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EXHIBIT 1.1
7,250,000 SHARES
TICKETMASTER GROUP, INC.
COMMON STOCK
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UNDERWRITING AGREEMENT
SELECTED DEALER AGREEMENT
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NOVEMBER __, 1996
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7,250,000 SHARES
TICKETMASTER GROUP, INC.
COMMON STOCK
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UNDERWRITING AGREEMENT
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November __, 1996
XXXXX & COMPANY INCORPORATED
LAZARD FRERES & CO. LLC
XXXXX XXXXXX INC.
As Representatives of the Several
Underwriters
c/o Allen & Company Incorporated
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Ticketmaster Group, Inc., an Illinois corporation (the "Company"), hereby
confirms its agreement with the several Underwriters named in Schedule A hereto
(the "Underwriters"),
for which you are acting as representatives (the "Representatives"), as
follows:
1. DESCRIPTION OF SECURITIES. The Company has authorized by appropriate
corporate action and proposes to issue and sell to the Underwriters its shares
of Common Stock, no par value. As further described in Section 3 hereof,
7,250,000 of such shares (the "Purchased Shares") are being sold by the Company
to the Underwriters and the Company is granting to the Underwriters an option
to purchase up to 1,087,500 additional shares (the "Option Shares"). The
Purchased Shares and Option Shares are herein collectively referred to as the
"Shares".
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2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. The Company
represents and warrants to and agrees with each Underwriter that:
(a) A registration statement on Form S-1 (the "Initial
Registration Statement") (File No. 333-12413) with respect to the
Shares, including a preliminary form of prospectus, copies of which
have heretofore been delivered to you, has been prepared by the
Company in conformity with the requirements of the Securities Act
of 1933, as amended (the "Act"), and the rules and regulations (the
"Rules and Regulations") of the Securities and Exchange Commission
(the "Commission") under the Act, and has been filed with the
Commission under the Act; such amendment or amendments to such
registration statement, copies of which have heretofore been
delivered to you, as may have been made prior to the date of this
Agreement have been so prepared and filed; the Initial Registration
Statement and any post-effective amendment thereto, each in the
form heretofore delivered to you and, excluding exhibits thereto,
to the 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 Act, which
became effective upon filing, no other document with respect to the
Initial Registration Statement has heretofore been filed by the
Company with the Commission; and the Company has so prepared and
proposes so to file in a timely manner after the effective date of
such registration statement the final form of prospectus. The
Initial Registration Statement and the Rule 462(b) Registration
Statement, if any (including all exhibits thereto), 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 4(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 or such part of the Rule 462(b)
Registration Statement, if any, at the time it became or
hereinafter becomes effective, each as finally amended and revised
at the time such part of the registration statement became
effective, is herein referred to as the "Registration Statement".
Such prospectus in the form filed pursuant to Rule 424(b) of the
Rules and Regulations, or, if no final prospectus is filed with the
Commission pursuant to Rule 424(b), in such form as such final
prospectus is included in
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the Registration Statement, is herein referred to as the
"Prospectus". Each preliminary form of prospectus is herein
referred to as a "Preliminary Prospectus".
(b) The Commission has not issued any order suspending the
effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, or preventing or suspending the use of any
Preliminary Prospectus and, to the knowledge of the Company, no
proceeding for that purpose has been initiated or threatened by the
Commission. At the time of filing of each Preliminary Prospectus,
such prospectus did not include any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. When
the Registration Statement becomes effective and at all times
subsequent thereto up to and at each Closing Date (hereinafter
defined) (i) the Registration Statement and Prospectus and any
amendments or supplements thereto will contain as of their
respective dates all material statements and information which are
required to be included therein in accordance with the Act and
Rules and Regulations and will in all material respects conform to
the requirements of the Act and the Rules and Regulations, and (ii)
neither the Registration Statement nor the Prospectus, nor any
amendment or supplement thereto will include, 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, any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading; provided, however, that the foregoing representations
and warranties shall not apply to information contained in or
omitted from 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 any
Underwriter through you specifically for use in the preparation
thereof.
(c) Each of the Company's significant subsidiaries (as such
term is defined in Regulation S-X promulgated by the Commission) is
hereinafter referred to as a "Significant Subsidiary" and all of
the Company's subsidiaries are collectively hereinafter
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referred to as the "Subsidiaries". Except as otherwise disclosed
in the Registration Statement, the Prospectus or otherwise, the
Company holds all right, title and interest in and to the entire
equity interest in each such subsidiary. Except as described in
the Prospectus, subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, neither the Company, nor any Significant Subsidiary,
taken as a whole, has incurred any direct or, to the best of the
Company's knowledge, contingent material liabilities or material
obligations, or entered into any material transactions or contracts
not in the ordinary course of business, and there has not been any
change in its equity, capital shares, options or warrants, nor any
material increase or decrease in the amount thereof outstanding or
in any of its long-term debt outstanding, except pursuant to the
terms of the instruments governing the same, or any material
adverse change in the condition (financial or otherwise), results
of operations, business or prospects of the Company and the
Subsidiaries taken as a whole.
(d) Except as set forth in the Prospectus, there is not now
pending or, to the knowledge of the Company, threatened, any
action, suit or proceeding to which the Company or any Subsidiary
is a party before any court or governmental agency or body which
might result in any material adverse change in the condition
(financial or otherwise), results of operations, business or
prospects of the Company and the Subsidiaries taken as a whole, or
would materially and adversely affect the properties, assets or
ability to do business as contemplated in the Prospectus of the
Company and the Subsidiaries taken as a whole; and there are no
contracts or documents required to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations
which have not been filed as exhibits to the Registration
Statement.
(e) This Agreement has been duly authorized, executed and
delivered on behalf of the Company and constitutes a valid and
binding agreement of the Company, enforceable in accordance with
its terms, except (1) that such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights, (2)
that the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and
to the
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discretion of the court before which any proceeding therefor may be
brought and (3) as rights to indemnity or contribution hereunder
may be limited by federal or state securities laws; the execution,
delivery and performance of this Agreement and the consummation of
the transactions herein contemplated will not result in a breach or
violation of any term or provision of, or constitute a default
under, any currently existing statute, any indenture, mortgage,
deed of trust, note agreement or other agreement or instrument to
which the Company or any Subsidiary is a party or by which it or
its property is bound, the charter or by-laws of the Company or any
Subsidiary or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or
over their properties; no consent, approval, authorization or order
of any court or governmental agency or body is required for the
consummation by the Company of the transactions on its part herein
contemplated, except such as may be required under the Act or as
may be required under state or other securities or blue sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters; and neither the Company nor any of the Subsidiaries
is now in default or violation, and no event has occurred which
with the giving of notice or lapse of time or both would be a
default, under any contract, agreement, indenture, mortgage or
other undertaking to which such entity is a party or its Articles
of Incorporation or By-Laws and which is material to the condition
(financial or otherwise), results of operations, business or
prospects of the Company and the Subsidiaries taken as a whole.
(f) Each of the Company and the Significant Subsidiaries has
been duly incorporated or organized, as the case may be, and is
validly existing as a corporation or partnership, as the case may
be, in good standing under the laws of the jurisdiction of its
incorporation or organization, as the case may be, with full power
and authority, corporate or otherwise, to own its properties and
conduct its business as described and contemplated in the
Registration Statement, and is duly qualified to do business as a
foreign corporation or partnership, as the case may be, in good
standing in all other jurisdictions where its operations or
ownership of property requires such qualifications and where
failure so to qualify would impair title to any material properties
of the Company or its rights to enforce contracts against others or
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expose it to liabilities material to the Company and the
Subsidiaries taken as a whole in such jurisdictions.
