1
Exhibit 1.1
DRAFT
AS OF 5-12-98
CLEVELAND INDIANS BASEBALL COMPANY, INC.
4,000,000 Class A Common Shares*
UNDERWRITING AGREEMENT
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______________, 1998
XxXxxxxx & Company Securities, Inc.
As Representative of the Several Underwriters
c/x XxXxxxxx & Company Securities, Inc.
XxXxxxxx Investment Center
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Dear Sirs:
1. INTRODUCTORY. Cleveland Indians Baseball Company, Inc., an
Ohio corporation (the "Company"), proposes to issue and sell 4,000,000 of its
Class A Common Shares, without par value (the "Common Shares"), which are
authorized but unissued, to the public through the underwriters named in
Schedule A annexed hereto (the "Underwriters") for whom you are acting as the
Representative. The 4,000,000 Common Shares to be purchased from the Company are
hereinafter referred to as the "Firm Stock." The Company also proposes to sell
to the Underwriters, at their option, an aggregate of not more than 600,000
additional Common Shares solely to cover over-allotments, which are hereinafter
referred to as the "Option Stock." The Firm Stock and the Option Stock are
hereinafter collectively referred to as the "Stock" and are more fully described
in the Registration Statement and the Prospectus (as hereinafter defined). The
Company hereby confirms its agreements, as set forth herein, with you, acting as
the Representative of the Underwriters.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each of the Underwriters that:
(a) The Company does not own or control, directly or
indirectly, any corporation, association or other entity. The Company has been
duly organized and is validly existing as a corporation in good standing under
the laws of Ohio with corporate power and
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* Plus an option to purchase up to 600,000 additional shares to cover
over-allotments.
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authority to own and lease its properties and conduct its business as
described in the Prospectus (as hereinafter defined). Upon completion of the
transactions described under the heading "Formation Transactions" in the
Registration Statement (the "Formation Transactions"), except for Cleveland
Indians Baseball Company Limited Partnership (the "Baseball Partnership"), the
Company will not have any subsidiaries (as defined in Rule 1-02(x) of Regulation
S-X). The Baseball Partnership has been formed and is validly existing as a
partnership in good standing under the laws of Ohio with power and authority to
own and lease its properties and conduct its business. Each of the Company and
the Baseball Partnership is duly qualified to do business as a foreign
corporation or partnership, as the case may be, and is in good standing in all
jurisdictions (i) in which the conduct of business, as presently being
conducted, requires such qualification and (ii) in which the Company or the
Baseball Partnership owns or leases real property (except for those
jurisdictions in which the failure to so qualify will not in the aggregate have
a material adverse effect on the Company and the Baseball Partnership, taken as
a whole). Except as disclosed in the Registration Statement and except for the
partnership interest in the Baseball Partnership owned by the Company, neither
the Company nor the Baseball Partnership owns, directly or indirectly, any
equity securities or securities convertible into or exchangeable for equity
securities of any other corporation, partnership, joint venture, Massachusetts
or other business trust or any other business enterprise.
(b) This Agreement has been duly and validly authorized, executed and
delivered on behalf of the Company.
(c) The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission"), in conformity with the requirements of the
Securities Act of 1933, as amended (the "Act"), and the Rules and Regulations of
the Commission thereunder (as hereinafter defined), a registration statement on
Form S-1 (Registration No. 333-49357) including a preliminary prospectus
relating to the Company's Stock, and such amendments to such registration
statement as may have been required prior to the date hereof have been similarly
prepared and filed with the Commission. The registration statement as amended at
the time when it becomes effective, or, if applicable, as amended at the time
the most recent post-effective amendment to such registration statement filed
with the Commission prior to the execution and delivery of this Agreement became
effective (the "Effective Date"), and including information (if any) contained
in a prospectus subsequently filed with the Commission pursuant to Rule 424(b)
under the Act, and deemed to be part of the registration statement at the time
of effectiveness pursuant to Rule 430A under the Act is hereinafter referred to
as the "Registration Statement"; the prospectus in the form first used to
confirm sales of Stock, whether or not filed with the Commission pursuant to
Rule 424(b) under the Act is hereinafter referred to as the "Prospectus." If an
abbreviated registration statement is prepared and filed with the Commission in
accordance with Rule 462(b) under the Act (an "Abbreviated Registration
Statement"), the term "Registration Statement" as used in this Agreement
includes the Abbreviated Registration Statement.
(d) As of the Effective Date, and at all times subsequent thereto up to and
including the respective Closing Dates (as hereinafter defined) of the offering,
the Registration Statement and the Prospectus, and any amendments thereof or
supplements thereto,
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will contain all statements of material facts which are required to be stated
therein in accordance with the Act and the applicable rules, regulations and
interpretive releases of the Commission thereunder (the "Rules and
Regulations"), and will in all material respects conform to the requirements of
the Act and the Rules and Regulations; and neither the Registration Statement
nor the Prospectus, nor any amendment thereof or supplement thereto, will
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
not misleading; provided, however, that the Company makes no representations,
warranties or agreements as to information contained in the Registration
Statement or the Prospectus or any such amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company through you as the Representative specifically for use in the
preparation thereof.
(e) The Company's duly authorized, issued and outstanding capital stock is
as set forth under "Capitalization" in the Prospectus; all of the outstanding
shares of capital stock of the Company are duly authorized and validly issued,
fully paid and nonassessable, are free of any preemptive rights, rights of first
refusal or similar rights, were issued and sold in compliance with the
applicable Federal and state securities laws and conform in all material
respects to the description thereof in the Prospectus; except as set forth or
contemplated in the Prospectus, there are no outstanding options, warrants or
other rights calling for the issuance of, and there are no commitments, plans or
arrangements to issue any shares of capital stock of the Company or any security
convertible or exchangeable or exercisable for capital stock of the Company.
There are no holders of securities of the Company who, by reason of the filing
of the Registration Statement have the right (and have not waived such right) to
request the Company to include in the Registration Statement securities owned by
them, other than such rights as have been satisfied by the inclusion of
securities in the Registration Statement.
(f) The Common Shares of the Company conform in substance to all statements
in relation thereto contained in the Registration Statement and the Prospectus;
the Stock to be sold by the Company hereunder has been duly authorized and, when
issued and delivered pursuant to this Agreement, will be validly issued, fully
paid and nonassessable and will conform to the description thereof contained in
the Prospectus. All corporate action required to be taken for the issuance of
the Stock by the Company has been validly taken. No preemptive rights of
security holders of the Company exist with respect to the issuance and sale of
the Stock by the Company pursuant hereto.
(g) Upon completion of the Formation Transactions, all of the general
partner interests in the Baseball Partnership will be owned by the Company and
all of the limited partner interests in the Baseball Partnership will be owned
by Cleveland Baseball Corporation, an Ohio corporation, in each case free and
clear of all liens, encumbrances, equities, security interests or claims; and
there will be no outstanding options, warrants or other rights calling for the
issuance of, and there will be no commitments, plans or arrangements to issue,
any interests in the Baseball Partnership or any security convertible or
exchangeable or exercisable for interests in the Baseball Partnership.
