<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 9, 1998
REGISTRATION NO. 333-53061
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
PRE-EFFECTIVE AMENDMENT NO. 2
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>
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:
<TABLE>
<S> <C>
MARK C. STEVENS, ESQ. ROBERT V. GUNDERSON, JR., ESQ.
JEFFREY R. VETTER, ESQ. BROOKS STOUGH, ESQ.
MICHAEL J. MCADAM, ESQ. CRAIG SCHMITZ, ESQ.
SCOTT LEICHTNER, ESQ. ALLISON TAKAHASHI, ESQ.
FENWICK & WEST LLP GUNDERSON DETTMER STOUGH
TWO PALO ALTO SQUARE VILLENEUVE FRANKLIN & HACHIGIAN, LLP
PALO ALTO, CALIFORNIA 94306 155 CONSTITUTION DRIVE
(650) 494-0600 MENLO PARK, CALIFORNIA 94025
(650) 321-2400
</TABLE>
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.
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. [ ]
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. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
======================================================================================================================
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED(1) SHARE(2) PRICE(2) REGISTRATION FEE(2)
- ----------------------------------------------------------------------------------------------------------------------
Common Stock, no par value.... 1,552,500 shares $63.22 $98,149,050 $28,954(3)
======================================================================================================================
</TABLE>
(1) Includes 202,500 shares that the Underwriters have the option to purchase to
cover over-allotments, if any.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee, pursuant to Rule 457(c) under the Securities Act, based on
the average of the high and low prices of the Common Stock on the Nasdaq
National Market on May 14, 1998.
(3) Previously paid.
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.
================================================================================
<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:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 28,954
NASD filing fee............................................. 10,315
Nasdaq National Market filing fee........................... 17,500
Accounting fees and expenses................................ 175,000
Legal fees and expenses..................................... 175,000
Printing.................................................... 150,000
Road show expenses.......................................... 30,000
Blue sky fees and expenses.................................. 5,000
Transfer agent fees and expenses............................ 10,000
Miscellaneous............................................... 48,231
--------
Total............................................. $650,000
========
</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.
II-1
<PAGE> 3
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 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.
The Underwriting Agreement contains covenants of indemnity between the
Underwriters, the Company and the Selling Shareholders against certain civil
liabilities, including liabilities under the Securities Act.
ITEM 16. EXHIBITS.
The following exhibits are filed herewith or incorporated by reference
herein:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
<C> <S>
1.01 -- Form of Underwriting Agreement.
2.01 -- Agreement and Plan of Reorganization dated as of August
7, 1996 by and among the Registrant, Excite Acquisition
Corporation, The McKinley Group, Inc., Isabel Maxwell,
Christine Maxwell, David Hayden, Roger Malina and Daniel
Lynch.(1)
2.02 -- Agreement of Merger dated as of August 30, 1996 by and
between Excite Acquisition Corporation and the McKinley
Group, Inc.(1)
2.03 -- Agreement and Plan of Reorganization dated as of October
30, 1997 by and among the Registrant, Excite Merger Sub,
Netbot, Inc. and certain shareholders of Netbot, Inc.(2)
2.04 -- Agreement and Plan of Reorganization dated as of January
15, 1998 by and among the Registrant, XCite Acquisition
Corporation, MatchLogic, TL Ventures III, L.P., TL
Ventures III Offshore, TL Ventures III, Interfund L.P.,
Sequel Limited Partnership, Sequel Euro Limited
Partnership, Internet Capital Group, L.L.C., Data
Strategies, Inc., and Gary Anderson.(3)
2.05 -- Agreement and Plan of Reorganization dated as of March
31, 1998 by and among the Registrant, Excite 2000
Acquisition Corporation, Classifieds2000, Inc. and
certain shareholders of Classifieds2000, Inc.(4)
4.01 -- Form of Specimen Certificate for Registrant's Common
Stock.(5)
4.02 -- Restated and Amended Investor's Rights Agreement.(5)
4.03 -- Amendment to Restated and Amended Investors' Rights
Agreement dated as of August 1, 1996.(6)
4.04 -- Amendment to Restated and Amended Investors' Rights
Agreement dated as of November 25, 1996.(7)
4.05 -- Registration Rights Agreement dated as of November 25,
1996 by and among the Registrant, America Online, Inc. and
AOL Ventures, Inc.(6)
4.06 -- Voting Agreement dated as of November 25, 1996 by and
among the Registrant and certain shareholders.(7)
4.07 -- Letter Agreement dated as of November 25, 1996 by and
among certain shareholders of Excite, Inc.(7)
5.01 -- Opinion of Fenwick & West LLP regarding the legality of
the securities being issued.
23.01 -- Consent of Ernst & Young LLP, Independent Auditors.*
</TABLE>
II-2
<PAGE> 4
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
<C> <S>
23.02 -- Consent of Price Waterhouse LLP, Independent
Accountants.*
23.03 -- Consent of Fenwick & West LLP (included in Exhibit 5.01).
24.01 -- Power of Attorney.+
</TABLE>
- ---------------
* To be filed by amendment.
+ Previously Filed.
(1) Previously filed with the Commission on September 12, 1996, as an exhibit to
the Registrant's Current Report on Form 8-K.
(2) Previously filed with the Commission on December 4, 1997, as an exhibit to
the Registrant's Current Report on Form 8-K.
(3) Previously filed with the Commission on February 17, 1998, as an exhibit to
the Registrant's Current Report on Form 8-K.
(4) Previously filed with the Commission on April 17, 1998, as an exhibit to the
Registrant's Current Report on Form 8-K.
(5) 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).
(6) Previously filed with the Commission on March 3, 1997, as an exhibit to the
Registrant's Registration Statement on Form S-1 (File No. 333-22669).
(7) Previously filed with the Commission on March 31, 1997, as an exhibit to the
Registrant's Annual Report on Form 10-K.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, 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; 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 sections
(i) and (ii) do not apply if the information required to be included in a
post-effective amendment by this section (iii) is contained in periodic
reports 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 that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration
II-3
<PAGE> 5
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.
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.
