions of Section 8, both
Parties consent and submit to the exclusive personal jurisdiction of the United
States District Courts and the state courts of the Commonwealth of Pennsylvania
in and for Montgomery County, Pennsylvania
12.4. No Assignment. Except as otherwise set forth herein, neither Party
shall transfer, assign or cede any rights or delegate any obligations hereunder,
in whole or in part, whether voluntarily or by operation of law, without the
prior written consent of the other Party,
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<PAGE>
which consent may be withheld at the other Party's reasonable business
discretion; provided, however, that VerticalNet may transfer this Agreement
without the prior written consent of LeadersOnline to an Affiliate of
VerticalNet, or to the surviving Party in a merger or consolidation, or to a
purchaser of all or substantially all of its assets.
12.5. Good Faith. The Parties undertake to display to each other the
utmost good faith, consistent with their respective rights and obligations set
forth in this Agreement.
12.6. Independent Contractors. In connection with this Agreement, each
Party is an independent contractor. This Agreement does not, and shall not be
construed to, create an employer-employee, agency, joint venture or partnership
relationship between the Parties. Neither Party shall have any authority to act
for or to bind the other Party in any way, to alter any of the terms or
conditions of any of the other Party's standard forms of invoices, sales
agreements, warranties or otherwise, or to warrant or to execute agreements on
behalf of the other or to represent that it is in any way responsible for the
acts, debts, liabilities or omissions of the other Party.
12.7. Notices. All notices, reports, payments and other communications
required or permitted to be given under this Agreement (each, a "Notice") shall
be in writing and shall be given either by personal delivery against a signed
receipt, by express delivery using a nationally recognized overnight courier, or
by facsimile. All Notices shall be properly addressed as follows, or to such
other addresses as may be specified in a Notice given hereunder:
If to VerticalNet:
Attn: General Counsel or Chief Financial Officer
VerticalNet, Inc.
700 Dresher Road, Suite 100
Horsham, Pennsylvania 19044
Tel No.: (215) 315-3200
Fax No.: (215) 784-1960
Email: [email protected]
with a copy to:
Michael J. Hagan
Executive Vice President
VerticalNet, Inc.
700 Dresher Road, Suite 100
Horsham, Pennsylvania 19044
Phone No.: (215) 315-3115
Fax No.: (215) 784-1960
Email: [email protected]
If to LeadersOnline:
Michael T. Christy
LeadersOnline, Inc.
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<PAGE>
18401 Von Karman Ave.
Suite 500
Irvine, California 92612
Phone No.: (949) 752-1000
Fax No.: (949) 752-1085
with a copy to:
Ronald S. Beard, Esq.
Gibson, Dunn & Crutcher LLP
Jamboree Center, 4 Park Plaza
Irvine, CA 92614
Phone No.: (949) 451-4089
Fax No.: (949) 475-4730
A Notice shall be deemed to be effective upon personal delivery or, if sent via
overnight delivery, upon receipt thereof. A Notice sent via facsimile is deemed
effective on the same day (or if such day is not a business day, then on the
next succeeding business day) if such facsimile is sent before 3:00 p.m.
prevailing Eastern Time and on the next day (or if such day is not a business
day, then on the next succeeding business day) if such Notice is sent after 3:00
p.m. prevailing Eastern Time.
12.8. Amendment or Modification. No subsequent amendment, modification or
waiver of any of the provisions of this Agreement shall be effective unless in
writing and signed by the Parties.
12.9. Entire Agreement. This Agreement sets out the entire agreement
between the Parties with respect to the subject matter of this Agreement and
supersedes all prior agreements, proposals, arrangements and communications,
whether oral or written, with respect to the subject matter hereof.
12.10. Severability. If any term or provision of this Agreement is held by
a tribunal of competent jurisdiction to be illegal, invalid, or otherwise
unenforceable in any jurisdiction, then to the fullest extent permitted by law
(a) the same shall not affect the other terms or provisions of this Agreement,
(b) such term or provision shall be deemed modified to the extent necessary in
the tribunal's opinion to render such term or provision enforceable, and the
rights and obligations of the Parties shall be construed and enforced
accordingly, preserving to the fullest extent the intent and agreements of the
Parties set forth herein and (c) such finding of invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
such term or provision in any other jurisdiction.