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(h) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus up to and including the respective
Closing Dates (as hereinafter defined), except as set forth or contemplated in
the Prospectus, (i) there has not been and will not have been any change on a
pro forma basis or otherwise in the capital stock (or partnership interests in
the case of the Baseball Partnership) or funded debt of the Company and the
Baseball Partnership which is material or any material adverse change in the
business or the financial position or results of operations of the Company and
the Baseball Partnership, taken as a whole, and (ii) no loss or damage (whether
or not insured) to the property of the Company and the Baseball Partnership has
been sustained which materially and adversely affects the operations of the
Company and the Baseball Partnership taken as a whole.
(i) The consummation of the transactions herein contemplated and the
fulfillment of the terms hereof will not conflict with or result in a breach of
any of the terms and provisions of, or constitute a default under, the Articles
of Incorporation or the Code of Regulations of the Company, or the Certificate
of Limited Partnership or Partnership Agreement of the Baseball Partnership, or
any indenture, mortgage, deed of trust or other agreement or instrument to which
the Company or the Baseball Partnership is a party or by which the Company or
the Baseball Partnership is bound, or any order, rule or regulation applicable
to the Company or the Baseball Partnership of any court or of any federal or
state regulatory body or administrative agency or other governmental body having
jurisdiction over the Company or the Baseball Company or any of their
properties, or any rule, regulation, guideline, bulletin, directive, policy or
agreement pertaining to Major League Baseball, including, without limitation,
the American League Constitution, the Major League Agreement, the Major League
Rules, the MLB Collective Bargaining Agreement and Ownership Guidelines
(together, the "MLB Governing Documents").
(j) The balance sheet of the Company and the combined financial statements
of the Baseball Partnership and Ballpark Management Company ("Ballpark
Management") included in the Registration Statement and the Prospectus fairly
present the financial position and results of operations of the Company and the
combined financial position and results of operations of the Baseball
Partnership and Ballpark Management at the respective dates and for the
respective periods to which they apply, and such balance sheet and combined
financial statements have been prepared in conformity with generally accepted
accounting principles consistently applied throughout the periods involved. The
pro forma financial statements of the Company included in the Prospectus fairly
present the pro forma financial position and results of operations of the
Company and the Baseball Partnership at the dates and for the periods to which
they apply, and have been prepared to give effect to certain assumptions and
proposed transactions made on reasonable bases which are fully and accurately
described in the Prospectus, and the pro forma adjustments have been properly
applied on the bases described therein.
(k) Deloitte & Touche LLP, who have examined and expressed their opinion on
the balance sheet of the Company and the combined financial statements of the
Baseball Partnership and Ballpark Management referenced in their opinions set
forth in the
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Prospectus, are independent accountants within the meaning of the Act and the
Rules and Regulations.
(l) Upon completion of the Formation Transactions, the Company and the
Baseball Partnership will hold all necessary material authorizations, approvals,
orders, licenses, certificates and permits of and from all governmental
regulatory officials and bodies (collectively the "licenses") required for the
conduct of its business as described in the Prospectus, and all such licenses
will be valid and in full force and effect, and the Company and the Baseball
Partnership will be operating in compliance in all material respects with the
terms and provisions of such licenses and with all material laws, regulations,
orders and decrees applicable to the Company and the Baseball Partnership, and
their respective businesses and assets.
(m) Neither the Company nor the Baseball Partnership is in violation of any
applicable Federal, state or local laws, statutes, rules, regulations or
ordinances relating to public health, safety or the environment, including,
without limitation, relating to releases, discharges, emissions or disposal to
air, water, land or groundwater, to the withdrawal or use of groundwater, to the
use, handling or disposal of polychlorinated biphenyls (PCBs), asbestos or urea
formaldehyde, to the treatment, storage, disposal or management of hazardous
substances (including, without limitation, petroleum, crude oil or any fraction
thereof, or other hydrocarbons), pollutants or contaminants, to exposure to
toxic, hazardous or other controlled, prohibited or regulated substances, which
violation would have a material adverse effect on the business, condition
(financial or other) or results of operations of the Company and the Baseball
Partnership, taken as a whole, or which might materially and adversely affect
the consummation of the transactions contemplated by this Agreement. In
addition, and irrespective of such compliance, to the Company's knowledge,
neither the Company nor the Baseball Partnership is subject to any liabilities
for environmental remediation or clean-up, including any liability or class of
liability of the lessee under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, or the Resource Conservation
and Recovery Act of 1976, as amended, which liability would have a material
adverse effect on the business, condition (financial or other) or results of
operations of the Company and the Baseball Partnership, taken as a whole, or
which might materially and adversely affect the consummation of the transactions
contemplated by this Agreement.
(n) There are no legal or governmental actions, suits or proceedings
pending or, to the knowledge of the Company, threatened to which the Company or
the Baseball Partnership, or any of their respective executive officers or
directors is a party or of which the business or property (including, without
limitation, any of the licenses referred to in (l) above) of the Company or the
Baseball Partnership or any of their respective employees is the subject which
could have a material adverse effect on the business, condition (financial or
other) or results of operations of the Company and the Baseball Partnership,
taken as a whole, except as set forth or contemplated in the Prospectus.
(o) The Company is not in violation of its Articles of Incorporation or its
Code of Regulations and the Baseball Partnership is not in violation of its
Certificate of
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Limited Partnership or Partnership Agreement, and no material default exists by
the Company or the Baseball Partnership in the due performance and observance of
any term, covenant or condition of any agreement material to the Company and the
Baseball Partnership to which the Company or the Baseball Partnership is a party
or by which the Company or the Baseball Partnership is bound.
(p) The Company and the Baseball Partnership have or, upon completion of
the Formation Transactions, will have good title to, or valid and enforceable
leasehold estates in, all properties and assets used for their businesses
(including the property described in the Prospectus as being owned, leased or
used by the Company), in each case free and clear of all liens, encumbrances and
defects other than those set forth or referred to in the Registration Statement
or Prospectus or those which do not materially affect the value of such property
or leasehold and do not materially interfere with the use made or proposed to be
made of such property or leasehold by the Company and the Baseball Partnership;
and all of the leases and subleases under which the Company and the Baseball
Partnership hold such properties are in full force and effect.