II-4
<PAGE> 6
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 9th 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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
PRINCIPAL EXECUTIVE OFFICER:
* President, Chief Executive June 9, 1998
- ----------------------------------------------------- Officer and Director
George Bell
PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER:
/s/ ROBERT C. HOOD Executive Vice President, June 9, 1998
- ----------------------------------------------------- Chief Administrative Officer
Robert C. Hood and Chief Financial Officer
ADDITIONAL DIRECTORS:
* Senior Vice President and June 9, 1998
- ----------------------------------------------------- Director
Joseph R. Kraus
* Director June 9, 1998
- -----------------------------------------------------
Vinod Khosla
* Director June 9, 1998
- -----------------------------------------------------
Geoffrey Y. Yang
*By: /s/ ROBERT C. HOOD Attorney-in-Fact June 9, 1998
------------------------------------------------
Robert C. Hood
</TABLE>
II-5
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- ------------------------------------------------------------
<C> <S> <C>
1.01 -- Form of Underwriting Agreement.
2.01 -- Agreement and Plan of Reorganization dated as of August
7, 1996 by and among the Registrant, Excite Acquisition
Corporation, The McKinley Group, Inc., Isabel Maxwell,
Christine Maxwell, David Hayden, Roger Malina and Daniel
Lynch.(1)
2.02 -- Agreement of Merger dated as of August 30, 1996 by and
between Excite Acquisition Corporation and the McKinley
Group, Inc.(1)
2.03 -- Agreement and Plan of Reorganization dated as of October
30, 1997 by and among the Registrant, Excite Merger Sub,
Netbot, Inc. and certain shareholders of Netbot, Inc.(2)
2.04 -- Agreement and Plan of Reorganization dated as of January
15, 1998 by and among the Registrant, XCite Acquisition
Corporation, MatchLogic, TL Ventures III, L.P., TL
Ventures III Offshore, TL Ventures III, Interfund L.P.,
Sequel Limited Partnership, Sequel Euro Limited
Partnership, Internet Capital Group, L.L.C., Data
Strategies, Inc., and Gary Anderson.(3)
2.05 -- Agreement and Plan of Reorganization dated as of March
31, 1998 by and among the Registrant, Excite 2000
Acquisition Corporation, Classifieds2000, Inc. and
certain shareholders of Classifieds2000, Inc.(4)
4.01 -- Form of Specimen Certificate for Registrant's Common
Stock.(5)
4.02 -- Restated and Amended Investor's Rights Agreement.(5)
4.03 -- Amendment to Restated and Amended Investors' Rights
Agreement dated as of August 1, 1996.(6)
4.04 -- Amendment to Restated and Amended Investors' Rights
Agreement dated as of November 25, 1996.(7)
4.05 -- Registration Rights Agreement dated as of November 25,
1996 by and among the Registrant, America Online, Inc. and
AOL Ventures, Inc.(6)
4.06 -- Voting Agreement dated as of November 25, 1996 by and
among the Registrant and certain shareholders.(7)
4.07 -- Letter Agreement dated as of November 25, 1996 by and
among certain shareholders of Excite, Inc.(7)
5.01 -- Opinion of Fenwick & West LLP regarding the legality of
the securities being issued.
23.01 -- Consent of Ernst & Young LLP, Independent Auditors.*
23.02 -- Consent of Price Waterhouse LLP, Independent
Accountants.*
23.03 -- Consent of Fenwick & West LLP (included in Exhibit 5.01).
24.01 -- Power of Attorney.+
</TABLE>
- ---------------
*To be filed by amendment.
+ Previously Filed.
(1) Previously filed with the Commission on September 12, 1996, as an exhibit to
the Registrant's Current Report on Form 8-K.
(2) Previously filed with the Commission on December 4, 1997, as an exhibit to
the Registrant's Current Report on Form 8-K.
<PAGE> 8
(3) Previously filed with the Commission on February 17, 1998, as an exhibit to
the Registrant's Current Report on Form 8-K.
(4) Previously filed with the Commission on April 17, 1998, as an exhibit to the
Registrant's Current Report on Form 8-K.
(5) 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).
(6) Previously filed with the Commission on March 3, 1997, as an exhibit to the
Registrant's Registration Statement on Form S-1 (File No. 333-22669).
(7) Previously filed with the Commission on March 31, 1997, as an exhibit to the
Registrant's Annual Report on Form 10-K.
<PAGE> 1
1,350,000 SHARES
EXCITE, INC.
COMMON STOCK (NO PAR VALUE)
UNDERWRITING AGREEMENT
June ___, 1998
<PAGE> 2
June __, 1998
Morgan Stanley & Co. Incorporated
BancAmerica Robertson Stephens
c/o Morgan Stanley & Co.
Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
Excite, Inc., a California corporation (the "COMPANY"), proposes to
issue and sell to the several Underwriters named in Schedule II hereto (the
"UNDERWRITERS"), and certain shareholders of the Company (the "SELLING
SHAREHOLDERS") named in Schedule I hereto severally propose to sell to the
several Underwriters, an aggregate of 1,350,000 shares of the Common Stock (no
par value) of the Company (the "FIRM SHARES"), of which 1,232,500 shares are to
be issued and sold by the Company and 117,500 shares are to be sold by the
Selling Shareholders, each Selling Shareholder selling the amount set forth
opposite such Selling Shareholder's name in Schedule I hereto.
The Company also proposes to issue and sell to the several Underwriters
not more than an additional 202,500 shares of its Common Stock (no par value)
(the "ADDITIONAL SHARES") if and to the extent that you, as Managers of the
offering, shall have determined to exercise, on behalf of the Underwriters, the
right to purchase such shares of common stock granted to the Underwriters in
Section 3 hereof. The Firm Shares and the Additional Shares are hereinafter
collectively referred to as the "Shares". The shares of Common Stock (no par
value) of the Company to be outstanding after giving effect to the sales
contemplated hereby are hereinafter referred to as the "COMMON STOCK". The
Company and the Selling Shareholders are hereinafter sometimes collectively
referred to as the "SELLERS".
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Shares. The registration statement as amended at the time it becomes effective,
including the information incorporated by reference therein and information (if
any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Securities Act of 1933, as amended
(the "SECURITIES ACT"), is hereinafter referred to as the "REGISTRATION
STATEMENT"; the prospectus in the form first used to confirm sales of Shares,
including the information incorporated by reference therein, is hereinafter
referred to as the "PROSPECTUS." If the Company has filed an abbreviated
registration statement to register additional shares of Common Stock pursuant to
Rule 462(b) under the Securities Act (the "RULE 462 REGISTRATION STATEMENT"),
then any reference herein to the term "REGISTRATION STATEMENT" shall be deemed
to include such Rule 462 Registration Statement.
