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Exhibit 1.1
956,500 Shares
COSTAR GROUP, INC.
Common Stock
UNDERWRITING AGREEMENT
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August 10, 2000
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Certain stockholders of CoStar Group, Inc., a Delaware corporation (the
"COMPANY"), named in Schedule I hereto (the "SELLING STOCKHOLDERS") severally
propose to issue and sell to Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
(the "UNDERWRITER"), an aggregate of 956,500 shares of the common stock, $.01
par value, of the Company (the "SHARES"), each Selling Stockholder selling the
amount set forth opposite such Selling Stockholder's name in Schedule I hereto.
The Selling Stockholders also propose to sell to the Underwriter not
more than an additional 35,755 shares of the common stock, $.01 par value, of
the Company (the "Additional Shares") if requested by the Underwriter as
provided in Section 2 hereof. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "Shares."
SECTION 1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"COMMISSION") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "ACT"), a registration statement on Form S-3, including a
prospectus, relating to the Shares. The registration statement, as amended at
the time it became effective is hereinafter referred to as the "REGISTRATION
STATEMENT"; and the prospectus in the form first used to confirm sales of Shares
is hereinafter referred to as the "PROSPECTUS". If the Company has filed or is
required pursuant to the terms hereof to file a registration statement pursuant
to Rule 462 under the Act registering additional shares of Common Stock (a "RULE
462 REGISTRATION STATEMENT"), then, unless otherwise specified, any reference
herein to the term "Registration Statement" shall be deemed to include such Rule
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462 Registration Statement.
SECTION 2. Agreements to Sell and Purchase and Lock-Up Agreements. On
the basis of the representations and warranties contained in this Agreement, and
subject to its terms and conditions, each Selling Stockholder agrees, severally
and not jointly, to sell the number of Shares set forth opposite such Selling
Stockholder's name in Schedule I hereto and the Underwriter agrees to purchase
from each Selling Stockholder at a price per Share of $26.75 (the "PURCHASE
PRICE") 965,500 Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Selling Stockholders
agree to sell the Additional Shares and the Underwriter shall have the right to
purchase up to 35,755 Additional Shares from the Selling Stockholders at the
Purchase Price. Additional Shares may be purchased solely for the purpose of
covering over-allotments made in connection with the offering of the Firm
Shares. The Underwriters may exercise their right to purchase Additional Shares
in whole or in part from time to time by giving notice thereof to the Selling
Stockholders on or before August 15, 2000. Such notice shall specify the
aggregate number of Additional Shares to be purchased pursuant to such exercise
and the date for payment and delivery thereof, which date shall be a business
day (i) no earlier than two business days after such notice has been given
(and, in any event, no earlier than the Closing Date (as hereinafter defined))
and (ii) no later than ten business days after such notice has been given.
SECTION 3. Terms of Public Offering. The Selling Stockholders are
advised by you that the Underwriter proposes to make a public offering of their
respective portions of the Shares as soon after the execution and delivery of
this Agreement as in your judgment is advisable.
SECTION 4. Delivery and Payment. The Shares shall be delivered by or on
behalf of the Selling Stockholders, with any transfer taxes thereon duly paid by
the respective Selling Stockholders, to Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation through the facilities of The Depository Trust Company ("DTC"), for
the account of the Underwriter, against payment to the Selling Stockholders of
the Purchase Price therefor by wire transfer of Federal or other funds
immediately available in New York City. The certificates representing the Shares
shall be made available for inspection not later than 9:30 A.M., New York City
time, on the business day prior to the Closing Date at the office of DTC or its
designated custodian (the "DESIGNATED OFFICE"). The time and date of delivery
and payment for the Shares shall be 9:00 A.M., New York City time, on August 15,
2000 or such other time on the same or such other date as Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation and the Selling Stockholders shall agree in
writing. The time and date of delivery and payment for the Shares are
hereinafter referred to as the "CLOSING DATE".
SECTION 5. Representations and Warranties of the Selling Stockholders.
Each Selling Stockholder represents and warrants to the Underwriter that:
(a) Such Selling Stockholder is the lawful owner of the Shares to be
sold by such Selling Stockholder pursuant to this Agreement and has, and on the
Closing Date will have, good and clear title to such Shares, free of all
restrictions on transfer, liens, encumbrances, security interests, equities and
claims whatsoever.