(q) Except as set forth or contemplated in the Prospectus, (i) upon
completion of the Formation Transactions, the Company and the Baseball
Partnership will own or possess, or will be able to acquire on reasonable terms,
the patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets, applications and other unpatented or unpatentable
proprietary or confidential information, systems or procedures), trademarks,
service marks, and trade names (collectively, "Proprietary Rights") used in or
necessary for the conduct of their businesses as now conducted and as proposed
to be conducted as described in the Prospectus; (ii) upon completion of the
Formation Transactions, the Company and the Baseball Partnership will have the
right to use all Proprietary Rights used in or necessary for the conduct of
their businesses without infringing the rights of any person or violating the
terms of any licensing or other agreement to which the Company or the Baseball
Partnership is a party, and to the knowledge of the Company no person is
infringing upon any Proprietary Right which the Company or the Baseball
Partnership has the sole and exclusive right to use which would have a material
adverse effect on the Company and the Baseball Partnership, taken as a whole;
(iii) no charges, claims or litigation have been asserted and remain pending or
to the knowledge of the Company have been threatened against the Company or the
Baseball Partnership and not withdrawn that contest the right of the Company or
the Baseball Partnership to use, or the validity of, any Proprietary Right or
challenging or questioning the validity or effectiveness of any license or
agreement pertaining thereto or asserting the misuse thereof, and, to the
Company's knowledge, no valid basis exists for the assertion of any such charge,
claim or litigation; (iv) upon completion of the Formation Transactions, all
licenses and other agreements to which the Company or the Baseball Partnership
will be a party relating to Proprietary Rights will be in full force and effect
and will constitute valid, binding and enforceable obligations of the Company or
the Baseball Partnership, and, to the Company's knowledge, the other respective
parties thereto, and, to the Company's knowledge, there will not be any defaults
thereunder which would have a material adverse effect on the Company and the
Baseball Partnership, taken as a whole, and no event will have occurred which
(whether by notice or lapse of time or both) would constitute such a default
under any license or other agreement affecting Proprietary Rights
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used in or necessary for the conduct of the businesses of the Company and the
Baseball Partnership by any party; and (v) the validity, continuation and
effectiveness of all such licenses and other agreements and the current terms
thereof will not be affected by the transactions contemplated by this Agreement.
(r) No approval, authorization, consent or other order of any public board
or body (other than in connection with or in compliance with the provisions of
the Act and the securities or Blue Sky laws of various jurisdictions) is legally
required for the sale of the Stock by the Company.
(s) The Common Shares have been registered under Section 12(g) of the
Securities Exchange Act of 1934, as amended, and have been authorized for
inclusion in the Nasdaq National Market ("Nasdaq") subject to notice of issuance
or sale, as the case may be.
(t) The outstanding debt, the properties and the business of the Company
and the Baseball Partnership conform in all material respects to the description
thereof contained in the Registration Statement and the Prospectus.
(u) The Company and the Baseball Partnership have filed on a timely basis
all necessary federal, state, local and foreign income and franchise tax returns
required to be filed through the date hereof and have paid all taxes shown as
due thereon; and no tax deficiency has been asserted against the Company or the
Baseball Partnership that has not been satisfied, nor does the Company know of
any tax deficiency which is likely to be asserted against the Company or the
Baseball Partnership which if determined adversely to the Company or the
Baseball Partnership could materially adversely affect the business, prospects,
properties, assets, results of operations or condition (financial or otherwise)
of the Company and the Baseball Partnership, taken as a whole. All tax
liabilities are adequately provided for on the books of the Company.
(v) The Company and the Baseball Partnership each maintain insurance of the
types and in the amounts generally deemed adequate for their businesses,
including, but not limited to, insurance covering (i) personal injury claims and
(ii) real and personal property owned or leased by the Company and the Baseball
Partnership against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against, all of which insurance is in full force and
effect.
(w) Except as set forth or contemplated in the Prospectus, to the best of
the Company's knowledge, no labor problem exists with its employees or is
threatened or imminent that could materially adversely affect the Company and
the Baseball Partnership, taken as a whole, and the Company is not aware of any
existing, threatened or imminent labor disturbance by the employees of any of
its principal suppliers, contractors or customers that could be expected to
materially adversely affect the business, prospects, properties, assets, results
of operation or condition (financial or other) of the Company and the Baseball
Partnership, taken as a whole.
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(x) The Company has obtained the agreement of each of its executive
officers, directors and shareholders that, for a period of 270 days from the
date of the final prospectus, such persons will not, without the prior written
consent of XxXxxxxx & Company Securities, Inc., directly or indirectly sell,
offer to sell, grant any option for the sale of, or otherwise dispose of Common
Shares (including, without limitation, Common Shares which may be deemed to be
beneficially owned by such persons in accordance with the 1934 Act Regulations)
or any securities convertible into Common Shares (including, without limitation,
Class B Common Shares).
(y) Neither the Company nor any of its officers, directors or affiliates
(as defined in the Act and the Rules and Regulations), has taken or will take,
directly or indirectly, any action designed to stabilize or manipulate, or which
has constituted, or might in the future reasonably be expected to cause or
result in, stabilization or manipulation of, the price of the Stock of the
Company in order to facilitate the sale or resale of the Stock or otherwise.
(z) The Company's system of internal accounting controls is sufficient to
meet the broad objectives of internal accounting control insofar as those
objectives pertain to the prevention or detection of errors or irregularities in
amounts that would be material in relation to the Company's financial
statements; and, to the best of the Company's knowledge, neither the Company nor
any employee or agent of the Company or of the Baseball Partnership has made any
payment of funds of the Company or the Baseball Partnership or received or
retained any funds and no funds of the Company or the Baseball Partnership have
been set aside to be used for any payment in violation of any law, rule or
regulation.
(aa) Neither the Company nor the Baseball Partnership is, or upon
completion of the transactions contemplated in the Prospectus will be, required
to register as an "investment company" under the Investment Company Act of 1940,
as amended.
(bb) All contracts and documents which are required to be filed as exhibits
to the Registration Statement have been so filed.
3. SALE, PURCHASE AND DELIVERY OF STOCK. (a) On the basis of the
representations and warranties herein contained, but subject to the terms and
conditions herein set forth, the Company hereby agrees to sell to each
Underwriter, and each Underwriter, severally and not jointly, agrees to purchase
from the Company the respective number of shares of the Firm Stock set forth
opposite the Underwriter's name in Schedule A hereto, at a price of $______ per
share.
(b) The Company will deliver the Firm Stock to you for the respective
accounts of the several Underwriters at the office of XxXxxxxx & Company
Securities, Inc., XxXxxxxx Investment Center, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxx 00000, at 10:00 a.m., Cleveland time, or to your designee at a specified
place at the same time, against payment of the purchase price at the place of
such Closing, by wire transfer in immediately available funds to the account
designated by the Company in writing on the third full business day after the
effective date of the Registration Statement (or, if the Firm Stock is priced
after 4:30 p.m.,
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Cleveland time on the effective date of the Registration Statement, the fourth
full business day after the effective date of the Registration Statement), or at
such other time not later than seven full business days after such initial
public offering as shall be determined by agreement between you and the Company,
such time and place being herein referred to as the "Closing Date." The
certificates for the Firm Stock so to be delivered will be in such denominations
and registered in such names as you may specify to the Company at or before 3:00
p.m., Cleveland time, on the second full business day prior to the Closing Date.