(g) The Company has the authorized and outstanding capital
stock set forth in the Prospectus; the outstanding capital stock of
the Company conforms, and the Shares when issued and sold as herein
contemplated will conform, in all material respects, to all
statements in relation thereto contained in the Registration
Statement and the Prospectus and all such stock has been duly
authorized and the outstanding capital stock has been and the
Shares, when issued and delivered against payment therefor as
provided herein, will be validly issued, fully-paid and
nonassessable; except as stated in the Prospectus, the stockholders
of the Company have no preemptive rights with respect to the Shares
and there are no outstanding rights, options or warrants granted by
the Company to acquire any securities of the Company; to the extent
that any rights, options or warrants to acquire any securities of
the Company are outstanding, except as otherwise set forth in the
Prospectus, the issuance of the Shares as described in the
Prospectus will not result in an adjustment of the exercise price
or number of shares issuable upon the exercise in respect of any
such rights, options or warrants; and, except as otherwise set
forth in the Prospectus or otherwise disclosed, the Company owns
(directly or indirectly) valid title to the respective equity
interests or outstanding shares of capital stock of the
Subsidiaries, free and clear of any material liens, encumbrances or
claims.
(h) Except as otherwise set forth in the Prospectus, to the
best of its knowledge, each of the Company and the Subsidiaries
owns or possesses, or can acquire on reasonable terms, adequate
patents, patent licenses, trademarks, service marks and trade names
necessary to carry on its business as presently conducted, and
except as set forth in the Prospectus, neither the Company nor any
of the Subsidiaries has received any notice of infringement of or
conflict with asserted rights of others with respect to any
patents, patent licenses, trademarks, service marks or trade names
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially and adversely affect
the condition (financial or otherwise), earnings, affairs, business
or prospects of the Company and the Subsidiaries taken as a whole.
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(i) Except as stated in the Prospectus, the Company
holds or has applied for all licenses, permits, authorizations,
franchises, consents and orders of all federal, state, local, and
foreign governmental bodies necessary to carry on its business as
reflected or contemplated in the Prospectus, except as would not
have a material and adverse effect on the condition (financial or
otherwise), earnings, affairs, business or prospects of the Company
and the Subsidiaries taken as a whole; except as stated in the
Prospectus, the Company has good and marketable title in fee simple
to all real property and good and marketable title to all personal
property owned by it, in each case free and clear of all liens,
encumbrances and defects with such exceptions as are not material
to the Company and the Subsidiaries taken as a whole; and the real
property and personal property referred to in the Prospectus as
held under lease by the Company is held by it under valid,
subsisting and enforceable leases with only such exceptions as in
the aggregate are not material and do not materially interfere with
the conduct of the business of the Company and the Subsidiaries
taken as a whole as contemplated by the Prospectus.
(j) To the best of its knowledge, the Company is conducting
and proposes to conduct its business so as to comply in all
material respects with all applicable federal, state, local and
foreign governmental statutes, rules and regulations; and except as
set forth in the Prospectus, neither the Company nor any Subsidiary
is charged with, or, to the best of the knowledge of the Company,
is under investigation with respect to, any violation of any of
such statutes, rules or regulations or is the subject of any
pending or threatened proceeding by an governmental body or
regulatory authority relating to any such violation, except as
would not have a material and adverse effect on the condition
(financial or otherwise), earnings, affairs, business or prospects
of the Company and the Subsidiaries taken as a whole.
(k) The Company and each of the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the
business in which they are engaged; and neither the Company nor any
of the Subsidiaries has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such
coverage expires or
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to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not
materially and adversely affect the business or financial condition
of the Company and the Subsidiaries taken as a whole, except as
described or contemplated in the Prospectus.
(l) The Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment
company" or an entity "controlled" by an "investment company", as
such terms are defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act").
(m) 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.
(n) KPMG Peat Marwick LLP, which has examined and expressed
its opinion on certain of the financial statements of the Company
filed with the Commission as a part of the Registration Statement,
are, to the Company's best knowledge, independent accountants with
respect to the Company within the meaning of the Act and the Rules
and Regulations; the financial statements, together with the
related notes, forming part of the Registration Statement and
Prospectus fairly present the financial condition of the Company
and its results of operations as of the dates and for the periods
described in such opinion in the Prospectus; and such financial
statements have been prepared in accordance with the requirements
of the Commission, except that with respect to disclosure of
audited historical and pro forma financial statements for
significant acquired or to be acquired businesses, the Company
received permission from the Commission to rely on amendments to
Rule 3-05 of Regulation S-X which were not effective as of the date
of the Registration Statement.
(o) The Company and each of the Subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurances that transactions are executed in accordance with
management's general or specific authorizations and are recorded as
necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles.
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(p) Except as disclosed in the Prospectus, all United States
federal income tax returns of the Company and the subsidiaries
required by law to be filed have been properly prepared and timely
filed, except insofar as the failure to properly prepare or timely
file such returns would not have a material adverse effect on the
current or future consolidated financial position, stockholders'
equity or results of operations of the Company and the Subsidiaries
taken as a whole, and all taxes (including any penalties, interest
and additions to tax) shown by such returns or otherwise assessed,
which are due and payable, have been paid, except for such taxes or
tax assessments, if any, as are being contested in good faith and
as to which adequate reserves, to the extent required by generally
accepted accounting principles ("GAAP"), have been provided.
Except as disclosed in the Prospectus, all other tax returns and
reports of the Company and the Subsidiaries required to be filed
pursuant to applicable foreign, U.S. federal, state or local law
have been properly prepared and timely filed, except insofar as the
failure to properly prepare or timely file such returns or reports
would not have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or results of
operations of the Company and the Subsidiaries taken as a whole,
and all taxes (including any penalties, interest and additions to
tax) shown on such returns and reports or otherwise assessed which
are due and payable have been paid (or, if applicable, have been
duly withheld or collected and remitted to the appropriate taxing
authority), except for such taxes or tax assessments, if any, as
are being contested in good faith and as to which adequate
reserves, to the extent required by GAAP, have been provided. To
the best of the Company's knowledge, the charges, accruals and
reserves on the books of the Company and the Subsidiaries in
respect of any tax liability (including any tax liability pursuant
to Treasury Regulation Section 1.1502-6 or analogous provision of
state or local law) and any unpaid interest, penalties and
additions to tax with respect thereto for any years not finally
determined are adequate (taking into account the Company's right to
indemnification under that certain Indemnification Agreement, dated
as of December 15, 1993 among HG, Inc., the Indemnitors (as defined
therein), Xxxx Xxxxx, the Company and under the Letter Agreement,
dated November ___, 1996, among HG, Inc., the Indemnitors, Xxxx
Xxxxx and the Company) to meet any assessments or re-assessments
for additional tax (including any
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penalties, interest and additions to tax) for any years not finally
determined, except as disclosed in the Prospectus and except to the
extent of any inadequacy that would not have a material adverse
effect on the current or future consolidated financial position,
stockholders' equity or results of operations of the Company and
the Subsidiaries taken as a whole.
(q) Except as stated in the Prospectus, the Company knows of
no outstanding claims for services allegedly authorized or approved
by the Company, either in the nature of a finder's fee or
origination fee, with respect to the transactions contemplated
hereby, and the Company agrees to indemnify and hold the
Underwriters harmless from any such claim for any such services of
such nature arising from the act of any person other than any
Underwriter.
