<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 9, 1998
REGISTRATION NO. 333-67459
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
AMENDMENT NO. 2 TO
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
-------------------
DOUBLECLICK INC.
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C> <C>
DELAWARE 7319 13-3870996
(State of (Primary Standard Industrial I.R.S. Employer
Incorporation) Classification Code) Identification Number)
</TABLE>
41 MADISON AVENUE, 32ND FLOOR
NEW YORK, NEW YORK 10010
(212) 683-0001
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
------------------------
KEVIN J. O'CONNOR
CHIEF EXECUTIVE OFFICER
DOUBLECLICK INC.
41 MADISON AVENUE, 32ND FLOOR
NEW YORK, NEW YORK 10010
(212) 683-0001
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
------------------------
COPIES TO:
<TABLE>
<S> <C>
ALEXANDER D. LYNCH, ESQ. MARK G. BORDEN, ESQ.
ALAN P. BLAUSTEIN, ESQ. JEFFREY A. STEIN, ESQ.
BROBECK, PHLEGER & HARRISON LLP HALE AND DORR LLP
1633 BROADWAY, 47TH FLOOR 60 STATE STREET
NEW YORK, NEW YORK 10019 BOSTON, MASSACHUSETTS 02109
(212) 581-1600 (617) 526-6000
</TABLE>
-------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the
effective date of this Registration Statement.
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, 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 THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(D)
UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT
FOR THE SAME OFFERING. / /
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX. / /
-------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than the
underwriting discount, payable by the Registrant in connection with the sale of
Common Stock being registered. All amounts are estimates except the SEC
registration fee and the NASD filing fees.
<TABLE>
<CAPTION>
AMOUNT TO
BE PAID
-------------
<S> <C>
SEC registration fee........................................................... $ 27,625
NASD filing fee................................................................ 10,437
Nasdaq National Market listing fee............................................. 17,500
Printing and engraving......................................................... 200,000
Legal fees and expenses........................................................ 200,000
Accounting fees and expenses................................................... 75,000
Blue sky fees and expenses (including legal fees).............................. 10,000
Transfer agent fees............................................................ 20,000
Miscellaneous.................................................................. 86,313
-------------
Total...................................................................... $ 646,875
-------------
-------------
</TABLE>
The Company will bear all expenses shown above.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Certificate of Incorporation (the "Certificate") provides
that, except to the extent prohibited by the Delaware General Corporation Law
(the "DGCL"), the Registrant's directors shall not be personally liable to the
Registrant or its stockholders for monetary damages for any breach of fiduciary
duty as directors of the Registrant. Under the DGCL, the directors have a
fiduciary duty to the Registrant which is not eliminated by this provision of
the Certificate and, in appropriate circumstances, equitable remedies such as
injunctive or other forms of nonmonetary relief will remain available. In
addition, each director will continue to be subject to liability under the DGCL
for breach of the director's duty of loyalty to the Registrant, for acts or
omissions which are found by a court of competent jurisdiction to be not in good
faith or involving intentional misconduct, for knowing violations of law, for
actions leading to improper personal benefit to the director, and for payment of
dividends or approval of stock repurchases or redemptions that are prohibited by
DGCL. This provision also does not affect the directors' responsibilities under
any other laws, such as the Federal securities laws or state or Federal
environmental laws. The Registrant has obtained liability insurance for its
officers and directors.
Section 145 of the DGCL empowers a corporation to indemnify its directors
and officers and to purchase insurance with respect to liability arising out of
their capacity or status as directors and officers, provided that this provision
shall not eliminate or limit the liability of a director: (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) arising under Section 174 of the DGCL, or (iv)
for any transaction from which the director derived an improper personal
benefit. The DGCL provides further that the indemnification permitted thereunder
shall not be deemed exclusive of any other rights to which the directors and
officers may be entitled under the corporation's bylaws, any agreement, a vote
of stockholders or otherwise. The Certificate eliminates the personal liability
of directors to the fullest extent permitted by Section 102(b)(7) of the DGCL
and provides that the Registrant shall fully indemnify any person who was or is
a party or is threatened to be made a party to
II-1
<PAGE>
any threatened, pending or completed action, suit or proceeding (whether civil,
criminal, administrative or investigative) by reason of the fact that such
person is or was a director or officer of the Registrant, or is or was serving
at the request of the Registrant as a director or officer of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, against expenses (including attorney's fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding.
At present, there is no pending litigation or proceeding involving any
director, officer, employee or agent as to which indemnification will be
required or permitted under the Certificate. The Registrant is not aware of any
threatened litigation or proceeding that may result in a claim for such
indemnification.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
The Registrant has sold and issued the following securities since January
23, 1996 (inception):
In January 1996, the Registrant issued an aggregate of 905,912 shares of its
common stock, par value $.01 per share ("Original Common Stock"), (i) to Poppe
Tyson, Inc. a subsidiary of Bozell, Jacobs, Kenyon & Eckhardt in exchange for
$500,000 in cash, and (ii) to Kevin J. O'Connor and Dwight A. Merriman in
exchange for $75,000 in cash and fixed assets having an approximate value of
$25,000. Such shares of Original Common Stock were sold in reliance upon an
exemption from registration under the Securities Act of 1933 pursuant to Section
4(2) thereof.
In August 1996, all outstanding shares of Original Common Stock were
converted into shares of class A common stock.
In June 1997, the DoubleClick Acquisition Corp. ("Newco") merged with and
into the Registrant (the "Merger"). As a result of the Merger, the Registrant
issued an aggregate of 36,667 shares of its Convertible Preferred Stock, par
value $.001 per share, to the holders of common stock of Newco which consisted
of: Bain Capital Fund V, L.P., Bain Capital Fund V-B, L.P., BCIP Associates,
BCIP Trust Associates, L.P., Brookside Capital Partners Fund, L.P., ABS Capital
Partners II, L.P., Greylock Equity Limited Partnership, Greylock IX Limited
Partnership, Canaan S.B.I.C., L.P., Canaan Equity, L.P., Canaan Capital Limited
Partnership, Canaan Capital Offshore Limited Partnership, C.V., Venrock
Associates and Venrock Associates II, L.P. Such shares of Convertible Preferred
Stock converted into an aggregate of 5,714,950 shares of Common Stock on the
closing of the Registrant's initial public offering. Such shares of Convertible
Preferred Stock were sold in reliance upon an exemption from registration under
the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof. In
addition, as part of the Registrant's recapitalization, 7,395,740 shares of
class A common stock were converted into 7,395,740 shares of Common Stock and
10,780,000 shares of class B common stock were converted into 2,987,721 shares
of Common Stock.
Also in June 1997, the Registrant sold 3,333 shares of its Convertible
Preferred Stock to the following investors for $3,333,000: WPG Enterprise Fund
III, L.P., Weiss, Peck & Greer Venture Associates IV, L.P. and Weiss, Peck &
Greer Venture Associates IV Cayman, L.P. Such shares of Convertible Preferred
Stock converted into an aggregate of 519,484 shares of Common Stock on the
closing of the Registrant's initial public offering.
In December 1997, the Company issued 779,302 shares of Common Stock to
Bozell, Jacobs, Kenyon & Eckhardt, Inc. upon conversion of a Convertible
Promissory Note in the principal amount of $5,000,000. Such shares of Common
Stock were issued in reliance upon an exemption from registration under the
Securities Act of 1933 pursuant to Section 4(2).
II-2
<PAGE>
The Registrant from time to time has granted stock options to employees in
reliance upon an exemption under the Securities Act of 1933, as amended,
pursuant to Rule 701 promulgated thereunder. The following table sets forth
certain information regarding such grants:
<TABLE>
<CAPTION>
RANGE OF
NUMBER OF EXERCISE
SHARES PRICES
------------- -----------------
<S> <C> <C>
January 23, 1996 (inception) through December 31, 1996................ 1,363,380 $0.14- 0.28
January 1, 1997 through December 31, 1997............................. 1,038,725 0.28-13.00
</TABLE>
Between January 1, 1996 and December 31, 1997, an aggregate of 176,668
shares of Common Stock were issued to employees of the Registrant pursuant to
the exercise of options at a weighted average exercise price of $0.16 per share
in reliance on an exemption under the Securities Act of 1933, as amended,
pursuant to Rule 701 promulgated thereunder.
As indicated, the above securities were offered and sold by the Registrant
in reliance upon exemptions from registration pursuant to either (i) Section
4(2) of the Securities Act of 1933, as amended, as transactions not involving
any public offering, or (ii) Rule 701 under the Securities Act of 1933, as
amended. No underwriters were involved in connection with the sales of
securities referred to in this Item 15.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits.
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement.
3.1** Amended and Restated Certificate of Incorporation.
3.2 Amended and Restated Bylaws (Incorporated by reference to Exhibit 3.5 of the Registrant's
Registration Statement on Form S-1 ("Registration Statement No. 333-42323")).
4.1 Specimen Common Stock certificate (Incorporated by reference to Exhibit 4.1 of Registration Statement
No. 333-42323).
4.2 See Exhibits 3.1 and 3.2 for provisions of the Amended and Restated Certificate of Incorporation and
Bylaws of the Registrant defining the rights of holders of Common Stock of the Registrant.
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
10.1 1996 Stock Option Plan (Incorporated by reference to Exhibit 10.1 of Registration Statement No.
333-42323).
10.2 1997 Stock Incentive Plan (Incorporated by reference to Exhibit 10.2 of Registration Statement No.
333-42323).
10.3 [Reserved]
10.4 Stockholders Agreement, dated as of June 4, 1997 (Incorporated by reference to Exhibit 10.4 of
Registration Statement No. 333-42323).
10.5 Sublease dated August 1996, between Martin, Marshall, Jaccoma & Mitchell Advertising, Inc. and the
Registrant (Incorporated by reference to Exhibit 10.5 of Registration Statement No. 333-42323).
10.6 Lease dated September 1998, between Investment Properties Associates and the Registrant.
10.7 Lease dated July 1997, between Investment Properties Associates and the Registrant (Incorporated by
reference to Exhibit 10.6 of Registration Statement No. 333-42323).
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
10.8+ Procurement and Trafficking Agreement, dated December 1996, by and between Registrant and Digital
Equipment Corporation (Incorporated by reference to Exhibit 10.7 of Registration Statement No.