<PAGE> 3
1. Representations and Warranties of the Company. The Company represents
and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) Each document filed or to be filed pursuant to the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), including each
of the documents incorporated by reference in the Prospectus (the "Incorporated
Documents") complied or will comply when so filed in all material respects with
the Exchange Act and the applicable rules and regulations of the Commission
thereunder, (ii) each part of the Registration Statement, when it became
effective, did not contain and each such part, as amended or supplemented, if
applicable, will not 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 not misleading, (iii) the Registration Statement and the
Prospectus comply and, as amended or supplemented, if applicable, will comply in
all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iv) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not through the
Option Closing Date (defined below) contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph do
not apply to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly\ incorporated,
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole; all of the issued shares of
capital stock of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned directly
by the Company, free and clear of all liens, encumbrances, equities or claims.
2
<PAGE> 4
(e) The Company and each of its subsidiaries has good and
marketable title to all real and personal property owned by it, free and clear
of all liens, encumbrances and defects except such as are described in the
Prospectus or such as do not materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings held under
lease by the Company or any of its subsidiaries are held by it under valid,
subsisting and enforceable leases, except with such exceptions as are not
material and do not interfere with the current and proposed use of such property
and buildings by the Company or it subsidiaries, except as described in or
contemplated by the Prospectus.
(f) This Agreement has been duly authorized, executed and
delivered by the Company.
(g) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained, or incorporated by
reference, in the Prospectus.
(h) The shares of Common Stock (including the Shares to be sold
by the Selling Shareholders) outstanding prior to the issuance of the Shares to
be sold by the Company have been duly authorized and are validly issued, fully
paid and non-assessable. Except as set forth in the Prospectus or in any
Incorporated Document, the Company does not have outstanding any options to
purchase, or any preemptive rights or other rights to subscribe for or to
purchase, any securities or obligations convertible into, or any contracts or
commitments to issue or sell, shares of its capital stock or any such options,
rights, convertible securities or obligations. All outstanding shares of capital
stock and options and other rights to acquire capital stock have been issued in
compliance with the registration and qualification provisions of all applicable
securities laws and were not issued in violation of any preemptive rights,
rights of first refusal and other similar rights.
(i) The Shares to be sold by the Company have been duly
authorized and, when issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive rights, rights of
first refusal or other similar rights.
(j) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will not
contravene any provision of applicable law or the articles of incorporation or
by-laws of the Company or any agreement or other instrument binding upon the
Company or any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or any
subsidiary, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, except such
as may be required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.
(k) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or
3
<PAGE> 5
otherwise, or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement).
(l) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as described
in or contemplated by the Prospectus, (i) the Company and its subsidiaries,
taken as a whole, have not incurred any material liability or obligation, direct
or contingent, nor entered into any material transaction not in the ordinary
course of business; (ii) the Company has not purchased any of its outstanding
capital stock, nor declared, paid or otherwise made any dividend or distribution
of any kind on its capital stock other than ordinary and customary dividends;
and (iii) there has not been any change in the capital stock, short-term debt or
long-term debt of the Company or any of its subsidiaries.
(m) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is subject
that are required to be described in the Registration Statement or the
Prospectus and are not so described or any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement that
are not described or filed as required.
(n) Each preliminary prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the Securities Act, complied when so filed
in all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(o) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
(p) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the business in which they
are engaged, except where the failure to have such insurance, singularly or in
the aggregate, would not have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business or operations of the
Company and its subsidiaries, taken as a whole; neither the Company nor any of
its subsidiaries has been refused any insurance coverage sought or applied for;
and the Company has no reason to believe that it will not be able to renew its
or its subsidiaries' existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its or their businesses at a cost that would not materially and
adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company and its subsidiaries, taken as a whole,
except as described in or contemplated by the Prospectus.
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(q) The Company and its subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries, taken as a
whole.
(r) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties) which
would, singly or in the aggregate, have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(s) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to require the
Company to file a registration statement under the Securities Act with respect
to any securities of the Company or to require the Company to include such
securities with the Shares registered pursuant to the Registration Statement.
(t) The Company has complied with all provisions of
Section 517.075, Florida Statutes relating to doing business with the Government
of Cuba or with any person or affiliate located in Cuba.
(u) The Company owns or possesses adequate licenses or
other rights to use all patents, copyrights, trademarks, service marks, trade
names, technology and know-how necessary to conduct its business and the
business of its subsidiaries in the manner described in the Prospectus and,
except as disclosed in the Prospectus, neither the Company nor any of its
subsidiaries has received any notice of infringement or conflict with asserted
rights of others with respect to any patents, copyrights, trademarks, service
marks, trade names, technology or know-how that could result in any material
adverse effect upon the Company and its subsidiaries, taken as a whole; and,
except as described in the Prospectus, the discoveries, inventions, products or
processes of the Company and its subsidiaries referred to in the Prospectus do
not, to the best knowledge of the Company, infringe or conflict with any right
or patent of any third party, or any discovery, invention, product or process
that is the subject of a patent application filed by any third party, known to
the Company that could have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(v) The Company and its subsidiaries possess all
consents, approvals, orders, certificates, authorizations and permits issued by,
and have made all declarations and filings with, all appropriate federal, state
or foreign governmental and self-regulatory authorities
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<PAGE> 7
and all courts and other tribunals necessary to conduct the Company's and
subsidiaries' businesses and to own, lease, license and use their properties in
the manner described in the Prospectus, except to the extent that the failure to
obtain or file would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole, and neither the Company nor any of its
subsidiaries has received any notice of proceedings related to the revocation or
modification of any such consent, approval, order, certificate, authorization or
permit that, singly or in the aggregate, if the subject of any unfavorable
decision, ruling or finding, or failure to obtain or file, would result in a
material adverse change in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its subsidiaries, taken as a
whole, except as described in the Prospectus.