Such certificates will be made available for checking and packaging at least 24
hours prior to the Closing Date.
(c) On the basis of the representations and warranties herein
contained, but subject to the terms and conditions herein set forth, the Company
hereby grants an option to the several Underwriters to purchase, severally and
not jointly, up to 600,000 additional shares in the aggregate of the Option
Stock at the purchase price set forth in Section 3(a) hereof, for use solely in
covering any over-allotments made by the Underwriters in the sale and
distribution of the Firm Stock. The option granted hereunder may be exercised at
any time (but not more than once) within 30 days after the date the Registration
Statement becomes effective, upon written or telegraphic notice by the
Representative to the Company setting forth the aggregate number of shares of
the Option Stock as to which the Underwriters are exercising the option and the
time and place at which certificates will be delivered, such time (which, unless
otherwise determined by you and the Company, shall not be earlier than three nor
later than seven full business days after the exercise of said option) being
herein called the "Second Closing Date." The number of shares of the Option
Stock to be sold by the Company to each Underwriter and purchased by such
Underwriter from the Company shall be the same percentage of the total number of
shares of the Option Stock to be purchased by the several Underwriters on the
Second Closing Date as such Underwriter purchased of the total number of shares
of the Firm Stock, as adjusted by the Representative to avoid fractions and to
reflect any adjustment required by Section 13 hereof. The Company will deliver
certificates for the shares of the Option Stock being purchased by the several
Underwriters to you on the Second Closing Date at the place and time of such
Closing, or to your designee at a specified place at the same time, against
payment of the purchase price at the place of such Closing by wire transfer in
immediately available funds to an account designed by the Company in writing.
The certificates for the Option Stock so to be delivered will be in such
denominations and registered in such names as you may specify to the Company at
or before 3:00 P.M., Cleveland time, on the second full business day prior to
the Second Closing Date. Such certificates will be made available for checking
and packaging at least 24 hours prior to the Second Closing Date. The option
granted hereby may be cancelled by you as the Representative of the several
Underwriters, as to the shares of the Option Stock for which the option is
unexercised, at any time prior to the expiration of the 30-day period, upon
notice to the Company.
4. OFFERING BY UNDERWRITERS. Subject to the terms and
conditions hereof, the several Underwriters agree that (i) they will offer the
Stock to the public as set forth in the Prospectus as soon after the
Registration Statement becomes effective as may be practicable, but in no event
later than 5:00 p.m., Cleveland time, on the 15th business day subsequent to the
date that the Registration Statement becomes effective, and (ii) they will offer
and sell the Stock to the public only in those jurisdictions, and in such
amounts, where due qualification and/or
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registration has been effected or an exemption from such qualification and/or
registration is available under the applicable securities or Blue Sky laws of
such jurisdiction; it being understood, however, that such agreement only covers
the initial sale of the Stock by the Underwriters and not any subsequent sale of
such Stock in any trading market which may develop after the public offering.
5. COVENANTS OF THE COMPANY. The Company covenants and agrees with each of
the Underwriters that:
(a) The Company will make every reasonable effort to cause the Registration
Statement to become effective and will advise you when it is effective under the
Act. The Company will not file any amendment to the Registration Statement, or
supplement to the Prospectus, of which you have not been previously advised and
furnished with a copy, or to which you have reasonably objected in writing.
(b) The Company will advise you promptly of any request of the Commission
for amendment of the Registration Statement or Prospectus or for additional
information and of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or of the institution of any
proceedings for that purpose of which it has knowledge, and the Company will
make every reasonable effort to prevent the issuance of any such stop order and
to obtain as soon as possible the lifting thereof, if issued.
(c) The Company will comply, to the best of its ability, with the Act so as
to permit the continuance of sales of and dealings in the Stock under the Act
for such period as may be required by the Act; whenever it is necessary to amend
or supplement the Prospectus to make the statements therein not misleading,
furnish, without charge to you as the Representatives, either amendments to the
Prospectus or supplemental information, so that the statements in the Prospectus
as so amended or supplemented will not be misleading; and file a post-effective
amendment to the Registration Statement whenever such an amendment may be
required and furnish, without charge to you, a reasonable number of copies of
any such amendment and related Prospectus.
(d) Not later than the 45th day following the end of the fiscal quarter
first occurring after the first anniversary of the Effective Date, the Company
will make generally available to its security holders and deliver to you an
earnings statement (which need not be audited) covering a period of at least 12
months beginning not earlier than the Effective Date which shall satisfy the
provisions of Section 11(a) of the Act or Rule 158 promulgated under the Act.
(e) The Company will furnish to you copies of the Registration Statement
(one of which will be signed and will include all exhibits thereto), each
preliminary prospectus, the Prospectus, all amendments of and supplements to
such documents, and all correspondence between the Commission and the Company or
its counsel or accountants relating thereto, in each case as soon as available
and in such quantities as you may reasonably request.
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(f) For a period of three years from the date of the Prospectus, the
Company will deliver to you (i) within 90 days after the end of each fiscal
year, consolidated balance sheets, statements of income, statements of cash flow
and statements of changes in stockholders' equity of the Company and its
consolidated subsidiaries, if any, as at the end of and for such year and the
last preceding year, all in reasonable detail and certified by independent
accountants, (ii) within 45 days after the end of each of the first three
quarterly periods in each fiscal year, unaudited consolidated balance sheets and
statements of income, statements of cash flow and statements of changes in
stockholders' equity of the Company and its consolidated subsidiaries, if any,
as at the end of and for such period, all in reasonable detail, (iii) as soon as
available, all such proxy statements, financial statements and reports as the
Company shall send or make available to its stockholders or the stockholders or
partners, as the case may be, of any subsidiary any of whose stock or
partnership interests are owned by any person other than the Company or any
subsidiary, and (iv) copies of all annual or periodic reports as the Company or
any subsidiary shall file with the Commission as required by the Act, the
Exchange Act and any rules or regulations thereunder, which are available for
public inspection at the Commission, or any material reports filed in connection
with the Company's listing on any stock exchange.
(g) The Company will apply the net proceeds from the sale of the Stock sold
by it in the manner set forth in the Prospectus.
(h) If, at the time that the Registration Statement becomes effective, any
information shall have been omitted therefrom in reliance upon Rule 430A
promulgated under the Act, then promptly following the execution of this
Agreement, the Company will prepare, and file or transmit for filing with the
Commission in accordance with Rule 430A and Rule 424(b) promulgated under the
Act, copies of an amended Prospectus or, if required by such Rule 430A, a
post-effective amendment (including an amended Prospectus), containing all
information so omitted.
