<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 29, 1998
REGISTRATION NO. 333-53057
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
PRE-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
EXCITE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
CALIFORNIA 77-0378215
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
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555 BROADWAY
REDWOOD CITY, CALIFORNIA 94063
(650) 568-6000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
ROBERT C. HOOD
EXECUTIVE VICE PRESIDENT, CHIEF ADMINISTRATIVE OFFICER AND CHIEF FINANCIAL
OFFICER
EXCITE, INC.
555 BROADWAY
REDWOOD CITY, CALIFORNIA 94063
(650) 568-6000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
Copies to:
MARK C. STEVENS, ESQ.
JEFFREY R. VETTER, ESQ.
MICHAEL J. MCADAM, ESQ.
FENWICK & WEST LLP
TWO PALO ALTO SQUARE
PALO ALTO, CALIFORNIA 94306
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement until
the sale of all shares registered hereunder.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The aggregate estimated expenses to be paid by the Registrant in connection
with this offering are as follows:
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<S> <C>
Securities and Exchange Commission registration fee......... $14,750.00
Accounting fees and expenses................................ 10,000.00
Legal fees and expenses..................................... 30,000.00
Miscellaneous............................................... 5,250.00
----------
Total............................................. $60,000.00
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Articles of Incorporation include a provision that
eliminates the personal liability of its directors to the Registrant and its
shareholders for monetary damages for breach of the directors' fiduciary duties
to the fullest extent permitted by law. This limitation has no effect on a
director's liability (i) for acts or omissions that involve intentional
misconduct or a knowing and culpable violation of law, (ii) for acts or
omissions that a director believes to be contrary to the best interests of the
Registrant or its shareholders or that involve the absence of good faith on the
part of the director, (iii) for any transaction from which a director derived an
improper personal benefit, (iv) for acts or omissions that show a reckless
disregard for the director's duty to the Registrant or its shareholders in
circumstances in which the director was aware, or should have been aware, in the
ordinary course of performing a director's duties, of a risk of a serious injury
to the Registrant or its shareholders, (v) for acts or omissions that constitute
an unexcused pattern of inattention that amounts to an abdication of the
director's duty to the Registrant or its shareholders, (vi) under Section 310 of
the California Corporations Code (the "California Code") (concerning contracts
or transactions between the Registrant and a director) or (vii) under Section
316 of the California Code (concerning directors' liability for improper
dividends, loans and guarantees). The provision does not extend to acts or
omissions of a director in his capacity as an officer. Further, the provision
will not affect the availability of injunctions and other equitable remedies
available to the Registrant's shareholders for any violation of a director's
fiduciary duty to the Registrant or its shareholders.
The Registrant's Articles of Incorporation also include an authorization
for the Registrant to indemnify its agents (as defined in Section 317 of the
California Code), through bylaw provisions, by agreement or otherwise, to the
fullest extent permitted by law. Pursuant to this latter provision, the
Registrant's Bylaws provide for indemnification of the Registrant's directors
and officers. In addition, the Registrant, at its discretion, may provide
indemnification to persons whom the Registrant is not obligated to indemnify.
The Bylaws also allow the Registrant to enter into indemnity agreements with
individual directors, officers, employees and other agents. These indemnity
agreements have been entered into with all directors and provide the maximum
indemnification permitted by law. These agreements, together with the
Registrant's Bylaws and Articles of Incorporation, may require the Registrant,
among other things, to indemnify such directors against certain liabilities that
may arise by reason of their status or service as directors (other than
liabilities resulting from willful misconduct of a culpable nature), to advance
expenses to them as they are incurred, provided that they undertake to repay the
amount advanced if it is ultimately determined by a court that they are not
entitled to indemnification, and to obtain directors' and officers' insurance if
available on reasonable terms.
Section 317 of the California Code and the Registrant's Bylaws make
provision for the indemnification of officers, directors and other corporate
agents in terms sufficiently broad to indemnify such persons, under certain
circumstances for liabilities (including reimbursement of expenses incurred)
arising under the Securities Act.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the
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<PAGE> 3
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable.
The Registrant has directors and officers liability insurance with a per
claim and annual aggregate coverage limit of $5,000,000.
ITEM 16. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made
pursuant to this Registration Statement, a post-effective amendment to this
Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the "Securities Act");
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement (notwithstanding the foregoing, any
increase or decrease in volume or securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement); and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement; provided, however, that paragraphs (1)(i) and (1)(ii) do not
apply if the information required to be included in a post-effective
amendment by paragraphs (1)(i) or (1)(ii) is contained in any periodic
report filed with or furnished to the Securities and Exchange Commission
by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment shall be deemed a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
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<PAGE> 4
ITEM 17. EXHIBITS
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<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
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<C> <C> <S>
3.01 -- Amended and Restated Articles of Incorporation of
Registrant, as amended.(1)
4.01 -- Form of Specimen Certificate for Registrant's Common
Stock.(2)
4.02 -- Bylaws of Registrant, as amended.(3)
4.03 -- Warrant Agreement, dated as of April 29, 1998, by and
between the Registrant and Netscape Communications
Corporation.
5.01 -- Opinion of Fenwick & West LLP.
23.01 -- Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02 -- Consent of Ernst & Young LLP, Independent Auditors
(previously filed).
23.03 -- Consent of Price Waterhouse LLP, Independent Accountants
(previously filed).
24.01 -- Power of Attorney (previously filed).
</TABLE>
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(1) Previously filed with the Commission on March 31, 1998 as an exhibit to the
Registrant's Annual Report on Form 10-K for the year ended December 31,
1997.
(2) Previously filed with the Commission on March 29, 1996 as an exhibit to
Amendment No. 1 to the Registrant's Registration Statement on Form SB-2
(File No. 333-2328-LA).
(3) Previously filed with the Commission on March 11, 1996 as an exhibit to the
Registrant's Registration Statement on Form SB-2 (File No. 333-2328-LA).
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<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all for the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Redwood City, State of California, on the 29th day of
June, 1998.
EXCITE, INC.
By: /s/ ROBERT C. HOOD
------------------------------------
Robert C. Hood
Executive Vice President, Chief
Administrative and Chief Financial
Officer
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
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<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <C> <S>
PRINCIPAL EXECUTIVE OFFICER:
* President, Chief Executive Officer June 29, 1998
- --------------------------------------------------- and Director
George Bell
PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER:
/s/ ROBERT C. HOOD Executive Vice President, June 29, 1998
- --------------------------------------------------- Chief Administrative Officer
Robert C. Hood and Chief Financial Officer
ADDITIONAL DIRECTORS:
* Senior Vice President and Director June 29, 1998
- ---------------------------------------------------
Joseph R. Kraus
* Director June 29, 1998
- ---------------------------------------------------
Vinod Khosla
* Director June 29, 1998
- ---------------------------------------------------
Geoffrey Y. Yang
*By: /s/ CHRIS VAIL Attorney-in-fact June 29, 1998
---------------------------------------------
Chris Vail
</TABLE>
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------
<C> <C> <S>
3.01 -- Amended and Restated Articles of Incorporation of
Registrant, as amended.(1)
4.01 -- Form of Specimen Certificate for Registrant's Common
Stock.(2)
4.02 -- Bylaws of Registrant, as amended.(3)
4.03 -- Warrant Agreement, dated as of April 29, 1998, by and
between the Registrant and Netscape Communications
Corporation.
5.01 -- Opinion of Fenwick & West LLP.
23.01 -- Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02 -- Consent of Ernst & Young LLP, Independent Auditors
(previously filed).
23.03 -- Consent of Price Waterhouse LLP, Independent Accountants
(previously filed).
24.01 -- Power of Attorney (previously filed).