(r) Except as set forth in the Prospectus, there are no
holders of securities (debt or equity) of the Company or any of the
Subsidiaries, or holders of rights (including, without limitation,
preemptive rights), warrants or options to obtain securities of the
Company or the Subsidiaries, who have the right to request the
Company or any of the Subsidiaries to register securities held by
them under the Act, other than holders who have waived such rights
or will not have such rights for the 180-day period after the date
hereof, and have waived their rights with respect to the inclusion
of their securities in the registration statement on Form S-1
relating to the Shares.
(s) The Company has obtained from each of its officers and
directors, and from each of its shareholders named in Schedule B
hereof, an executed agreement (in agreed upon form) that they will
not, without the prior written consent of Xxxxx & Company
Incorporated on behalf of the Underwriters, sell, offer for sale,
contract to sell or otherwise dispose of any shares of the
Company's Common Stock or any securities exercisable for or
convertible into its Common Stock for a period of 180 days from the
date of the final Prospectus.
3. PURCHASE, SALE AND DELIVERY OF SHARES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to each
Underwriter and each Underwriter agrees, severally and not jointly, to purchase
from the Company, at a purchase price of $______ per Share, the number
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of Shares set forth opposite the name of such Underwriter in Schedule A hereto.
The Company will deliver the Purchased Shares to you for the accounts of
the several Underwriters at the office of Xxxxx & Company Incorporated, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, against payment of the purchase price
therefor by certified or official bank check or checks or wire transfer,
payable to the order of the Company in Federal (same day) funds, at 10:00 A.M.,
New York Time, on November __, 1996, or at such other time and date as you and
the Company may determine, such time and date of delivery and payment being
herein called the "First Closing Date". The certificates for the Purchased
Shares to be so delivered will be made available to you at such office for
checking at least one full business day prior to such Closing Date and will be
in such names and denominations as you may request not less than two full
business days prior to such Closing Date.
On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, the
Company grants to the Underwriters an option to purchase up to 1,087,500 Option
Shares at the same price per share as the Underwriters shall pay for the
Purchased Shares. Such option may be exercised only to cover over-allotments
arising in connection with the sale of Purchased Shares by the Underwriters,
such exercise to be upon written notice by you to the Company within 30 days of
the date hereof setting forth the number of Options Shares as to which the
Underwriters are exercising the option, the denominations and names in which
certificates for such Shares should be registered and the time and place at
which such certificates are to be delivered. Such time and place (unless such
time is the First Closing Date), herein referred to as the "Second Closing
Date", shall be determined by you but shall not be earlier than the First
Closing Date, nor earlier than three full business days or later than ten full
business days after the exercise of such option. The Company will deliver
Option Shares to you for the accounts of the several Underwriters against
payment of the purchase price therefor by certified or official bank check or
checks or wire transfer, payable to the order of the Company in Federal (same
day) funds. The number of Option Shares to be purchased by each Underwriter
shall be in the same proportion to the aggregate number of Option Shares
purchased as the number of Purchased Shares set forth opposite the name of such
Underwriter in Schedule A hereto bears to 7,250,000 shares.
It is understood that you, individually and not as the Representatives of
the several Underwriters, may (but shall not be obligated to) make payment on
behalf of any Underwriter or
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Underwriters for Shares to be purchased by such Underwriter or Underwriters.
Any such payment by you shall not relieve any such Underwriter or Underwriters
of any of its or their obligations hereunder.
After the execution of this Agreement, the several Underwriters propose to
offer the Shares to the public as set forth in the Prospectus.
4. COVENANTS OF THE COMPANY. The Company covenants and agrees with the
several Underwriters that:
(a) The Company will prepare the Prospectus in a form approved
by you and 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; it will notify you, promptly
after it shall receive notice thereof, of the time when the
Registration Statement or any subsequent amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or amended Prospectus has been filed;
it will notify you promptly of any request by the Commission for
the amending or supplementing of the Registration Statement or
Prospectus or for additional information; it will promptly notify,
and upon the request of the Representatives prepare, file with the
Commission, and furnish without charge to each Underwriter and any
dealer in securities, as many copies as the Representatives may
from time to time reasonably request of any amendments or
supplements to the Registration Statement or Prospectus which may
be necessary to correct any statements or omissions, if, at any
time prior to the expiration of nine months when a prospectus
relating to the Shares is required to be delivered under the Act,
any event shall have occurred as a result of which the Prospectus
or any other prospectus relating to the Shares as then in effect
would include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein,
in 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 same period to amend or
supplement the Prospectus in order to comply with the Act; in case
any Underwriter is required to deliver a prospectus after the
nine-month period referred to in Section 10(a)(3) of the Act in
connection with sales of
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the Shares purchased by the Underwriters from the Company pursuant
to Section 3 or otherwise acquired by the Underwriters during the
distribution of the Shares in connection with stabilization or
otherwise, the Company will prepare and file with the Commission
promptly upon request of, but at the expense of, such Underwriter,
any amendments or supplements to the Registration Statement or
Prospectus as may be necessary, in such Underwriter's reasonable
opinion, to permit the sale of such Shares, in the manner
determined by such Underwriter, in compliance with the requirements
of the Act, including Section 10(a)(3) thereunder; and the Company
will file no amendment or supplement to the Registration Statement
or Prospectus that shall not previously have been submitted to you
in writing a reasonable time prior to the proposed filing thereof
or to which you shall reasonably object in writing, unless required
to do so by law.
(b) The Company will advise you, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the
use of any Preliminary Prospectus or Prospectus, or of any order
suspending trading in the Shares or other of the Company's
securities or of the suspension of the qualification of the Shares
for offering or sale in any jurisdiction or of the initiation of
any proceeding for that purpose; and it will use promptly its
reasonable best efforts to prevent the issuance of any stop order
or to obtain its withdrawal if such a stop order should be issued.
(c) The Company will use its reasonable best efforts to
qualify the Shares for sale under the blue sky or securities laws
of such jurisdictions as you may reasonably designate and to
continue such qualifications in effect for so long as may be
required for purposes of the distribution of the Shares, except
that the Company shall not be required in connection therewith or
as a condition thereof to qualify as a foreign corporation or to
execute a general consent to service of process in any state.
(d) The Company will furnish to you, as soon as available on
the business day next succeeding the date of this Agreement and
from time to time, copies of the Registration Statement (two of
which will be signed and will include all exhibits), each
Preliminary
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Prospectus, the Prospectus, and any amendments or supplements to
such documents, including any prospectus prepared to permit
compliance with Section 10(a)(3) of the Act, in New York City, all
in such quantities as you may from time to time reasonably request.
(e) The Company will make generally available to its
securityholders as soon as practicable, a financial statement
(which will be in reasonable detail but need not be audited)
covering a 12-month period beginning after the effective date of
the Registration Statement which shall satisfy the provisions of
Section 11(a) of the Act.