(i) The Company will file with Nasdaq all documents and notices required of
companies that have issued securities that are traded in the over-the-counter
market and quotations for which are reported by Nasdaq.
(j) The Company will cooperate with you and your counsel to qualify the
Stock for sale under the securities or Blue Sky laws of such jurisdictions
within the United States as you designate, including furnishing such information
and executing such instruments as may be required, and will continue such
qualifications for as long as necessary to complete the offering; provided,
however, the Company shall not be required to register or qualify as a foreign
corporation or as a dealer in securities nor, except as to matters and
transactions relating to the offer and sale of the Stock, consent to a service
of process in any jurisdiction.
(k) For a period of 270 days from the time of the initial public offering
of the Stock by the Underwriters, the Company will not publicly sell, except
with your prior written consent, any Common Shares or securities convertible
into Common Shares for cash,
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except pursuant to the exercise of any outstanding stock options of the Company
that are described in the Prospectus.
(l) After the Closing Dates, the Company and the Baseball Partnership will
be in compliance with the financial record-keeping requirements and internal
accounting control requirements of Section 13(b)(2) of the Exchange Act.
6. PAYMENT OF EXPENSES. The Company will pay or cause to be paid all costs
and expenses incident to the performance of the obligations of the Company
hereunder, including, but not limited to, the reasonable fees and disbursements
of its counsel; the reasonable fees, costs and expenses of preparing, printing
and delivering the certificates for the Stock; the reasonable fees, costs and
expenses of the transfer agent and registrar for the Common Shares; the
reasonable fees and disbursements of its accountants; the filing fees and
reasonable expenses incurred in connection with the qualification, registration
or exemption of the Stock under state securities or Blue Sky laws and the fees
and disbursements of counsel for the Underwriters in connection with such
qualification, registration or exemption and the preparation and printing of the
preliminary and final Blue Sky Surveys; the filing fees and reasonable expenses
paid and incurred by the Underwriters, including fees and disbursements of
counsel for Underwriters, in connection with the review of the terms of the
underwriting arrangements by the NASD; the costs and expenses in connection with
the preparation, printing and filing of the Registration Statement (including
exhibits thereto) and the Prospectus and the furnishing to the Underwriters of
such copies of each preliminary and final Prospectus as the Underwriters may
reasonably require; and the costs and expenses in connection with the printing
of this Agreement, the Agreement Among Underwriters, the Selected Dealers
Agreement and other documents distributed to the Underwriters.
7. CONDITIONS OF THE OBLIGATION OF THE UNDERWRITERS. The obligations of the
several Underwriters to purchase and pay for the Firm Stock on the Closing Date
and the Option Stock on the Second Closing Date shall be subject to the
condition that the representations and warranties made by the Company herein are
true and correct as of the date hereof and as of the respective Closing Dates,
to the condition that the written statements of Company officers made pursuant
to the provisions hereof are true and correct, to the condition that the
Formation Transactions shall have been consummated, and to the performance by
the Company of their obligations hereunder and to the following additional
conditions:
(a) The Registration Statement shall have become effective not later
than 5:00 P.M., Cleveland time, on the date of this Agreement, or at such later
time as shall have been consented to by you, and prior to each Closing Date no
stop order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been instituted or
shall be pending, or to the knowledge of the Company or you, shall be
contemplated by the Commission.
(b) You shall not have advised the Company that the Registration
Statement or Prospectus or any amendment thereof or supplement thereto contains
an untrue statement of fact which, in the reasonable opinion of Xxxxxx, Halter &
Xxxxxxxx LLP, counsel for
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the Underwriters, is material, or omits to state a fact which, in the opinion of
such counsel, is material and is required to be stated therein or is necessary
to make the statements therein not misleading.
(c) You shall have received as of each Closing Date (or prior thereto as
indicated) the following:
(i) An opinion of Xxxxx & Xxxxxxxxx LLP, dated the respective Closing
Dates, to the effect that:
(aa) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of Ohio with all requisite
corporate power and authority to own its properties and conduct its business as
described in the Prospectus. The Baseball Partnership has been duly formed and
is validly existing as a partnership in full force and effect under the laws of
Ohio, with all requisite partnership power and authority to own and lease its
properties and conduct its business. The Company and the Baseball Partnership
are duly qualified to do business as a foreign corporation or partnership, as
the case may be, and are in good standing in all jurisdictions in which the
conduct of business, as presently being conducted, or the ownership or leasing
of its properties, requires such qualification (except for those jurisdictions
in which the failure to so qualify will not in the aggregate have a material
adverse effect on the Company and the Baseball Partnership, taken as a whole).
(bb) The authorized capital stock of the Company is as set forth
under "Capitalization" in the Prospectus; all issued and outstanding Common
Shares of the Company have been duly authorized and validly issued and are fully
paid and nonassessable, and are free of statutory preemptive rights of
stockholders or, to the best knowledge of such counsel, contractual preemptive
rights, rights of first refusal or similar contractual rights. Except as
described in the Prospectus, to the best knowledge of such counsel, there are no
outstanding options, warrants or other rights calling for the issuance of and
there are no commitments, plans or arrangements to issue any shares of capital
stock of the Company or any security convertible or exchangeable or exercisable
for capital stock of the Company, and, to the best knowledge of such counsel,
there are no holders of securities of the Company who, by reason of the filing
of the Registration Statement, have the right (and have not waived such right)
to request the Company to include in the Registration Statement securities owned
by them.
(cc) The Common Shares of the Company to be issued and sold by
the Company hereunder have been duly authorized, and, when issued, delivered and
paid for pursuant to this Agreement, will be validly issued, fully paid and
nonassessable. No statutory or, to the best knowledge of such counsel, any other
preemptive rights of security holders of the Company exist with respect to the
issuance and sale of the Stock by the Company pursuant to this Agreement. The
Common Shares of the Company conform to the description thereof contained in the
Prospectus and the certificates for the Common Shares of the Company (including
the Stock) are in due and legal form under Ohio law.
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(dd) The Company has the corporate power and authority to enter
into and perform this Agreement, and to issue and deliver the Stock as provided
herein. The execution, delivery and performance of this Agreement by the Company
has been duly authorized by all necessary action of the Company. This Agreement
constitutes the legal, valid and binding obligation of the Company, enforceable
in accordance with its terms, except as rights to indemnity may be limited by
public policy and applicable federal or state securities laws and except as
enforcement thereof may be limited by bankruptcy, insolvency or other laws of
general application affecting the enforcement of creditors' rights or
limitations upon the availability of certain remedies that may be precluded by
general principles of equity.
(ee) Except as disclosed in the Registration Statement and except
for the partnership interest in the Baseball Partnership owned by the Company,
neither the Company nor the Baseball Partnership owns, directly or indirectly,
any shares of capital stock of any corporation or has any equity interest in any
firm, partnership, joint venture, association or other entity.