333-42323).
10.9 Amendment No. 1 to Procurement and Trafficking Agreement, dated January 1998, by and between
Registrant and Digital Equipment Corporation (Incorporated by reference to Exhibit 10.8 of
Registration Statement No. 333-42323).
11.1** Statement re: Computation of Basic and Diluted Net Loss Per Share.
16.1 Letter from KPMG Peat Marwick LLP (Incorporated by reference to Exhibit 16.1 of Registration
Statement No. 333-42323).
21.1** Subsidiaries of the Registrant.
23.1** Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1).
24.1** Powers of Attorney.
27.1** Financial Data Schedule.
(b) Financial Statement Schedules.
</TABLE>
<TABLE>
<S> <C>
Schedule II Valuation and Qualifying Accounts.
</TABLE>
- ------------------------
** Previously filed.
+ Confidential treatment granted for certain portions of this Exhibit pursuant
to Rule 406 promulgated under the Securities Act.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the Delaware General Corporation Law, the Certificate of
Incorporation of the Registrant, the Underwriting Agreement, 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
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 hereunder, the Registrant will,
unless in the opinion of 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 Act and
will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Act, the information
omitted from the form of Prospectus filed as part of this Registration Statement
in reliance upon Rule 430A and contained in a form of Prospectus filed by the
Registrant pursuant to Rule 424 (b) (1) or (4), or 497 (h) under the Act shall
be deemed to be part of this Registration Statement as of the time it was
declared effective.
(2) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of Prospectus shall be deemed to
be 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.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 2 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized in the City of New
York, State of New York, on this 9th day of December, 1998.
DOUBLECLICK INC.
By: /s/ KEVIN J. O'CONNOR
------------------------------------------
Kevin J. O'Connor
Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 2 to the Registration Statement has been signed by the following
persons in the capacities indicated on December 9, 1998:
<TABLE>
<CAPTION>
SIGNATURE TITLE(S)
------------------------------------------------------ --------------------------------------------------
<S> <C> <C>
Chief Executive Officer and Chairman of the Board
/s/ KEVIN J. O'CONNOR Directors (Principal Executive Officer)
-------------------------------------------
Kevin J. O'Connor
* President and Chief Operating Officer
-------------------------------------------
Kevin P. Ryan
Chief Financial Officer (Principal Financial
* Officer and Principal Accounting Officer)
-------------------------------------------
Jeffrey E. Epstein
* Chief Technology Officer and Director
-------------------------------------------
Dwight A. Merriman
* Director
-------------------------------------------
David N. Strohm
* Director
-------------------------------------------
Mark E. Nunnelly
* Director
-------------------------------------------
W. Grant Gregory
* Director
-------------------------------------------
Donald Peppers
* Director
-------------------------------------------
Thomas S. Murphy
</TABLE>
<TABLE>
<S> <C> <C> <C>
*By: /s/ KEVIN J. O'CONNOR
-------------------------
Kevin J. O'Connor
Attorney-in-fact
</TABLE>
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement.
3.1** Amended and Restated Certificate of Incorporation.
3.2 Amended and Restated Bylaws (Incorporated by reference to Exhibit 3.5 of the Registrant's
Registration Statement on Form S-1 ("Registration Statement No. 333-42323")).
4.1 Specimen Common Stock certificate (Incorporated by reference to Exhibit 4.1 of Registration Statement
No. 333-42323).
4.2 See Exhibits 3.1 and 3.2 for provisions of the Amended and Restated Certificate of Incorporation and
Bylaws of the Registrant defining the rights of holders of Common Stock of the Registrant.
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
10.1 1996 Stock Option Plan (Incorporated by reference to Exhibit 10.1 of Registration Statement No.
333-42323).
10.2 1997 Stock Incentive Plan (Incorporated by reference to Exhibit 10.2 of Registration Statement No.
333-42323).
10.3 [Reserved]
10.4 Stockholders Agreement, dated as of June 4, 1997 (Incorporated by reference to Exhibit 10.4 of
Registration Statement No. 333-42323).
10.5 Sublease dated August 1996, between Martin, Marshall, Jaccoma & Mitchell Advertising, Inc. and the
Registrant (Incorporated by reference to Exhibit 10.5 of Registration Statement No. 333-42323).
10.6 Lease dated September 1998, between Investment Properties Associates and the Registrant.
10.7 Lease dated July 1997, between Investment Properties Associates and the Registrant (Incorporated by
reference to Exhibit 10.6 of Registration Statement No. 333-42323).
10.8+ Procurement and Trafficking Agreement, dated December 1996, by and between Registrant and Digital
Equipment Corporation (Incorporated by reference to Exhibit 10.7 of Registration Statement No.
333-42323).
10.9 Amendment No. 1 to Procurement and Trafficking Agreement, dated January 1998, by and between
Registrant and Digital Equipment Corporation (Incorporated by reference to Exhibit 10.8 of
Registration Statement No. 333-42323).
11.1** Statement re: Computation of Basic and Diluted Net Loss Per Share.
16.1 Letter from KPMG Peat Marwick LLP (Incorporated by reference to Exhibit 16.1 of Registration
Statement No. 333-42323).
21.1** Subsidiaries of the Registrant.
23.1** Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1).
24.1** Powers of Attorney (See Signature Page on Page II-6).
27.1** Financial Data Schedule.
</TABLE>
- ------------------------
** Previously filed.
+ Confidential treatment granted for certain portions of this Exhibit pursuant
to Rule 406 promulgated under the Securities Act.
<PAGE>
Exhibit 1.1
DOUBLECLICK INC.
COMMON STOCK, PAR VALUE $.001 PER SHARE
UNDERWRITING AGREEMENT
December __, 1998
Goldman, Sachs & Co.
BT Alex. Brown Incorporated
Donaldson, Lufkin & Jenrette
Securities Corporation
Salomon Smith Barney Inc.
As representatives of the several Underwriters
named in Schedule I hereto
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
DoubleClick Inc., a Delaware corporation (the "Company"), proposes, subject
to the terms and conditions stated herein, to issue and sell to the Underwriters
named in Schedule I hereto (the "Underwriters") an aggregate of 2,500,000 shares
(the "Firm Shares") and, at the election of the Underwriters, up to 375,000
additional shares (the "Optional Shares") of Common Stock, par value $.001 per
share ("Stock"), of the Company (the Firm Shares and the Optional Shares that
the Underwriters elect to purchase pursuant to Section 2 hereof being
collectively called the "Shares").
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-67459) and all
pre-effective amendments thereto (the "Initial Registration Statement") in
respect of the Shares has been filed with the Securities and Exchange Commission
(the "Commission"); the Initial Registration Statement and any post-effective
amendment thereto, each in the form heretofore delivered to you, and, excluding
exhibits thereto, to you for each of the other Underwriters, have been declared
effective by the Commission in such form; other than a registration statement,
if any, increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act of 1933, as
amended (the "Act"), which became effective upon filing, no other document with
respect to the Initial Registration Statement has heretofore been filed with the
Commission; and no stop order suspending the effectiveness of the Initial
Registration Statement, any post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission (any
1
<PAGE>
preliminary prospectus included in the Initial Registration Statement and the
Rule 462(b) Registration Statement, if any, or filed with the Commission
pursuant to Rule 424(a) of the rules and regulations of the Commission under the
Act, is hereinafter called a "Preliminary Prospectus"; the various parts of the
Initial Registration Statement and the Rule 462(b) Registration Statement, if
any, including all exhibits thereto and including the information contained in
the form of final prospectus filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 5(a) hereof and deemed by virtue of
Rule 430A under the Act to be part of the Initial Registration Statement at the
time it was declared effective, each as amended at the time such part of the
Initial Registration Statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective, are
hereinafter collectively called the "Registration Statement"; and such final
prospectus, in the form first filed pursuant to Rule 424(b) under the Act, is
hereinafter called the "Prospectus");
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary Prospectus,
at the time of filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; PROVIDED, HOWEVER, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Goldman, Sachs & Co. expressly for use therein;
(c) The Registration Statement conforms, and any further amendments to the
Registration Statement will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date as to
the Registration Statement and any amendment thereto, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading. The
Prospectus conforms, and any further amendments or supplements to the Prospectus
will conform, in all material respects to the requirements of the Act and the
rules and regulations of the Commission thereunder and do not and will not, as
of the applicable filing date contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The representations and warranties in this paragraph (c)
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Goldman, Sachs & Co. expressly for use therein;
(d) Neither the Company nor any of its subsidiaries (as defined in Rule
405 of the rules and regulations under the Act) has sustained since the date of
the latest audited financial statements included in the Prospectus any material
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since the respective dates as of which
information is given in the Registration Statement and the Prospectus, there has
not been any change in the capital stock or long-term debt of the Company or any
of its subsidiaries or any material adverse change, or any development which is
reasonably likely to result in a prospective material adverse change, in or
affecting the
2
<PAGE>
general affairs, management, business, properties, financial condition or
results of operations of the Company and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Prospectus;
(e) The Company and its subsidiaries have good and marketable title to all
personal property owned by them, in each case 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 materially
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 and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not materially interfere with the use made and proposed to be made of such
property and buildings by the Company and its subsidiaries;
(f) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with power
and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of New York and each other jurisdiction in which it owns or
leases properties or conducts any business so as to require such qualification,
except where the failure to so qualify would not have, or would not be
reasonably likely to have, a material adverse effect on the general affairs,
management, business, properties, financial condition or results of operations
of the Company and its subsidiaries taken as a whole (a "Material Adverse
Effect"); and each subsidiary of the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation;
(g) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and conform to the description of the Stock contained in the Prospectus; and 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 or indirectly by the Company, free and clear of all
liens, encumbrances, equitable interests or claims (and no person has any
option, right or claim to acquire any stock of any subsidiary);
(h) The Shares to be issued and sold by the Company to the Underwriters
hereunder have been duly and validly authorized and, when issued and delivered
against payment therefor as provided herein, will be duly and validly issued and
fully paid and non-assessable and will conform to the description of the Stock
contained in the Prospectus;
(i) The issue and sale of the Shares by the Company and the compliance by
the Company with all of the provisions of this Agreement and the consummation of
the transactions herein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound or to which
any of the property or assets of the Company or any of its subsidiaries is
subject, nor will such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the
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Company or any of its subsidiaries or any of their properties; and no consent,
approval, authorization, order, registration or qualification of or with any
such court or governmental agency or body is required for the issue and sale of
the Shares or the consummation by the Company of the transactions contemplated
by this Agreement, except the registration under the Act of the Shares and such
consents, approvals, authorizations, registrations or qualifications as may be
required by the National Association of Securities Dealers, Inc., the Nasdaq
National Market, or under state securities or Blue Sky laws in connection with
the purchase and distribution of the Shares by the Underwriters;
(j) Neither the Company nor any of its subsidiaries is in violation of its
Certificate of Incorporation or By-laws (or other charter documents) or in
default in the performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party or by
which it or any of its properties may be bound, except where such default would
not have a Material Adverse Effect;
(k) The statements set forth in the Prospectus under the caption
"Description of Securities", insofar as they purport to constitute a summary of
the terms of the Stock, and under the caption "Underwriting", insofar as they
purport to describe the provisions of the laws and documents referred to
therein, are accurate, complete and fair;
(l) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property of the Company or any of its subsidiaries is
the subject which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a Material Adverse
Effect; and, to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by others;
(m) The Company is not and, after giving effect to the offering and sale
of the Shares, will not be an "investment company" or an entity "controlled" by
an "investment company", as such terms are defined in the Investment Company Act
of 1940, as amended (the "Investment Company Act");
(n) Neither the Company nor any of its affiliates does business with the
government of Cuba or with any person or affiliate located in Cuba within the
meaning of Section 517.075, Florida Statutes;
(o) PricewaterhouseCoopers LLP, who have certified certain consolidated
financial statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(p) Other than as set forth in the Prospectus, the Company and its
subsidiaries have sufficient interests in all patents, trademarks, servicemarks,
trade names, copyrights, trade secrets, information, proprietary rights and