(w) The Company and its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principals of the United States and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(x) No material labor dispute with employees of the Company or
any of its subsidiaries exists or to the knowledge of the Company, is imminent,
and the Company is not aware of any existing, threatened or imminent labor
disturbance by the employees of any of the principal suppliers, manufacturers or
contractors of the Company or any of its subsidiaries that could result in any
material adverse change in the condition, financial or otherwise, the earnings,
the business or operations of the Company and its subsidiaries, taken as a
whole.
(y) As of the date the Registration Statement became effective,
the Common Stock was authorized for quotation on The Nasdaq National Market upon
official notice of issuance.
2. Representations and Warranties of the Selling Shareholders. Each of
the Selling Shareholders represents and warrants to and agrees with each of the
Underwriters that:
(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder.
(b) The execution and delivery by such Selling Shareholder of,
and the performance by such Selling Shareholder of its obligations under, this
Agreement, the Custody Agreement signed by such Selling Shareholder and [BANK
BOSTON,] as Custodian, relating to the deposit of the Shares to be sold by such
Selling Shareholder (the "CUSTODY AGREEMENT") and the Power of Attorney
appointing certain individuals as such Selling Shareholder's attorneys-in-fact
to the extent set forth therein, relating to the transactions contemplated
hereby and by the Registration Statement (the "POWER OF ATTORNEY"), will not
contravene any provision of applicable law, or the articles of incorporation or
by-laws of such Selling Shareholder (if such Selling Shareholder is a
corporation), or any agreement or other instrument binding upon such
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<PAGE> 8
Selling Shareholder or any judgment, order or decree of any governmental body,
agency or court having jurisdiction over such Selling Shareholder, and no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by such Selling
Shareholder of its obligations under this Agreement or the Custody Agreement or
Power of Attorney of such Selling Shareholder, except such as may be required by
the securities or Blue Sky laws of the various states in connection with the
offer and sale of the Shares.
(c) Such Selling Shareholder has, and on the Closing Date will
have, valid title to the Shares to be sold by such Selling Shareholder and the
legal right and power, and all authorization and approval required by law, to
enter into this Agreement, the Custody Agreement and the Power of Attorney and
to sell, transfer and deliver the Shares to be sold by such Selling Shareholder.
(d) The Shares to be sold by such Selling Shareholder pursuant
to this Agreement have been duly authorized and are validly issued, fully paid
and non-assessable.
(e) The Custody Agreement and the Power of Attorney have been
duly authorized, executed and delivered by such Selling Shareholder and are
valid and binding agreements of such Selling Shareholder.
(f) Delivery of the Shares to be sold by such Selling
Shareholder pursuant to this Agreement will pass title to such Shares free and
clear of any security interests, claims, liens, equities and other encumbrances.
(g) (i) The Registration Statement, when it became effective,
did not contain and, as amended or supplemented, if applicable, will not 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 not
misleading, (ii) the Registration Statement and the Prospectus comply and, as
amended or supplemented, if applicable, will comply in all material respects
with the Securities Act and the applicable rules and regulations of the
Commission thereunder and (iii) the Prospectus does not contain and, as amended
or supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in this
paragraph 2(g) do not apply to statements or omissions in the Registration
Statement or the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein.
3. Agreements to Sell and Purchase. Each Seller, severally and not
jointly, hereby agrees to sell to the several Underwriters, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees, severally
and not jointly, to purchase from such Seller at $______ a share (the "PURCHASE
PRICE") the number of Firm Shares (subject to such adjustments to eliminate
fractional shares as you may determine) that bears the same proportion to the
number of Firm Shares to be sold by
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<PAGE> 9
such Seller as the number of Firm Shares set forth in Schedule II hereto
opposite the name of such Underwriter bears to the total number of Firm Shares.
On the basis of the representations and warranties contained in
this Agreement, and subject to its terms and conditions, the Company agrees to
sell to the Underwriters the Additional Shares, and the Underwriters shall have
a one-time right to purchase, severally and not jointly, up to 202,500
Additional Shares at the Purchase Price. If you, on behalf of the Underwriters,
elect to exercise such option, you shall so notify the Company in writing not
later than 30 days after the date of this Agreement, which notice shall specify
the number of Additional Shares to be purchased by the Underwriters and the date
on which such shares are to be purchased. Such date may be the same as the
Closing Date (as defined below) but not earlier than the Closing Date nor later
than ten business days after the date of such notice. Additional Shares may be
purchased as provided in Section 5 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each Underwriter agrees, severally and
not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Additional Shares to be purchased as the
number of Firm Shares set forth in Schedule II hereto opposite the name of such
Underwriter bears to the total number of Firm Shares.
Each Seller hereby agrees that, without the prior written
consent of Morgan Stanley & Co. Incorporated on behalf of the Underwriters, it
will not, during the period ending 90 days after the date of the Prospectus, (i)
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the Shares to be sold hereunder, (B) the issuance by the Company of
shares of Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof of which the
Underwriters have been advised in writing or (C) transactions by any person
other than the Company relating to shares of Common Stock or other securities
acquired in open market transactions after the completion of the offering of the
Shares. In addition, each Selling Shareholder, agrees that, without the prior
written consent of Morgan Stanley & Co. Incorporated on behalf of the
Underwriters, it will not, during the period ending 90 days after the date of
the Prospectus, make any demand for, or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock.
4. Terms of Public Offering. The Sellers are advised by you that
the Underwriters propose to make a public offering of their respective portions
of the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Sellers are further
advised by you that the Shares are to be offered to the public
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<PAGE> 10
initially at $_____________ a share (the "PUBLIC OFFERING PRICE") and to certain
dealers selected by you at a price that represents a concession not in excess of
$______ a share under the Public Offering Price, and that any Underwriter may
allow, and such dealers may reallow, a concession, not in excess of $_____ a
share, to any Underwriter or to certain other dealers.
5. Payment and Delivery. Payment for the Firm Shares to be sold by each
Seller shall be made to such Seller in Federal or other funds immediately
available in New York City against delivery of such Firm Shares for the
respective accounts of the several Underwriters at 10:00 a.m., New York City
time, on ____________, 1998, or at such other time on the same or such other
date, not later than _________, 1998, as shall be designated in writing by you.
The time and date of such payment are hereinafter referred to as the "CLOSING
DATE".