</TABLE>
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(1) Previously filed with the Commission on March 31, 1998 as an exhibit to the
Registrant's Annual Report on Form 10-K for the year ended December 31,
1997.
(2) Previously filed with the Commission on March 29, 1996 as an exhibit to
Amendment No. 1 to the Registrant's Registration Statement on Form SB-2
(File No. 333-2328-LA).
(3) Previously filed with the Commission on March 11, 1996 as an exhibit to the
Registrant's Registration Statement on Form SB-2 (File No. 333-2328-LA).
<PAGE> 1
EXHIBIT 4.03
WARRANT AGREEMENT
This Warrant Agreement (this "Agreement") is made and entered into as
of April 29, 1998, by and between Excite, Inc., a California corporation (the
"Company"), and Netscape Communications Corporation, a Delaware corporation (the
"Investor").
RECITAL
WHEREAS, the Company desires to issue to the Investor, and the Investor
desires to receive from the Company, warrants to purchase shares of the
Company's Common Stock on the terms and conditions set forth in this Agreement
in consideration of the execution and delivery by the Investor of a "Netcenter
Services Agreement" between the parties (the "Netcenter Services Agreement");
NOW, THEREFORE, in consideration of the foregoing recital, the mutual
promises hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. ISSUANCE OF WARRANTS.
1.1 Issuance of Warrants. Subject to the terms and conditions
of this Agreement, the Company agrees to issue to the Investor, at the closing
provided for in Section 2.1 below (the "Closing"), two (2) warrants (the
"Warrants") to purchase shares of the Company's Common Stock having an aggregate
exercise price of Fifty Million Dollars ($50,000,000), which amount shall be
subject to adjustment as provided in the Warrant attached hereto as Exhibit B)
(the "Shares"). The Warrants shall be in the forms of Exhibit A and Exhibit B
attached hereto. It is understood and agreed that the sole consideration for the
Company's issuance of the Warrants to the Investor shall be the Investor's
entering into the Netcenter Services Agreement with the Company; the Investor
will not be required to pay any issuance price or other amount to the Company or
to any other person or entity in connection with the Company's issuance of the
Warrants to the Investor; provided, however, that in order to exercise the
Warrants, in whole or in part, the Investor will be required to pay the exercise
prices set forth therein (except as otherwise provided therein).
2. CLOSING AND CLOSING DELIVERIES.
2.1 Closing. The closing hereunder (the "Closing") shall take
place at 11:00 a.m. on April 30, 1998 at the offices of Morrison & Foerster LLP,
Palo Alto, California. The date of the Closing is hereinafter referred to as the
"Closing Date".
<PAGE> 2
2.2 Closing Deliveries by the Company. Subject to the terms of
this Agreement, at the Closing, the Company shall deliver to the Investor the
following:
(i) Warrants in the forms of Exhibit A
and Exhibit B attached hereto, duly executed by an authorized officer of the
Company;
(ii) A certificate signed on the Company's
behalf by its Chief Executive Officer and its Chief Financial Officer,
certifying that: (1) each of the representations and warranties of the Company
contained in Section 3 are true and correct on and as of the Closing Date in all
material respects; and (2) the Company has performed and complied in all
material respects with all agreements, obligations and conditions contained in
this Agreement and the Netcenter Services Agreement that are required to be
performed or complied with by it on or before the Closing Date and has obtained
all material approvals, consents and qualifications necessary to enter into this
Agreement and the Netcenter Services Agreement and to consummate the issuance of
the Warrants (and the issuance of the Shares upon exercise thereof) to the
Investor and the other transactions contemplated by this Agreement and the
Netcenter Services Agreement.
(iii) A copy of the Articles of
Incorporation of the Company, certified as of a recent date by the Secretary of
State of California as a complete and correct copy thereof as of such date;
(iv) A certificate of the Secretary of the
Company, which has attached thereto: (1) the Bylaws of the Company (as amended
through the date thereof), certified by the Secretary of the Company as a true
and correct copy thereof as of the date of the certificate, and (2) a copy,
certified by the Secretary of the Company as a complete and correct copy
thereof, of the resolutions of the Board of Directors of the Company providing
for the approval of this Agreement and the Netcenter Services Agreement, the
issuance of the Warrants (and the issuance of the Shares upon exercise thereof)
to the Investor and the consummation of the transactions contemplated by this
Agreement and the Netcenter Services Agreement; and
(v) An opinion addressed to the
Investor, dated as of the date of the Closing, from Fenwick & West LLP, counsel
to the Company, in the form of Exhibit C hereto.
2.3 Closing Deliveries by the Investor. At the Closing, the
Investor shall deliver to the Company the following:
(i) A certificate signed on the
Investor's behalf by an authorized officer certifying that (1) each of the
representations and warranties of the Investor contained in Section 4 are true
and correct on and as of the Closing Date in all material respects; and (2) the
Investor has performed and complied in all material respects with all
agreements, obligations and conditions contained in this Agreement and the
Netcenter Services Agreement that are required to be performed or complied with
by it on or before the Closing Date and has obtained all material approvals,
consents and qualifications necessary to enter into this
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<PAGE> 3
Agreement and the Netcenter Services Agreement and to consummate the
transactions contemplated by this Agreement and the Netcenter Services
Agreement;
(ii) A copy of the Certificate of
Incorporation of the Investor, certified as of a recent date by the Secretary of
State of Delaware as a complete and correct copy thereof as of such date; and
(iii) A certificate of the Secretary of the
Investor, which has attached thereto the Bylaws of the Investor (as amended
through the date thereof), certified by the Secretary of the Investor as a true
and correct copy thereof as of the date of the certificate.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Investor that the statements in this Section 3
are true and correct, except as set forth in the Disclosure Letter from the
Company dated April 29, 1998 (the "Disclosure Letter").
3.1 Organization, Good Standing and Qualification. The Company
is a corporation duly organized, validly existing and in good standing under the
laws of the State of California and has all corporate power and authority
required to (a) carry on its business as presently conducted, and (b) enter into
this Agreement and the Netcenter Services Agreement, and to consummate the
transactions contemplated hereby and thereby, including the issuance of the
Warrants (and the issuance of the Shares upon exercise thereof) to the Investor.
The Company is qualified to do business and is in good standing in each
jurisdiction in which the failure to so qualify would have a Material Adverse
Effect on the Company. As used in this Agreement, "Material Adverse Effect"
means a material adverse effect on, or a material adverse change in, or a group
of such effects on or changes in, the business, operations, financial condition,
results of operations, prospects, assets or liabilities of the Company or the
Investor, as applicable; provided, however, that any adverse change or effect
that is primarily caused by (i) conditions affecting the United States economy
generally, (ii) conditions generally affecting the Internet industry or (iii)
the announcement or pendency of this Agreement or the Netcenter Services
Agreement, shall not be taken into account in determining whether there has been
or would be a "Material Adverse Effect;" provided further, that any adverse
change in the stock price of the Company or the Investor, as applicable, as
quoted on the Nasdaq National Market shall not be taken into account in
determining whether there has been or would be a "Material Adverse Effect."
3.2 Capitalization. As of the date of this Agreement the
capitalization of the Company is as follows:
(a) Common Stock. A total of 50,000,000 authorized
shares of Common Stock, of which 22,317,229 shares were issued and outstanding
as of March 31, 1998. All of such outstanding shares are validly issued, fully
paid and non-assessable.
(b) Preferred Stock. A total of 4,000,000 authorized
shares of Preferred Stock (the "Preferred Stock"), none of which is issued or
outstanding.