processes ("Intellectual Property") necessary for their business as described in
the Prospectus and, to the Company's knowledge, necessary in connection with the
products and services under development, in each case, to the knowledge of the
Company after due inquiry, without any conflict with or infringement of the
interests of others, and have taken all
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reasonable steps necessary to secure interests in such Intellectual Property
from their contractors; except as set forth in the Prospectus, the Company is
not aware of outstanding options, licenses or agreements of any kind relating to
the Intellectual Property of the Company which are required to be set forth in
the Prospectus, and, except as set forth in the Prospectus, neither the Company
nor any of its subsidiaries is a party to or bound by any options, licenses or
agreements with respect to the Intellectual Property of any other person or
entity which are required to be set forth in the Prospectus; none of the
technology employed by the Company has been obtained or is being used by the
Company or its subsidiaries in violation of any contractual fiduciary obligation
binding on the Company or any of its subsidiaries or any of its directors or
executive officers or, to the Company's knowledge, any of its employees or
otherwise in violation of the rights of any persons; except as disclosed in the
Prospectus, neither the Company nor any of its subsidiaries has received any
written or, to the Company's knowledge, oral communications alleging that the
Company or any of its subsidiaries has violated, infringed or conflicted with,
or, by conducting its business as set forth in the Prospectus, would violate,
infringe or conflict with any of the Intellectual Property of any other person
or entity other than any such violation, infringement or conflict which would
not have a Material Adverse Effect; neither the execution nor delivery of this
Agreement, nor the operation of the Company's business by the employees of the
Company, nor the conduct of the Company's business as described in the
Prospectus or the business of any of its subsidiaries as described in the
Prospectus will result in any breach or violation of the terms, conditions or
provisions of, constitute a default under, any material contract, covenant or
instrument known to the Company under which any of such employees is now
obligated; and the Company and its subsidiaries have taken and will maintain
reasonable measures to prevent the unauthorized dissemination or publication of
their confidential information and, to the extent contractually required to do
so, the confidential information of third parties in their possession;
(q) The Company maintains insurance of the types and in the amounts
generally deemed adequate for its business, including, but not limited to,
insurance covering real and personal property owned or leased by the Company
against theft, damage, destruction, acts of vandalism and all other risks
customarily insured against, all of which insurance is in full force and effect;
(r) The Company has reviewed its operations and that of its subsidiaries
and any third parties with which the Company or any of its subsidiaries has a
material relationship to evaluate the extent to which the business or operations
of the Company or any of its subsidiaries will be affected by the Year 2000
Problem. As a result of such review, the Company has no reason to believe, and
does not believe, that the Year 2000 Problem will have a Material Adverse Effect
or result in any material loss or interference with the Company's business or
operations. The "Year 2000 Problem" as used herein means any significant risk
that computer hardware or software used in the receipt, transmission,
processing, manipulation, storage, retrieval, retransmission or other
utilization of date or in the operation of mechanical or electrical systems of
any kind will not, in the case of dates or time periods occurring after December
31, 1999, function at least as effectively as in the case of dates or time
periods occurring prior to January 1, 2000;
(s) There are no contracts, other documents or other agreements required
to be described in the Registration Statement or to be filed as exhibits to the
Registration Statement by the Act or by the rules and regulations thereunder
which have not been described or filed as required; the contracts so described
in the Prospectus are in full force and effect on the date hereof;
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and neither the Company nor, to the best of the Company's knowledge, any other
party is in breach of or default in any material respect under any of such
contracts;
(t) The Company has not been advised, and has no reason to believe, that
it is not conducting business in compliance with all applicable laws, rules and
regulations of the jurisdictions in which it is conducting business, including,
without limitation, all applicable local, state and federal environmental laws
and regulations, except where failure to be so in compliance would not have a
Material Adverse Effect;
(u) The Company has filed all reports it has been required to file under
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission thereunder (the "Exchange Act"); such reports when filed
conformed in all material respects to the requirements of the Exchange Act; and
none of such reports contained an untrue statement of material fact or omitted
to state a material fact required to be stated therein to make the statements
therein, in light of the circumstances under which they were made, nor
misleading; and
(v) The Common Stock is registered pursuant to Section 12(g) of the
Exchange Act, and is listed on NASDAQ (as defined below), and the Company has
taken no action designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or delisting the Common
Stock from NASDAQ, nor has the Company received any notification that the
Commission or NASDAQ is contemplating terminating such registration or listing.
2. Subject to the terms and conditions herein set forth, (a) the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price per share of $____, the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto and (b) in the event
and to the extent that the Underwriters shall exercise the election to purchase
Optional Shares as provided below, the Company agrees to issue and sell to each
of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at the purchase price per share set forth
in clause (a) of this Section 2, that portion of the number of Optional Shares
as to which such election shall have been exercised (to be adjusted by you so as
to eliminate fractional shares) determined by multiplying such number of
Optional Shares by a fraction, the numerator of which is the maximum number of
Optional Shares which such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I hereto and the denominator
of which is the maximum number of Optional Shares that all of the Underwriters
are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to 375,000 Optional Shares, at the purchase price per share
set forth in the paragraph above, for the sole purpose of covering
overallotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the Company,
given within a period of 30 calendar days after the date of this Agreement,
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by you but
in no event earlier than the First Time of Delivery (as defined in Section 4
hereof) or, unless you and the Company otherwise agree in writing, no earlier
than two or later than ten business days after the date of such notice.
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3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Goldman, Sachs & Co. may request upon at least forty-eight hours' prior
notice to the Company shall be delivered by or on behalf of the Company to
Goldman, Sachs & Co., through the facilities of the Depository Trust Company
("DTC"), for the account of such Underwriter, against payment by or on behalf of
such Underwriter of the purchase price therefor by wire transfer payable to the
order of the Company in same day funds. The Company will cause the certificates
representing the Shares to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery (as defined below) with respect
thereto at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be, with respect
to the Firm Shares, 9:30 a.m., New York City time, on December __, 1998 or such
other time and date as Goldman, Sachs & Co. and the Company may agree upon in
writing, and, with respect to the Optional Shares, 9:30 a.m., New York time, on
the date specified by Goldman, Sachs & Co. in the written notice given by
Goldman, Sachs & Co. of the Underwriters' election to purchase such Optional
Shares, or such other time and date as Goldman, Sachs & Co. and the Company may
agree upon in writing. Such time and date for delivery of the Firm Shares is
herein called the "First Time of Delivery", such time and date for delivery of
the Optional Shares, if not the First Time of Delivery, is herein called the
"Second Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross receipt
for the Shares and any additional documents requested by the Underwriters
pursuant to Section 7(j) hereof, will be delivered at the offices of Brobeck,
Phleger & Harrison LLP, 1633 Broadway, 47th Floor, New York, New York 10019 (the
"Closing Location"), and the Shares will be delivered at the Designated Office,
all at such Time of Delivery. A meeting will be held at the Closing Location at
2:00 p.m., New York City time, on the New York Business Day next preceding such
Time of Delivery, at which meeting the final drafts of the documents to be
delivered pursuant to the preceding sentence will be available for review by the
parties hereto. For the purposes of this Section 4, "New York Business Day"
shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a
day on which banking institutions in New York are generally authorized or
obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's
close of business on the second business day following the execution and
delivery of this Agreement, or, if applicable, such earlier time as may be
required by Rule 430A(a)(3) under the Act; to make no further amendment or any
supplement to the Registration Statement or Prospectus which shall be
disapproved by you promptly after reasonable notice thereof; to advise you,
promptly after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed and to furnish you
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with copies thereof; to advise you, promptly after it receives notice thereof,
of the issuance by the Commission of any stop order or of any order preventing
or suspending the use of any Preliminary Prospectus or Prospectus, of the
suspension of the qualification of the Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional information; and,
in the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or Prospectus or suspending any
such qualification, promptly to use its best efforts to obtain the withdrawal of
such order;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Shares for offering and sale under the securities laws of
such jurisdictions as you may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of the Shares, provided
that in connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in any
jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business Day
next succeeding the date of this Agreement and from time to time, to furnish the
Underwriters with copies of the Prospectus in New York City in such quantities
as you may reasonably request, and, if the delivery of a prospectus is required
at any time prior to the expiration of nine months after the time of issue of
the Prospectus in connection with the offering or sale of the Shares and if at
such time any event shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made
when such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary during such period to amend or supplement the Prospectus
in order to comply with the Act, to notify you and upon your request to prepare
and furnish without charge to each Underwriter and to any dealer in securities
as many copies as you may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such statement
or omission or effect such compliance, and in case any Underwriter is required
to deliver a prospectus in connection with sales of any of the Shares at any
time nine months or more after the time of issue of the Prospectus, upon your
request but at the expense of such Underwriter, to prepare and deliver to such
Underwriter as many copies as you may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(d) If the Company elects to rely upon Rule 462(b), the Company shall file
a Rule 462(b) Registration Statement with the Commission in compliance with Rule
462(b) by 10:00 P.M. Washington, D.C. time, on the date of this Agreement, and
the Company shall at the time of filing either pay to the Commission the filing
fee for the Rule 462(b) Registration Statement or give irrevocable instructions
for the payment of such fee pursuant to Rule 111(b) under the Act;
(e) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
thereunder (including, at the option of the Company, Rule 158);
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(f) During the period beginning from the date hereof and continuing to and
including the date 90 days after the date of the Prospectus, not to offer, sell,
contract to sell or otherwise dispose of, except as provided hereunder any
securities of the Company that are substantially similar to the Shares,
including but not limited to any securities that are convertible into or
exchangeable for, or that represent the right to receive, Stock or any such
substantially similar securities (other than pursuant to employee stock option
plans existing on, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of, the date of this Agreement), without
your prior written consent, except that the Company may issue such securities in
exchange for all of the equity or substantially all of the assets of a company
in connection with a merger or acquisition, provided that prior to any such
issuance the recipients of such securities shall have agreed with Goldman,
Sachs & Co. in writing to be bound by this provision for the remainder of the
90-day period;
(g) To furnish to its stockholders as soon as practicable after the end of
each fiscal year an annual report (including a balance sheet and statements of
income, stockholders' equity and cash flows of the Company and its consolidated
subsidiaries certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of each fiscal
year (beginning with the fiscal quarter ending after the effective date of the
Registration Statement), consolidated summary financial information of the
Company and its subsidiaries for such quarter in reasonable detail;
(h) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and to deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed; and (ii)
such additional information concerning the business and financial condition of
the Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission);
(i) To use the net proceeds received by it from the sale of the Shares
pursuant to this Agreement in the manner specified in the Prospectus under the
caption "Use of Proceeds"; and
(j) To use its best efforts to list for quotation the Shares on the Nasdaq
National Market ("NASDAQ").