Payment for any Additional Shares shall be made to the Company in
Federal or other funds immediately available in New York City against delivery
of such Additional Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 3 or at such other time on the same or on such other
date, in any event not later than _______, 1998, as shall be designated in
writing by you. The time and date of such payment are hereinafter referred to as
the "OPTION CLOSING DATE".
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
6. Conditions to the Underwriters' Obligations. The obligations of the
Sellers to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall have become
effective not later than 5:30 p.m. (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the following
further conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act; and
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(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement) that, in your judgment, is material and adverse and that makes it, in
your judgment, impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of the
Company, to the effect set forth in Section 6(a)(i) above and to the effect that
the representations and warranties of the Company contained in this Agreement
are true and correct as of the Closing Date and that the Company has complied
with all of the agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon the
best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an
opinion of Fenwick & West LLP, outside counsel for the Company, dated the
Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its property and
to conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(ii) each significant subsidiary of the Company has been
duly incorporated, is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole;
(iii) the Company has the authorized and outstanding
capital stock as set forth or incorporated by reference in the Prospectus;
except as disclosed in the Prospectus, to such counsel's knowledge, there is no
outstanding option, warrant or other right calling for the issuance of, and no
commitment, plan or arrangement to issue, any share of capital stock of the
Company or any security convertible into or exchangeable or exercisable for
capital stock of the Company;
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(iv) the shares of Common Stock (including the Shares to
be sold by the Selling Shareholders) outstanding prior to the issuance of the
Shares to be sold by the Company have been duly authorized and are validly
issued and non-assessable, and, to the knowledge of such counsel, fully paid;
(v) all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and issued, are
non-assessable and, to the knowledge of such counsel, fully paid, and are owned
directly by the Company, free and clear of all liens, encumbrances, equities or
claims;
(vi) the Shares to be sold by the Company have been duly
authorized and, when issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive rights, or, to
such counsel's knowledge, rights of first refusal or similar rights;
(vii) this Agreement has been duly authorized, executed
and delivered by the Company;
(viii) the execution and delivery by the Company of, and
the performance by the Company of its obligations under, this Agreement will not
contravene any provision of applicable law or the articles of incorporation or
by-laws of the Company or, to the knowledge of such counsel, any agreement or
other instrument filed as an Exhibit to the Registration Statement, or, to the
knowledge of such counsel, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company or any subsidiary,
and no consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company of
its obligations under this Agreement, except such as may be required by the
rules of the National Association of Securities Dealers (the "NASD") or the
securities or Blue Sky laws of the various states or foreign jurisdictions in
connection with the offer and sale of the Shares as to which such counsel
expresses no opinion;
(ix) the statements (A) in the Prospectus under the
captions "Risk Factors--Risks Related to Netcenter Agreement," "Risk
Factors--Government Regulation and Legal Uncertainties" "Risk Factors--Shares
Eligible for Future Sale; Shelf Registration Statements and Registration
Rights," "Risk Factors--Proposed Reincorporation; Certain Anti-Takeover
Provisions," and "Business--Relationship with Netscape," (B) the description of
the litigation set forth in the fourth, fifth and sixth paragraphs of that
certain Form 8-K filed by the Company with the Securities and Exchange
Commission on June 1, 1998, (C) in the Incorporated Documents relating to the
description of the Company's authorized and outstanding capital stocks, and (D)
in the Registration Statement in Item 15, in each case insofar as such
statements constitute summaries of the legal matters, documents or proceedings
referred to therein, fairly present the information called for with respect to
such legal matters, documents and proceedings;
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(x) such counsel does not know of any legal or
governmental proceedings pending or threatened to which the Company or any of
its subsidiaries is a party or to which any of the properties of the Company or
any of its subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required;
(xi) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended;
(xii) such counsel (A) is of the opinion that the
Registration Statement and Prospectus (except for financial statements and
schedules and other financial and statistical data included therein as to which
such counsel need not express any opinion) comply as to form in all material
respects with the Securities Act and the applicable rules and regulations of the
Commission thereunder, and (B) the Incorporated Documents (except for financial
statements and schedules and financial and statistical data included therein as
to which such counsel need not express any opinion) comply as to form in all
material respects with the Exchange Act and the applicable rules and regulations
of the Commission thereunder. In addition to the matters set forth above, such
opinion shall also include a statement to the effect that nothing has come to
the attention of such counsel that causes them to believe that (i) the
Registration Statement at the time the Registration Statement became effective
under the Act, but after giving effect to any modification incorporated therein
pursuant to Rule 430A under the Act, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (ii) the
Prospectus, or any supplement thereto, including without limitation the
Incorporated Documents as updated by the Prospectus, on the date the Prospectus
was filed pursuant to the Act and the rules and regulations promulgated
thereunder and as of the Closing Date, as the case may be, contained an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements, in light of the circumstances under which they
were made, not misleading. Fenwick & West LLP may exclude from the scope of its
opinion and such statement the financial statements, the notes thereto, the
schedules and statistical information in the Registration Statement and may
state that its statement is based upon participation in the preparation of the
Registration Statement, Prospectus and the Incorporated Documents and any
amendments or supplements thereto and the documents incorporated by reference,
but are without independent check or verification.;
(xiii) the Shares to be sold under this Agreement to the
Underwriters by the Company are duly authorized for quotation on notice of
issuance on The Nasdaq National Market;
(xiv) to the knowledge of such counsel, there is no
legal or beneficial owner of any securities of the Company who has any rights,
not effectively satisfied or
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waived, to require registration of any shares of capital stock of the Company in
connection with the filing of the Registration Statement;
(xv) the Company has corporate power and authority to
enter into this Agreement and to issue, sell and deliver to the Underwriters the
Shares to be issued and sold by the Company; and
(xvi) the Registration Statement has become effective
under the Securities Act, and, to such counsel's knowledge, no stop order
proceedings with respect thereto have been instituted or are pending or
threatened under the Securities Act, and any required filing of the Prospectus
and any supplement thereto pursuant to Rule 424(b) under the Securities Act has
been made in the manner and within the time period required by such Rule 424(b).