(f) The Company agrees, during each fiscal year for a period
of five years from the date hereof, to furnish to its stockholders
as promptly as may be practicable an annual report (including
financial statements audited by independent public accountants) and
to furnish quarterly financial statements (which need not be
audited) for each of the first three quarters of each fiscal year,
and to furnish, upon request, to each Underwriter hereunder (i) as
soon as practicable after the end of each of the first three
quarters of each fiscal year, statements of operations and surplus
of the Company for such quarter in reasonable detail and certified
by the Company's principal financial or accounting officer or the
Company's quarterly report on Form 10-Q; (ii) as soon as
practicable after the end of each fiscal year, financial statements
of the Company as at the end of such fiscal year, including
statements of operations, retained earnings and changes in
financial position of the Company for such fiscal year, all in
reasonable detail and accompanied by a copy of the report thereon
of independent public accountants or the Company's annual report on
Form 10-K; and (iii) as soon as they are available, copies of all
reports and financial statements furnished to or filed with the
Commission. During such period, if and so long as the Company
shall have active Subsidiaries, the foregoing financial statements
shall be on a combined or consolidated basis to the extent that the
accounts of the Company and its Subsidiaries are combined or
consolidated.
(g) 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
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the Act; (ii) all other expenses in connection with the
preparation, printing, and filing of the Registration Statement,
each Preliminary Prospectus, and the Prospectus and amendments and
supplements thereto, and the mailing and delivering of copies
thereof to the Underwriters and dealers; (iii) the cost of printing
this Agreement, the Selected Dealer Agreement, the Blue Sky
Memorandum, and any other documents in connection with the
offering, purchase, sale and delivery of the Shares; (iv) all costs
and expenses in connection with the issuance and delivery of the
Shares hereunder to the Underwriters, including related transfer
taxes, if any; (v) all expenses in connection with the
qualification of the Shares for offering and sale under the
securities laws of various jurisdictions, including the fees and
disbursements of counsel for the Underwriters in connection with
such qualification and in connection with the Blue Sky Survey; (vi)
the filing fees incident to, and 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; (vii) the costs of preparing
stock certificates; (viii) the cost and charges of any transfer
agent or registrar; (ix) the costs and expenses incident to
approving the Shares for quotation on the NASDAQ National Market
System; and (x) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise
specifically provided for in this Section 4. The Underwriters
shall bear their own legal, travel, roadshow and syndicate
expenses, except that the Company shall reimburse the Underwriters
for all of their itemized out-of-pocket expenses, including their
legal fees and expenses, if the Company determines not to proceed
with the offering for any reason, other than the Underwriters'
unwillingness to proceed on the terms and conditions set forth in
this Agreement, or if the Representatives exercise their right to
terminate this Agreement pursuant to Section 10(b)(i) hereof.
(h) The Company agrees that it will not, without the prior
written consent of Xxxxx & Company Incorporated on behalf of the
Underwriters, directly or indirectly, offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant for
the sale of, or otherwise dispose of or transfer any shares of
Common Stock or any securities exchangeable or exercisable for or
convertible into its
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Common Stock, or participate in any registration statement under
the Act with respect to any of the foregoing or enter into any swap
or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequence of
ownership of the Common Stock, whether any such swap or transaction
is to be settled by delivery of Common Stock or other securities,
in cash or otherwise, for a period of 180 days after the date of
the Prospectus, except for certain stock repurchases that may be
required pursuant to employment agreements or except as otherwise
contemplated by the Prospectus. In addition, the Company also
agrees to obtain the written agreement of each officer and director
of the Company, and each of its shareholders named in Schedule B
hereto that such person will not, without such prior written
consent, directly or indirectly, offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant for the
sale of, or otherwise dispose of or transfer any shares of Common
Stock or any securities exchangeable or exercisable for or
convertible into its Common Stock, whether now owned or hereafter
acquired by any such director, officer or shareholder or with
respect to which any such director, officer or shareholder has or
hereafter acquires the power of disposition, or participate in any
registration statement under the Act with respect to any of the
foregoing or enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common
Stock, whether any such swap or transaction is to be settled by
delivery of Common Stock or other securities, in cash or otherwise,
for a period of 180 days after the date of the Prospectus, except
for certain stock repurchases that may be required pursuant to
employment agreements.
(i) The Company agrees to use the net proceeds received by it
from the sale of the Shares pursuant to this Agreement in the
manner specified in the Prospectus under the caption "Use of
Proceeds."
(j) The Company agrees to file with the Commission such
reports on Form SR as may be required by Rule 463 under the Act.
(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
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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.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Purchased Shares on the First
Closing Date and the Option Shares on the Second Closing Date, as provided
herein shall be subject to the accuracy, as of the date hereof and such Closing
Date (as if made on and as of such Closing Date), of the representations and
warranties of the Company herein, to the performance by the Company of its
obligations hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective not
later than 5:30 P.M., New York City Time, on the date of this
Agreement, or such later date as shall be consented to in writing
by you; the Prospectus and any amendment or supplement thereto
shall have been filed with the Commission in the manner and within
the time period required by Rule 424(b) under the Act; 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; and no stop
order suspending the effectiveness thereof shall have been issued
and, to the knowledge of the Company or any Underwriter, no
proceedings for that purpose shall have been initiated or
threatened by the Commission, and any request of the Commission for
additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied
with to your reasonable satisfaction.
(b) Prior to such Closing Date, except as contemplated in the
Prospectus, there shall not have been any change in the capital
shares (other than pursuant to the exercise of options described in
the Prospectus), nor the issuance of any rights, options, or
warrants to purchase any capital shares, nor any material increase
or decrease in any long-term debt of the Company and the
Subsidiaries taken as a whole or any material adverse change in the
condition (financial or otherwise), results of operations, business
or prospects of the Company and the Subsidiaries taken as a whole
which in your reasonable judgment renders it
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inadvisable to proceed with the offering and sale of the Shares.