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Blue Sky Memorandum,
closing documents (including any compilations thereof) and any other documents
in connection with the offering, purchase, sale and delivery of the Shares;
(iii) all expenses in connection with the qualification of the Shares for
offering and sale under state securities laws as
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provided in Section 5(b) hereof, including the reasonable fees and disbursements
of counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky survey; (iv) all fees and expenses in connection
with listing the Shares on NASDAQ; (v) the filing fees incident to, and the fees
and disbursements of counsel for the Underwriters in connection with, securing
any required review by the National Association of Securities Dealers, Inc. of
the terms of the sale of the Shares; (vi) the cost of preparing stock
certificates; (vii) the cost and charges of any transfer agent or registrar; and
(viii) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section,
and Sections 8 and 11 hereof, the Underwriters will pay all of their own costs
and expenses, including the fees of their counsel, stock transfer taxes on
resale of any of the Shares by them, and any advertising expenses connected with
any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company herein are, at and as of such Time of Delivery, true and correct,
the condition that the Company shall have performed all of its obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by the
rules and regulations under the Act and in accordance with Section 5(a) hereof;
if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M. Washington,
D.C. time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Hale and Dorr LLP, counsel for the Underwriters, shall have furnished
to you such written opinion (a draft of such opinion is attached as Annex II(a)
hereto), dated such Time of Delivery, with respect to the matters covered in
paragraphs (i), (ii), (vi) and (ix), and the second-to-last and third-to-last
paragraphs of subsection (c) below as well as such other related matters as you
may reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(c) Brobeck, Phleger & Harrison LLP, counsel for the Company, shall have
furnished to you their written opinion (a draft of such opinion is attached as
Annex II(b) hereto), dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware, with
requisite corporate power and authority to own its properties and conduct its
business as described in the Prospectus;
(ii) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the Company
(including the Shares being delivered at such Time of Delivery) have been duly
and validly authorized and issued and upon payment for
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the Shares in accordance with the terms of the Underwriting Agreement, all
issued shares of the capital stock of the Company will be fully paid and
non-assessable; and the Shares conform in all material respects as to legal
matters to the description of the Stock contained in the Prospectus;
(iii) The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of New
York and each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, except where the
failure to so register or qualify would not have a Material Adverse Effect (such
counsel being entitled to rely in respect of the opinion in this clause upon
opinions of local counsel and in respect of matters of fact upon certificates of
officers of the Company, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such opinions and
certificates);
(iv) Any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases;
(v) To such counsel's knowledge and other than as set forth in the
Prospectus, there are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if determined adversely
to the Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect, and, to such counsel's knowledge, no
such proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(vi) This Agreement has been duly authorized, executed and
delivered by the Company;
(vii) The issue and sale of the Shares being delivered at such Time
of Delivery by the Company and the compliance by the Company with all of the
provisions of this Agreement and the consummation of the transactions herein
contemplated will not (i) conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument known
to such counsel to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject, or (ii)
result in any violation of the provisions of the Certificate of Incorporation or
By-laws of the Company, or (iii) result in any violation of any statute or any
order, rule or regulation known to such counsel of any court or governmental
agency or body having jurisdiction over the Company or any of its subsidiaries
or any of their properties;
(viii) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Shares or the consummation by the Company
of the transactions contemplated by this Agreement, except the registration
under the Act of the Shares, and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Shares by
the Underwriters;
(ix) The statements set forth in the Prospectus under the caption
"Description of Securities", insofar as they purport to constitute a summary of
the terms of the Stock and under the
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caption "Underwriting", insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate, complete and fair in
all material respects; and
(x) The Company is not an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act.
Such opinion letter shall also state that, although such counsel does not
assume any responsibility for the accuracy, completeness or fairness of the
statements in the Registration Statement, such counsel has participated in the
preparation of the Registration Statement and the Prospectus, including review
and discussion of the contents thereof with representatives of the Underwriters
and their counsel, officers and representatives of the Company, and
representatives of the independent certified public accountants of the Company,
and nothing has come to such counsel's attention that has caused it to believe
that the Registration Statement or any further amendment thereto, at the time
the Registration Statement or such amendment became effective, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or that the Prospectus or any further amendment or supplement thereto, as of its
date or as of such Time of Delivery, contained an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (it being understood that such counsel expresses no opinion
with respect to the financial statements and the notes thereto and the related
financial schedules included in the Registration Statement or the Prospectus).
Such opinion letter shall also state that the Registration Statement and
the Prospectus and any further amendments and supplements thereto made by the
Company prior to such Time of Delivery (other than the financial statements and
the notes thereto and related financial schedules therein, as to which such
counsel need express no opinion) comply as to form in all material respects with
the requirements of the Act and the rules and regulations thereunder, and that
such counsel does not know of any amendment to the Registration Statement
required to be filed or of any contracts or other documents of a character
required to be filed as an exhibit to the Registration Statement or required to
be described in the Registration Statement or the Prospectus which are not filed
or described as required.
As to matters of fact, such counsel may rely upon certificates of officers
of the Company and of public officials.
(d) On the date of the Prospectus at a time prior to the execution of this
Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, PricewaterhouseCoopers
LLP shall have furnished to you a letter or letters, dated the respective dates
of delivery thereof, in form and substance satisfactory to you, to the effect
set forth in Annex I hereto (the executed copy of the letter delivered prior to
the execution of this Agreement is attached as Annex I(a) hereto and a draft of
the form of letter to be delivered on the effective date of any post-effective
amendment to the Registration Statement and as of each Time and Delivery is
attached as Annex I(b) hereto);
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(e) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Prospectus any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus, and (ii) since the respective dates as
of which information is given in the Prospectus there shall not have been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development which is reasonably likely to
result in a prospective change, in or affecting the general affairs, management,
business, properties, financial condition or results of operations of the
Company and its subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case described
in Clause (i) or (ii), is in the judgment of the Representatives so material and
adverse as to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares being delivered at such Time of Delivery
on the terms and in the manner contemplated in the Prospectus;
(f) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange or NASDAQ; (ii) a suspension or
material limitation in trading in the Company's securities on NASDAQ; (iii) a
general moratorium on commercial banking activities declared by either Federal
or New York State authorities; or (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war, if the effect of any such event specified in this
Clause (iv) in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the Shares
being delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(g) The Shares to be sold at such Time of Delivery shall have been duly
listed for quotation on NASDAQ;
(h) The Company shall have obtained and delivered to the Underwriters
executed copies of an agreement from the stockholders and optionholders listed
on Annex III hereto, substantially to the effect that during the period
beginning from the date hereof and continuing to and including the date 90 days
after the date of the Prospectus, such stockholder or optionholder shall not
offer, sell, contract to sell or otherwise dispose of, except as provided
hereunder, any Stock, or any securities of the Company that are substantially
similar to the Shares, including but not limited to any securities that are
convertible into or exchangeable for, or that represent the right to receive,
Stock or any such substantially similar securities (other than pursuant to
employee stock option plans existing on the date of this Agreement), without
your prior written consent;
(i) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York Business
Day next succeeding the date of this Agreement; and
(j) The Company shall have furnished or caused to be furnished to you at
such Time of Delivery certificates of officers of the Company satisfactory to
you as to the accuracy of the representations and warranties of the Company
herein at and as of such Time of Delivery, as to the performance by the Company
of all of its obligations hereunder to be performed at or prior to such
13
<PAGE>
Time of Delivery, as to the matters set forth in subsections (a) and (e) of this
Section and as to such other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (ii) an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, or (iii) the
provisions of the Stockholders' Agreement filed (or incorporated by reference)
as Exhibit 10.4 of the Registration Statement, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; PROVIDED, HOWEVER, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through Goldman, Sachs & Co.
expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through Goldman, Sachs & Co.