(d) The Underwriters shall have received on the Closing Date an
opinion of Fenwick & West LLP, on behalf of the Selling Shareholders, dated the
Closing Date, to the effect that:
(i) this Agreement has been duly authorized, executed
and delivered by or on behalf of each of the Selling Shareholders;
(ii) the execution and delivery by each Selling
Shareholder of, and the performance by such Selling Shareholder of its
obligations under, this Agreement and the Custody Agreement and Powers of
Attorney of such Selling Shareholder will not contravene any provision of
applicable law, or, to such counsel's knowledge, any agreement or other
instrument binding upon such Selling Shareholder or, to such counsel's
knowledge, any judgment, order or decree of any governmental body, agency or
court having jurisdiction over such Selling Shareholder, and no consent,
approval, authorization or order of, or qualification with, any governmental
body or agency is required for the performance by such Selling Shareholder of
its obligations under this Agreement or the Custody Agreement or Power of
Attorney of such Selling Shareholder, except such as may be required by the
rules of the NASD or the securities or Blue Sky laws of the various states and
foreign jurisdictions in connection with offer and sale of the Shares as to
which such counsel expresses no opinion;
(iii) to such counsel's knowledge, each of the Selling\
Shareholders has the legal right and power, and all authorization and approval
required by law, to enter into this Agreement and the Custody Agreement and
Power of Attorney of such Selling Shareholder and to sell, transfer and deliver
the Shares to be sold by such Selling Shareholder, except such as may be
required by the rules of the NASD or the securities or Blue Sky laws of the
various states and foreign jurisdictions in connection with offer and sale of
the Shares as to which such counsel expresses no opinion;
(iv) the Custody Agreement and the Power of Attorney of
each Selling Shareholder have been duly authorized, executed and delivered by
such Selling Shareholder and are valid and binding agreements of such Selling
Shareholder, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally, (ii) as limited by laws
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<PAGE> 15
relating to the availability of specific performance, injunctive relief, or
other equitable remedies, and (iii) to the extent the indemnification provisions
contained in the Custody Agreement and the Power of Attorney may be limited by
applicable federal or state securities laws; and
(v) upon delivery of and payment for the Shares to be
sold by the Selling Shareholders as provided in this Agreement, and upon
registration of such Shares in the stock records of the Company in the names of
the Underwriters or their nominees and the issuance by the Company of stock
certificates therefor, the Underwriters will be the owners of such Shares, free
and clear of any adverse claim, provided that (a) neither the Underwriters nor
their nominees grant any right, title or interest in or to such Shares to any
person or entity prior to sale of such Shares to the public, (b) the
Underwriters are purchasing such Shares in good faith and (c) the Underwriters,
together with their nominees (if any), hold such Shares without notice of any
adverse claim.
(e) The Underwriters shall have received on the Closing Date an
opinion of Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP,
counsel for the Underwriters, dated the Closing Date, covering the matters
referred to in Sections 6(c)(vi), 6(c)(vii), 6(c)(ix) (but only as to the
statements in the Prospectus under "Underwriters") and 6(c)(xii) (but only as to
clauses A, C and D thereof).
With respect to Section 6(c)(xii) above, Fenwick & West LLP may state
that their opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus and any amendments or
supplements thereto and the documents incorporated by reference and review and
discussion of the contents thereof, but are without independent check or
verification, except as specified. With respect to Section 6(c)(xii) above,
Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP may state that
their opinion and belief are based upon their participation in the preparation
and discussion of the Registration Statement and Prospectus and any amendments
or supplements thereto (other than the Incorporated Documents) and review of the
contents thereof (including the Incorporated Documents), but are without
independent check or verification, except as specified. With respect to Section
6(d) above, Fenwick & West LLP may rely upon an opinion or opinions of counsel
for any Selling Shareholders and, with respect to factual matters and to the
extent such counsel deems appropriate, upon the representations of each Selling
Shareholder contained herein and in the Custody Agreement and Power of Attorney
of such Selling Shareholder and in other documents and instruments; provided
that (A) each such counsel for the Selling Shareholders is satisfactory to your
counsel, (B) a copy of each opinion so relied upon is delivered to you and is in
form and substance satisfactory to your counsel, (C) copies of such Custody
Agreements and Powers of Attorney and of any such other documents and
instruments shall be delivered to you and shall be in form and substance
satisfactory to your counsel and (D) Fenwick & West LLP shall state in their
opinion that they are justified in relying on each such other opinion.
The opinion of Fenwick & West LLP described in Sections 6(c) and 6(d)
above (and any opinions of counsel for any Selling Shareholder referred to in
the immediately preceding paragraph) shall be rendered to the Underwriters at
the request of the Company or one or more of the Selling Shareholders, as the
case may be, and shall so state therein.
14
<PAGE> 16
(f) The Underwriters shall have received, on each of the
date hereof and the Closing Date, a letter dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to the
Underwriters, from Ernst & Young LLP, independent public accountants, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information contained in, or incorporated by reference into,
the Registration Statement and the Prospectus; provided that the letter
delivered on the Closing Date shall use a "cut-off date" not earlier than the
date hereof.
(g) The "lock-up" agreements between you and certain
shareholders, officers and directors of the Company relating to sales and
certain other dispositions of shares of Common Stock or certain other
securities, delivered to you on or before the date hereof, shall be in full
force and effect on the Closing Date.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the delivery to you on the Option Closing Date
of such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of the Additional
Shares and other matters related to the issuance of the Additional Shares.
7. Covenants of the Company. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, three signed copies of
the Registration Statement (including exhibits thereto and documents
incorporated by reference) and for delivery to each other Underwriter a
conformed copy of the Registration Statement (without exhibits thereto but
including documents incorporated by reference) and to furnish to you in New York
City, without charge, prior to 10:00 a.m. New York City time on the business day
next succeeding the date of this Agreement and during the period mentioned in
Section 7(c) below, as many copies of the Prospectus, any documents incorporated
by reference, and any supplements and amendments thereto or to the Registration
Statement as you may reasonably request. The terms "supplement" and "amendment"
or "amend" as used in this Agreement shall include all documents subsequently
filed by the Company with the Commission pursuant to the Exchange Act, that are
deemed to be incorporated by reference in the Prospectus.