(ff) Upon completion of the Formation Transactions, all of the
general partner interests in the Baseball Partnership will be owned by the
Company and all of the limited partner interests in the Baseball Partnership
will be owned by Cleveland Baseball Corporation, an Ohio corporation, in each
case, to the best knowledge of such counsel, free and clear of all liens,
encumbrances, equities, security interests or claims; and, to the best knowledge
of such counsel, there are no outstanding options, warrants or other rights
calling for the issuance of, and there are no commitments, plans or arrangements
to issue, any interests in the Baseball Partnership or any security convertible
or exchangeable or exercisable for interests in the Baseball Partnership.
(gg) The Registration Statement has become effective under the
Act and, to the best of the knowledge of such counsel, 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. The Registration Statement and the Prospectus, and each amendment
thereof or supplement thereto (except for the financial statements and schedules
included 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 (except for the financial statements and schedules included therein
as to which such counsel need express no opinion); the statements in the
Prospectus under the captions "Business - Operating Agreements and Leases,"
"Major League Baseball - Collective Bargaining Agreement," "Management - Stock
Option Plan; - Employment Agreements" and "Description of Capital Shares," in
each case insofar as such statements constitute summaries of the legal matters,
documents or proceeding referred to therein, fairly present the information
called for by the Act with respect to such legal matters, documents and
proceedings and fairly summarize the matters referred to therein; and such
counsel does not know of any legal or governmental proceedings, pending or
threatened, which are required by the Act and the Rules and Regulations to be
described in the Prospectus and which are not described as so required, or of
any leases, contracts or other documents that are required by the Act and the
Rules and Regulations to be
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described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement and which are not described or filed as
so required.
(hh) The consummation of the transactions herein contemplated and
the fulfillment of the terms hereof do not result in a breach of any of the
terms and provisions of, or constitute a default under, any indenture, mortgage,
deed of trust or other agreement or instrument to which the Company or the
Baseball Partnership is a party and of which such counsel has knowledge, or the
Articles of Incorporation or Code of Regulations of the Company, or the
Certificate of Limited Partnership or partnership agreement of the Baseball
Partnership, or any of the MLB Governing Documents, or, to the knowledge of such
counsel, any approval, consent, order, rule or regulation applicable to the
Company or the Baseball Partnership of any court or of any federal or state
regulatory body or administrative agency or other governmental body having
jurisdiction over the Company or the Baseball Partnership or the properties of
any of them, except for such breaches or defaults as will not have a material
adverse effect on the consummation of the transactions herein contemplated and
the fulfillment of the terms hereof by the Company, except such as may be
required under the securities or Blue Sky laws of any jurisdiction as to which
such counsel need express no opinion.
(ii) The Company is not required to register as an "investment
company" under the Investment Company Act of 1940, as amended.
Such counsel shall also state that no facts have come to the
attention of such counsel which would lead such counsel to believe that either
the Registration Statement at the time it became effective and at the Closing
Date or the Second Closing Date, as the case may be, 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 the Prospectus as of the date thereof and as of the Closing Date or the
Second Closing Date, as the case may be, contained an untrue statement of a
material fact or omitted to state any material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
belief or opinion with respect to the financial statements and schedules
included therein).
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws other than the laws of the United
States and jurisdictions in which they are admitted, to the extent specified in
such opinion, if at all, upon an opinion or opinions of other counsel, familiar
with the applicable laws; and (B) as to matters of fact on certificates of
officers of the Company and certificates or other written statements of officers
of departments of various jurisdictions having custody of documents respecting
the corporate existence or good standing of the Company and the Baseball
Partnership. The opinion of such counsel for the Company shall state that the
opinion of any such other counsel is in form satisfactory to such counsel and,
in their opinion, you and they are justified in relying thereon.
(ii) Such opinion or opinions of Xxxxxx, Halter & Xxxxxxxx LLP,
counsel for the Underwriters, dated the respective Closing Dates, with respect
to the sufficiency of all corporate proceedings and other legal matters relating
to this Agreement, the
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validity of the Stock, the Registration Statement, the Prospectus, and other
related matters as you may reasonably request, and the Company shall have
furnished to such counsel such documents as they may request for the purpose of
enabling them to pass upon such matters. In connection with such opinions, such
counsel may rely on representations or certificates of officers of the Company.
(iii) A certificate of the Company executed by the principal executive
officer and the principal financial and accounting officer of the Company, dated
each respective Closing Date, to the effect that:
(aa) The representations and warranties of the Company in Section
2 of this Agreement are true and correct as of each respective 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 each
respective Closing Date.
(bb) No stop order suspending the effectiveness of the
Registration Statement has been issued and, to the knowledge of the respective
signers of the certificate, no proceedings for that purpose have been instituted
or are pending or are contemplated under the Act.
(cc) The signers of the certificate have carefully examined the
Registration Statement and the Prospectus; no facts have come to their attention
which would lead them to believe that either the Registration Statement at the
time it became effective (or any amendment thereof or supplement thereto made
prior to the Closing Date or the Second Closing Date, as the case may be, as of
the date of such amendment or supplement) contained an untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus as of the date thereof (or any amendment thereof or supplement
thereto made prior to the Closing Date or the Second Closing Date, as the case
may be, as of the date of such amendment or supplement) contained an untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; since the latest
respective dates as of which information is given in the Registration Statement,
there has been no material adverse change in the financial position, business or
results of operations of the Company and its Subsidiaries, except as set forth
in or contemplated by the Prospectus; and since the Effective Date of the
Registration Statement there has occurred no event required to be set forth in
an amended or supplemented Prospectus which has not been set forth.
(iv) Letters from Deloitte & Touche LLP dated respectively the date of
this Agreement and each respective Closing Date, addressed to you and the
Company and in form and substance previously approved by you, with respect to
the financial statements and certain financial and statistical information
contained in the Registration Statement and the Prospectus.
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(d) Prior to the Closing Date the Company shall have furnished to you
such further certificates and documents indicated in the Closing Memorandum
prepared by counsel for the Underwriters and furnished to the Company prior to
the date hereof.
(e) Prior to each Closing Date no stop orders suspending the
qualification of the Stock under the securities or Blue Sky laws of the states
in which the Stock is to be offered and sold shall have been issued and no
proceedings for that purpose shall have been instituted or shall be pending, or
to the knowledge of the Company or you, shall be contemplated by the applicable
state securities administrators.
If any condition of the Underwriters' obligations hereunder to be satisfied
prior to any Closing Date is not so satisfied, this Agreement may be terminated
by you prior to such Closing Date, by notice in writing or by telegram confirmed
in writing to the Company.
All such opinions, certificates, letters and documents furnished to you
pursuant to this Section 7 will be in compliance with the provisions hereof only
if they are in all material respects satisfactory to you and to Xxxxxx, Halter &
Xxxxxxxx LLP, counsel for the Underwriters, as to which both you and such
counsel shall act reasonably. The Company will furnish you with such executed
and conformed copies of such opinions, certificates, letters and documents as
you may request.
