WORLDWIDE ENTERTAINMENT & SPORTS CORP.
1,300,000 UNITS
1,300,000 SHARES OF COMMON STOCK
WITH
WARRANTS TO PURCHASE 1,300,000 SHARES OF COMMON STOCK
AGREEMENT AMONG UNDERWRITERS
New York, New York
, 1996
To: Each of the Underwriters named
in Schedule A to the attached
Underwriting Agreement
Dear Sirs:
Worldwide Entertainment & Sports Corp., a Delaware corporation
(the "Company"), proposes to enter into an underwriting agreement, substantially
in the form attached hereto as Exhibit A (the "Underwriting Agreement"), with
Xxxxxxx Xxxxx & Company, LLC (the "Representative") of the Underwriters named in
Schedule A hereto(the "Underwriters"), acting severally and not jointly, with
respect to the purchase from the Company of an aggregate of 1,300,000 units (the
"Offered Units") consisting of an aggregate of 1,300,000 shares of common stock,
$.01 par value (the "Common Shares"), and 1,300,000 Common Share purchase
warrants (the "Warrants") entitling the holder of each Warrant to purchase one
Common Share during the five-year period commencing one year after the original
issuance of the Warrants. Such Common Shares and Warrants will be offered to the
public in Units, each Unit consisting of one Common Share and one Warrant. The
Underwriting Agreement also provides for the grant to the Representative,
individually, and not as representative of the Underwriters, of up
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to an additional 195,000 Units (the "Optional Units"), at its option, for the
sole purpose of covering over-allotments in the sale of the Offered Units. The
Units are described in the Registration Statement and Prospectus (as defined in
the Underwriting Agreement). The Representative will, unless otherwise
specified, act as the representative of the Underwriters in the transactions
described herein and in the Underwriting Agreement.
1. AUTHORITY OF THE REPRESENTATIVE. Each Underwriter hereby
severally authorizes the Representative on such Underwriter's behalf to (a)
enter into an Underwriting Agreement with the Company substantially in the form
attached hereto as Exhibit A; (b) fix the initial public offering price per Unit
and the discount in connection therewith; (c) fix the exercise price for the
Warrants; (d) extend, at the Representative's discretion, the date specified in
Section 6(a) of the Underwriting Agreement by which the Registration Statement
is to become effective and fix and extend, to not later than 10:00 a.m., New
York City time, on the third full business day after the Registration Statement
shall have become effective (or any postponed date pursuant to Section 10 of the
Underwriting Agreement), the Closing Date (referred to in Section 3 of the
Underwriting Agreement) for the purchase of Offered Units; (e) act as such
Underwriter's representative to carry out the Underwriting Agreement and this
Agreement and the purchase, sale and distribution of the Offered Units hereunder
and thereunder; (f) exercise the authority and discretion vested in the
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Underwriters by the Underwriting Agreement; (g) obtain loans or advance the
Representative's own funds for the account of such Underwriter, charging current
interest rates, and, in connection therewith, execute and deliver any notes or
other instruments and hold or pledge as security therefor any of the Units
acquired pursuant to Section 5 hereof; and (h) take such other action as the
Representative deems necessary or advisable in order to carry out the provisions
of the Underwriting Agreement and this Agreement, including authority to agree
to any variation of the terms of the Underwriting Agreement which, in the
Representative's judgment, is necessary or advisable.
Any lender may rely on the Representative's instructions in all
matters relating to any loans referred to in clause (g) of Section 1 above.
The initial public offering of the Units is to be made on the
date and at the public offering price fixed by the Representative. The
Representative may vary such price and the dealers' concession and reallowance
from time to time after the initial public offering.
The initial public advertisement will appear on the date of the
public offering of the Units or the day following and will be over the
Representative's name and the names of such other Underwriters as the
Representative may determine. After such
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advertisement has appeared, but not before, any Underwriter may advertise at its
own risk and expense.