12.11. No Waiver. Failure to enforce any term of this Agreement is not a
waiver of future enforcement of that or any other term. No term or provision of
this Agreement will be deemed waived and no breach excused unless such waiver or
excuse is in writing and signed by the Party against whom enforcement of such
waiver or excuse is sought.
12.12. Survival. Sections 5.2, , 6.6, 6.7, 7.2, 7.3, 12.1, 12.3, 12.5,
12.6, 12.7, 12.9, 12.10, 12.11, 12.12, 12.14, 12.16 and 12.17 and Articles 8, 9,
10, 11, any payment obligations of the
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Parties hereunder accruing prior to the date of termination; and any other
provision herein expressly surviving termination or necessary to interpret the
rights and obligations of the Parties in connection with the termination of the
Term of this Agreement will survive the termination or expiration of this
Agreement.
12.13. No Third Party Beneficiaries. Nothing in this Agreement is intended
to confer benefits, rights or remedies unto any person or entity other than the
Parties and their permitted successors and assigns.
12.14. Waiver of Jury Trial. Each Party hereby irrevocably waives all
rights a Party may have to a trial by jury in any legal action or proceeding
arising out of or in connection with this Agreement or the transactions
contemplated hereby.
12.15. Titles. The headings appearing at the beginning of the Sections
contained in this Agreement have been inserted for identification and reference
purposes only and shall not be used to determine the construction or
interpretation of this Agreement. The nomenclature of the defined terms in this
Agreement shall only be used for the construction of this Agreement, and are not
to be used for any other purpose, including, but not limited to, interpretation
for accounting purposes.
12.16. Force Majeure. Neither Party shall be held to be in breach of this
Agreement by reason of a force majeure event, including, but not limited to, act
of God, delay in transportation, fire, flood, earthquake, storm, war, act of a
public enemy, civil commotion or any law, rule, regulation, order or other
action by any public authority or any other matter reasonably beyond a Party's
control. To the extent failure to perform is caused by such a force majeure
event, such Party shall be excused from performance hereunder so long as such
event continues to prevent such performance, and provided the non-performing
Party takes all reasonable steps to resume full performance, provided further
that if such delay in performance exceeds 60 days, the other Party may terminate
this Agreement upon written notice to the non-performing Party.
12.17. Compliance with Laws. Each Party shall comply with all prevailing
laws, rules and regulations and obtain all necessary approvals, consents and
permits required by the applicable agencies of the government of the
jurisdictions that apply to its activities or obligations under this Agreement.
12.18. Execution in Counterparts, Facsimiles. This Agreement may be
executed in one or more counterparts, each of which when delivered to the other
Party shall be deemed an original and all of which together shall constitute one
and the same instrument. This Agreement shall become binding when any one or
more counterparts hereof, individually or taken together, bear the signatures of
both Parties hereto. For the purposes hereof, a facsimile copy of this
Agreement, including the signature pages hereto, shall be deemed an original.
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IN WITNESS WHEREOF, the Parties to the Agreement by their duly authorized
representatives have executed this Agreement as of the date first written above.
VERTICALNET, INC. LeadersOnline, INC.
By: /s/ James W. McKenzie, Jr. By: /s/ Michael T. Christy
--------------------------------- --------------------------------
Name: James W. McKenzie, Jr. Name: MICHAEL T. CHRISTY
------------------------------- ------------------------------
Title: Sr. Vice President Title: PRESIDENT
------------------------------- ------------------------------
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EXHIBIT 10.9
[Certain confidential information has been omitted from this Exhibit 10.9
------------
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "***" at each place in this Exhibit 10.9 where the omitted information
------------
appeared in the original.]
[LOGO]
Master Services Agreement
This Services Agreement ("Agreement") made and entered into this 23rd day of
March, 2000 and effective March 23, 2000 by and between GartnerGroup, Inc., a
Delaware corporation having a principal place of business at 56 Top Gallant
Road, Stamford, CT 06904 its subsidiaries, affiliates ("Gartner" or "Client")
and LeadersOnline of 18401 Von Karman Avenue, Suite 500, Irvine, CA 92612
("Leaders!" or "Vendor") describes the terms and conditions and the Statement of
work under which LeadersOnLine will perform services ("Services").