(c) You shall have received the opinion of Xxxx, Xxxxxx &
Xxxxxxxxx (a draft of each such opinion is attached as Annex II(b)
hereof), counsel for the Company, in form and substance reasonably
satisfactory to you and dated such Closing Date, to the effect
that:
(i) each of the Company and its Significant Subsidiaries
has been duly incorporated or organized, as the case may be,
and is validly existing as a corporation or partnership, as
the case may be, in good standing under the laws of its
jurisdiction of incorporation or organization, as the case
may be, with full corporate or other power and authority to
own its properties and to conduct its business as described
in the Registration Statement and, to the knowledge of such
counsel, is duly qualified to do business as a foreign
corporation or partnership, as the case may be, in each state
or jurisdiction where its operations and the ownership of its
properties requires such qualification, except with respect
to qualification as a foreign corporation or partnership, as
the case may be, in such jurisdictions in which the failure
to so qualify has not had and is reasonably not likely to
have a material adverse effect on the business of the Company
and the Subsidiaries taken as a whole;
(ii) the Company has authorized capital stock as set
forth in the Prospectus; all shares of Common Stock,
including the Shares, conform as to legal matters in all
material respects to the appropriate descriptions thereof
under the heading "Description of Capital Stock" in the
Prospectus; all outstanding shares of Company capital stock
have been duly authorized and are validly issued, fully paid
and non-assessable; and the issuance of the Shares has been
duly authorized and, when issued and delivered in accordance
with this Agreement, the Shares will be validly issued, fully
paid and non-assessable; and, except as described in the
Prospectus, the issuance of the Shares as described in the
Prospectus will not result in any adjustment of the exercise
price or number of shares issuable upon exercise in respect
of any outstanding options or warrants of the Company; and,
except as otherwise set forth in the
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Registration Statement or otherwise disclosed, the Company
owns (directly or indirectly) all of the respective
outstanding shares of capital stock of each of the
Subsidiaries, to the best of the knowledge of such counsel,
free and clear of any material liens, encumbrances or claims;
(iii) this Agreement has been duly authorized, executed
and delivered by the Company and constitutes a valid and
binding agreement of the Company, enforceable in accordance
with its terms, except that (1) such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to
creditors' rights, (2) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought, and (3)
rights to indemnity or contribution hereunder may be limited
by federal or state securities laws; the sale of the Shares
under this Agreement and the consummation of the transactions
herein contemplated do not result in a breach or violation of
any terms or provisions of, or constitute a default under,
any presently existing statute, or to the best of such
counsel's knowledge, any indenture, mortgage, deed of trust,
note agreement or other agreement or instrument known to such
counsel to which the Company is a party or by which it or its
properties are bound or affected, or to which any of the
material property or assets of the Company or the
Subsidiaries is subject, the Company's Articles of
Incorporation or By-Laws, or, to the best of such counsel's
knowledge, any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the
Company or the Subsidiaries or over their respective
properties;
(iv) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
consummation by the Company of the transactions contemplated
by this Agreement, except such as may be required under the
Act or as may be required under state securities or blue sky
laws in connection with the purchase and distribution of the
Shares by the Underwriters;
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(v) the Registration Statement has become effective under
the Act and to the best of such counsel's knowledge no stop
order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under
the Act;
(vi) except as stated in the Prospectus, to the best of
such counsel's knowledge, the Company and the Subsidiaries
hold all material licenses, permits, authorizations,
franchises, consents and orders, in each case valid and in
good standing, of Federal, State or local, and foreign
governmental bodies necessary to carry on their respective
businesses as reflected in the Registration Statement;
(vii) the provisions of the agreements to which the
Company or the Subsidiaries are a party which are summarized
in the Prospectus conform in all material respects to such
summaries;
(viii) to the best of such counsel's knowledge, there
are no legal or governmental proceedings pending or
threatened to which the Company or any Subsidiary is a party
or to which any properties of the Company or the Subsidiaries
are subject which is required to be described in the
Registration Statement or the Prospectus and is not so
described;
(ix) to the best of such counsel's knowledge, all
contracts and documents pertaining to the Company required to
be filed as Exhibits to the Registration Statement have been
filed as required or have been appropriately incorporated by
reference and all contracts and documents required to be
described in the Prospectus have been accurately described
therein in all material respects;
(x) neither the Company nor any of its Significant
Subsidiaries is in violation of its Articles of Incorporation
or By-laws or, to such counsel's knowledge, in default in the
performance or observance of any material obligation,
covenant or condition contained in any material indenture,
mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a
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party or by which it or any of its properties may be bound;
(xi) the statements set forth in the Prospectus under
the caption "Description of Capital Stock", insofar as they
purport to constitute a summary of the Shares are accurate,
complete and fair;
(xii) the Company is not an "investment company" or an
entity "controlled" by an "investment company", as such terms
are defined in the Investment Company Act; and
(xiii) the Registration Statement and the Prospectus and
any further amendments and supplements thereto made by the
Company prior to the Closing Date (other than the financial
statements and related schedules and other financial and
statistical data therein, as to which such counsel need
express no opinion) comply as to form in all material
respects with the requirements of the Act and the Rules and
Regulations; although they do not assume any responsibility
for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus,
except for those referred to in the opinion in subsection
(xi) of this Section 5(c), they have no reason to believe
that, as of its effective date, the Registration Statement or
any further amendment thereto made by the Company prior to
the Closing Date (other than the financial statements and
related schedules and other financial and statistical data
therein, as to which such counsel need express no opinion)
contained an 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, as of its date, the Prospectus or any further amendment
or supplement thereto made by the Company prior to the
Closing Date (other than the financial statements and related
schedules and other financial and statistical data therein,
as to which such counsel need express no opinion) contained
an 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 or that, as of the Closing
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Date, either the Registration Statement or the Prospectus or
any further amendment or supplement thereto made by the
Company prior to the Closing Date (other than the financial
statements and related schedules and other financial and
statistical data therein, as to which such counsel need
express no opinion) contains an untrue statement of a
material fact or omits to state a material fact necessary to
make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering the foregoing opinions, such counsel may rely as
to factual matters on certificates of officers and representatives
of the Company or any Subsidiary and of public officials, and will
not be required to independently verify the accuracy or
completeness of information or documents furnished to it in respect
to the Registration Statement or the Prospectus. To the extent
that such counsel's opinion relates to the laws of jurisdictions
other than the State of New York, the federal law of the United
States and the Illinois Business Corporation Act, such counsel
shall be permitted to rely on the opinion of local counsel
reasonably satisfactory to counsel for the several Underwriters.
(d) You shall have received from Fried, Frank, Harris, Xxxxxxx
& Xxxxxxxx (a draft of each such opinion is attached as Annex II(a)
hereof), counsel for the several Underwriters, an opinion or
opinions, dated such Closing Date, in form and substance
satisfactory to you, with respect to the sufficiency of all such
corporate proceedings and other legal matters relating to this
Agreement and the transactions contemplated hereby as you may
reasonably require, and the Company shall have furnished to such
counsel such documents as they may have requested for the purpose
of enabling them to pass upon such matters; in giving such opinion
such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the federal law of the United States and
the law of the State of New York, upon the opinions of counsel
reasonably satisfactory to you.
(e) You shall have received, at the time of execution of this
Agreement and on such Closing Date from KPMG Peat Marwick LLP,
independent public accountants, a letter or letters, dated the date
of delivery thereof, substantially in the form and
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substance heretofore approved by you (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 the Closing Date is
attached as Annex I(b) hereto).
(f) You shall have received a certificate, dated such Closing
Date, of each of the President and Chief Executive Officer and the
Chief Financial Officer of the Company, delivered on behalf of the
Company, to the effect that:
(i) the representations and warranties of the Company in
this Agreement are true and correct as if made on and as of
such Closing Date; and the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued, and, to their
knowledge, no proceedings for that purpose have been
instituted or are contemplated by the Commission; and
(iii) except as contemplated in the Prospectus, neither
the Company nor any Subsidiary taken as a whole has incurred
any direct or, to the best of the Company's knowledge,
contingent material liabilities or obligations, or entered
into any material transactions or contracts not in the
ordinary course of business, and there has not been any
change in its capital shares, nor the issuance of any rights,
options, or warrants to purchase any capital shares, nor any
material increase or decrease in any thereof or in any
long-term debt or any material adverse change in the
condition (financial or otherwise) results of operations,
business or prospects of the Company and the Subsidiaries
taken as a whole.
(g) The Company shall have furnished to you such certificates,
in addition to those specifically mentioned herein, as you may have
reasonably requested, as to the accuracy and completeness at such
Closing Date of any statement in the Registration Statement or
Prospectus, as to the accuracy at such Closing Date of
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the representations and warranties of the Company herein, as to the
performance by the Company of its obligations hereunder, and as to
the fulfillment of the conditions concurrent and precedent to the
obligations of the Underwriters hereunder.
(h) The Company shall have furnished to you the agreements
described in Section 2(s) of this Agreement.
(i) 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 the NASDAQ National Market System; (ii) a suspension or material
limitation in trading in the Company's securities on the NASDAQ
National Market System; (iii) a general moratorium on commercial
banking activities declared by either Federal, New York or
California 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 on
the terms and in the manner contemplated in the Prospectus; or (v)
the occurrence of any material adverse change in the existing
financial, political or economic conditions in the United States
which, in the reasonable judgment of the Representatives, would
materially and adversely affect the financial markets or the market
for the Shares.