3
<PAGE> 4
(c) Options, Warrants, Reserved Shares. Except for
(i) 4,835,000 shares of Common Stock issuable upon the exercise of options
outstanding as of December 31, 1997, (ii) an aggregate of 1,303,000 shares of
Common Stock reserved for issuance as of such date for future grants or sale
under the Company's 1995 Equity Incentive Plan, 1996 Equity Incentive Plan, 1996
Directors Plan and 1996 Employee Stock Purchase Plan (the "Plans"), (iii) 95,122
shares of Common Stock issuable upon the exercise of outstanding warrants to
purchase Common Stock as of such date, (iv) 325,000 shares of Common Stock
issuable upon conversion of Series E-3 Convertible of Preferred Stock issuable
upon the exercise of a warrant, and (v) 166,667 shares of Common Stock issuable
upon the conversion of a Convertible Promissory Note with Itochu Corporation,
there are not outstanding any options, warrants, rights (including conversion or
preemptive rights) or agreements for the purchase or acquisition from the
Company of any shares of its capital stock or any securities convertible into or
ultimately exchangeable or exercisable for any shares of the Company's capital
stock. Except for any stock repurchase rights of the Company under the Plans, no
shares of the Company's outstanding capital stock, or stock issuable upon
exercise, conversion or exchange of any outstanding options, warrants or rights,
or other stock issuable by the Company, are subject to any rights of first
refusal or other rights to purchase such stock (whether in favor of the Company
or any other person), pursuant to any agreement, commitment or other obligation
of the Company.
3.3 Due Authorization. All corporate action on the part of the
Company, its officers, directors and shareholders necessary for the
authorization, execution, delivery of, and the performance of all obligations of
the Company under this Agreement and the Netcenter Services Agreement, the
authorization and issuance of the Warrants and the authorization, reservation
for issuance, issuance and delivery of all of the Shares issuable upon exercise
of the Warrants has been taken, and this Agreement, the Netcenter Services
Agreement and the Warrants constitute the valid and legally binding obligations
of the Company, enforceable against the Company in accordance with their
respective terms, except as may be limited by (i) applicable bankruptcy,
insolvency, reorganization or others laws of general application relating to or
affecting enforcement of creditors' rights generally, and (ii) the effect of
rules of law governing the availability of equitable remedies.
3.4 Valid Issuance of Stock.
(a) The Shares, when issued and delivered upon
exercise of the Warrants in accordance with the terms thereof, shall be duly and
validly issued, fully paid and nonassessable and not subject to any preemptive
or similar rights.
(b) Based in part on the representations made by the
Investor in Section 4 hereof, the Warrants are being issued, and upon exercise
thereof the Shares will be issued, in compliance with the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
or in compliance with applicable exemptions therefrom, and the registration and
qualification requirements of all applicable securities laws of the states of
the United States.
3.5 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local
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<PAGE> 5
governmental authority on the part of the Company is required in connection with
the consummation of the transactions contemplated hereby and by the Netcenter
Services Agreement, including the issuance of the Warrants and the issuance of
the Shares upon exercise thereof, except for the filing of such qualifications
or filings under the Securities Act and all applicable state securities laws as
may be required in connection with the transactions contemplated by this
Agreement. All such qualifications and filings have been made, in the case of
qualifications, on or prior to the date hereof, and have been made or will be
made, in the case of filings, within the time prescribed by law.
3.6 Non-Contravention. The execution, delivery and performance
of this Agreement and the Netcenter Services Agreement by the Company, and the
consummation by the Company of the transactions contemplated hereby and thereby,
including the issuance of the Warrants and the issuance of the Shares upon
exercise thereof, do not and will not (i) contravene or conflict with the
Articles of Incorporation or Bylaws of the Company; (ii) constitute a material
violation of any provision of any federal, state, local or foreign law, rule or
regulation binding upon or applicable to the Company; or (iii) constitute a
default or require any consent under, give rise to any right of termination,
cancellation or acceleration of, or to a loss of any benefit to which the
Company is entitled under, or result in the creation or imposition of any lien,
claim or encumbrance on any assets of the Company under, any contract to which
the Company is a party or any permit, license or similar right relating to the
Company or by which the Company may be bound or affected in such a manner as
would have a Material Adverse Effect on the Company.
3.7 Litigation. There is no action, suit, proceeding, claim,
arbitration or investigation ("Action") pending: (a) that seeks to prevent,
enjoin, alter or delay the transactions contemplated by this Agreement and the
Netcenter Services Agreement; or (b) that has not previously been disclosed in
one of the SEC Documents (as defined below) and is currently required to be
disclosed under the rules of the SEC in any registration statement, report or
proxy statement filed with the SEC. The Company is not a party to or subject to
the provisions of any order, writ, injunction, judgment or decree of any court
or government agency or instrumentality having a Material Adverse Effect on the
Company. No Action by the Company is currently pending nor does the Company
intend to initiate any Action that is reasonably likely to have a Material
Adverse Effect on the Company.
3.8 Registration Rights. Except as set forth in Section 5
below, the Company is not currently subject to any grant or agreement to grant
to any person or entity any rights (including piggyback registration rights) to
have any securities of the Company registered with the United States Securities
and Exchange Commission (the "SEC" or "Commission") or registered or qualified
with any other governmental authority.
3.9 SEC Documents.
(a) The Company has furnished to the Investor prior
to the date hereof copies of its Annual Report on Form 10-K for the fiscal year
ended December 31, 1997 ("Form 10-K"), and all other registration statements,
reports and proxy statements filed by the Company with the Commission on or
after December 31, 1997 (the Form 10-K and such registration
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<PAGE> 6
statements, reports and proxy statements are collectively referred to herein as
the "SEC Documents"). Each of the SEC Documents, as of the respective date
thereof, did not, as of the date thereof, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading, except as may have been corrected in a subsequent SEC
Document. The Company is not a party to any material contract, agreement or
other arrangement that was required to have been filed as an exhibit to the SEC
Documents that is not so filed.
(b) The Form 10-K contains the Company's audited
financial statements (the "Audited Financial Statements") for the fiscal year
ended December 31, 1997 (the "Balance Sheet Date"). Since the Balance Sheet
Date, the Company has duly filed with the Commission all registration
statements, reports and proxy statements required to be filed by it under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
Securities Act. The audited and unaudited consolidated financial statements of
the Company included in the SEC Documents filed prior to the date hereof fairly
present, in conformity with generally accepted accounting principles (" GAAP ")
(except as otherwise permitted by Form 10-Q) applied on a consistent basis
(except as may be indicated in the notes thereto), the consolidated financial
position of the Company and its consolidated subsidiaries as at the date thereof
and the consolidated results of their operations and cash flows for the periods
then ended (subject to normal year and audit adjustments in the case of
unaudited interim financial statements).
(c) Except as and to the extent reflected or reserved
against in the Company's Audited Financial Statements (including the notes
thereto), the Company has no material liabilities (whether accrued or unaccrued,
liquidated or unliquidated, secured or unsecured, joint or several, due or to
become due, vested or unvested, executory, determined or determinable) other
than: (i) liabilities incurred in the ordinary course of business since the
Balance Sheet Date that are consistent with the Company's past practices, (ii)
liabilities with respect to agreements to which the Investor is a party, and
(iii) other liabilities that either individually or in the aggregate, would not
result in a Material Adverse Effect on the Company.
(d) The Company meets the requirements for the use of
Form S-3 for registration of the sale by the Investor of the Registrable
Securities (as defined below), and the Company covenants that it shall file all
reports required to be filed by the Company with the SEC in a timely manner so
as to maintain such eligibility for the use of Form S-3.