Statement of Work
- -----------------
GartnerGroup's initial requirements include the identification and recruiting of
candidates for an estimated 366 current openings in Key Groups as detailed
below:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Research estimate = ***; Compensation: $*** base plus ***% bonus
Channel Interactive estimate = ***; Compensation: $*** base plus ***% bonus
Consultants (North America) estimate = ***; Compensation: $*** base plus ***% bonus
IS/T estimate = ***; Compensation: $*** base plus ***% bonus
Sales estimate = ***; Compensation: $*** base plus ***% bonus
----
Total 366
===== ===
</TABLE>
Understanding the criticality of recruiting top talent in the shortest possible
time in order to support Gartner's aggressive business growth strategy, Leaders!
is prepared to commit significantly to this relationship:
. Leaders! will commit *** (***) dedicated full-time e!Cruiters to the Gartner
Group assignment. Our e!Cruiters will work from the Gartner offices in
Stamford and San Jose and will work Gartner full-time standard office hours.
Space and telephones will be provided at no cost to Leaders!. LeadersOnline
will provide its e!Cruiting team with computer and related equipment. Karen
Sanderson will be the Lead e!Cruiter for Gartner and your single point of
contact for our e!Cruiting effort. We will also dedicate at least two full-
time e!Search Associates to this project.
. Leaders! will develop a customized, web-based recruiting and recruiting
management system to support your needs. Our industry-leading web
"Opportunity Pages" will be constructed for each of the five groups of
positions. Karen and our e!Cruiters and e!Search staff will meet with your HR
and hiring managers immediately to develop position specifications, search
strategies, and hiring processes.
___________
*** Omitted pursuant to a confidential treatment request filed separately.
<PAGE>
Master Services Agreement
March 23, 2000
Page 2 of 7
. Leaders! will initiate targeted traditional and web-based marketing and
advertising to drive quality candidates to our Opportunity Pages. This
significant customized marketing effort will include print advertising and
Internet marketing through our various Partnership channels as well as other
venues necessary to attract quality candidates.
Professional Fees
- -----------------
We will base our fees upon ***% of the candidate's first annual compensation.
Total compensation is defined as base salary plus ***% of the target bonus
stated in each offer letter as our candidates are hired. Estimated contract
value based on 366 positions is $10,053,000.
Terms of Payment
- ----------------
GartnerGroup agrees to pay Leaders! a retainer fee of $***. $*** will be
invoiced upon the effective date of this contract and another $*** will be
invoiced 150 days from the effective date of this contract. The remaining $***
retainer will begin to be invoiced in 180 days from the effective date of this
contract and will be invoiced in equal monthly installments over the duration of
the contract. In addition, Leaders! will invoice a fee of ***% of the
candidate's first year's annual total compensation. Annual total compensation
is defined as base salary plus ***% of the target bonus stated in each offer
letter as our candidates are hired.
Both parties understand that the total value of the contract could be more or
less than the estimated $10,053,000, depending on number of hires, potential
additional assignments.
Duration of Agreement
- ---------------------
It is acknowledged that the GartnerGroup and leadersOnline enter into this
agreement for a period of 18 months commencing on the effective date of this
Agreement and continuing until September 30, 2001. Either party may cancel the
contract by giving thirty (30) days notice, in which case in the event of
contract cancellation by Garnter, Leaders! will charge only the prorata portion
of the Leaders! retainer fee ($***) plus expenses, up to the date notice of the
cancellation is received. Prorata formula will be $*** divided by 18 months.
Leaders! will be entitled to be paid fees agreed to; which are invoiced pursuant
hereto prior to the effective date of cancellation and be reimbursed for all
direct expenses incurred prior to such date.
Expenses
- --------
Leaders! will invoice Gardner for direct expenses. These expenses include the
direct costs of travel, meals, hotel, etc., associated with the interviewing and
selection process and with visits to the client location. Leaders e!Cruiters
will adhere to the Gartner travel and expense policy. In addition, any
extraordinary expenses incurred at the written request of GartnerGroup will be
invoiced as direct expenses.