expressly for use therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled
14
<PAGE>
to participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from the
offering of the Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault 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 Company on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
subsection (d) were determined by PRO RATA allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this subsection (d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed to
include 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 subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount
15
<PAGE>
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 which
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 Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company (including any
person who is named in the Registration Statement as about to become a director
of the Company) and to each person, if any, who controls the Company within the
meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Shares on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such Shares, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to you to purchase such Shares on such terms. In the event that,
within the respective prescribed periods, you notify the Company that you have
so arranged for the purchase of such Shares, or the Company notifies you that it
has so arranged for the purchase of such Shares, you or the Company shall have
the right to postpone such Time of Delivery for a period of not more than seven
days, in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of all
the Shares to be purchased at such Time of Delivery, then the Company shall have
the right to require each non-defaulting Underwriter to purchase the number of
shares which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a)
16
<PAGE>
above, the aggregate number of such Shares which remains unpurchased exceeds
one-eleventh of the aggregate number of all the Shares to be purchased at such
Time of Delivery, or if the Company shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to purchase Shares
of a defaulting Underwriter or Underwriters, then this Agreement (or, with
respect to the Second Time of Delivery, the obligations of the Underwriters to
purchase and of the Company to sell the Optional Shares) shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or
the Company, except for the expenses to be borne by the Company and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Underwriter except as
provided in Sections 6 and 8 hereof; but, if for any other reason, any Shares
are not delivered by or on behalf of the Company as provided herein, the Company
will reimburse the Underwriters through you for all out-of-pocket expenses
approved in writing by you, including fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the purchase,
sale and delivery of the Shares not so delivered, but the Company shall then be
under no further liability to any Underwriter except as provided in Sections 6
and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Goldman, Sachs & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Goldman, Sachs &
Co., 85 Broad Street, New York, New York 10004, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail to the
address of the Company set forth in the Registration Statement, Attention: CEO
(and a copy thereof shall be sent to Brobeck, Phleger & Harrison LLP, 1633
Broadway, 47th Floor, New York, New York 10019, Attention: Alexander D. Lynch,
Esq.); provided, however, that any notice to an Underwriter pursuant to Section
8(c) hereof shall be delivered or sent by mail, telex or facsimile transmission
to such Underwriter at its address set forth in its Underwriters' Questionnaire,
or telex constituting such Questionnaire, which address will be supplied to the
Company by you upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and, to the extent provided in Sections 8 and
10 hereof, the officers and
17
<PAGE>
directors of the Company and each person who controls the Company or any
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Shares from any Underwriter
shall be deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
18
<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us seven counterparts hereof, and upon the acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement among each of the Underwriters and the
Company. It is understood that your acceptance of this letter on behalf of each
of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
DOUBLECLICK INC.
By:
-------------------------------
Name: Kevin J. O'Connor
Title: Chief Executive Officer
Accepted as of the date hereof at
New York, New York
Goldman, Sachs & Co.
BT Alex. Brown Incorporated
Donaldson, Lufkin & Jenrette Securities Corporation
Salomon Smith Barney Inc.
By:
------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
19
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Number of
Total Number of Optional Shares to
Firm Shares be Purchased if
Underwriter to Be Purchased Option Exercised
----------- --------------- ------------------
<S> <C> <C>
Goldman, Sachs & Co. ...................
BT Alex. Brown Incorporated ............
Donaldson, Lufkin & Jenrette ...........
Securities Corporation ................
Salomon Smith Barney Inc. ..............
Total................................ 2,500,000 375,000
========= =======
</TABLE>
20
<PAGE>
ANNEX I
COMFORT LETTER
21
<PAGE>
FORM OF ANNEX I DESCRIPTION OF COMFORT LETTER
FOR REGISTRATION STATEMENTS ON FORM S-1
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included in the Prospectus or the Registration Statement comply as
to form in all material respects with the applicable accounting
requirements of the Act and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance with
standards established by the American Institute of Certified Public
Accountants of the unaudited consolidated interim financial statements,
selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited
financial statements of the Company for the periods specified in such
letter, as indicated in their reports thereon, copies of which have been
specifically furnished to the representatives of the Underwriters (the
"Representatives") and are attached hereto;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus as indicated in their reports thereon copies of which have been
separately furnished to the Representatives and are attached hereto and on
the basis of specified procedures including inquiries of officials of the
Company who have responsibility for financial and accounting matters
regarding whether the unaudited condensed consolidated financial statements
referred to in paragraph (vi)(A)(i) below comply as to form in all material
respects with the applicable accounting requirements of the Act and the
related published rules and regulations, nothing came to their attention
that cause them to believe that the unaudited condensed consolidated
financial statements do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the related published
rules and regulations;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Prospectus
agrees with the corresponding amounts (after restatements where applicable)
in the audited consolidated financial statements for such five fiscal years
which were included or incorporated by reference in the Company's Annual
Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on
the basis of limited
22
<PAGE>
procedures specified in such letter nothing came to their attention as a
result of the foregoing procedures that caused them to believe that this
information does not conform in all material respects with the disclosure
requirements of Items 301, 302, 402 and 503(d), respectively, of Regulation
S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included in the Prospectus, inquiries
of officials of the Company and its subsidiaries responsible for financial
and accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
(A) (i) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act and
the related published rules and regulations, or (ii) any material
modifications should be made to the unaudited condensed consolidated
statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial statements
from which such data and items were derived, and any such unaudited
data and items were not determined on a basis substantially consistent
with the basis for the corresponding amounts in the audited
consolidated financial statements included in the Prospectus;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived any unaudited
condensed financial statements referred to in Clause (A) and any
unaudited income statement data and balance sheet items included in
the Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
consolidated financial statements included in the Prospectus;
(D) any unaudited pro forma consolidated condensed
financial statements included in the Prospectus do not comply as to
form in all material respects with the applicable accounting
requirements of the Act and the published rules and regulations
thereunder or the pro forma adjustments have not been properly applied
to the historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock upon
exercise of options and stock appreciation rights,
23
<PAGE>
upon earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on the
date of the latest financial statements included in the Prospectus) or
any increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current assets or
stockholders' equity or other items specified by the Representatives,
or any increases in any items specified by the Representatives, in
each case as compared with amounts shown in the latest balance sheet
included in the Prospectus, except in each case for changes, increases
or decreases which the Prospectus discloses have occurred or may occur
or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred
to in Clause (E) there were any decreases in consolidated net revenues
or operating profit or the total or per share amounts of consolidated
net income or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each case
as compared with the comparable period of the preceding year and with
any other period of corresponding length specified by the
Representatives, except in each case for decreases or increases which
the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(vii) In addition to the examination referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in paragraphs (iii) and
(vi) above, they have carried out certain specified procedures, not
constituting an examination in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Representatives, which are derived from the
general accounting records of the Company and its subsidiaries, which
appear in the Prospectus, or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and have
found them to be in agreement.
24
<PAGE>
ANNEX II(a)
OPINION OF HALE AND DORR LLP
25
<PAGE>
ANNEX II(b)
OPINION OF BROBECK, PHLEGER & HARRISON LLP
26
<PAGE>
ANNEX III
PERSONS SUBJECT TO LOCK-UP AGREEMENTS
27
<PAGE>
Exhibit 5.1
December 9, 1998
DoubleClick Inc.
41 Madison Avenue, 32nd Floor
New York, NY 10010
Ladies and Gentlemen:
We have assisted in the preparation and filing by DoubleClick Inc. (the
"Company") of a Registration Statement on Form S-1, as amended through
December 9, 1998 (the "Registration Statement"), with the Securities and
Exchange Commission, relating to the sale of up to 2,875,000 shares (the
"Shares") of Common Stock, $.001 par value (the "Common Stock"), of the
Company. A form of underwriting agreement (the "Underwriting Agreement") is
filed as an exhibit to the Registration Statement.
We have examined such records and documents and have made such
examination of laws as we considered necessary to form a basis for the
opinion set forth herein. In our examination, we have assumed the genuineness
of all signatures, the authenticity of all documents submitted to us as
originals, and the conformity with the originals of all documents submitted
to us as copies thereof.
Based upon and subject to the foregoing, we are of the opinion that the
Shares have been duly authorized and, when sold and paid for in accordance
with the terms of the Underwriting Agreement, will be validly issued, fully
paid and nonassessable.
We hereby consent to the use of our name in the Registration Statement
under the caption "Legal Matters" in the related Prospectus and consent to
the filing of this opinion as an exhibit thereto.
Very truly yours,
/s/ BROBECK, PHLEGER & HARRISON LLP
------------------------------------
BROBECK, PHLEGER & HARRISON LLP
<PAGE>
Exhibit 10.6
Lease made as of the 1st day of September, 1998, between Investment
Properties Associates hereinafter referred to as "Landlord" or "Lessor", and
DoubleClick, Inc. hereinafter referred to as "Tenant" or "Lessee".
W I T N E S S E T H:
--------------------
Landlord hereby leases to Tenant and Tenant hereby hires from Landlord
Entire 16th Floor (said space is hereinafter called the "premises") in the
building known as 245 Fifth Avenue ("the building") in the County of New York,
City of New York, for a term of 1 year and 3 months to commence on the 1st day
of October 1998, and to expire on the 31st day of December, 1999, or until such
term shall sooner end as in Article 12 and elsewhere herein provided, both dates
inclusive, at a fixed annual rental (subject to Articles 23 and 41) at the
annual rate of $330,021.00 per annum (10/1/98-12/31/99) payable in equal monthly
installments in advance on the first day of each month, except that the first
installment of rent due under this lease shall be paid by Tenant upon its
execution of this lease, unless this lease be a renewal.
Landlord and Tenant covenant and agree:
PURPOSE.
1. Tenant shall use and occupy the premises only for offices relating
to Tenant's business, and for no other purpose. [general & executive offices]
RENT AND ADDITIONAL RENT.
2. Tenant agrees to pay rent as herein provided at the office of
Landlord or such other place as Landlord may designate, payable in United States
legal tender, by case, or by good and sufficient check drawn on a New York City
Clearing House Bank, and without any set off or deduction whatsoever. Any sum
other than fixed rent payable hereunder shall be deemed additional rent and due
on demand.
ASSIGNMENT.