(b) Such Selling Stockholder has, and on the Closing Date will have,
full legal right, power and authority, and all authorization and approval
required by law, to enter into this Agreement, the Custody Agreement signed by
such Selling
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Stockholder and American Stock Transfer & Trust, as Custodian, relating to the
deposit of the Shares to be sold by such Selling Stockholder (the "CUSTODY
AGREEMENT") and the Power of Attorney, if applicable, of such Selling
Stockholder appointing certain individuals as such Selling Stockholder's
attorneys-in-fact (the "ATTORNEYS") to the extent set forth therein, relating to
the transactions contemplated hereby and by the Registration Statement and the
Custody Agreement (the "POWER OF ATTORNEY") and to sell, assign, transfer and
deliver the Shares to be sold by such Selling Stockholder in the manner provided
herein and therein.
(c) This Agreement has been duly authorized, executed and delivered by
or on behalf of such Selling Stockholder.
(d) The Custody Agreement of such Selling Stockholder has been duly
authorized, executed and delivered by such Selling Stockholder and is a valid
and binding agreement of such Selling Stockholder, enforceable in accordance
with its terms.
(e) The Power of Attorney of each Selling Stockholder executing a
Power of Attorney has been duly authorized, executed and delivered by such
Selling Stockholder and is a valid and binding instrument of such Selling
Stockholder, enforceable in accordance with its terms, and, pursuant to such
Power of Attorney, such Selling Stockholder has, among other things, authorized
the Attorneys, or any one of them, to execute and deliver on such Selling
Stockholder's behalf this Agreement and any other document that they, or any one
of them, may deem necessary or desirable in connection with the transactions
contemplated hereby and thereby and to deliver the Shares to be sold by such
Selling Stockholder pursuant to this Agreement.
(f) Upon delivery of and payment for the Shares to be sold by such
Selling Stockholder pursuant to this Agreement, good and clear title to such
Shares will pass to the Underwriter, free of all restrictions on transfer,
liens, encumbrances, security interests, equities and claims whatsoever.
(g) The execution, delivery and performance of this Agreement and the
Custody Agreement by or on behalf of such Selling Stockholder, and with respect
to the Selling Stockholders who execute a Power of Attorney of such Selling
Stockholder, the compliance by such Selling Stockholder with all the provisions
hereof and thereof and the consummation of the transactions contemplated hereby
and thereby will not (i) require any consent, approval, authorization or other
order of, or qualification with, any court or governmental body or agency
(except such
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as may be required under the securities or Blue Sky laws of the various states),
(ii) conflict with or constitute a breach of any of the terms or provisions of,
or a default under, the organizational documents of such Selling Stockholder, if
such Selling Stockholder is not an individual, or any indenture, loan agreement,
mortgage, lease or other agreement or instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder or any property of
such Selling Stockholder is bound or (iii) violate or conflict with any
applicable law or any rule, regulation, judgment, order or decree of any court
or any governmental body or agency having jurisdiction over such Selling
Stockholder or any property of such Selling Stockholder, except in the case of
each of (i), (ii) and (iii), where there would not be a material adverse effect.
(h) The information in the Registration Statement under the caption
"Selling Stockholders" which specifically relates to such Selling Stockholder
does not, and will not on the Closing Date, contain 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 the light of the circumstances
under which they were made, not misleading.
(i) At any time during the period in which a prospectus is required by
law to be delivered in connection with sales by the Underwriter or a dealer, if
there is any change in the information referred to in Section 5(h), such Selling
Stockholder will immediately notify you of such change.
(j) Each certificate signed by or on behalf of such Selling
Stockholder and delivered to the Underwriter shall be deemed to be a
representation and warranty by such Selling Stockholder to the Underwriter as to
the matters covered thereby.
SECTION 6. Conditions of Underwriter's Obligations. The obligation of
the Underwriter to purchase the Shares under this Agreement are subject to the
satisfaction of each of the following conditions:
(a) If the Company is required to file a Rule 462 Registration
Statement after the effectiveness of this Agreement, such Rule 462 Registration
Statement shall have become effective by 10:00 P.M., New York City time, on the
date of this Agreement; and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been commenced or shall be pending before or contemplated by
the Commission.
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(b) Since the respective dates on which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there shall not have occurred any change or any development involving a change
in the condition, financial or otherwise, or the earnings, business, management
or operations of the Company and its subsidiaries, taken as a whole, (ii) there
shall not have been any change or any development involving a change in the
capital stock or in the long-term debt of the Company or any of its subsidiaries
and (iii) neither the Company nor any of its subsidiaries shall have incurred
any liability or obligation, direct or contingent, the effect of which, in any
such case described in clause (i), (ii) or (iii), in your reasonable judgment,
is material and adverse and, in your judgment, makes it impracticable to market
the Shares on the terms and in the manner contemplated in the Prospectus.