2. SALES TO INSTITUTIONS, DEALERS, ETC. Each Underwriter
authorizes the Representative to reserve for sale and to sell for the account of
such Underwriter all or part of the Offered Units which such Underwriter has
agreed to purchase (a) to institutions and other retail purchasers, in the
proportion, except as adjusted by the Representative to eliminate fractional
Units, that the underwriting commitment of each underwriter to purchase the
Offered Units bears to the aggregate underwriting commitments of all
Underwriters, and (b) to securities dealers selected by the Representative (the
"Dealers"), who may include any of the several Underwriters, in such proportion
as the Representative may determine. Each Dealer will be a member of the
National Association of Securities Dealers, Inc. (the "NASD") or, if a foreign
dealer not eligible for membership in the NASD, will agree to conform to the
provisions of the Rules of Fair Practice of the NASD in making sales outside the
United States and to maker no sales within the United States or to persons who
are citizens thereof or residents therein. Sales to Dealers will be made less
such Dealers' selling concession as the Representative will determine and will
be subject to the terms and conditions of a selected dealer agreement
substantially in the form attached hereto as Exhibit B (the "Selected Dealer
Agreement").
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3. SALES BY UNDERWRITERS. Each Underwriter agrees that, until the
termination of the Selected Dealer Agreement, if a selling group is formed, or
if not, for 25 days after the initial public offering of the Offered Units or
until notification by the Representative terminating this provision, whichever
is earlier, all sales of the Units by it or on its behalf will be made in all
respects in compliance with and subject to the provisions of the Selected Dealer
Agreement, provided that (a) the Representative may make sales for its account
pursuant to this Agreement, and (b) any Underwriter, without the
Representative's consent, may sell Offered Units to any other Underwriter at the
initial public offering price, less the Dealers' selling concession, and with
the Representative's consent may sell Offered Units to any other Underwriter
upon such terms as the Representative may in each instance, or generally,
approve.
Each Underwriter agrees to advise the Representative, upon the
Representative's request, of the number of Offered Units purchased pursuant to
the Underwriting Agreement remaining unsold by it and to release to the
Representative for sale any part or all of such unsold Offered Units not in
excess of the Dealers' selling concession as the Representative may determine.
4. REPURCHASED UNITS. Any Units sold by an Underwriter, except
through the Representative, which will be purchased or contracted for by the
Representative in the open
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market or otherwise during the term of this Agreement may be redelivered by the
Representative to such Underwriter at a price equal to the Representative's
cost, including any commissions paid thereon and transfer taxes on redelivery.
Units so redelivered need not be represented by the identical certificates
purchased by such Underwriter. In lieu of redelivering such Units, the
Representative may sell such Units for the account of such Underwriter publicly
or privately, at such price and upon such terms and to such persons, including
the Representative or any of the Underwriters, as the Representative may
determine, charging the amount of any loss and expense or crediting the amount
of any profit, less any expense resulting from such sale, to the account of such
Underwriter, or the Representative may charge its account with an amount not in
excess of the Dealers' selling concession.
5. PAYMENT AND DELIVERY. The Representative will give each
Underwriter at least 24 hours' notice of the Closing Date. At or before 8:45
a.m., New York City time, on the Closing Date, each Underwriter agrees to
deliver to the Representative at its offices at 0000 Xxxxx Xxxx, Xxxxx Xxx
Xxxxxx 00000, a certified or official bank check payable to Xxxxxxx Xxxxx &
Company, LLC. in New York Clearing House funds, in an amount equal to the full
purchase price of the Offered Units which such Underwriter is to purchase on
such date pursuant to the Underwriting Agreement. Each Underwriter authorizes
the Representative, for such Underwriter's account, (a) to deliver the
Representative's check or checks in payment for the
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Offered Units which such Underwriter is to purchase, and (b) to receive the
certificates for the Common Shares and Warrants comprising the Offered Units
registered in the name of such Underwriter or in any other name or form as the
Representative deems desirable.
Certificates for the Common Shares and Warrants received by the
Representative for the account of any Underwriter, and not reserved, will be
delivered to that Underwriter following payment therefor as stated above.
Certificates for Common Shares and Warrants reserved for the account of any
Underwriter which remain unsold at any time prior to the settlement of accounts
hereunder may, in the Representative's discretion, and will, upon the request of
such Underwriter, be delivered to such Underwriter (but until the settlement of
accounts hereunder, unless otherwise determined by the Representative, the
delivery will be for carrying purposes only).