Timing
- ------
Immediately upon the effective date of this contract, Leaders! will assign a
SWAT Team to ensure rapid deployment of our resources. Leaders! will begin the
actual recruiting effort no later than 30 days after your approval of
Opportunity Pages. Opportunity Pages will be created in the first 30 days from
the effective date of this contract. Leaders! will provide a minimum of ***
qualified and interested candidates within 150 days of the initiation of the
search effort.
___________
*** Omitted pursuant to a confidential treatment request filed separately.
<PAGE>
Master Services Agreement
March 23, 2000
Page 3 of 7
Adjustments
- -----------
In the course of executing this assignment, our e!Cruiting team may determine
that market conditions indicate the need to make adjustments in targeted
compensation. If this need arises, GartnerGroup agrees to work with Leaders! in
determining acceptable solutions.
Source of Candidates
- --------------------
If a candidate is referred to or acquired by Gartner from a source other than
Leaders!, Gartner will refer the candidate to the Leaders! e!Cruiter for
screening and assessment. Any candidate provided to Gartner by Leaders!,
regardless of source, will be considered a Leaders! candidate under the terms of
the agreement.
Referral Fees
- -------------
For each employer that is referred to Leaders! by Gartner, Leaders! shall
calculate the aggregate amount of fees received (and no longer subject to
forfeiture) for each twelve (12) month period beginning on the date of the
Agreement. Leaders! shall pay Gartner *** percent (***%) of such aggregated
hiring fees up to $***, *** percent (***%) of such aggregated hiring fees to the
extent they exceed $*** but are $*** or less, and *** percent (***%) of such
aggregated hiring fees in excess of $***.
With respect to each candidate referred to Leaders! by Gartner ("Gartner
Candidate") that is placed by Leaders!, Leaders! shall pay Gartner as follows.
If the first year's total compensation to such Gartner Candidate is less than
$***, the fee of Gartner is $***. If the first year's total compensation to
such Gartner Candidate is more than $*** but less than $***, the fee to Gartner
shall be $***. If the first year's total compensation to such Gartner Candidate
is greater than $***, the fee to Gartner shall be $***. These fees shall be
paid to Gartner only when Leaders! has received the applicable hiring fee and
the hiring fee is no longer subject to forfeiture.
***
Diligence
- ---------
Because we focus on identifying high quality, passive job seekers, it is
imperative that identified candidates be contacted promptly. Therefore, in
order to maintain high candidate interest levels, GartnerGroup agrees to make
initial contact with all identified candidates within three (3) business days of
the initial presentation.
Training
- --------
Leaders e!Cruiters will begin knowledge transfer/training of GG recruiting staff
as soon as they are on site at GG. Bruce Lachenauer, VP fulfillment at Leaders!
will be responsible for managing this deliverable. GG recruiters will
immediately be trained on "Competency Base Assessment" and "Heidrick & Struggles
Search Methodology Best Practices"
___________
*** Omitted pursuant to a confidential treatment request filed separately.
<PAGE>
Master Services Agreement
March 23, 2000
Page 4 of 7
Non-Disclosure Agreement
- ------------------------
Each Leaders! employee involved in this project will be required to sign a Non-
Disclosure Agreement as part of this overall contractual engagement:
Leaders! acknowledges that it or its employees may, in the course of performing
its responsibilities under this Agreement, be exposed to or acquire information
which is proprietary to or confidential to the GartnerGroup or its affiliates or
their clients or to third parties to whom the GartnerGroup owes a duty of
confidentiality. Any and all non-public information of any form obtained by
Leaders! or its employees in the performance of this Agreement shall be deemed
to be confidential and proprietary information (singularly or collectively,
"Confidential Information"). Leaders! agrees to hold such Confidential
Information in strict confidence and not to copy, reproduce, sell, assign,
license, market, transfer or otherwise dispose of, give or disclose such
Confidential Information to third parties or to use such Confidential
Information for any purposes whatsoever other than the provision of Services to
the GartnerGroup contemplated by this Agreement and to advise each of its
employees who may be exposed to such Confidential Information of their
obligations to keep such information confidential.