(j) The Shares shall have been approved for quotation on the
Nasdaq National Market System, subject to official notice of
issuance.
(k) The Company shall have complied with the provisions of
Section 4(d) hereof with respect to the furnishing of prospectuses
on the business day next succeeding the date of this Agreement.
6. INDEMNIFICATION. (a) The Company will indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of the Act, against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or such controlling
person may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or
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alleged untrue statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, 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 and each such controlling person for any legal or other
expenses reasonably incurred by such Underwriter or such controlling person in
connection with investigating or defending against any such loss, claim,
damage, liability or action; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement,
such Preliminary Prospectus, the Prospectus or such amendment or such
supplement in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through you specifically for use
therein; and provided further, that the foregoing indemnity with respect to
Preliminary Prospectuses shall not inure to the benefit of any Underwriter (or
to the benefit of any person controlling such Underwriter) if such untrue
statement or omission or alleged untrue statement or omission made in any
Preliminary Prospectus is eliminated or remedied in the Prospectus and a copy
of the Prospectus has not been furnished to the person asserting any such
losses, claims, damages, or liabilities at or prior to the written confirmation
of the sale of such Shares to such person. Such indemnity obligation will be
in addition to any liability which the Company may otherwise have. The
indemnity agreement of the Company contained in this paragraph (a) and the
representations and warranties of the Company contained in Section 2 hereof
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall survive
the delivery of and payment for the Shares.
(b) Each Underwriter, severally and not jointly, will indemnify and hold
harmless the Company, each of its directors, each of its officers who signed
the Registration Statement, and each person, if any, who controls the Company
within the meaning of the Act, against any losses, claims, damages or
liabilities, joint or several, to which the Company or any such director,
officer or controlling person may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, 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
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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 reliance upon and in conformity with written information furnished
to the Company by any Underwriter through you specifically for use therein; and
will reimburse any legal or other expenses reasonably incurred by the Company
or any such director, officer or controlling person in connection with
investigating or defending against any such loss, claim, damage, liability or
action. Such indemnity obligation will be in addition to any liability which
such Underwriter may otherwise have. The indemnity agreement of each
Underwriter contained in this paragraph (b) shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
indemnified party and shall survive the delivery of and payment for the Shares.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
this Section, notify the indemnifying party of the commencement thereof.
Indemnification shall not be available to any party who shall fail so to give
notice, if the party to whom notice was required to be given was unaware of the
action, suit, investigation, inquiry or proceeding to which the notice would
have related, to the extent that such party was prejudiced by the failure to
give notice; but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party
otherwise than under this Section. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel chosen by
such indemnifying party which is reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation;
provided, however, that (i) if the indemnified party reasonably determines that
there may be a conflict between the positions of the indemnifying party and of
the indemnified party in conducting the defense of such action, suit,
investigation, inquiry or proceeding or that there may be legal defenses
available to such indemnified party different from or in addition to those
available to the
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indemnifying party, then counsel for the indemnified party shall be entitled to
conduct the defense to the extent reasonably determined by such counsel to be
necessary to protect the interests of the indemnified party and (ii) in any
event, the indemnified party shall be entitled to have counsel chosen by such
indemnified party participate in, but not conduct, the defense. If the
indemnifying party does not assume the defense of such action, it is understood
that the indemnifying party shall not, in connection with any one such action,
be liable for the fees and expenses of more than one separate firm of attorneys
(in addition to one separate firm of local attorneys) at any time for all such
indemnified parties. No indemnifying party shall be liable to any indemnified
party in respect to any settlement effected without its prior written consent,
which consent shall not be unreasonably withheld. In addition, the
indemnifying party will not, without the prior written consent of an
indemnified party, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action, suit or proceeding in respect of
which indemnification may be sought hereunder (whether or not such indemnified
party is a party to such claim, action or suit or proceeding), unless such
settlement, compromise or consent includes an unconditional release of such
indemnified party from all liability arising out of such claim, action, suit or
proceeding.
7. CONTRIBUTION. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 6(a) or 6(b)
hereof is for any reason, other than the first proviso to Section 6(a), held to
be unavailable, the Company and the Underwriters shall contribute to the
aggregate losses, claims, damages and liabilities of the nature contemplated by
such indemnification provisions (including any investigation, legal and other
expenses incurred in connection with, any amount paid in settlement of, any
action, suit or proceeding or any claims asserted) to which the Company and one
or more of the Underwriters may be subject, in such proportions so that the
Underwriters are responsible for that portion in each case represented by the
percentage that the respective underwriting discounts appearing on the cover
page of the Prospectus bear to the public offering price of the Shares, and the
Company is responsible for the remaining portion; provided, however, that (i)
except as may be provided in its Master Agreement Among Underwriters provided
to Xxxxx & Company Incorporated, in no case shall any Underwriter be
responsible for any amount in excess of the underwriting discount applicable to
the Shares purchased by such Underwriter hereunder and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, each person,
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if any, who controls an Underwriter within the meaning of Section 15 of the Act
shall have the same rights to contribution as such Underwriter, and each
person, if any, who controls the Company within the meaning of Section 15 of
the Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same right to
contribution as the Company, subject in each case to clauses (i) and (ii) of
this Section 7. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against
such party in respect of which a claim for contribution may be made against
another party or parties under this Section 7, notify such party or parties
from whom contribution may be sought, but the omission to so notify such party
or parties shall not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have hereunder or otherwise
than under this Section 7. No party shall be liable for contribution with
respect to any action or claim settled without its consent, which consent shall
not be unreasonably withheld.
8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements of the Company or of the
Underwriters herein or in certificates delivered pursuant hereto shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any Underwriter or any controlling person, the Company, or any
of its officers, directors, or controlling persons, and shall survive delivery
of the Shares to the several Underwriters hereunder.
9. SUBSTITUTION OF UNDERWRITERS. If any Underwriter or Underwriters
shall fail to take up and pay for the number of Shares to be purchased by such
Underwriter or Underwriters hereunder upon tender of such Shares in accordance
with the terms hereof, and if the aggregate number of Shares which such
defaulting Underwriter or Underwriters so agreed but failed to purchase does
not exceed 10% of the Shares, the remaining Underwriters shall be obligated
severally in proportion to their respective commitments hereunder to take up
and pay for the Shares of such defaulting Underwriter or Underwriters. If one
or more of the Underwriters shall fail or refuse (other than for a reason
sufficient to justify the termination of this Agreement) to purchase on any
Closing Date the aggregate number of Shares agreed to be purchased by such
Underwriter or Underwriters and the aggregate number of Shares agreed to be
purchased by such Underwriter or Underwriters shall exceed 10% of the aggregate
number of Shares to be sold on any Closing Date hereunder by the Company to the
Underwriters, then the other Underwriters shall have the right to purchase or
procure one or more other underwriters to purchase, in such proportions as they
may agree upon and upon the terms herein set forth, the Shares which such
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defaulting Underwriter or Underwriters agreed to purchase, and this Agreement
shall be carried out accordingly. If such other Underwriters do not exercise
such right within twenty-four hours after receiving notice of any such default,
which notice the Representatives shall have also promptly delivered to the
Company, then the Company shall have the right to procure another party or
parties reasonably satisfactory to the Representatives to purchase or agree to
purchase such Shares on the terms herein set forth. If the Company is unable
to procure another such party, the Company may notify the Representatives that
the non-defaulting Underwriters are, by the giving of such notice, released
from their obligations to purchase such number of Shares being sold hereunder
by the Company as are indicated in such notice as, when subtracted from the
total number of Shares originally agreed to be purchased by all of the
Underwriters hereunder, shall leave a reduced number of Shares to be purchased
by the non-defaulting Underwriters not in excess of 110% of the aggregate
number of Shares originally contracted to be purchased hereunder by the
non-defaulting Underwriters, and each of them, in which event such
non-defaulting Underwriters shall purchase such reduced number of Shares. In
any such case, either the Representatives or the Company shall have the right
to postpone any Closing Date for a period of not more than seven business days
in order that necessary changes and arrangements may be effected by the
Representatives and the Company. If neither the non-defaulting Underwriters
nor the Company shall make arrangements within the period stated for the
purchase of the Shares which such defaulting Underwriter or Underwriters agreed
to purchase, including such arrangements for the purchase of a reduced number
of Shares as are provided for in this Section 9, then this Agreement shall
terminate without liability on the part of any non-defaulting Underwriters to
the Company and without liability on the part of the Company to the
Underwriters.