3.10 Absence of Certain Changes Since Balance Sheet Date.
Since the Balance Sheet Date, the business and operations of the Company have
been conducted in the ordinary course consistent with past practice, and there
has not been:
(a) any declaration, setting aside or payment of any
dividend or other distribution of the assets of the Company with respect to any
shares of capital stock of the Company, or any repurchase, redemption or other
acquisition by the Company or any subsidiary of the Company of any outstanding
shares of the Company's capital stock;
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(b) any damage, destruction or loss, whether or not
covered by insurance, except for such occurrences that have not resulted, and
are not expected to result, in a Material Adverse Effect on the Company;
(c) any waiver by the Company of a valuable right or
of a material debt owed to it, except for such waivers that have not resulted,
and are not expected to result, in a Material Adverse Effect on the Company;
(d) any material change or amendment to, or any
waiver of any material rights under, a material contract or arrangement by which
the Company or any of its assets or properties is bound or subject, except for
changes, amendments, or waivers that are expressly provided for or disclosed in
this Agreement or that have not resulted, and are not expected to result, in a
Material Adverse Effect on the Company;
(e) any change by the Company in its accounting
principles, methods or practices or in the manner it keeps its accounting books
and records, except any such change required by a change in GAAP; and
(f) any other event or condition of any character,
except for such events and conditions that have not resulted, and cannot
reasonably be expected to result, in a Material Adverse Effect on the Company.
3.11 Full Disclosure. The information contained in this
Agreement, the Disclosure Letter, and the SEC Documents, together with the other
written disclosures made by the Company to the Investor in the course of their
discussions leading to this Agreement, taken together, with respect to the
business, operations, assets, results of operations and financial condition of
the Company is true and complete in all material respects and does not omit 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.
4. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF THE INVESTOR.
The Investor hereby represents and warrants to the Company as follows,
provided, however, that nothing set forth in this Article 4 shall limit or
modify the representations and warranties made by the Company in Article 3.
4.1 Authorization. This Agreement has been duly authorized by
all necessary corporate action on the part of the Investor. The Agreement
constitutes the Investor's valid and legally binding obligation, enforceable
against it in accordance with its terms, except as may be limited by (a)
applicable bankruptcy, insolvency, reorganization or other laws of general
application relating to or affecting the enforcement of creditors' rights
generally and (b) the effect of rules of law governing the availability of
equitable remedies. The Investor has full corporate power and authority to enter
into this Agreement.
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4.2 Acquisition for Own Account. The Warrants are being
acquired, and the Shares will be acquired, for the Investor's own account, not
as a nominee or agent, and not with a view to the public resale or distribution
thereof without registration under the Securities Act or an exemption therefrom.
4.3 Accredited Investor Status. The Investor is an
"accredited investor" within the meaning of Regulation D promulgated under the
Securities Act.
4.4 Restricted Securities. The Investor understands that the
Warrants to be issued to the Investor hereunder and the Shares issuable upon
exercise thereof are "restricted securities" under the Securities Act inasmuch
as they are being acquired or will be acquired from the Company in a transaction
not involving a public offering and that under the Securities Act and applicable
regulations thereunder such securities may be resold without registration under
the Securities Act only in certain limited circumstances. The Investor is
familiar with Rule 144 of the SEC, as presently in effect, and understands the
resale limitations imposed thereby and by the Securities Act.
4.5 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Investor is required in connection with the consummation of the transactions
contemplated hereby and by the Netcenter Services Agreement, including the
acquisition of the Warrants and the purchase of the Shares upon exercise
thereof. All such qualifications have been made, in the case of qualifications,
on or prior to the date hereof, and have been or will be made, in the case of
filings, within the time prescribed by law.
4.6 Non-Contravention. The execution, delivery and performance
of this Agreement and the Netcenter Services Agreement by the Investor, and the
consummation by the Investor of the transactions contemplated hereby and
thereby, including the acquisition of the Warrants and the purchase of the
Shares upon exercise thereof, do not and will not (i) contravene or conflict
with the Certificate of Incorporation or Bylaws of the Investor; (ii) constitute
a material violation of any provision of any federal, state, local or foreign
law, rule or regulation binding upon or applicable to the Investor; or (iii)
constitute a default or require any consent under, give rise to any right of
termination, cancellation or acceleration of, or to a loss of any benefit to
which the Investor is entitled under, or result in the creation or imposition of
any lien, claim or encumbrance on any assets of the Investor under, any contract
to which the Investor is a party or any permit, license or similar right
relating to the Investor or by which the Investor may be bound or affected in
such a manner as would have a Material Adverse Effect on the Investor.
4.7 Further Limitations on Disposition. Without in any way
limiting the representations set forth above, the Investor agrees not to make
any disposition of all or any portion of the Warrants without the prior written
consent of the Company, which consent may be withheld in the Company's sole
discretion. The Investor further agrees not to make any disposition of all or
any portion of the Shares unless and until:
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(a) there is then in effect a registration statement
under the Securities Act covering such proposed disposition and such disposition
is made in accordance with such registration statement; or
(b) the Investor has notified the Company of the
proposed disposition and has furnished the Company with a statement of the
circumstances surrounding the proposed disposition, and the Investor has
furnished the Company, at the expense of the Investor or its transferee, with an
opinion of counsel, reasonably satisfactory to the Company, that such
disposition will not require registration of such securities under the
Securities Act.
Notwithstanding the provisions of paragraphs (a) and (b) of this Section 4.7, no
such registration statement or opinion of counsel will be required for any
transfer of any Shares in compliance with SEC Rule 144, Rule 144A or Rule
145(d), or if such transfer otherwise is exempt from the registration
requirements of the Securities Act in the opinion of the Company's counsel.
Furthermore, notwithstanding the other provisions of this Section 4.7, the
Investor shall be permitted to transfer all or any portion of the Warrants (i)
to an underwriter of a public offering of Common Stock if and only if the
Warrants (or any such portion) shall be immediately exercised by such
underwriter and the Shares issued upon such exercise are immediately sold to the
public, (ii) to any affiliate (as that term is defined in the Securities Act) of
the Investor, or (iii) in connection with any merger or consolidation to which
the Investor is a party, any sale of all or substantially all of the Investor's
assets or any other acquisition of the Investor.
4.8 Legends. Certificates evidencing the Warrants and
the Shares will bear the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR
UNDER THE SECURITIES LAWS OF CERTAIN
STATES. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE
AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE ACT AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT
TO REGISTRATION OR EXEMPTION THEREFROM.
The legend set forth above will be removed by the Company from any certificate
evidencing Shares upon delivery to the Company of an opinion by counsel,
reasonably satisfactory to the Company, that a registration statement under the
Securities Act is at that time in effect with respect to the legended security
or that such security can be freely transferred in a public sale without such a
registration statement being in effect and that such transfer will not
jeopardize the exemption or exemptions from registration pursuant to which the
Company issued the Shares.
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5. NO TREATMENT AS AFFILIATE; REGISTRATION
5.1 No Treatment as Affiliate. On the basis of the facts now
in its possession, upon and following the Closing of the transactions
contemplated by this Agreement, the Company shall not treat the Investor as an
"affiliate" of the Company (as such term is defined in the Securities Act) for
purposes of any federal or state securities laws.
5.2 Registration.
(a) Certain Definitions. As used in this Section
5.2, the following terms shall have the following respective meanings:
"Registrable Securities" shall mean (i) all Shares
issued or issuable upon exercise of the Warrants, and (ii) any shares of Common
Stock of the Company issued as (or issuable upon conversion or exercise of any
warrant, right or other security which is issued as) a stock dividend or other
distribution with respect to, or in exchange for or in replacement of, any
Shares; provided, however, that shares of Common Stock or other securities shall
only be treated as Registrable Securities if and so long as they have not been
sold to or through a broker or dealer or underwriter in a public distribution or
a public securities transaction.