Press Release
- -------------
The GartnerGroup agrees to allow Leaders! to release a mutually acceptable press
release announcing the formation of this relationship and to refer to
GartnerGroup in client lists and reference documents.
Non-Competition. LeadersOnLine shall retain the right to perform work for other
- ---------------
entities during the term of this Agreement. However, during the term of this
Agreement and for a period of *** following GartnerGroup's final acceptance of
the Deliverables, LeadersOnLine shall no provide services that are similar to
the Services for the following direct competitors of GartnerGroup including,
without limitation, ***.
LeadersOnLine's Personnel. (a) LeadersOnLine shall provide fully trained,
- -------------------------
competent and skilled personnel for the tasks to which they are assigned in the
performance of Services. LeadersOnLine shall bear sold responsibility for its
personnel, including, without limitation, the payment of compensation to its
personnel, payment and reporting of taxes, unemployment insurance, workers'
compensation coverage, and any other benefits such personnel are entitled to.
LeadersOnLine's personnel shall observe GartnerGroup's code of conduct (business
conduct guidelines) and conflicts of interest policy in connection with the
performance of the Services.
Continuity of Staff. LeadersOnLine shall use its reasonable efforts to ensure
- -------------------
the continuity of LeadersOnLine employees assigned to perform the Services. In
the event that any of the LeadersOnLine's employees is unable to perform the
Services for any reason LeadersOnLine will promptly provide a qualified
replacement as soon as reasonably possible. GartnerGroup shall not be charged
for any time spent by the replacement employee to learn about the Services until
the replacement employee is performing to the level of effectiveness and
productivity of the employee that was replaced.
___________
*** Omitted pursuant to a confidential treatment request filed separately.
<PAGE>
Master Services Agreement
March 23, 2000
Page 5 of 7
Unacceptability of Employee. If any LeadersOnLine employee assigned to Services
- ---------------------------
is unacceptable to GartnerGroup for performance reasons, GartnerGroup shall
notify LeadersOnLine in writing and LeadersOnLine shall immediately take
appropriate corrective action. GartnerGroup shall be reasonable in its
evaluation of LeadersOnLine employees, but is the sole judge as to performance
capability. should the appropriate corrective action require removal of an
employee from performance under this Agreement, LeadersOnLine will promptly
provide a qualified replacement. GartnerGroup shall not be charged for any time
spent by the replacement employee to learn about the Services until the
replacement employee is performing to the level of effectiveness and
productivity of the employee that was replaced.
Subcontractors. None of the Services shall be provided by any personnel other
- --------------
than LeadersOnLine's own employees, unless LeadersOnLine first obtained the
prior written consent of GartnerGroup, and any subcontractor approved by
GartnerGroup agrees a confidentiality and non-competition agreement that
contains terms substantially similar to the terms set forth herein for
LeadersOnLine.
Progress Reports and Meetings. (a) Meetings. At either party's reasonable
- ----------------------------- --------
request from time to time during the term of this Agreement, and in no event
less frequently than once per month, the Project Director and the Project
Manager and any other personnel which either party may designate shall meet to
review the progress of the Services and the relationship in general. At each
such meeting, LeadersOnLine shall provide GartnerGroup with a Written Status
Report (described in clause (b) below). Written minutes of each meeting will be
kept by LeadersOnLine and distributed to GartnerGroup prior to the next meeting.
(b) Written Status Reports. Each Written Status Report shall specify
----------------------
in reasonable detail accomplishments during the previous period, items to be
done in the next period, the status of the Schedule, any problem or circumstance
encountered by LeadersOnLine during the preceding month, setting forth the
reason, in LeadersOnLine's reasonable judgment, underlying such problem and the
specific steps taken or proposed to be taken to remedy such problem. Submission
by LeadersOnLine to GartnerGroup of the specific reports shall not affect
LeadersOnLine's obligations hereunder.
Limitations. NEITHER PARTY SHALL BE LIABLE FOR THE OTHER FOR INDIRECT, SPECIAL
- -----------
OR CONSEQUENTIAL DAMAGES, OR FOR LOST PROFITS ARISING OUT OF THIS AGREEMENT OR
THE PROVISION OF THE SERVICES BY LEADERSONLINE.