(b) Before amending or supplementing the Registration Statement
or the Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to which
you reasonably object, and to file with the Commission within the applicable
period specified in Rule 424(b) under the Securities Act any prospectus required
to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters the
Prospectus is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event shall occur or condition exist as a result of
which it is necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the Prospectus is
15
<PAGE> 17
delivered to a purchaser, not misleading, or if, in the opinion of counsel for
the Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the Commission and
furnish, at its own expense, to the Underwriters and to the dealers (whose names
and addresses you will furnish to the Company) to which Shares may have been
sold by you on behalf of the Underwriters and to any other dealers upon request,
either amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading or
so that the Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement covering the
twelve-month period ending June 30, 1999 that satisfies the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
8. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Sellers agree to
pay or cause to be paid all expenses incident to the performance of their
obligations under this Agreement, including: (i) the fees, disbursements and
expenses of the Company's counsel, the Company's accountants and counsel for the
Selling Shareholders in connection with the registration and delivery of the
Shares under the Securities Act and all other fees or expenses in connection
with the preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the mailing
and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon, (iii) the cost of printing or producing any Blue
Sky or Legal Investment memorandum in connection with the offer and sale of the
Shares under state securities laws and all expenses in connection with the
qualification of the Shares for offer and sale under state securities laws as
provided in Section 7(d) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or Legal Investment
memorandum, (iv) all filing fees and the reasonable fees and disbursements of
counsel to the Underwriters incurred in connection with the review and
qualification of the offering of the Shares by the National Association of
Securities Dealers, Inc., (v) all costs and expenses incident to listing the
Shares on The Nasdaq National Market, (vi) the cost of printing certificates
representing the Shares, (vii) the costs and charges of any transfer agent,
registrar or depositary, (viii) the costs and expenses of the Company relating
to investor presentations on any "road show" undertaken in connection with the
marketing of the offering of the Shares, including, without limitation, expenses
associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Company, travel and lodging
expenses of the representatives and officers of the Company and any such
consultants, and the cost of any
16
<PAGE> 18
aircraft chartered in connection with the road show, and (ix) all other costs
and expenses incident to the performance of the obligations of the Company
hereunder for which provision is not otherwise made in this Section. It is
understood, however, that except as provided in this Section, Section 7 entitled
"Indemnity and Contribution", and the last paragraph of Section 9 below, the
Underwriters will pay all of their costs and expenses, including fees and
disbursements of their counsel, stock transfer taxes payable on resale of any of
the Shares by them and any advertising expenses connected with any offers they
may make.
The provisions of this Section shall not supersede or otherwise affect
any agreement that the Sellers may otherwise have for the allocation of such
expenses among themselves.
9. Indemnity and Contribution. (a) The Sellers, jointly and severally,
agree to indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(b) Each Selling Shareholder agrees, severally and not jointly,
to indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only with reference to information relating to such Selling Shareholder
furnished in writing by or on behalf of such Selling Shareholder expressly for
use in the Registration Statement, any preliminary prospectus, the Prospectus or
any amendments or supplements thereto.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Sellers, the directors of the Company, the
officers of the Company who sign the Registration Statement and each person, if
any, who controls the Company or any
17
<PAGE> 19
Selling Shareholder within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal or
other expenses reasonably incurred in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(d) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to Section 9(a), 9(b) or 9(c), such person (the
"INDEMNIFIED PARTY") shall promptly notify the person against whom such
indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (i) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Underwriters and all persons, if any, who
control any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, (ii) the fees and expenses of
more than one separate firm (in addition to any local counsel) for the Company,
its directors, its officers who sign the Registration Statement and each person,
if any, who controls the Company within the meaning of either such Section and
(iii) the fees and expenses of more than one separate firm (in addition to any
local counsel) for all Selling Shareholders and all persons, if any, who control
any Selling Shareholder within the meaning of either such Section, and that all
such fees and expenses shall be reimbursed as they are incurred. In the case of
any such separate firm for the Underwriters and such control persons of any
Underwriters, such firm shall be designated in writing by Morgan Stanley & Co.
Incorporated. In the case of any such separate firm for the Company, and such
directors, officers and control persons of the Company, such firm shall be
designated in writing by the Company. In the case of any such separate firm for
the Selling Shareholders and such control persons of any Selling Shareholders,
such firm shall be designated in writing by the persons named as
attorneys-in-fact for the Selling Shareholders under the Powers of Attorney. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any
18
<PAGE> 20
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(e) To the extent the indemnification provided for in Section
9(a), 9(b) or 9(c) is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering of the Shares
or (ii) if the allocation provided by clause 9(e)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 9(e)(i) above but also the relative
fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Sellers on the one hand and the Underwriters on the other hand
in connection with the offering of the Shares shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Shares
(before deducting expenses) received by each Seller and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate Public
Offering Price of the Shares. The relative fault of the Sellers on the one hand
and the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Sellers or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Underwriters' respective obligations to
contribute pursuant to this Section 9 are several in proportion to the
respective number of Shares they have purchased hereunder, and not joint.
(f) The Sellers and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 9 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of
19
<PAGE> 21
allocation that does not take account of the equitable considerations referred
to in Section 9(e). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Shares underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 9 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
(g) The indemnity and contribution provisions contained in this
Section 9 and the representations, warranties and other statements of the
Company and the Selling Shareholders contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any Underwriter or any
person controlling any Underwriter, any Selling Shareholder or any person
controlling any Selling Shareholder, or the Company, its officers or directors
or any person controlling the Company and (iii) acceptance of and payment for
any of the Shares.
(h) Notwithstanding any other provision of this Agreement, the
liability of each Selling Shareholder under the expense agreements contained in
Section 8 hereof and the indemnity and contribution agreements contained in this
Section 9 shall be limited to an amount equal to the net proceeds received by
such Selling Shareholder from the public offering of the Shares sold by such
Selling Shareholder to the Underwriters. In addition, no Selling Shareholder
shall be liable under the expense agreements contained in Section 8 hereof and
the indemnity and contribution agreements contained in this Section 9 unless and
until the Underwriters have made written demand on the Company for payment under
such respective sections which shall not have been paid by the Company within 45
days after receipt of such demand. The Company and the Selling Shareholders may
agree, as among themselves and without limiting the rights of the Underwriters
under this Agreement, as to the respective amounts of such liability for which
they each shall be responsible, including, without limitation, allocating
between the Company and the Selling Shareholders the liability resulting in a
breach of the representations and warranties of the Company and the Selling
Shareholders hereunder.