6. STABILIZATION.
(a) Each Underwriter authorizes the Representative, until
the termination of this Agreement and subject to the applicable
provisions of the statutes administered by the Securities and Exchange
Commission (the "Commission") and its rules and regulations, to make
purchases and sales of any Units or the Warrants and Common Shares
included therein,
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either for long or short account and on such terms and at such prices as
the Representative determines; and to make over-allotments of the
Offered Units and to make purchases for the purpose of covering any
over-allotments so made. Except as a result of the exercise of the
overallotment option pursuant to Section 3 of the Underwriting
Agreement, such purchases, sales and over-allotments will be for the
accounts of the several Underwriters in proportion as nearly as
practicable to their respective commitments to purchase Offered Units.
Each Underwriter agrees upon the Representative's request to take up at
cost (but until the settlement of accounts hereunder, unless otherwise
determined by the Representative, for carrying purposes only) any Units
so purchased by the Representative for its account, and on request to
deliver to the Representative, against payment therefor, any Units so
sold for its account through over-allotment or otherwise, provided that
at no time will the resulting net commitment of any Underwriter on long
or short account exceed 10% of the aggregate number of Offered Units
which such Underwriter is obligated to purchase under the Underwriting
Agreement. The Representative will have authority to pay on behalf of
the respective Underwriters such commissions, taxes and other expenses
as the Representative may deem proper in connection with such purchases
and sales and to charge the respective accounts of the Underwriters with
commissions, taxes and appropriate expenses on purchases and sales
effected by the
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Representative. This provision is not an assurance that the price of the
Units, Warrants or the Common Stock will be stabilized or that
stabilization, if commenced, will not be discontinued at any time.
(b) Each Underwriter authorizes the Representative to file
with the Commission any and all reports required by Rule 17a-2 under the
Securities Act of 1934, as amended (the "Exchange Act"), or any other
applicable rule of the commission, in connection with any purchases or
sales made by the Representative for the respective accounts of the
Underwriters pursuant to the foregoing authorization. The Representative
will advise each Underwriter promptly of the dates on which the
Representative commences and terminates any such transactions. Each
Underwriter has, and assumes for itself, the responsibility for making
the reports required by such rules with respect to its own transactions
which are subject thereto. Each Underwriter shall retain the records
required by such rules with respect to its own transactions which are
subject thereto.
(c) Until the termination of this Agreement or prior
notification by the Representative, the Representative will have the
sole right to effect stabilizing transactions in the Units. Each
Underwriter agrees that until such time it will not make any purchases
or sales of the Units of the
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Company except (i) pursuant to the Underwriting Agreement or this
Agreement, (ii) pursuant to authorization received from the
Representative, or (iii) in the ordinary course of business as broker or
agent for a customer pursuant to an unsolicited order.
7. COMPENSATION AND EXPENSES OF THE REPRESENTATIVE. The
Representative may charge against the account of each Underwriter when the final
accounting is made:
(a) as the Representative's compensation for services
pursuant to this Agreement, an aggregate amount equal to $______ per
Unit for each Offered Unit purchased by such Underwriter pursuant to the
Underwriting Agreement;
(b) all transfer taxes paid on the Underwriter's behalf on
sales or transfers made for its account and its proportionate part of
all expenses, other than those specifically provided for in other
sections of this Agreement, incurred by the Representative hereunder;
(c) the Underwriter's proportionate part of all other
expenses, in excess of those reimbursed by the Company pursuant to
Section 5(i) of the Underwriting Agreement, incurred by the
Representative under the terms of this Agreement or in connection with
the purchase, carrying, sale
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or distribution of the Units: and
(d) the Underwriter's proportionate part of the expenses
chargeable against any Underwriter failing to perform its obligations
under this Agreement or under the Underwriting Agreement and of any
additional losses or expenses arising from such failure, without,
however, relieving such Underwriter from its liability therefor.
The Representative's determination and apportionment of such
expenses shall be conclusive.