Indemnification. LeadersOnLine shall indemnify and hold GartnerGroup harmless
from and against all loss, liability, costs, charges, claims or damages to any
person or property, arising out of this Agreement or the provision of the
Services, to the extent caused by this fault or negligence of Contractor, or its
employees, officers, contractors, representatives or agents. Contractor shall
also indemnify and hold GartnerGroup harmless from and against all loss,
liability, costs, charges, claims or damages for death, personal injury, or
property damage caused by LeadersOnLine, its employees, officers, contractors,
representatives or agents in connection with this Agreement.
<PAGE>
Master Services Agreement
March 23, 2000
Page 6 of 7
Insurance. During the term of this Agreement LeadersOnLine shall maintain the
- ---------
following insurance coverage:
(i) Insurance for its employees including, but not limited to,
workmen's compensation, disability, unemployment insurance,
and any other insurance required by law, covering all its
operations in all locations of GartnerGroup at which
Services will be performed by LeadersOnLine under this
Agreement;
(ii) Comprehensive General Liability insurance, including Broad-
form Property Damage Insurance. Minimum coverage must be at least $1,000,000 for
each occurrence and $2,000,000 aggregates for damage to property and injury to
or death of persons.
(iii) Errors and Omissions Insurance which covers professional
errors and omissions of LeadersOnLine and all professionals who are employees or
contractors of LeadersOnLine and are engaged to furnish professional services in
connection with the Services.
LeadersOnLine shall provide GartnerGroup evidence of insurance indicating the
foregoing coverages and naming GartnerGroup as a LOSS payee as its interest may
appear.
Notices. Any notices to be given hereunder by either party to the other may be
- -------
effected by personal delivery in writing, by facsimile or by mail, registered or
certified, postage prepaid with return receipt requested. Notices shall be
addressed to the parties at the address appearing in this Agreement, but each
party may change such address by written notice in accordance with this
paragraph. Notices delivered personally will be deemed communicated as of the
date of actual receipt. Mailed and faxed notices (if confirmation of receipt of
such faxed notices have been received) will be deemed communicated as of 2 days
after mailing.
Entire Agreement; Amendments. This agreement supersedes any other agreements,
- ----------------------------
either oral or written, between the parties hereto with respect to the Services,
and contains all the covenants and agreements between the parties with respect
to the rendering of the services described therein. Any modification of this
Agreement will be effective only if it is in writing signed by the party to be
charged.
Severability. If any provision of this Agreement is held by a court of
- ------------
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions will nevertheless continue in full force without being impaired or
invalid in any way, and the invalid provisions will be reduced in scope, if
possible, so as to become valid.
Force Majeure. Neither party shall be in default or otherwise liable for any
- -------------
delays in or failure to its performance under this Agreement where such delay or
failure arise by reason of any act of nature, or of any government or
governmental body, strikes, or labor disputes, civil unrest or dispute, embargo
blockade, work stoppage, protest, delay or other cause beyond the control of
such party.
Assignment and Delegation. Except as expressly provided in this Agreement,
- -------------------------
LeadersOnLine shall not assign any rights or delegate any obligations under this
Agreement without the prior written consent of GartnerGroup. GartnerGroup may
assign any rights and delegate any obligations under this Agreement to any
subsidiary.
<PAGE>
Master Services Agreement
March 23, 2000
Page 7 of 7
Equitable Relief. Because LeadersOnLine shall have access to and become
- ----------------
acquainted GartnerGroup's Confidential Information and proprietary information,
LeadersOnLine acknowledges that LeadersOnLine's breach of the confidentiality or
non-compete provisions of this Agreement may result in irreparable harm to
GartnerGroup, and agrees that GartnerGroup shall have the right to enforce such
provisions by injunction, specific performance or other equitable relief,
without prejudice to any other rights and remedies GartnerGroup may have.
Warranties. Company shall perform the Services in a professional manner in
- ----------
accordance with industry standards. Company shall also perform the Services in
a manner, which substantially meets the Requirements Document.