In the event of any termination of this Agreement pursuant to the
preceding paragraph of this Section, the Company shall not be under any
liability to any Underwriter (except as provided in Section 4(g) and 6 hereof)
nor shall any Underwriter (other than an Underwriter who shall have failed,
otherwise than for some reason permitted under this Agreement, to purchase the
number of Shares to be purchased by such Underwriter hereunder, which
Underwriter shall remain liable to the Company and the other Underwriters for
damages resulting from such default) be under any liability to the Company
(except as provided in Section 6 hereof).
The term "Underwriter" in this Agreement shall include any person
substituted for an Underwriter under this Section 9.
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10. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION. (a) This
Agreement shall become effective at such time after you in your discretion
shall first release the Shares for sale to the public. For the purposes of
this Section the Shares shall be deemed to have been released for sale to the
public upon release by you for publication of a newspaper advertisement
relating to the Shares or upon release by you of letters or telegrams offering
the Shares for sale to securities dealers, whichever shall first occur. By
giving notice as hereinafter specified before the time this Agreement becomes
effective, you, as Representatives of the several Underwriters, or the Company
may prevent this Agreement from becoming effective without liability on the
part of the Company to any Underwriter or of any Underwriter to the Company,
other than as provided in Sections 4(g) and 6 hereof.
(b) You, as Representatives of the several Underwriters, shall have the
right to terminate this Agreement by giving notice as hereinafter specified at
any time at or prior to the First Closing Date if (i) the Company shall have
failed, refused or been unable, at or prior to the First Closing Date, to
perform any material agreement on its part to be performed, or because any
other material condition of the Underwriters' obligations hereunder required to
be fulfilled by the Company is not fulfilled; (ii) there has been, since the
respective dates as of which information is given in the Prospectus, any
material adverse change, or any development involving a prospective material
adverse change in the condition (financial or otherwise), earnings, business
affairs or business prospects of the Company and the Subsidiaries, taken as a
whole, whether or not arising in the ordinary course of business; (iii) or if
trading in any securities of the Company has been suspended by the Commission,
trading on the New York Stock Exchange or the Nasdaq National Market System
shall have been suspended, or minimum or maximum prices for trading shall have
been fixed, or maximum ranges for prices for securities shall have been
required, on the New York Stock Exchange by the New York Stock Exchange or on
the Nasdaq National Market System by the NASD or, in either case, by order of
the Commission or any other governmental authority having jurisdiction, since
the execution of this Agreement; (iv) a banking moratorium shall have been
declared by Federal, New York or California authorities since the execution of
this Agreement; (v) there has occurred any 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 (v) in the reasonable judgment of the Underwriters makes it
impracticable to proceed with the public offering or the delivery of the Shares
on the terms and in the manner contemplated in the Prospectus; or (vi) there
has occurred any material adverse
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change in the existing financial, political or economic conditions in the
United States which, in the reasonable opinion of the Underwriters would
materially and adversely affect the financial market or the market for the
Shares. Any such termination shall be without liability on the part of the
Company to any Underwriter or of any Underwriter to the Company other than as
provided in Sections 4(g) and 6 hereof.
(c) If you elect to prevent this Agreement from becoming effective
or to terminate this Agreement as provided in this Section, the Company shall be
notified promptly by you by telephone or telegram, confirmed by letter. If the
Company shall elect to prevent this Agreement from becoming effective, you
shall be notified promptly by the Company by telephone, facsimile or telegram,
confirmed by letter.
11. NOTICES. All notices or communications hereunder, except as
herein otherwise specifically provided, shall be in writing and if sent to you
shall be mailed, delivered or telecopied and confirmed to you c/o Allen &
Company Incorporated, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, with copy to
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attn: Xxxxxxx Xxxxxxx, Esq. or if sent to the Company shall
be mailed, delivered or telecopied and confirmed to the Company at 0000 Xxxxxxxx
Xxxxxxxxx, 0xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attn: Xxxxxxx X. Xxxxx and
Xxx X. Xxxxxxxxx, with a copy to Xxxx, Gerber & Xxxxxxxxx, Xxx Xxxxx XxXxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attn: Xxxxxxx Xxxxx Gerber, Esq. Notice to
any Underwriter pursuant to Section 6 shall be mailed, delivered or telecopied
and confirmed to such Underwriter's address as set forth in its Master
Agreement Among Underwriters furnished to Xxxxx & Company Incorporated.
12. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the several Underwriters and the Company and their respective
successors and assigns. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person or corporation, other than
the parties hereto and their respective successors and assigns and the
controlling persons, officers and directors referred to in Section 6, any
legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision herein contained; this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of the parties hereto and their respective successors and assigns and
said controlling persons and said officers and directors, and for the benefit
of no other person or corporation. No purchaser of any of the Shares from any
Underwriter shall be construed a successor or assign merely by reason of such
purchase.
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In all dealings with the Company under this Agreement, you shall be
and are authorized to act on behalf of each of the several Underwriters, and the
Company shall be entitled to act and rely upon any statement request, notice or
agreement on behalf of each of the several Underwriters if the same shall have
been made or given in writing by you.
13. APPLICABLE LAW. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York
applicable to agreements made, and to be fully performed, therein.
If the foregoing correctly sets forth the understanding between the
Company and the several Underwriters, please so indicate in the space provided
below for that purpose whereupon this letter shall constitute a binding
agreement between the Company and the several Underwriters.
Very truly yours,
TICKETMASTER GROUP, INC.
By:___________________________
Name:
Title:
Accepted as of the date
first above written:
XXXXX & COMPANY INCORPORATED
LAZARD FRERES & CO. LLC
XXXXX XXXXXX INC.
By: Xxxxx & Company Incorporated
By: ______________________________
Name:
Title:
On behalf of each of the several
Underwriters named in Schedule A hereto.
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SCHEDULE A
NUMBER
NAME AND ADDRESS OF UNDERWRITER OF SHARES
------------------------------- ---------
Xxxxx & Company Incorporated . . . . . . . . . . . . . . . . . . .
000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000
Lazard Freres & Co. LLC . . . . . . . . . . . . . . . . . . . . .
00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, XX 00000
Xxxxx Xxxxxx Inc. . . . . . . . . . . . . . . . . . . . . . . . .
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000
---------
Total . . . . . . . . . . . . . . . . . . 7,250,000
=========
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SCHEDULE B
SHAREHOLDERS OF THE COMPANY
EXECUTING LOCK-UP LETTERS
36
7,250,000 SHARES
TICKETMASTER GROUP, INC.