The terms "register," "registered" and
"registration" refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act, and the
declaration or ordering of the effectiveness of such registration statement.
"Registration Statement" shall mean the registration
statement of the Company under the Securities Act contemplated by Section 5.2(b)
below.
(b) Registration.
(i) Mandatory Registration. The Company
shall prepare and file with the SEC as soon as practicable after the Closing,
but no later than ten (10) days after the Closing Date, a Registration Statement
on Form S-3 (or, if Form S-3 is not then available, on such form of Registration
Statement as is then available to effect a registration of all of the
Registrable Securities) covering the resale of the Registrable Securities. The
Company shall use its best efforts to cause the Registration Statement to become
effective as soon as practicable after filing, but in no event later than the
first to occur of (i) the third (3rd) day after the SEC notifies the Company
that the Registration Statement will not be reviewed by the SEC or that the SEC
does not have any further comments on the Registration Statement and (ii) ninety
(90) days after the Closing Date, and to keep such Registration Statement
current and effective pursuant to SEC Rule 415 at all times until such date as
is the earlier of (A) the date on which all of the Registrable Securities have
been sold, and (B) the date on which all of the Registrable Securities (in the
reasonable opinion of counsel to the Investor) may be immediately sold to the
public without registration or restriction pursuant to Rule 144 under the
Securities Act within a single three-month period (the "Registration Period").
The Registration Statement (and each amendment or supplement thereto, and each
request for acceleration of effectiveness thereof)
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shall be provided to, and be subject to the reasonable approval of, the Investor
and its counsel prior to the filing or other submission thereof to the SEC.
(ii) Permitted Delay Periods; Suspension
of Sales. If at any time prior to the expiration of the Registration Period, the
Chief Executive Officer of the Company has determined in good faith that (A)
compliance by the Company with its disclosure obligations in connection with the
Registration Statement would be seriously detrimental to the Company and its
shareholders, or (B) the Company then is unable to comply with its disclosure
obligations or SEC requirements in connection with the Registration Statement,
then in either such case the Company shall not be required to maintain the
effectiveness thereof or amend or supplement the Registration Statement for a
period (a "Permitted Delay Period") expiring upon the earlier to occur of (I)
the date on which such material information is disclosed to the public or ceases
to be material or the Company is able to so comply with its disclosure
obligations and SEC requirements, or (II) sixty (60) days after the Chief
Executive Officer of the Company makes such good faith determination. The
Company will give prompt written notice to the Investor of each Permitted Delay
Period. Such notice shall state to the extent, if any, as is practicable, an
estimate of the duration of such Permitted Delay Period. The Investor, by its
acceptance of any Registrable Securities, agrees that, upon receipt of such
notice it will forthwith discontinue disposition of the Registrable Securities
pursuant to the Registration Statement, and will not deliver any prospectus
forming a part thereof in connection with any sale of Registrable Securities,
until the expiration of such Permitted Delay Period. There shall not be more
than one (1) Permitted Delay Period in any twelve (12) month period.
(c) Obligations of the Company. In connection with
the registration of the Registrable Securities, the Company shall have the
following obligations:
(i) No Registration Statement (including
any amendments or supplements thereto and prospectuses contained therein and all
documents incorporated by reference therein) shall contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein, or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(ii) The Company shall prepare and file with
the SEC such amendments (including post-effective amendments) and supplements to
the Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to keep the Registration Statement
effective at all times during the Registration Period and, during such period,
comply with the provisions of the Securities Act with respect to the disposition
of all Registrable Securities of the Company covered by the Registration
Statement until such time as all of such Registrable Securities have been
disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof as set forth in the Registration Statement.
(iii) The Company shall furnish to the
Investor and its legal counsel (A) promptly after the same is prepared and
publicly distributed, filed with the SEC or received by the Company, one copy of
the Registration Statement and any amendment thereto,
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each preliminary prospectus and prospectus and each amendment or supplement
thereto, and each letter written by or on behalf of the Company to the SEC or
the staff of the SEC (including, without limitation, any request to accelerate
the effectiveness of the Registration Statement or amendment thereto), and each
item of correspondence from the SEC or the staff of the SEC, in each case
relating to the Registration Statement (other than any portion, if any, thereof
which contains information for which the Company has sought confidential
treatment), (B) on the date of effectiveness of the Registration Statement or
any amendment thereto, a notice stating that the Registration Statement or
amendment has been declared effective, and (C) such number of copies of a
prospectus, including a preliminary prospectus, and all amendments and
supplements thereto and such other documents as the Investor may reasonably
request in order to facilitate the disposition of the Registrable Securities.
(iv) The Company shall (A) register and
qualify the Registrable Securities covered by the Registration Statement under
such securities or "blue sky" laws of such jurisdictions as the Investor
reasonably requests, (B) prepare and file in those jurisdictions such amendments
(including post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (C) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration Period, and (D) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to (I) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 5.2(c)(iv), (II) subject itself to general taxation in any such
jurisdiction, (III) file a general consent to service of process in any such
jurisdiction, or (IV) make any change in its charter or bylaws, which in each
case the Board of Directors of the Company determines to be contrary to the best
interests of the Company and its shareholders.
(v) As promptly as practicable after
becoming aware of such event, the Company shall notify the Investor of the
happening of any event, as a result of which the prospectus included in the
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company shall
promptly prepare a supplement or amendment to the Registration Statement to
correct such untrue statement or omission and deliver such number of copies of
such supplement or amendment to the Investor as reasonably requested by the
Investor.
(vi) Except as provided in Section
5.2(b)(ii), the Company shall use its best efforts to prevent the issuance of
any stop order or other suspension of effectiveness of the Registration
Statement and, if such an order is issued, to obtain the withdrawal of such
order at the earliest practicable moment (including in each case by amending or
supplementing the Registration Statement). The Company shall promptly notify the
Investor of the issuance of any such order and the resolution thereof (and if
the Registration Statement is supplemented or amended, deliver such number of
copies of such supplement or amendment to the Investor as the Investor may
reasonably request).
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(vii) The Company shall give a single firm
of counsel designated by the Investor the opportunity to review the Registration
Statement and all amendments and supplements thereto a reasonable period of time
prior to their filing with the SEC, and not file any document in a form to which
such counsel reasonably objects in a timely fashion.
(viii) At the request of the Investor, the
Company shall furnish, on the date of effectiveness of the Registration
Statement, an opinion, dated as of such date, from counsel representing the
Company addressed to the Investor and (1) in the case of an underwritten public
offering, in form, scope and substance as is customarily given in an
underwritten public offering, and (2) in all other cases, as mutually agreed by
the Company and the Investor.
(ix) The Company shall hold in confidence
and not make any disclosure of information concerning the Investor provided to
the Company unless (A) disclosure of such information is necessary to comply
with federal or state securities laws, (B) the disclosure of such information is
necessary to avoid or correct a misstatement or omission in the Registration
Statement, (C) the release of such information is ordered pursuant to a subpoena
or other order from a court or governmental body of competent jurisdiction, (D)
such information has been made generally available to the public other than by
disclosure in violation of this or any other agreement, or (E) the Investor
consents to the form and content of any such disclosure. The Company agrees that
it shall, upon learning that disclosure of such information concerning the
Investor is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Investor prior to
making such disclosure, and allow the Investor, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, such information.
(x) The Company shall promptly either
(A) cause all of the Registrable Securities covered by the Registration
Statement to be listed on the NYSE, the AMEX or other national securities
exchange on which securities of the same class or series issued by the Company
are then listed, if any, if the listing of such Registrable Securities is then
permitted under the rules of such exchange, or (B) secure the designation and
quotation of all of the Registrable Securities covered by the Registration
Statement on the Nasdaq National Market and, without limiting the generality of
the foregoing, to arrange for or maintain at least two market makers to register
with the National Association of Securities Dealers ("NASD") as such with
respect to such Registrable Securities.