You, on behalf of the Underwriters, may waive in writing the compliance by
the Company of any one or more of the foregoing conditions or extend the time
for their performance.
8. REPRESENTATIONS OF THE UNDERWRITERS. Each of the Underwriters severally
represents and warrants to the Company that the information furnished to the
Company in writing by such Underwriters or by you expressly for use in the
preparation of the Registration Statement or the Prospectus does not, and any
amendments thereof or supplements thereto thus furnished will not, contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.
Through you each Underwriter has furnished to the Company expressly for such
use, only those statements made in the last paragraph of the cover page of the
Prospectus and the statements relating to the terms of the offering by the
several Underwriters set forth in the first, second, sixth, and seventh
paragraphs under the caption "Underwriting" in the Prospectus.
9. TERMINATION OF AGREEMENT. This Agreement shall become effective: (i)
upon the execution and delivery hereof by the parties hereto; or (ii) if, at the
time this Agreement is executed and delivered, it is necessary for the
registration statement or a post-effective amendment thereto to be declared
effective before the offering of the Stock may commence, when notification of
the effectiveness of the registration statement or such post-effective amendment
has been released by the Commission. At any time before the happening of such
occurrence, the Company may, by notice to you, terminate this Agreement; and at
any time prior to such time, you, as the Representative of the several
Underwriters, may, by notice to the Company, terminate this Agreement.
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This Agreement may also be terminated by you, as the Representative of the
several Underwriters, by notice to the Company on or after the Effective Date of
the Registration Statement and prior to each respective Closing Date, if at any
time during such period any of the following has occurred: (i) except as
disclosed in or contemplated by the Registration Statement, since the respective
dates as of which information is given in the Registration Statement and the
Prospectus, any material adverse change or any development involving a
prospective material adverse change in or affecting the condition, financial or
otherwise, of the Company and its Subsidiaries taken as a whole or the earnings,
business affairs, management or business prospects of the Company and its
Subsidiaries taken as a whole, whether or not arising in the ordinary course of
business; (ii) any outbreak of hostilities or escalation in existing hostilities
anywhere in the world or other national or international calamity or crisis or
change in economic or political conditions, if the effect of such outbreak,
escalation, calamity, crisis or change on the financial markets in the United
States would, in your reasonable judgment, make it impracticable to offer for
sale or to enforce contracts made by the Underwriters for the resale of the
Stock agreed to be purchased hereunder; (iii) any general suspension of trading
in securities on the New York Stock Exchange or the American Stock Exchange or
the Nasdaq or any general limitation on prices for such trading or any general
restrictions on the distribution of securities, all to such a degree as would in
your reasonable judgment materially adversely affect the market for the Stock;
or (iv) a banking moratorium shall have been declared by either Federal, Ohio or
New York State authorities.
This Agreement may also be terminated as provided in Sections 7 and 11
hereof.
If this Agreement shall be terminated by you because of any failure on the
part of the Company to comply with any of the terms or to fulfill any of the
conditions of this Agreement, the Company shall pay, in addition to the costs
and expenses referred to in Section 6, all reasonable out-of-pocket expenses
incurred by the Underwriters in contemplation of the performance by them of
their obligations hereunder, including but not limited to the reasonable fees
and disbursements of counsel for the Underwriters, the Underwriters' reasonable
printing and traveling expenses and postage, telegraph and telephone charges
relating directly to the offering contemplated by the Prospectus, and also
including reasonable advertising expenses of the Representative incurred after
the Effective Date of the Registration Statement and so relating, it being
understood that such out-of-pocket expenses shall not include any compensation,
salaries or wages of the officers, partners or employees of any of the
Underwriters. Only such out-of-pocket expenses as shall be accounted for by the
Underwriters shall be paid to the Underwriters by the Company.
The Company shall not in any event be liable to the several Underwriters
for damages on account of loss of anticipated profits arising out of the
transactions contemplated by this Agreement.
10. INDEMNIFICATION. (a) The Company will indemnify and hold harmless each
Underwriter, and each person, if any, who controls each Underwriter within the
meaning of the Act, against any losses, claims, damages or liabilities, joint or
several, to which such
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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 in whole or in part on any inaccuracy
in the representations and warranties of the Company contained herein or any
failure of the Company to perform its obligations hereunder, or arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, any related preliminary prospectus
(if used prior to the Effective Date), the Prospectus or any amendment thereof
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, subject to the
provisions of Section 10(c), 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 any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this Section 10(a) with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter or to
the benefit of any person controlling such Underwriter in respect of any loss,
claim, damage, liability or action asserted by a person who purchases shares of
the Stock from such Underwriter, if such Underwriter failed to send or give a
copy of the Prospectus (as the same may then be amended or supplemented) to such
person with or prior to written confirmation of the sale to such person; and
provided, further, 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 omission or alleged omission made in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendment thereof or supplement thereto in reliance upon or in conformity with
written information furnished to the Company by an Underwriter specifically for
use in the preparation thereof, as referred to in the last sentence of Section 8
hereof. This indemnity agreement will be in addition to any liability which the
Company may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company, each
person, if any, who controls the Company within the meaning of the Act, each of
its directors, and each of its officers who have signed the Registration
Statement, against any losses, claims, damages or liabilities to which the
Company, or any such director or officer may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement,
any preliminary prospectus, the Prospectus, or any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, any preliminary prospectus, the Prospectus or any amendment thereof
or supplement thereto in reliance upon or in conformity with written information
furnished to the Company by such Underwriter through you, as the Representative
of the Underwriters, specifically for use in the preparation thereof, as
referred to in the last sentence of Section 8 of this Agreement; and will
reimburse the Company and each such director or officer for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability which the Underwriters may
otherwise have.
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(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 an indemnifying party under this
Section, notify each party against whom indemnification is to be sought in
writing of the commencement thereof; but the omission so to notify an
indemnifying party will not relieve it from any liability which they 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 in, and to the extent that it may wish, to assume the defense
thereof, with counsel approved by such indemnified party (which approval shall
not be unreasonably withheld), 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. The indemnified party
shall have the right to employ its counsel in any such action, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the employment of counsel by such indemnified party has been
authorized in writing by the indemnifying parties, (ii) the named parties to any
such action include both the indemnifying party and the indemnified party, and
the indemnified party shall have reasonably concluded that there is an actual or
potential conflict of interest between the indemnifying parties and the
indemnified party in the conduct of the defense of such action (in which case
the indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party) or (iii) the indemnifying parties
shall not have employed counsel to assume the defense of such action within a
reasonable time after notice of the commencement thereof, in each of which cases
the reasonable fees and expenses of counsel shall be at the expense of the
indemnifying parties. In no event shall the indemnifying party or parties be
liable for the fees and expenses of more than one counsel for all indemnified
parties in connection with any one or separate but similar or related actions in
the same jurisdiction arising out of the same allegations or circumstances.