3. Neither Tenant nor Tenant's legal representatives or successors in
interest by operation of law or otherwise, shall assign, mortgage or otherwise
encumber this lease, or sublet or permit all or part of the premises to be used
by others, without the prior written consent of Landlord in each instance. The
transfer of a majority of the issued and outstanding capital stock of any
corporate tenant or sublessee of this lease or a majority of the total interest
in any partnership tenant or sublessee, however accomplished, and whether in a
single transaction or in a series of related or unrelated transactions, and the
conversion of a tenant or sublessee entity to either a limited liability company
or a limited liability partnership shall be deemed an assignment of this lease
or of such sublease. The merger or consolidation of a corporate tenant or
sublessee where the net worth of the resulting corporation is less than the net
worth of the tenant or sublessee immediately proper to such merger or
consolidation shall be deemed an assignment of this lease or of such sublease.
If without Landlord's written consent this lease is assigned, or the premises
are sublet or occupied by anyone other than Tenant, Landlord may accept the rent
from
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such assignee, subtenant or occupant, and apply the net amount thereof to the
rent herein reserved, but no such assignment, subletting, occupancy or
acceptance of rent shall be deemed a waiver of this covenant. Consent by
Landlord to an assignment or subletting shall not relieve Tenant from the
obligation to obtain Landlord's written consent to any further assignment or
subletting. In no event shall any permitted sublessee assign or encumber its
sublease or further sublet all or any portion of its sublet space, or otherwise
suffer or permit the sublet space or any part thereof to be used or occupied by
others, without Landlord's prior written consent in each instance. A
modification, amendment or extension of a sublease shall be deemed a sublease.
DEFAULT.
4. Landlord may terminate this lease on three (3) days' notice: (a) if
rent or additional rent is not paid within five (5) days after written notice
from Landlord; or (b) if Tenant shall have failed to cure a default in the
performance or any covenant of this lease (except the payment of rent), or any
rule or regulation hereinafter set forth, within ten (10) days after written
notice thereof from Landlord, or if default cannot be completely cured in such
time, if Tenant shall not promptly proceed to cure such default within said ten
(10) days, or shall not complete the curing of such default with due diligence;
or (c) when and to the extent permitted by law, if a petition in bankruptcy
shall be filed by or against Tenant or if Tenant shall make a general assignment
for the benefit of creditors, or receive the benefit of any insolvency or
reorganization act; or (d) if a receiver or trustee is appointed for any portion
of Tenant's property and such appointment is not vacated within twenty (20)
days; or (e) if an execution or attachment shall be issued under which the
premises shall be taken or occupied or attempted to be taken or occupied by
anyone other than Tenant; or (f) if the premises become and remain vacant or
deserted for a period often (10) days; or (g) if Tenant shall default beyond any
grace period under any other lease between Tenant and Landlord.
At the expiration of the three (3) day notice period, this lease and
any rights of renewal or extension thereof shall terminate as completely as if
that were the date originally fixed for the expiration of the term of this
lease, but Tenant shall remain liable as hereinafter provided.
RELETTING, ETC.
5. If Landlord shall re-enter the premises on the default of Tenant, by
summary proceedings or otherwise: (a) Landlord may re-let the premises or any
part thereof as Tenant's agent, in the name of Landlord, or otherwise for a term
shorter or longer than the balance of the term of this lease, and may grant
concessions or free rent. (b) Tenant shall pay Landlord any deficiency between
the rent hereby reserved and the net amount of any rent collected by Landlord
for the remaining term of this lease, through such re-letting. Such deficiency
shall become due and payable monthly, as it is determined. Landlord shall have
no obligation to re-let the premises, and its failure or refusal to do so, or
failure to collect rent on re-letting, shall not affect Tenant's liability
hereunder. In computing the net amount to rent collected through such
re-letting, Landlord may deduct all reasonable expenses incurred in obtaining
possession of re-letting the premises, including reasonable legal expenses and
fees, brokerage fees, the cost of restoring the premises to good order, and the
cost of all alterations and decorations deemed necessary by Landlord to effect
re-letting. In no event shall Tenant be entitled to a credit or repayment for
rerental income which exceeds the sums payable by Tenant hereunder or which
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covers a period after the original term of this lease. (c) Tenant hereby
expressly waives any right of redemption granted by any present or future law.
"Re-enter" and "re-entry" as used in this lease are not restricted to their
technical legal meaning. In the event of a breach or threatened breach of any of
the covenants or provisions hereof Landlord shall have the right of injunction.
Mention herein of any particular remedy shall not preclude Landlord from any
other available remedy. (d) Landlord shall recover as liquidated damages, in
addition to accrued rent and other charges, if Landlord's re-entry is the result
of Tenant's bankruptcy, insolvency, or reorganization, the full rental for the
maximum period allowed by any act relating to bankruptcy, insolvency or
reorganization.
If Landlord re-enters the premises for any cause, or if Tenant abandons
or vacates the premises, and after the expiration of the term of this lease, any
property left in the premises by the Tenant shall be deemed to have been
abandoned by Tenant, and Landlord shall have the right to retain or dispose of
such property in any manner without any obligation to account therefor to
Tenant. If Tenant shall at any time default hereunder, and if Landlord shall
institute an actions or summary proceedings against Tenant based upon such
default, then Tenant will reimburse Landlord for the reasonable legal expenses
and fees thereby incurred by Landlord.
LANDLORD MAY CURE DEFAULTS.
6. If Tenant shall default in performing any covenant or condition of
this lease, Landlord may, after giving Tenant three (3) days prior written
notice thereof, perform the same for the account of Tenant, and if Landlord, in
connection therewith, or in connection with any default by Tenant, makes any
expenditures or incurs any obligations for the payment of money, including but
not limited to attorney's fees, such sums so paid or obligations incurred shall
be deemed to be additional rent hereunder, and shall be paid by Tenant to
Landlord within five (5) days of rendition of any bill or statement therefor,
and if Tenant's lease term shall have expired at the time of the making of such
expenditures of incurring of such obligations, such sums shall be recoverable by
Landlord as damages.
ALTERATIONS.
7. Tenant shall make no decoration, alteration, addition or improvement
in the premises without the prior written consent of Landlord, and then only by
contractors or mechanics and in such manner and with such materials as shall be
approved by Landlord. All alterations, additions or improvements to the
premises, including window and central air conditioning equipment and duct work,
except movable office furniture and equipment installed at the expense of
Tenant, shall, unless Landlord elects otherwise in writing, become the property
of Landlord, and shall be surrendered with the premises at the expiration or
sooner termination of the term of this lease. Any such alterations, additions
and improvements which Landlord shall designate, shall be removed by Tenant and
any damage repaired, at Tenant's expense, prior to the expiration of the term of
this lease.
LIENS.
8. Prior to commencement of its work in the demised premises. Tenant
shall obtain and deliver to Landlord a written letter of authorization, in form
satisfactory to Landlord's
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counsel, signed by architects, engineers and designers to become involved in
such work, which shall confirm that any of their drawings or plans are to be
removed from any filing with governmental authorities, on request of Landlord,
in the event that said architect, engineer, or designer thereafter no longer is
providing services with respect to the demised premises. With respect to
contractors, subcontractors, materialmen and laborers, and architects, engineers
and designers, for all work or materials to be furnished to Tenant at the
premises, Tenant agrees to obtain and deliver to Landlord written and
unconditional waiver of mechanics liens upon the premises or the building, after
payments to the contractors, etc., subject to any then applicable provisions of
the Lien law. Notwithstanding the foregoing, Tenant at its expense shall cause
any lien filed against the premises or the building, for work or materials
claimed to have been furnished to Tenant, to be discharged of record within
twenty (20) days after notice thereof.
REPAIRS.
9. Tenant shall take good care of the premises and the fixtures and
appurtenances therein, and shall make all repairs necessary to keep them in good
working order and condition, including structural repairs when those are
necessitated by the negligence of Tenant or its agents, employees or invitees.
During the term of this lease, Tenant may have the use of any air-conditioning
equipment located in the premises, and Tenant, at its own cost and expense,
shall maintain and repair any such equipment serving only the premises and shall
reimburse Landlord, in accordance with Article 41 of this lease, for electricity
consumed by the equipment. The exterior walls of the building, the windows and
the portions of all window sills outside same and areas above any hung ceiling
are not part of the premises demised by this lease, and Landlord hereby reserves
all rights to such parts of the building.
DESTRUCTION.
10. If the premises shall be partially damaged by fire or other
casualty, the damage shall be repaired at the expense of Landlord, but
without prejudice to the rights of subrogation, if any, of Landlord's
insurer. Landlord shall not be required to repair or restore any of Tenant's
property or any alteration or leasehold improvement made by or for Tenant at
Tenant's expense. The rent shall abate in proportion to the portion of the
premises not usable by Tenant. Landlord shall not be liable to Tenant for any
delay in restoring the premises. Tenant's sole remedy being the right to an
abatement of rent as above provided. If the premises are rendered wholly
untenantable by fire or other casualty and if Landlord shall decide not to
restore the premises, or if the building shall be so damaged that Landlord
shall decide to demolish it or to rebuild it (whether or not the premises
have been damaged), Landlord may within ninety (90) days after such fire or
other cause give written notice to Tenant of its election that the term of
this lease shall automatically expire no less than ten (10) days after such
notice is given. Notwithstanding the foregoing, each party shall look first
to any insurance in its favor before making any claim against the other party
for recovery for loss or damage resulting from fire or other casualty, and to
the extent that such insurance is in force and collectible and to the extent
permitted by law, Landlord and Tenant each hereby releases and waives all
right of recovery against the other or any one claiming through or under each
of them by way of subrogation or otherwise. The foregoing release and waiver
shall be in force only if both releasors' insurance policies contain a clause
providing that such a release or waiver shall not invalidate the insurance
and also, provided that such a policy can be obtained without additional
premiums. Tenant hereby
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expressly waives the provisions of Section 227 of the Real Property law and
agrees that the foregoing provisions of this Article shall govern and control in
lieu thereof.
END OF TERM.