10. Termination. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a
20
<PAGE> 22
general moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities or (iv) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in your judgment, is material
and adverse and (b) in the case of any of the events specified in clauses
10(a)(i) through 10(a)(iv), such event, singly or together with any other such
event, makes it, in your judgment, impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus.
11. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares that
it has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule II bears to the aggregate number of
Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided that in no event shall the number of
Shares that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 11 by an amount in excess of one-ninth of
such number of Shares without the written consent of such Underwriter. If, on
the Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of Firm
Shares to be purchased, and arrangements satisfactory to you, the Company and
the Selling Shareholders for the purchase of such Firm Shares are not made
within 36 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter, the Company or the
Selling Shareholders. In any such case either you or the relevant Sellers 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 in the Prospectus or in any other documents or arrangements may be
effected. If, on the Option Closing Date, any Underwriter or Underwriters shall
fail or refuse to purchase Additional Shares and the aggregate number of
Additional Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Additional Shares to be purchased, the
non-defaulting Underwriters shall have the option to (i) terminate their
obligation hereunder to purchase Additional Shares or (ii) purchase not less
than the number of Additional Shares that such non-defaulting Underwriters would
have been obligated to purchase in the absence of such default. Any action taken
under this paragraph shall not relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of any Seller to comply with
the terms or to fulfill any of the conditions of this Agreement, or if for any
reason any Seller shall be unable to
21
<PAGE> 23
perform its obligations under this Agreement, the Sellers will reimburse the
Underwriters or such Underwriters as have so terminated this Agreement with
respect to themselves, severally, for all out-of-pocket expenses (including the
fees and disbursements of their counsel) reasonably incurred by such
Underwriters in connection with this Agreement or the offering contemplated
hereunder.
12. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
14. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
Very truly yours,
EXCITE, INC.
By:
----------------------------------------
Name:
Title:
Accepted as of the date hereof
Morgan Stanley & Co. Incorporated
BancAmerica Robertson Stephens
Acting severally on behalf
of themselves and the several Underwriters
named in Schedule I hereto.
By: Morgan Stanley & Co. Incorporated
By:
-------------------------------------
Name:
Title:
22
<PAGE> 24
<TABLE>
<CAPTION>
SCHEDULE I
NUMBER OF FIRM
SHARES TO BE
SELLING SHAREHOLDER PURCHASED
- ------------------- ---------
<S> <C>
George Bell 25,000
Joseph R. Kraus, IV 25,000
Graham Spencer 25,000
Brett T Bullington 17,500
Robert C. Hood 12,500
Kenneth Wachtel 12,500
-------
Total .............................. 117,500
=======
</TABLE>
S-1
<PAGE> 25
SCHEDULE II
<TABLE>
<CAPTION>
NUMBER OF FIRM
SHARES TO BE
UNDERWRITER PURCHASED
- -----------
<S> <C>
Morgan Stanley & Co. Incorporated
BancAmerica Robertson Stephens
[NAMES OF OTHER UNDERWRITERS]
-------------------
Total................ 1,232,500
===================
</TABLE>
S-2
<PAGE> 26
EXHIBIT A
[FORM OF LOCK-UP LETTER]
EXCITE, INC.
April __, 1998
Morgan Stanley & Co. Incorporated
BancAmerica Robertson Stephens
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
Dear Sirs and Mesdames:
The undersigned understands that Morgan Stanley & Co. Incorporated
("Morgan Stanley") proposes to enter into an Underwriting Agreement (the
"Underwriting Agreement") with Excite, Inc., a California corporation (the
"Company") providing for the public offering (the "Public Offering") by the
several Underwriters, including Morgan Stanley (the "Underwriters"), of
______________ shares (the "Shares") of the Common Stock (no par value), of the
Company (the "Common Stock").
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Morgan
Stanley on behalf of the Underwriters, it will not, during the period commencing
on the date hereof and ending 90 days after the date of the final prospectus
relating to the Public Offering (the "Prospectus"), (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (2) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
Common Stock, whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Common Stock or such other securities, in cash
or otherwise. The foregoing sentence shall not apply to (a) the sale of any
Shares to the Underwriters pursuant to the Underwriting Agreement or (b)
transactions relating to shares of Common Stock or other securities acquired in
open market transactions after the completion of the Public Offering. In
addition, the undersigned agrees that, without the prior written consent of
Morgan Stanley on behalf of the Underwriters, it will not, during the period
E-1
<PAGE> 27
commencing on the date hereof and ending 90 days after the date of the
Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock.
Whether or not the Public Offering actually occurs depends
on a number of factors, including market conditions.
Any Public Offering will only be made pursuant to an Underwriting Agreement, the
terms of which are subject to negotiation between the Company and the
Underwriters.
Very truly yours,
--------------------------------------------------
(Name)
--------------------------------------------------
(Address)
E-2
<PAGE> 1
EXHIBIT 5.01
June 9, 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 333-53061) (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 an aggregate of 1,350,000 shares of your Common Stock (the
"Stock"), 117,500 of which are presently issued and outstanding and will be
sold by certain selling shareholders (the "Selling Shareholders").
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;
(3) the Registration Statement, together with the Exhibits filed as a
part thereof;
(4) the Prospectus prepared in connection with the Registration
Statement;
(5) 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;
(6) 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 holders respecting your
capital stock and of any rights to purchase capital stock that was
prepared by you and dated April 30, 1998);
(7) a Management Certificate addressed to us and dated of even date
herewith executed by the Company containing certain factual and
other representations;
(8) the agreements under which the Selling Shareholders acquired the
Stock to be sold by them as described in the Registration
Statement; and
(9) the Letters of Transmittal and Custody Agreements and the Selling
Shareholders' Irrevocable Powers of Attorney signed by the Selling
Shareholders in connection with the sale of Stock described in the
Registration Statement.
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.
<PAGE> 2
June 9, 1998
Page 2
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 117,500 shares of
Stock to be sold by the Selling Shareholders pursuant to the Registration
Statement are validly issued, fully paid and nonassessable, and that the up
to 1,232,500 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,
/s/ FENWICK & WEST LLP