(xi) The Company shall maintain a transfer
agent and registrar, which may be a single entity, for the Registrable
Securities not later than the effective date of the first Registration
Statement.
(xii) The Company shall cooperate with the
Investor to facilitate the timely preparation and delivery of certificates (not
bearing any restrictive legends) representing Registrable Securities to be
offered pursuant to the Registration Statement and enable such certificates to
be in such denominations or amounts, as the case may be, as the Investor may
reasonably request and registered in such names as the Investor may request,
and,
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within five (5) business days after the Registration Statement is ordered
effective by the SEC, the Company shall deliver, and shall cause legal counsel
selected by the Company to deliver, to the transfer agent for the Registrable
Securities (with copies to the Investor) an opinion of such counsel as required
by the transfer agent prior to the transfer of the Registrable Securities.
(xiii) At the request of the Investor, the
Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary in order to change the plan of distribution set forth in the
Registration Statement.
(xiv) The Company shall comply with all
applicable laws related to the Registration Statement and the offering and sale
of securities thereunder and all applicable rules and regulations of
governmental authorities in connection therewith (including without limitation
the Securities Act and the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated by the SEC).
(xv) The Company shall take all such other
actions as the Investor reasonably requests in order to expedite or facilitate
the disposition of such Registrable Securities.
(xvi) From and after the date of this
Agreement, the Company shall not, and shall not agree to, allow the holders of
any securities of the Company to include any of their securities in the
Registration Statement under Section 5.2(b)(i) hereof or any amendment or
supplement thereto under Section 5.2(c)(ii) hereof without the prior written
consent of the Investor. The foregoing shall not apply to the extent, and only
to the extent, that such holders are contractually entitled, as of the date of
this Agreement, to so include their securities in such Registration Statement or
amendment or supplement thereto; provided, however, that the Company shall use
its best efforts to cause such holders to waive their rights to be so included
(it being understood and agreed that the Company will not be required to seek a
waiver from America Online in this regard).
(d) Obligations of the Investor. In connection with
the registration of the Registrable Securities, the Investor shall have the
following obligations:
(i) It shall be a condition precedent to
the obligations of the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Securities that the Investor shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of the Registrable
Securities as shall be required to effect the registration of such Registrable
Securities and shall execute such documents in connection with such registration
as the Company may reasonably request. At least two (2) business days prior to
the first anticipated filing date of the Registration Statement, the Company
shall notify the Investor of the information the Company requires from the
Investor.
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(ii) The Investor, by its acceptance of the
Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of the
Registration Statement hereunder.
(iii) The Investor agrees that, upon receipt
of any notice from the Company of the happening of any event of the kind
described in Section 5.2(c)(vi) or 5.2(c)(vii), the Investor will immediately
discontinue disposition of Registrable Securities pursuant to the Registration
Statement covering such Registrable Securities until receipt by the Investor of
the copies of the supplemented or amended prospectus contemplated by Section
5.2(c)(vi) or 5.2(c)(vii) and, if so directed by the Company, the Investor shall
deliver to the Company (at the expense of the Company) or destroy (and deliver
to the Company a certificate of destruction) all copies in the Investor's
possession, of the prospectus covering such Registrable Securities current at
the time of receipt of such notice.
(iv) The Investor agrees to comply with the
prospectus delivery requirements under the Securities Act in connection with the
Investor's sales of the Registrable Securities.
(v) The Investor agrees, for so long as
the Investor owns any Registrable Securities and upon request of the
underwriters managing any underwritten public offering of the Company's Common
Stock, to enter into a standard form of lock-up agreement (not to exceed ninety
(90) days) in connection with such offering, provided that all officers and
directors of the Company and all shareholders of the Company who hold at least
the same number of shares of Common Stock of the Company (including such shares
issuable upon exercise or conversion of exercisable or convertible securities)
as the number of shares of Registrable Securities then held by the Investor,
enter into the same form of lock-up agreement.
(e) Expenses of Registration. All reasonable expenses
incurred by the Company or the Investor in connection with registrations,
filings or qualifications pursuant to Sections 5.2(b) and 5.2(c) above,
including, without limitation, all registration, listing and qualifications
fees, printers and accounting fees, the fees and disbursements of counsel for
the Company, the fees and disbursements of one counsel selected by the Investor,
but not underwriting discounts and commissions, shall be borne by the Company.
In addition, the Company shall pay all of the Investor's reasonable costs and
expenses (including legal fees) incurred in connection with the enforcement of
the rights of the Investor hereunder. (f) Indemnification.
(i) To the extent permitted by law, the
Company will indemnify, hold harmless and defend (A) the Investor, and (B) the
directors, officers, partners, members, employees and agents of the Investor and
each person who controls the Investor within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, if any, (each, an "Indemnified
Person"), against any joint or several losses, claims, damages, liabilities or
expenses (collectively, together with actions, proceedings or inquiries by any
regulatory or self-regulatory organization, whether commenced or threatened, in
respect thereof, "Claims") to which any of them may become subject insofar as
such Claims arise out of or are based upon:
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(A) any untrue statement or alleged untrue statement of a material fact in the
Registration Statement or the omission or alleged omission to state therein a
material fact required to be stated or necessary to make the statements therein
not misleading, (B) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus if used prior to the
effective date of the Registration Statement, or contained in the final
prospectus related thereto (as amended or supplemented, if the Company files any
amendment thereof or supplement thereto with the SEC) or the omission or alleged
omission to state therein any material fact necessary to make the statements
made therein, in light of the circumstances under which the statements therein
were made, not misleading, or (C) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any other law, including,
without limitation, any state securities law, or any rule or regulation
thereunder relating to the offer or sale of the Registrable Securities (the
matters in the foregoing clauses (A) through (C) being, collectively,
"Violations"). Subject to the restrictions set forth in Section 5.2(f)(iii) with
respect to the number of legal counsel, the Company shall reimburse the Investor
and each other Indemnified Person, promptly as such expenses are incurred and
are due and payable, for any reasonable legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 5.2(f)(i): (A) shall not apply to a Claim
arising out of or based upon a Violation which occurs in reliance upon and in
conformity with information furnished in writing to the Company by such
Indemnified Person expressly for use in the Registration Statement or any such
amendment thereof or supplement thereto; (B) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of the Company, which consent shall not be unreasonably withheld; and
(C) with respect to any preliminary prospectus, shall not inure to the benefit
of any Indemnified Person if the untrue statement or omission of material fact
contained in the preliminary prospectus was corrected on a timely basis in the
prospectus, as then amended or supplemented, if such corrected prospectus was
timely made available by the Company pursuant to Section 5.2(c)(iii) hereof, and
the Indemnified Person was promptly advised in writing not to use the incorrect
prospectus prior to the use giving rise to a Violation and such Indemnified
Person, notwithstanding such advice, used it. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Indemnified Person.