COMMON STOCK
_______________________
SELECTED DEALER AGREEMENT
November __, 1996
Dear Sirs:
1. PURCHASE OF SECURITIES BY THE SEVERAL UNDERWRITERS. The several
Underwriters named in the enclosed Prospectus, on whose behalf we are acting as
Representatives, have severally agreed to purchase from Ticketmaster Group,
Inc. (the "Company") an offering of 7,250,000 Shares of the Company's Common
Stock (the "Shares"), as set forth in the Prospectus and subject to the terms
of the Underwriting Agreement between the several Underwriters and the Company.
The Shares are described in the Prospectus, additional copies of which will be
supplied in reasonable quantities upon request to us.
2. OFFERING TO SELECTED DEALERS. One or more of the several Underwriters
acting through us are severally offering a portion of the Shares to certain
dealers ("Selected Dealers") as principals, subject to the terms and conditions
of their purchase, to the terms and conditions hereof, and to the modification
or cancellation of the offering without notice, at the public offering price
set forth in the Prospectus, less a concession not in excess of $____ per
Share. Shares purchased by the several Underwriters, and not sold to the
Selected Dealers as aforesaid, may be sold by the several Underwriters. Any of
the several Underwriters may be included among the Selected Dealers.
The offering of a portion of the Shares to Selected Dealers may be made on
the basis of reservations or allotments against subscription. We are advising
you by telegram of the method and terms of the offering. Acceptance of any
reserved Shares received by us at the office of Xxxxx & Company Incorporated,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, after the time specified therefor
in the telegrams, and any subscriptions for additional Shares, will be subject
to prior sale and allotment. Subscription books may be closed by us at any
time without notice, and the right is reserved to reject any subscriptions in
whole or in part.
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3. OFFERING TO PUBLIC BY SELECTED DEALERS. Upon receipt of the
aforementioned telegram, the Shares purchased by you hereunder may be
re-offered to the public in conformity with the terms of offering set forth in
the Prospectus. You may, in accordance with the rules of the National
Association of Securities Dealers, Inc., reallow a concession of $_____ per
Share sold by you to any other dealer or broker who is a member of the National
Association of Securities Dealers, Inc., provided such discount is retained.
Neither you nor any other person is or has been authorized by the Company,
any of the several Underwriters or us to give information or make any
representations in connection with the sale of the Shares other than those
contained in the Prospectus.
In the event that during the term of this agreement we, as Representatives
for the account of the several Underwriters, shall purchase or contract to
purchase, at or below the original public offering price set forth in the
Prospectus, any of the Shares purchased by you hereunder (which Shares
theretofore were not effectively placed for investment by you, including Shares
represented by transfers), we may, at our election, either (a) require you to
repurchase such Shares at a price equal to the total cost of such Shares
purchased by us, including brokerage commissions, if any, and transfer taxes on
the redelivery, or (b) charge you with and collect from you an amount equal to
the selling concession with respect to the Shares so purchased by us.
4. PAYMENT AND DELIVERY. Payment for the Shares which you have agreed to
purchase hereunder shall be made by you on _________, 1996, or such later date
as we may advise you, at 9:00 a.m., New York Time, at Xxxxx & Company
Incorporated's office at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, by
certified or bank cashier's check or wire transfer, payable to the order of
Xxxxx & Company Incorporated in Federal (same day) funds, against delivery of
such Shares. Delivery instructions must be in our hands at said address as
such time as we request.
Additional Shares confirmed to you shall be delivered on such date or
dates as we shall advise you.
5. BLUE SKY MATTERS. Neither we nor any of the several Underwriters
shall have any obligation or responsibility with respect to the right of any
dealer to sell the Shares in any jurisdiction, notwithstanding any information
which may be furnished as to the states under the securities laws of which it
is believed the Shares may be sold.
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6. TERMINATION. This agreement shall terminate 20 full days after the
First Closing Date (as defined in the Underwriting Agreement) but may be
extended for a period or periods not exceeding in the aggregate 20 days as we
may determine. We may terminate this Agreement at any time without prior
notice. Notwithstanding the termination of this agreement, you shall remain
liable for your portion of any transfer tax or other liability which may be
asserted or assessed against us or any one or more of the several Underwriters
or Selected Dealers based upon the claim that the Selected Dealers or any of
them constitute a partnership, an association, an unincorporated business or
other separate entity.
7. OBLIGATIONS OF SELECTED DEALERS. Your acceptance hereof will
constitute an obligation on your part to purchase, upon the terms and
conditions hereof, the aggregate amount of the Shares reserved for and accepted
by you and to perform and observe all the terms and conditions hereof.
You are not authorized to act as agent for any of the several Underwriters
in offering Shares to the public or otherwise. Nothing contained herein shall
constitute the Selected Dealers an association, or partners with the several
Underwriters, with us, or with each other.
8. POSITION OF THE REPRESENTATIVES. We shall have full authority to take
such action as we may deem advisable in respect of all matters pertaining to
the offering or arising hereunder, but shall act only as Representatives of the
several Underwriters. Neither we nor any of the several Underwriters shall be
under any liability to you, except for our own want of good faith, obligations
assumed in this agreement, or any liabilities arising under the Securities Act
of 1933. No obligation not expressly assumed by us in this agreement shall be
implied hereby or inferred herefrom.
9. NOTICES. All communications from you should be addressed to us, c/o
Allen & Company Incorporated, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Any
notice from us to you shall be deemed to have been duly given if mailed or
telegraphed to you at the address to which this letter is mailed.
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XXXXX & COMPANY INCORPORATED
LAZARD FRERES & CO. LLC
XXXXX XXXXXX INC.
As Representatives of the several Underwriters
c/o Allen & Company Incorporated
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Sirs:
We hereby confirm our agreement to purchase _____ Shares of Ticketmaster
Group, Inc. (the "Shares"), subject to your acceptance or rejection in whole or
in part in the case of a subscription subject to allotment or in excess of any
reservation, and subject to all the other terms and conditions stated in the
foregoing letter.
We hereby acknowledge receipt of the prospectus relating to the above
described Shares (the "Prospectus") and we further state that in purchasing the
Shares confirmed to us we have relied upon such Prospectus and on no other
statements whatsoever, written or oral.
We hereby represent that we are a member in good standing of the National
Association of Securities Dealers, Inc. ("NASD") and agree to comply with the
NASD's Rules of Fair Practice (the "NASD Rules"), or, if we are not such a
member, we are a foreign dealer or institution that is not registered under
Section 15(b) of the Securities Exchange Act of 1934 and that hereby agrees (i)
to make no sales within the United States, its territories or its possessions
or to persons who are citizens thereof or residents therein, (ii) if the
offering of the Shares is one within the scope of the NASD's interpretation
with respect to free-riding and withholding, to comply with such interpretation
and (iii) to comply with Rule 2740 and to comply, as though you were a member
of the NASD, with NASD Rules 2730 and 2750 and to comply with Rule 2420 as that
Rule applies to non-member foreign dealers.
Name of Selected Dealer
__________________________________
__________________________________
(Authorized Signature)
Dated: ______________, 1996
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Please confirm the foregoing by signing the duplicate copy of this
agreement enclosed herewith and returning it to us at the address in Section 9
above.
Very truly yours,
XXXXX & COMPANY INCORPORATED
LAZARD FRERES & CO. LLC
XXXXX XXXXXX INC.
By: Xxxxx & Company Incorporated
By: ______________________________
Vice President