(c) All the representations and warranties of each Selling Stockholder
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date.
(d) The Selling Stockholders shall not have failed on or prior to the
Closing Date to perform or comply with any of the agreements herein contained
and required to be performed or complied with by the Selling Stockholders on or
prior to the Closing Date.
SECTION 7. Effectiveness of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Selling Stockholders if any of the
following has occurred: (i) any outbreak or escalation of hostilities or other
national or international calamity or crisis or change in economic conditions or
in the financial markets of the United States or elsewhere that, in your
judgment, is material and adverse and, in your judgment, makes it impracticable
to market the Shares on the terms and in the manner contemplated in the
Prospectus, (ii) the suspension or material limitation of trading in securities
or other instruments on the New York Stock Exchange, the American Stock
Exchange, the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange, the Chicago Board of Trade or the Nasdaq National Market or limitation
on prices for securities or other instruments on any such exchange or the Nasdaq
National Market, (iii) the suspension of trading of any securities of the
Company on any exchange or in the
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over-the-counter market or (iv) the declaration of a banking moratorium by
either federal or New York State authorities.
SECTION 8. Agreements of the Selling Stockholders. Each Selling
Stockholder agrees with you:
(a) To pay or to cause to be paid all transfer taxes payable in
connection with the transfer of the Shares to be sold by such Selling
Stockholder to the Underwriter.
(b) To do and perform all things to be done and performed by such
Selling Stockholder under this Agreement prior to the Closing Date and to
satisfy all conditions precedent to the delivery of the Shares to be sold by
such Selling Stockholder pursuant to this Agreement.
SECTION 9. Miscellaneous. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Selling Stockholders
(other than Xxxxxx X. Xxxxxxxx), to Xxxx Xxxxxxx and Xxxxx X. Xxxxxxx XX c/o
CoStar Group, Inc. or (ii) if to Xxxxxx X. Xxxxxxxx, c/o CoStar Group Inc., 0
Xxxxxxxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000.
The representations, warranties and other statements of the Selling
Stockholders and the Underwriter set forth in or made pursuant to this Agreement
shall remain operative and in full force and effect regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf of
the Underwriter, the officers or directors of the Underwriter, any person
controlling the Underwriter, any Selling Stockholder or any person controlling
such Selling Stockholder, (ii) acceptance of the Shares and payment for them
hereunder and (iii) termination of this Agreement.
If for any reason the Shares are not delivered by or on behalf of any
Selling Stockholder as provided herein (other than as a result of any
termination of this Agreement pursuant to Section 7), the Selling Stockholders
agree, severally and not jointly, to reimburse the Underwriter for all
out-of-pocket expenses (including the reasonable fees and disbursements of
counsel) incurred by it . The Selling Stockholders also agree, severally and
not jointly, to reimburse the Underwriter, its directors and officers and any
persons controlling the Underwriter for any and all fees and expenses
(including, without limitation, the reasonable fees disbursements of counsel)
incurred by them in connection with enforcing their rights hereunder and under
the indemnity agreement to be entered into among the Underwriter and the Selling
Stockholders.
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Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Selling Stockholders,
the Underwriter, the Underwriter's directors and officers, any controlling
persons referred to herein, and their respective successors and assigns, all as
and to the extent provided in this Agreement, and no other person shall acquire
or have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Shares from the Underwriter
merely because of such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
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Please confirm that the foregoing correctly sets forth the agreement
among the Selling Stockholders and the Underwriter.
Very truly yours,
Blue Chip Capital Fund Ltd.
Partnership
Xxxxx X. Xxxxxxx
Xxxxxxxx Business Trust
Xxxxxx X. Xxxxxxx
Xxxxxxx Business Trust
Church of the Apostles of Atlanta
By: ____________________
Attorney-in fact
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Please confirm that the foregoing correctly sets forth the agreement among the
Selling Stockholders and the Underwriter.
___________________________
Xxxxxx X. Xxxxxxxx
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Please confirm that the foregoing correctly sets forth the agreement among the
Selling Stockholders and the Underwriter.
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By ________________________
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SCHEDULE I
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SELLING STOCKHOLDERS
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Name Number of
Shares Being Sold
Blue Chip Capital Fund Ltd. Partnership 304,843
Xxxxx X. Xxxxxxx 212,954
Xxxxxxxx Business Trust 168,215
Xxxxxx X. Xxxxxxx 143,938
Xxxxxxx Business Trust 64,082
Church of the Apostles of Atlanta 43,189
Xxxxxx Xxxxxxxx 19,279
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Total 956,500
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