8. BLUE SKY QUALIFICATION. The Representative will advise each
Underwriter as to the states or jurisdictions under the securities or Blue Sky
laws of which the Representative believes the Units are eligible for sale, but
the Representative will assume no responsibility as to such eligibility or as to
the right of any Underwriter to sell any Units in any state or jurisdiction. The
Representative has caused to be filed a Further State Notice respecting the
Units to be offered to the public in New York in the form required by, and
pursuant to, the provisions of Article 23A of the General Business Law of the
State of New York.
9. INDEMNIFICATION. Each Underwriter, severally, will indemnify
and hold harmless each other Underwriter, any person who may be deemed to
control any other Underwriter within the meaning
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of Section 15 of the Securities Act of 1933, as amended (the "Securities Act"),
and each officer, director, partner, employee and agent of any other
Underwriter, to the extent and upon the terms set forth in the Underwriting
Agreement. Such indemnity will survive the termination of this Agreement and
will remain in full force and effect regardless of any investigation made by, or
on behalf of, such other Underwriter or such persons.
10. TERMINATION OF AGREEMENT. Except as to accrued obligations
and except as otherwise provided herein, this Agreement will terminate (a) at
the close of business on the 20th day following the effective date of the
Registration Statement, or (b) at such other date, but in no event more than 40
days following such effective date, as the Representative may fix by notice to
each Underwriter, or (c) if the Underwriting Agreement will be terminated, in
accordance with its terms. Such termination, however, will not relieve any
Underwriter from its proportionate share of any charges, liabilities or expenses
incurred prior thereto.
11. SETTLEMENT OF ACCOUNTS. Accounts will be closed and settled
under this Agreement as soon as practicable after termination. At such time any
Units held by the Representative for the account of an Underwriter shall be
distributed by the Representative to such Underwriter, and the net credit or
debit balance of each Underwriter will be paid to it or collected from it
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by the Representative, but the Representative may establish reasonable reserves
against any claims and expenses not then ascertained. No statements by the
Representative of the amount of credit or debit balance or payment or reserve
will constitute a representation as to the existence or nonexistence of any
other charges, liabilities or expenses, for all of which the several
Underwriters will continue to be liable as provided for in this Agreement. Any
Units which are held by the Representative for the account of any Underwriter by
reason of a default by a retail purchaser or a Dealer will be purchased by the
Underwriter for whose account the Units have been sold by the Representative to
such retail purchasers or Dealers, as the case may be, and the Representative is
authorized to make appropriate charges and credits to the account of each such
Underwriter for this purpose. Notwithstanding any distribution or settlement on
the termination of accounts, each Underwriter will remain liable for its proper
proportion of any tax or other liability which may be asserted against any one
or more of the Underwriters in respect of this Agreement or the Underwriting
Agreement based upon the claim that the Underwriters constitute a partnership,
an association, an unincorporated business or other separate entity, and each
Underwriter agrees to pay its proper proportion of the expenses of resisting any
such claim. The provisions of this Section 11 will survive the termination of
this Agreement.
12. COMPLIANCE WITH EXCHANGE ACT, ETC. Each Under-
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writer will comply with any applicable provisions of the Exchange Act or
regulations of the Commission. Each Underwriter represents that it is a member
in good standing of the NASD and agrees to comply with all applicable provisions
of the Rules of Fair Practice of the NASD including, without limitation,
Sections 8, 24 and 36 of the Rules of Fair Practice. Each Underwriter represents
that its commitment hereunder will not place such Underwriter in violation of
Rule 15c3-1 of the rules of the Commission under the Exchange Act. Each
Underwriter will notify each of its customers with respect to whose account it
has investment discretion and to whose account it proposes to sell any of the
Units that it proposes to sell to such customer's account as a principal and to
obtain the written consent of such customer to any such sale.