11. Tenant shall surrender the premises to Landlord at the expiration
or sooner termination of this lease in good order and condition, except for
reasonable wear and tear and damage by fire or other casualty or damage for
which Tenant is not responsible. Tenant agrees that if possession of the
premises is not surrendered to Landlord within one (1) day after the date of the
expiration or sooner termination of the term of this lease, then Tenant will pay
Landlord as liquidated damages for each month and for each portion of any month
during which Tenant holds over in the premises after expiration or termination
of the term of this lease, a sum equal to 1.5 times the average rent and
additional rent which was payable per month under this lease during the last six
months of the term thereof. The aforesaid obligations shall survive the
expirations or sooner termination of the term of this lease. At any time during
the term of this lease, Landlord may upon reasonable prior notice to Tenant
exhibit the premises to prospective purchasers or mortgagees of Landlord's
interest therein. During the last four months of the term of this lease,
Landlord may upon reasonable prior notice to Tenant exhibit the premises to
prospective tenants.
SUBORDINATION AND ESTOPPEL, ETC.
12. This lease is and shall be subject and subordinate to all ground
and underlying leases and to all mortgages which may now or hereafter affect
such leases or the real property of which the premises form a part, and to all
renewals, modifications, consolidations, replacements and extensions thereof.
This Article shall be self-operative and no further instrument of subordination
shall be necessary. In confirmations of such subordination, tenant shall execute
promptly any certificate that Landlord may request. Tenant hereby appoints
Landlord as tenant's irrevocable attorney-in-fact to execute any document of
subordination on behalf of Tenant. In the event that any ground or underlying
lease is terminated or any mortgage foreclosed, this lease shall not terminate
or be terminable by Tenant unless Tenant was specifically named in any
termination or foreclosure judgment or final order. In the event that any ground
or underlying lease is terminated as aforesaid, or expires (as hereinafter
provided), or if the interests of Landlord under this lease are transferred by
reason of or assigned in lieu of foreclosure or other proceedings for
enforcement of any mortgage, or if the holder of any mortgage acquires a lease
in substitution therefor, then tenant will, at the option to be exercised in
writing by such purchaser, assignee or lessee, as the case may be, (i) attorn to
it and will perform for its benefit all the terms, covenants and conditions of
this lease on the Tenant's part to be performed with the same force and effect
as if said landlord or such purchaser, assignee or lessee, were the landlord
originally named in this lease, or (ii) enter into a new lease with said lessor
or such purchaser, assignee or lessee, as landlord, for the remaining term of
this lease and otherwise on the same terms, conditions and rentals as herein
provided. From time to time, Tenant, on at least ten (10) days prior written
request by Landlord will deliver to Landlord a statement in writing certifying
that this lease is unmodified and in full force and effect (or if there shall
have been modifications, that the same is in full force and effect as modified
and stating the modification) and the dates to which the rent and other charges
have been paid and stating whether or not the Landlord is in default in
performance of any covenant, agreement, or condition contained in this lease
and, if so, specifying each such default of which Tenant may have knowledge.
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CONDEMNATION.
13. If the whole or any substantial part of the premises shall be
condemned by eminent domain or acquired by private purchase in lieu thereof for
any public or quasi-public purpose, this lease shall terminate on the date of
the vesting of title through such proceeding or purchase, and Tenant shall have
no claim against Landlord for the value of any unexpired portion of the term of
this lease, nor shall Tenant be entitled to any part of the condemnation award
or private purchase price. If less than a substantial part of the premises is
condemned, this lease shall not terminate, but rent shall abate in proportion to
the portion of the premises condemned.
REQUIREMENTS OF LAW.
14. (a) Tenant at its expense shall comply with all laws, orders
and regulations of any governmental authority having or asserting jurisdiction
over the premises, which shall impose any violation, order or duty upon Landlord
or Tenant with respect to Tenant's particular manner of use of the premises
including, without limitation, compliance in the premises with all City, State
and Federal laws, rules and regulations on the disabled or handicapped, on fire
safety and on hazardous materials. The foregoing shall not require Tenant to do
structural work.
(b) Tenant shall require every person engaged by him to clean
any window in the premises from the outside, to use the equipment and safety
devices required by Section 202 of the labor law and the rules of any
governmental authority having or asserting jurisdiction.
(c) Tenant at its expense shall comply with all requirements
of the New York Board of Fire Underwriters, or any other similar body affecting
the premises and shall not use the premises in a manner which shall increase the
rate of fire insurance of Landlord or of any other tenant, over that in effect
prior to this lease. If Tenant's particular manner of use of the premises
increases the fire insurance rate, Tenant shall reimburse Landlord for all such
increased costs. That the premises are being used for the purpose set forth in
Article I hereof shall not relieve Tenant from the foregoing duties, obligations
and expenses.
CERTIFICATE OF OCCUPANCY.
15. Tenant will at no time use or occupy the premises in violation of
the certificate of occupancy issued for the building. The statement in this
lease of the nature of the business to be conducted by Tenant shall not be
deemed to constitute a representation or guaranty by Landlord that such use is
lawful or permissible in the premises under the certificate of occupancy for the
building.
POSSESSION.
16. If Landlord shall be unable to give possession of the premises on
the commencement date of the term because of the retention of possession of any
occupant thereof alteration or construction work, or for any other reason except
as hereinafter provided, Landlord shall not be subject to any liability for such
failure. In such event, this lease shall stay in full force and effect, without
extension of its term. However, the rent hereunder shall not commence until the
premises are available for occupancy by Tenant. If delay in possession is due to
work, changes or decorations being made by Tenant, or is otherwise caused by
Tenant, there shall be
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no rent abatement and the rent shall commence on the date specified in this
lease. If permission is given to Tenant to occupy the demised premises or other
premises prior to the date specified as the commencement of the term, such
occupancy shall be deemed to be pursuant to the terms of this lease, except that
the parties shall separately agree as to the obligation of Tenant to pay rent
for such occupancy. The provisions of this Article are intended to constitute an
"express provision to the contrary" within the meaning of Section 223(a), New
York Real Property Law.
QUIET ENJOYMENT.
17. Landlord covenants that if Tenant pays the rent and performs all of
Tenant's other obligations under this lease, Tenant may peaceably and quietly
enjoy the demised premises, subject to the terms, covenants and conditions of
this lease and to the ground leases, underlying leases and mortgages
hereinbefore mentioned.
RIGHT OF ENTRY.
18. Tenant shall permit Landlord to erect and maintain pipes and
conduits in and through the premises. Landlord or its agents shall have the
right to enter or pass through the premises at all times, by master key, by
reasonable force or otherwise, to examine the same, and to make such repairs,
alterations or additions as it may deem necessary or desirable to the premises
or the building, and to take all material into and upon the premises that may be
required therefor. Such entry and work shall not constitute an eviction of
Tenant in whole or in part, shall not be grounds for any abatement of rent, and
shall impose no liability on Landlord by reason of inconvenience or injury to
Tenant's business. Landlord shall have the right at any time, without the same
constituting an actual or constructive eviction, and without incurring any
liability to Tenant, to change the arrangement and/or location of entrances or
passageways, windows, corridors, elevators, stairs, toilets, or other public
parts of the building, and to change the name or number by which the building is
known.
VAULT SPACE.
19. Anything contained in any plan or blueprint to the contrary
notwithstanding, no vault or other space not within the building property line
is demised hereunder. Any use of such space by Tenant shall be deemed to be
pursuant to a license, revocable at will by Landlord, without diminution of the
rent payable hereunder. If Tenant shall use such vault space, any fees, taxes or
charges made by any governmental authority for such space shall be paid by
Tenant.
INDEMNITY.
20. Tenant shall indemnify, defend and save Landlord harmless from and
against liability or expense arising from the use or occupation of the premises
by Tenant, or anyone on the premises with Tenant's permission, or from any
breach of this lease.
LANDLORD'S LIABILITY.
21. This lease and the obligations of Tenant hereunder shall in no way
be affected because Landlord is unable to fulfill any of its obligations or to
supply any service, by reason of strike or other cause not within the Landlord's
control. Landlord shall have the right, without
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incurring any liability to Tenant, to stop any service because of accident or
emergency, or for repairs, alterations or improvements, necessary or desirable
in the judgement of Landlord, until such repairs, alterations or improvements
shall have been completed. Landlord shall not be liable to Tenant or anyone
else, for any loss or damage to its agents, employees, or invitees person,
property or business, unless due to the negligence of Landlord nor shall
Landlord be liable for any latent defect in the premises or the building.
Tenant, during the term of the lease, shall carry public liability and property
damage insurance, from a company authorized to do business in New York, with
limitations acceptable to Landlord and its designees as additional insureds.
Evidence of the policies, and of their timely renewal, shall be delivered to
Landlord. All such insurance shall contain an agreement by the insurance company
that the policy or policies will not be cancelled or the coverage changed,
without thirty (30) days' prior written notice to the Landlord. Tenant agrees to
look solely to Landlord's estate and interest in the land and building, or the
lease of the building or of the land and building, and the demised premises, for
the satisfaction of any right or remedy of Tenant for the collection of a
judgement (or other judicial process) requiring the payment of money by
Landlord, in the event of any liability by Landlord, and no other property or
assets of Landlord shall be subject to levy, execution or other enforcement
procedure for the satisfaction of Tenant's remedies under or with respect to
this lease, the relationship of landlord and tenant hereunder, or Tenant's use
and occupancy of the premises or any other liability of Landlord to Tenant
(except for negligence).
CONDITION OF PREMISES.
22. Tenant acknowledges that Landlord has made no representation of
promise, except as herein expressly set forth. Tenant agrees to accept the
premises "as is", except for any work which Landlord has expressly agreed in
writing to perform.
COST OF LIVING ADJUSTMENTS.
23. The fixed annual rent reserved in this lease and payable hereunder
shall be adjusted, as of the times and in the manner set forth in this Article:
(a) Definitions: For the purpose of this Article, the
following definitions shall apply:
(i) The term "Base Year" shall mean the full 1999
calendar year.
(ii) The term "Price Index" shall mean the "Consumer
Price Index" published by the Bureau of Labor Statistics of the U.S. Department
of Labor, All Items, New York, N.Y.--Northeastern N.J., all urban consumers
(presently denominated "CPI-U"), or a successor or substitute index
appropriately adjusted.
(iii) The term "Price Index for the Base Year" shall
mean the average of the monthly All Items Price Indexes for each of the 12
months of the Base Year.