Anything in this Section to the contrary notwithstanding, no indemnifying party
shall, without the written consent of the indemnified party, such consent not to
be unreasonably withheld, effect the settlement or compromise of, or consent to
the entry to any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification may be sought hereunder (whether or
not the indemnified party is an actual or potential party to such action or
claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to or an admission
of fault, culpability or failure to act, by or on behalf of any indemnified
party.
(d) In order to provide for contribution in circumstances in which the
indemnification provided for in this Section is for any reason held to be
unavailable from the Company or the Underwriters or is insufficient to hold
harmless a party indemnified hereunder, the Company and the Underwriters shall
contribute to the aggregate losses, claims, damages, liabilities and expenses of
the nature contemplated by such indemnification provisions (including any
investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claims
asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company, any
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contribution received by the Company from persons, other than the Underwriters,
who may also be liable for contribution, including persons who control the
Company within the meaning of the Act, officers of the Company who signed the
Registration Statement and directors of the Company) to which the Company and
one or more of the Underwriters may be subject, in such proportions as is
appropriate to reflect the relative benefits received by the Company and the
Underwriters from the offering of the Stock or, if such allocation is not
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in this Section,
in such proportion as is appropriate to reflect not only the relative benefits
referred to above but also the relative fault of the Company and the
Underwriters in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and the Underwriters shall be deemed to be in the same proportion as (x) the
total proceeds from the offering (net of underwriting discounts and commissions
but before deducting expenses) received by the Company and (y) the underwriting
discounts and commissions received by the Underwriters, respectively, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault of the Company and of the Underwriters shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omissions or alleged omission to state a material fact
relates to information supplied by the Company or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 10(d) were determined by pro rata allocation even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this Section 10(d), (i) in no case
shall any Underwriter (except as may be provided in the Agreement Among
Underwriters) be liable or responsible for any amount in excess of the
underwriting discounts and commissions applicable to the Stock 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, if any, who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 10(d), each person, 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 rights to contribution as the
Company, subject in each case to clauses (i) and (ii) of this Section 10(d). 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 10(d), 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
obligation it or they may have under this Section 10(d) or otherwise. Anything
in this Section to the contrary notwithstanding, no party shall be liable,
without the written consent of such party, such consent not to be unreasonably
withheld, for any settlement or compromise of, or consent to the entry of any
judgment with respect to, any pending or threatened action or claim for
contribution which may be sought hereunder (whether or not such party is an
actual or
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potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of such party from all liability
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or failure to act, by or on behalf of such
party.
11. DEFAULT OF THE UNDERWRITERS. If any Underwriter or
Underwriters default in their obligations to purchase the Stock hereunder and
arrangements satisfactory to you and the Company, evidenced by a writing or
writings signed by you and the Company, for the purchase of such Stock by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter and
the Company (except that the Company shall be liable for the expenses to be paid
by it pursuant to the provisions of Section 6), provided, however, that if the
number of shares of the Stock which all such defaulting Underwriters have agreed
but failed to purchase shall not exceed 10% of the number of shares of the Firm
Stock or the Option Stock, as the case may be, agreed to be purchased pursuant
to this Agreement (other than the shares agreed to be taken up hereunder which
the defaulting Underwriters failed to purchase) by all non-defaulting
Underwriters, the non-defaulting Underwriters shall be obligated proportionately
to take up and pay for the shares of the Firm Stock or the Option Stock which
such defaulting Underwriters failed to purchase.
If any such default occurs, either you or the Company shall
have the right to postpone the Closing Date for not more than seven business
days in order that the necessary changes in the Registration Statement,
Prospectus and any other documents, as well as any other arrangement, may be
effected. As used in this Agreement, the term "Underwriters" includes any person
substituted for an Underwriter under this Section. Nothing herein will relieve a
defaulting Underwriter from its liability to the other several Underwriters and
the Company for its default hereunder.
12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations and warranties of the
Company and the several Underwriters, set forth in or made pursuant to this
Agreement, will remain in full force and effect, regardless of any investigation
made by or on behalf of any Underwriter, the Company or any of its officers or
directors or any controlling person, and will survive delivery of and payment
for the Stock and, in the case of the agreements contained in Sections 6, 9 and
10 hereof, will survive any termination of this Agreement.
13. NOTICES. All communications hereunder will be in writing
and, if sent to the Underwriters, will be mailed, delivered or telegraphed and
confirmed to you at XxXxxxxx & Company Securities, Inc., XxXxxxxx Investment
Center, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, Attention: Xxxxx X. Xxxxx
Xxxxx, Xx., with a copy to Xxxxxx, Halter & Xxxxxxxx LLP, 1400 XxXxxxxx
Investment Center, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, Attention: Xxxxxx
X. XxXxx, Esq., or if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to the Company at 0000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxx
00000, Attention: Xxxxxx Xxxxxx, Executive Vice President, with a copy to Xxxxx
& Xxxxxxxxx LLP, 3200 National City Center, 0000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxx 00000, Attention: Xxxxxx X. Xxxxxxx, Xx., Esq.
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14. SUCCESSORS, GOVERNING LAW. This Agreement will inure
solely to the benefit of and be binding upon the parties hereto and the officers
and directors and controlling persons referred to in Section 10 hereof and their
respective successors, assigns, heirs, executors and administrators, and no
other persons will have any right or obligation hereunder. This Agreement will
be governed by and construed in accordance with the laws of the State of Ohio,
without giving effect to the principles of conflicts of laws thereof.
15. EXECUTION IN COUNTERPARTS. This Agreement may be executed
by any one or more of the parties hereto in any number of counterparts, each of
which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument.
16. AUTHORITY OF THE REPRESENTATIVE. You represent and warrant
that you have been authorized by the several Underwriters to enter into this
Agreement on their behalf and to act for them in the manner hereinbefore
provided.
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If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us the enclosed copies hereof,
whereupon it will become a binding agreement by and between the Company and the
several Underwriters in accordance with its terms.
Very truly yours,
CLEVELAND INDIANS BASEBALL
COMPANY, INC.
By:
---------------------------------
Its:
--------------------------
The foregoing Agreement is hereby confirmed
and accepted by us in Cleveland, Ohio,
acting on our own behalf and as the
Representative of the several Underwriters
named on Schedule A annexed hereto, as of
the date first above written.
XxXXXXXX & COMPANY SECURITIES, INC.
As Representative of the Several Underwriters
By:
----------------------------------------
Managing Director
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SCHEDULE A
UNDERWRITERS
Number of Shares to
Underwriter be Purchased
----------- ------------
XxXxxxxx & Company Securities, Inc....................
Total ...............................................
A-1