13. REGISTRATION STATEMENT; PROSPECTUS. Each Underwriter confirms
(a) that it has examined each Preliminary Prospectus, the Registration
Statement and the form of Prospectus (and any amendments or supplements thereto)
referred to in the Underwriting Agreement; (b) that the information therein is
correct and not misleading insofar as such information relates to such
Underwriter; (c) that copies of the Preliminary Prospectus complying with Rule
430 under the Securities Act have been expeditiously distributed to all persons
to whom it was then expected to mail confirmations of sale not less than 48
hours prior to the time it was expected to mail confirmations of sale; and (d)
that it is willing to accept the responsibilities under the
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Securities Act of an underwriter named in the Registration Statement and is
willing to proceed with the underwriting in the manner contemplated thereby.
Each Underwriter authorizes the Representative, with the approval of counsel for
the Underwriters, on behalf of such Underwriter, to consent to the filing of any
further amendments or supplements to any Preliminary Prospectus, the
Registration Statement or the Prospectus.
14. STATUS OF REPRESENTATIVE AND UNDERWRITERS. In any action
taken hereunder, except in the sale of the Units underwritten by the
Representative and in the performance of the Representative's own obligations
hereunder, under the Underwriting Agreement and the Selected Dealer Agreement,
the Representative will act only as the representative of the several
Underwriters. Nothing contained herein shall constitute the Underwriters, or any
of them, partners or any of them liable to make payments otherwise than
as herein provided, or impair the several nature of their obligations under this
Agreement and the Underwriting Agreement.
15. DEFAULT BY AND UNDERWRITER. If any Underwriter shall fail or
refuse to purchase any of the Offered Units that it has severally agreed to
purchase and arrangements satisfactory to the Representative and the Company for
the purchase of such amount of Offered Units are not made within 48 hours after
such default, this Agreement will terminate without liability on the part of the
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non-defaulting Underwriters for the purchase or sale of any of the Offered Units
under the Underwriting Agreement. In any such case, either the non-defaulting
Representative or the Company shall have the right to postpone the Closing Date
but in no event for longer than seven days, in order that the required changes,
if any, in the Registration Statement and the Prospectus or in any other
documents or arrangements may be effected. Any action taken under this section
shall not relieve the defaulting Underwriter from liability in respect of its
default under this Agreement.
16. INTEREST ON FUNDS. The Representative will not be under any
duty to account for any interest on funds of any of the Underwriters at any time
in the Representative's hands, and such funds may be held by the Representative
unsegregated from its general funds.
17. LIABILITY OF REPRESENTATIVE. Except as expressly stated
herein, or as may arise under the Securities Act, the Representative will not be
under any liability for, or in respect of: the validity or value of the Units;
the form of, or the statements contained in, the Registration Statement, any
Preliminary Prospectus, the Prospectus (or any amendments or supplements
thereto), or any supplemental sales data or other letters or instruments
executed by, or obtained from, the Company; the form or validity of the
Underwriting Agreement, the Selected Dealer Agreement or this Agreement; the
eligibility of the Units
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for sale under the laws of any state or jurisdiction; the delivery of the Units;
the performance by the Company or others of any agreement on its or their part;
or any matter in connection with any of the foregoing, except the
Representative's own lack of good faith.
18. NOTICES. Any notice to any Underwriter will be deemed to have
been duly given if mailed, telegraphed or delivered to such Underwriter at the
address set forth in the Underwriter's questionnaire provided to the
Representative.
19. CONSTRUCTION OF AGREEMENT. This Agreement will be governed
by, and construed and enforced in accordance with, the laws of the State of New
York applicable to contracts made and to be wholly performed in such State.
20. HEADINGS. The headings in this Agreement are for purposes of
reference only and will not limit or otherwise affect any of the terms or
provisions hereof.
21. COUNTERPARTS. This Agreement may be signed in any number of
counterparts which, taken together, will constitute one and the same instrument.
If the foregoing meets with your approval, please sign
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and return to the Representative one counterpart of this Agreement. Upon your
confirmation hereof and upon confirmation of identical agreements by each of the
other Underwriters, covering in the aggregate all the Offered Units, this
Agreement will constitute a valid and binding contract between you and the
Representative.
Very truly yours,
XXXXXXX XXXXX & COMPANY, LLC
As Representative of
the Underwriters
By: _________________________
Confirmed as of the date first above written:
______________________________________
By:__________________________________
Authorized Signature
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