Non-Solicitation. During the term of this Agreement and for a period of 1 year
- ----------------
thereafter, each party agrees that without the prior written consent of the
other, that it will not engage as an employee (either directly or indirectly)
any person who is employed or has been employed by the other and who was
involved with the performance of the Services, with in the 6 month period
immediately preceding such hiring. Such restriction shall not apply to
employees who respond to a published advertisement.
Survival. Any terms or conditions of this Agreement which by their express
- --------
terms extend beyond termination of this Agreement or which by their nature
should so extend shall survive and continue in full force and effect after any
termination of this Agreement. Further, Articles for Confidentiality,
Liability, Equitable Relief, Warranties and Non solicitation survive termination
of this Agreement.
GOVERNING LAW; CONSENT TO JURISDICTION. THIS AGREEMENT SHALL BE GOVERNED BY AND
- --------------------------------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CONNECTICUT WITHOUT REGARD
TO ITS PRINCIPLES OF CONFLICT OF LAWS. LEADERSONLINE AND GARTNERGROUP EACH
CONSENT IN ADVANCE TO THE JURISDICTION OF THE COURTS OF THE STATE OF
CONNECTICUT.
Costs and Attorneys Fees. If any action is necessary to enforce any of the
- ------------------------
terms and conditions of this Agreement, the prevailing party shall be entitled
to receive from the other party all costs and expenses, including reasonable
attorneys' fees in connection therewith.
<TABLE>
<CAPTION>
ACCEPTED:
<S> <C> <C> <C>
/s/ Regina Paolillo Date 2/23/00 /s/ Michael T. Christy Date 2/24/00
- -------------------- ------- ----------------------- -------
Name: Regina Paolillo Name: Michael T. Christy
Title: EVP & CFO Title: President
GartnerGroup LeadersOnLine!
</TABLE>
<PAGE>
ATTACHMENT A
------------
GartnerGroup Retainer Billing
CLIENT INVOICING SCHEDULE PER CONTRACT
March 23, 2000 - August 23, 2001
<TABLE>
<CAPTION>
Invoice No. Date of Invoice Billing Amount
- -----------------------------------------------------------------------------------------
<S> <C> <C>
92C100 Mar 23, 2000 $***
92C101 Aug 23, 2000 $***
92C102 Sep 23, 2000 $***
92C103 Oct 23, 2000 $***
92C104 Nov 23, 2000 $***
92C105 Dec 23, 2000 $***
92C106 Jan 23, 2001 $***
92C107 Feb 23, 2001 $***
92C108 Mar 23, 2001 $***
92C109 Apr 23, 2001 $***
92C110 May 23, 2001 $***
92C111 Jun 23, 2001 $***
92C112 July 23, 2001 $***
92C113 Aug 23, 2001 $***
- -----------------------------------------------------------------------------------------
TOTAL $***
- -----------------------------------------------------------------------------------------
</TABLE>
Payment terms and schedule defined in March 23, 2000 executed Agreement between
GartnerGroup, Inc. and LeadersOnline.
REVISED April 13, 2000
___________
*** Omitted pursuant to a confidential treatment request filed separately.
<PAGE>
ATTACHMENT B
------------
GartnerGroup Retainer Billing
REVENUE RECOGNITION SCHEDULE BOOKED TO LEADERS
GENERAL LEDGER, PER SAB101
March 23, 2000 - August 23, 2001
<TABLE>
<CAPTION>
Date Amount
- -------------------------------------------------------------
<S> <C>
Mar 23, 2000 $***
Aug 23, 2000 $***
Sep 23, 2000 $***
Oct 23, 2000 $***
Nov 23, 2000 $***
Dec 23, 2000 $***
Jan 23, 2001 $***
Feb 23, 2001 $***
Mar 23, 2001 $***
Apr 23, 2001 $***
May 23, 2001 $***
Jun 23, 2001 $***
July 23, 2001 $***
Aug 23, 2001 $***
- -------------------------------------------------------------
$***
- -------------------------------------------------------------
</TABLE>
REVISED April 13, 2000
___________
*** Omitted pursuant to a confidential treatment request filed separately.