(ii) The Investor agrees to indemnify, hold
harmless and defend, to the same extent and in the same manner set forth in
Section 5.2(f)(i), the Company, each of its directors, each of its officers who
signs the Registration Statement, its employees, agents and each person, if any,
who controls the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act (collectively and together with an Indemnified
Person, an "Indemnified Party"), against any Claim to which any of them may
become subject, under the Securities Act, the Exchange Act or otherwise, insofar
as such Claim arises out of or is based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished to the Company by the Investor
expressly for use in connection with the Registration Statement; and subject to
Section 5.2(f)(iii), the Investor will reimburse any legal or other expenses
(promptly as such expenses are incurred and are due and payable) reasonably
incurred by them in connection with investigating or defending any such Claim;
provided, however, that the
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<PAGE> 17
indemnity agreement contained in this Section 5.2(f)(ii) shall not apply to
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of the Investor, which consent shall not be
unreasonably withheld; provided, further, however, that the Investor shall be
liable under this Agreement (including this Section 5.2(f)(ii) and Section
5.2(g)) for only that amount as does not exceed the net proceeds actually
received by the Investor as a result of the sale of Registrable Securities
pursuant to the Registration Statement. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such
Indemnified Party and shall survive the transfer of the Registrable Securities
by the Investor. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 5.2(f)(ii) shall not inure
to the benefit of any Indemnified Party (i) with respect to any preliminary
prospectus if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected on a timely basis in the final prospectus,
as then amended or supplemented, and the Indemnified Party failed to utilize
such corrected prospectus, or (ii) with respect to any liability arising from
the failure to deliver any prospectus if the Indemnified Party failed to deliver
such prospectus as required under the Securities Act.
(iii) Promptly after receipt by an
Indemnified Person or Indemnified Party under this Section 5.2(f) of notice of
the commencement of any action (including any governmental action), such
Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is
to made against any indemnifying party under this Section 5.2(f), deliver to the
indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person or
the Indemnified Party, as the case may be; provided, however, that such
indemnifying party shall not be entitled to assume such defense and an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses to be paid by the indemnifying party, if, in
the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
conflicts of interest between such Indemnified Person or Indemnified Party and
any other party represented by such counsel in such proceeding or the actual or
potential defendants in, or targets of, any such action include both the
Indemnified Person or the Indemnified Party and the indemnifying party and any
such Indemnified Person or Indemnified Party reasonably determines that there
may be legal defenses available to such Indemnified Person or Indemnified Party
which are in conflict with those available to such indemnifying party. The
indemnifying party shall pay for only one separate legal counsel for the
Indemnified Persons or the Indemnified Parties, as applicable, and such legal
counsel shall be selected by the Investor, if the Investor is entitled to
indemnification hereunder, or by the Company, if the Company is entitled to
indemnification hereunder, as applicable. The failure to deliver written notice
to the indemnifying party within a reasonable time after the commencement of any
such action shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section 5.2(f), except to the
extent that the indemnifying party is actually prejudiced in its ability to
defend such action. The indemnification required by this Section 5.2(f) shall be
made by periodic payments of the amount
17
<PAGE> 18
thereof during the course of the investigation or defense, as such expense,
loss, damage or liability is incurred and is due and payable.
(g) Reports Under the Exchange Act. With a view to
making available to the Investor the benefits of Rule 144 promulgated under the
Securities Act or any other similar rule or regulation of the SEC that may at
any time permit the Investor to sell securities of the Company to the public
without registration ("Rule 144"), the Company agrees to:
(i) file with the SEC in a timely manner
and make and keep available all reports and other documents required of the
Company under the Securities Act and the Exchange Act so long as the Company
remains subject to such requirements and the filing and availability of such
reports and other documents is required for the applicable provisions of Rule
144; and
(ii) furnish to the Investor, so long as the
Investor owns Registrable Securities, promptly upon written request, (A) a
written statement by the Company that it has complied with the reporting
requirements of Rule 144, the Securities Act and the Exchange Act, (B) a copy of
the most recent annual or other report of the Company and such other reports and
documents so filed by the Company, and (C) such other information as may be
reasonably requested to permit the Investor to sell such securities pursuant to
Rule 144 without registration.
6. MISCELLANEOUS
6.1 Successors and Assigns. The terms and conditions of this
Agreement will inure to the benefit of and be binding upon the respective
successors and assigns of the parties.
6.2 Governing Law. This Agreement will be governed by and
construed under the internal laws of the State of California as applied to
agreements among California residents entered into and to be performed entirely
within California, without reference to principles of conflict of laws or choice
of laws.
6.3 Counterparts. This Agreement may be executed in two or
more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
6.4 Headings. The headings and captions used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement. All references in this Agreement to sections and
paragraphs will, unless otherwise provided, refer to sections and paragraphs
hereof.
6.5 Notices. Any notice required or permitted under this
Agreement shall be given in writing, shall be effective when received, and shall
in any event be deemed received and effectively given upon personal delivery to
the party to be notified or three (3) business days after deposit with the
United States Post Office, by registered or certified mail, postage prepaid,
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<PAGE> 19
or one (1) business day after deposit with a nationally recognized courier
service such as Federal Express under circumstances where such service
guarantees next business day delivery, or one (1) business day after facsimile
with copy delivered by registered or certified mail, postage prepaid and
addressed to the party to be notified at the address indicated for such party on
the signature page hereof or at such other address as the Investor or the
Company may designate by giving at least ten (10) days advance written notice
pursuant to this Section 6.5.
6.6 No Finder's Fees. Each party represents that it neither is
nor will be obligated for any finder's or broker's fee or commission in
connection with this transaction. The Investor will indemnify and hold harmless
the Company from any liability for any commission or compensation in the nature
of a finders' or broker's fee for which the Investor or any of its officers,
employees, consultants or representatives is responsible. The Company will
indemnify and hold harmless the Investor from any liability for any commission
or compensation in the nature of a finder's or broker's fee for which the
Company or any of its officers, employees, consultants or representatives is
responsible.
6.7 Survival. All representations and warranties of the
Investor and the Company contained herein shall survive the Closing until the
first anniversary of the date of this Agreement, regardless of whether the
applicable statute of limitations, including extensions thereof, may expire. All
covenants and agreements of the Investor and the Company contained herein shall
survive the Closing in perpetuity (except to the extent any such covenant or
agreement shall expire by its terms). All claims in respect of any breach of
such covenants or agreements shall survive the Closing until the expiration of
one year following the non-breaching party's obtaining actual knowledge of such
breach.
6.8 Amendments and Waivers. This Agreement may be amended and
the observance of any term of this Agreement may be waived (either generally or
in a particular instance and either retroactively or prospectively), only with
the written consent of the Company and the Investor. Any amendment or waiver
effected in accordance with this Section 6.8 will be binding upon the Investor,
the Company and their respective successors and assigns.
6.9 Severability. If any provision of this Agreement is held
to be unenforceable under applicable law, such provision will be excluded from
this Agreement and the balance of the Agreement will be interpreted as if such
provision were so excluded and will be enforceable in accordance with its terms.
6.10 Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties with respect to the subject matter
hereof and supersedes any and all prior negotiations, correspondence,
agreements, understandings duties or obligations between the parties with
respect to the subject matter hereof.
6.11 Further Assurances. From and after the date of this
Agreement upon the request of the Investor or the Company, the Company and the
Investor will execute and deliver such instruments, documents or other writings
as may be reasonably necessary or desirable to confirm and carry out and to
effectuate fully the intent and purposes of this Agreement.
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<PAGE> 20
6.12 Meaning of Include and Including. Whenever in this
Agreement the word "include" or "including" is used, it shall be deemed to mean
"include, without limitation" or "including, without limitation," as the case
may be, and the language following "include" or "including" shall not be deemed
to set forth an exhaustive list.
6.13 Fees, Costs and Expenses. All fees, costs and expenses
(including attorneys' fees and expenses) incurred by either party hereto in
connection with the preparation, negotiation and execution of this Agreement,
and the consummation of the transactions contemplated hereby and thereby, shall
be the sole and exclusive responsibility of such party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
EXCITE, INC. NETSCAPE
COMMUNICATIONS
CORPORATION
By: /s/ Robert C. Hood By: /s/ Mike Homer
-------------------------------- -------------------------------
Name: Robert C. Hood Name: Mike Homer
------------------------------ -----------------------------
Title: EVP - CFO Title: EVP
----------------------------- ----------------------------
Date signed: 4/29/98 Date Signed: 4/29/98
----------------------- ----------------------
Address: 555 Broadway Address: 501 East Middlefield Road
Redwood City, CA 94063 Mountain View, CA 94043
Telephone No.: 650/568-6000 Telephone No.: 650/254-1900
Facsimile No.: 650/568-6029 Facsimile No.: 650/528-4123
[SIGNATURE PAGE TO WARRANT AGREEMENT]
20
<PAGE> 21
EXHIBIT A
FORM OF INITIAL WARRANT
<PAGE> 22
EXHIBIT B
FORM OF SUBSEQUENT WARRANT
<PAGE> 23
EXHIBIT C
FORM OF OPINION OF COMPANY'S COUNSEL
(1) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of California and has all corporate
power and authority required to (a) carry on its business as presently
conducted, and (b) enter into the Agreement and to consummate the transactions
contemplated thereby, including the issuance of the Warrants (and the issuance
of the Shares upon exercise thereof) to the Investor.
(2) As of the date of the Agreement the capitalization of the Company
is as follows:
(a) Common Stock. A total of 50,000,000 authorized
shares of Common Stock, of which 22,317,229 shares were issued and outstanding
as of March 31, 1998. All of such outstanding shares are validly issued, fully
paid and non-assessable.
(b) Preferred Stock. A total of 4,000,000 authorized
shares of Preferred Stock, none of which is issued or outstanding.
(3) All corporate action on the part of the Company, its officers,
directors and shareholders necessary for the authorization, execution, delivery
of, and the performance of all obligations of the Company under the Agreement,
the authorization and issuance of the Warrants and the authorization,
reservation for issuance, issuance and delivery of all of the Shares issuable
upon exercise of the Warrants has been taken, and the Agreement and the Warrants
constitute the valid and legally binding obligations of the Company, enforceable
against the Company in accordance with their respective terms.
(4) The Shares, when issued and delivered upon exercise of the Warrants
in accordance with the terms thereof, shall be duly and validly issued, fully
paid and nonassessable and not subject to any statutory preemptive rights.
(5) Based in part on the representations made by the Investor in
Section 4 of the Agreement, the Warrants are being issued, and upon exercise
thereof the Shares will be issued, in full compliance with the registration and
prospectus delivery requirements of the Securities Act of 1933, as amended (the
"Securities Act"), or in compliance with applicable exemptions therefrom, and
the registration and qualification requirements of all applicable securities
laws of the state of California.
(6) No consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any federal, state or
local governmental authority on the part of the Company is required in
connection with the consummation of the transactions contemplated by the
Agreement, including the issuance of the Warrants and the issuance of the Shares
upon exercise thereof, except for the filing of such qualifications or filings
under the Securities Act and California securities laws as may be required in
connection with the
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<PAGE> 24
transactions contemplated by the Agreement. All such qualifications and filings
have been made, in the case of qualifications, on or prior to the date hereof,
and have been made or will be made, in the case of filings, within the time
prescribed by law.
(7) The execution, delivery and performance of the Agreement by the
Company, and the consummation by the Company of the transactions contemplated
thereby, including the issuance of the Warrants and the issuance of the Shares
upon exercise thereof, do not and will not (i) contravene or conflict with the
Articles of Incorporation or Bylaws of the Company; (ii) constitute a material
violation of any provision of any federal, state, local or foreign law, rule or
regulation binding upon or applicable to the Company; or (iii) constitute a
default or require any consent under, give rise to any right of termination,
cancellation or acceleration of, or to a loss of any benefit to which the
Company is entitled under, or result in the creation or imposition of any lien,
claim or encumbrance on any assets of the Company under, any contract to which
the Company is a party and which is attached as an Exhibit to one of the SEC
Documents.
<PAGE> 1
EXHIBIT 5.01
June 26, 1998
Excite, Inc.
555 Broadway
Redwood City, CA 94063
Gentlemen/Ladies:
At your request, we have examined the Registration Statement on Form
S-3 (File Number 333-53057) (the "Registration Statement") originally filed by
you with the Securities and Exchange Commission (the "Commission") on May 19,
1998, in connection with the registration under the Securities Act of 1933, as
amended, of 423,079 shares of your Common Stock issuable upon exercise of a
warrant, dated April 29, 1998, issued by the Company to Netscape Communications
Corporation ("Netscape") pursuant to a Warrant Agreement, dated as April 29,
1998, by and between the Company and Netscape (the "Warrant Agreement"), plus an
additional number of shares of your Common Stock having an aggregate exercise
price of up to $25.0 million issuable upon exercise of a second warrant, dated
April 29, 1998, issued by the Company to Netscape pursuant to the Warrant
Agreement (together, the "Warrants," and such shares of Common Stock, the
"Stock"), all of which will be sold to the public by Netscape or its permitted
assigns.
In rendering this opinion, we have examined the following:
(1) your registration statement on Form 8-A (File Number 0-28064)
filed with the Commission on March 18, 1996 and declared
effective by the Commission on April 3, 1996;
(2) the Registration Statement, together with the Exhibits filed
as a part thereof;
(3) the Prospectus prepared in connection with the Registration
Statement;
(4) the minutes of meetings and actions by written consent of the
shareholders and Board of Directors that are contained in your
minute books that are in our possession;
(5) the stock records that you have provided to us (consisting of
a list of shareholders issued by your transfer agent,
BankBoston, N.A., and a list of option and warrant
<PAGE> 2
June 26, 1998
Page 2
holders respecting your capital stock and of any rights to
purchase capital stock that was prepared by you and dated
April 30, 1998);
(6) a Management Certificate addressed to us and dated of even
date herewith executed by the Company containing certain
factual and other representations;
(7) the Warrants; and
(8) the Warrant Agreement.
We have also confirmed the continued effectiveness of the Company's
registration under the Securities Exchange Act of 1934, as amended, by telephone
call to the offices of the Commission, and have confirmed your eligibility to
use Form S-3.
In our examination of documents for purposes of this opinion, we have
assumed, and express no opinion as to, the genuineness of all signatures on
original documents, the authenticity of all documents submitted to us as
originals, the conformity to originals of all documents submitted to us as
copies, the legal capacity of all natural persons executing the same, the lack
of any undisclosed terminations, modifications, waivers or amendments to any
documents reviewed by us and the due execution and delivery of all documents
where due execution and delivery are prerequisites to the effectiveness thereof.
As to matters of fact relevant to this opinion, we have relied solely
upon our examination of the documents referred to above and have assumed the
current accuracy and completeness of the information obtained from public
officials and records referred to above. We have made no independent
investigation or other attempt to verify the accuracy of any of such information
or to determine the existence or non-existence of any other factual matters;
however, we are not aware of any facts that would cause us to believe that the
opinion expressed herein is not accurate.
We are admitted to practice law in the State of California, and we
express no opinion herein with respect to the application or effect of the laws
of any jurisdiction other than the existing laws of the United States of America
and the State of California.
Based upon the foregoing, it is our opinion that the shares of Stock to
be issued and sold by you, when issued and sold in accordance in the manner
referred to in the Prospectus associated with the Registration Statement, will
be validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to all references to us, if any, in the
Registration Statement, the Prospectus constituting a part thereof and any
amendments thereto.
This opinion speaks only as of its date and we assume no obligation to
update this opinion should circumstances change after the date hereof. This
opinion is intended solely for the your use as an exhibit to the Registration
Statement for the purpose of the above sale of the Stock and is not to be relied
upon for any other purpose.
Very truly yours,
FENWICK & WEST LLP