(b) Effective as of each January and July subsequent to the
Base Year, there shall be made a cost of living adjustment of the fixed annual
rental rate payable hereunder. The July adjustment shall be based on the
percentage difference between the Price Index for the preceding month of June
and the Price Index for the Base year. The January adjustment shall be
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based on such percentage difference between the Price Index for the preceding
month of December and the Price Index for the Base Year.
(i) In the event the Price Index for June in any
calendar year during the term of this lease reflects an increase over the Price
Index for the Base Year, then the fixed annual rent herein provided to be paid
as of the July 1st following such month of June (unchanged by any adjustments
under this Article) shall be multiplied by the percentage difference between the
Price Index for the Base Year, and the resulting sum shall be added to such
fixed annual rent, effective as of such July 1st. Said adjusted fixed annual
rent shall thereafter be payable hereunder, in equal monthly installments until
it is readjusted pursuant to the terms of this lease.
(ii) In the event the Price Index for December in any
calendar year during the terms of this lease reflects an increase over the Price
Index for the Base Year, then the fixed annual rent herein provided to be paid
as of the January 1st following such month of December (unchanged by any
adjustments under this Article) shall be multiplied by the percentage difference
between the Price Index for December and the Price Index for the Base Year, and
the resulting sum shall be added to such fixed annual rent effective as of
January 1st. Said adjusted fixed annual rent shall thereafter be payable
hereunder, in equal monthly installments, until it is readjusted pursuant to the
terms of this lease.
The following illustrates the intentions of the parties hereto as to
the computation of the aforementioned costs of living adjustment in the annual
rent payable hereunder:
Assuming the said fixed annual rent is $10,000, that the Price
Index for the base Year was 102.0 and that the Price Index for the
month of June in a calendar year following the Base year was 105.0 then
the percentage increase thus reflected, i.e., 2.941% (3.0/102.0) would
be multiplied by $10,000, and said fixed annual rent would be increased
by $294.10 effective as of July 1st of said calendar year.
In the event that the Price Index ceases to use 1982-84 = 100 as the
basis of calculations, or if a substantial change is made in the terms of number
of items contained in the Price Index, then the Price Index shall be adjusted to
the figure that would have been arrived at had the manner of computing the Price
Index in effect at the date of this lease not been altered. In the event such
Price Index (or a successor or substitute index) is not available, a reliable
governmental or other non-partisan publication evaluating the information
thereto used in determining the Price Index shall be used.
(c) Landlord will cause statements of the cost of living
adjustments provided for in subdivisions (b) to be prepared in reasonable detail
and delivered to Tenant.
(d) In no event shall the fixed annual rent originally
provided to be paid under this lease (exclusive of the adjustments under this
Article) be reduced by virtue of this Article.
(e) Any delay or failure of Landlord, beyond July or January
of any year, computing of billing for the rent adjustments hereinabove provided,
shall not constitute a waiver of or in any way impair the continuing obligation
of Tenant to pay such rent adjustment hereunder.
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(f) Notwithstanding any expiration or termination of this
lease prior to the lease expiration date (except in the case of a cancellation
by mutual agreement) Tenant's obligation to pay rent as adjusted under this
Article shall continue and shall cover all periods up to the lease expiration
date, and shall survive any expiration or termination of this lease.
(g) Notwithstanding any provision to the contrary, cost of
living adjustments in the fixed annual rent rate for any calendar year are
limited in an amount equal to 3% of the fixed annual rental payable under this
lease as of December 1st of the immediately preceding calendar year, including
any adjustments under this article.
TAX ESCALATION
24. Tenant shall pay Landlord, as additional rent, tax escalation in
accordance with this Article:
(a) For purposes of this lease the rentable square foot areas
of the presently demised premises shall be deemed to be 12,223 square feet.
(b) Definitions: For the purpose of this Article, the
following definitions shall apply:
(i) The term "base year tax" as hereinafter set forth
for the determination of real estate tax escalation, shall mean the New York
City real estate tax year commencing July 1, 1998 and ending June 30, 1999.
(ii) The term "The Percentage", for purposes of
computing tax escalation, shall mean 4.410% (4.410%). The Percentage has been
computed on the basis of a fraction, the numerator of which is the rentable
square foot area of the demised premises and the denominator of which is the
total rentable square foot area of the office and commercial space in the
building project. The parties acknowledge and agree that the total rentable
square foot area of the office and commercial space in the building project
shall be deemed to be 277,155 sq. ft.
(iii) The term "the building project" shall mean the
aggregate combined parcel of land on a portion of which are the improvements of
which the demised premises form a part, with all the improvements thereon, said
improvements being a part of the block and lot for tax purposes which are
applicable to the aforesaid land.
(iv) The term "comparative year" shall mean the
twelve (12) months following the base tax year, and each subsequent Period of
twelve (12) months (or such other Period of twelve (12) months occurring during
the term of this lease as hereafter may be duly adopted as the tax year for real
estate tax purposes by the City of New York).
(v) The term "real estate taxes" shall mean the total
of all taxes and special or other assessments levied, assessed or imposed at any
time by any governmental authority upon or against the building project, and
also any tax or assessment levied, assessed or imposed at any time by any
governmental authority in connection with the receipt of income or rents from
said building project to the extent that same shall be in lieu of all or a
portion of any of the aforesaid taxes or assessments, or additions or increases
thereof, upon or against said
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building project. If, due to a future change in the method of taxation or in the
taxing authority, or for any other reason, a franchise, income, transit, profit
or other tax or governmental imposition, however designated, shall be levied
against landlord in substitution in whole or in part for the real estate taxes,
or in lieu of additions to or increases of said real estate taxes, then such
franchise, income, transit, profit or other tax or governmental imposition shall
be deemed to be included within the definition of "real estate taxes" for the
purposes hereof. As to special assessments which are payable over a period of
time extending beyond the term of this lease, only a pro rata portion thereof
covering the portion of the term of this lease unexpired at the time of the
imposition of such assessment, shall be included in "real estate taxes." If by
law, any assessment may be paid in installments, then, for the purposes hereof
(a) such assessment shall be deemed to have been payable in the maximum number
of installments permitted by law and (b) there shall be included in real estate
taxes, for each comparative year in which such installments may be paid, the
installments of such assessment so becoming payable during such comparative
year, together with interest payable during such comparative year.
(vi) Where more than one assessment is imposed by the
City of New York for any tax year, whether denominated an "actual assessment" or
a "transitional assessment" or otherwise, then the phrases herein "assessed
value" and "assessments" shall mean whichever of the actual, transitional or
other assessment is designated by the City of New York as the taxable assessment
for that tax year.
(vii) The phrase "real estate taxes payable during
the base tax year" shall mean that amount obtained by multiplying the assessed
value of the land and buildings of the building project for the base tax year by
the tax rate for the base tax year for each $100 of such assessed value.
(c) 1. In the event that the real estate taxes payable for any
comparative year shall exceed the amount of the real estate taxes payable during
the base tax year, tenant shall pay to landlord, as additional rent for such
comparative year, an amount equal to The Percentage of the excess. Before or
after the start of each comparative year, Landlord shall furnish to Tenant a
statement of the real estate taxes payable for such comparative year, and a
statement of the real estate taxes payable during the base tax year. If the real
estate taxes payable for such comparative year exceed the real estate taxes
payable during the base tax year, additional rent for such comparative year, in
an amount equal to The Percentage of the excess, shall be due from Tenant to
Landlord, and such additional rent shall be payable by Tenant to Landlord within
ten (10) days after receipt of the aforesaid statement. The benefit of any
discount for any earlier payment or prepayment of real estate taxes shall accrue
solely to the benefit of Landlord, and such discount shall not be subtracted
from the real estate taxes payable for any comparative year.
Additionally, Tenant shall pay to Landlord, on demand, a sum equal to
The Percentage of any business improvement district assessment payable by the
building project.
2. Should the real estate taxes payable during the base tax
year be reduced by final determination of legal proceedings, settlement or
otherwise, then, the real estate taxes payable during the base tax year shall be
correspondingly revised, the additional rent theretofore paid or payable
hereunder for all comparative years shall be recomputed on the basis of such
reduction, and tenant shall pay to Landlord as additional rent, within ten (10)
days after
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being billed therefor, any deficiency between the amount of such additional rent
as theretofore computed and the amount thereof due as the result of such
recomputations. Should the real estate taxes payable during the base tax year be
increased by such final determination of legal proceedings, settlement or
otherwise, then appropriate recomputation and adjustment also shall be made.
3. If after Tenant shall have made a payment of additional
rent under this subdivision (c), Landlord shall receive a refund of any portion
of the real estate taxes payable for any comparative year after the base tax
year on which such payment of additional rent shall have been based, as a result
of a reduction of such real estate taxes by final determination of legal
proceedings, settlement or otherwise. Landlord shall within ten (10) days after
receiving the refund pay to Tenant The Percentage of the refund less The
Percentage of expenses (including attorneys' and appraisers' fees) incurred by
Landlord in connection with any such application or proceeding. If prior to the
payment of taxes for any comparative year, Landlord shall have obtained a
reduction of that comparative year's assessed valuation of the building project,
and therefore of said taxes, then the term "real estate taxes" for that
comparative year shall be deemed to include the amount of Landlord's expenses in
obtaining such reduction in assessed valuation, including attorneys' and
appraisers' fees.
4. The statements of the real estate taxes to be furnished by
Landlord as provided above shall be certified by Landlord and shall constitute a
final determination as between Landlord and Tenant of the real estate taxes for
the Periods represented hereby, unless Tenant within thirty (30) days after they
are furnished shall give a written notice to Landlord that it disputes their
accuracy or their appropriateness, which notice shall specify the particular
respects in which the statement is inaccurate or inappropriate. If Tenant shall
so dispute said statement then, pending the resolution of such dispute, tenant
shall pay the additional rent to Landlord in accordance with the statement
furnished by Landlord.
5. In no event shall the fixed annual rent under this lease
(exclusive of the additional rents under this Article) be reduced by virtue of
this Article.
6. If the commencement date of the term of this lease is not
the first day of the first comparative year, then the additional rent due
hereunder for such first comparative year shall be a proportionate share of said
additional rent for the entire comparative year, said proportionate share to be
based upon the length of time that the lease term will be in existence during
such first comparative year. Upon the date of any expiration or termination of
this lease (except termination because of Tenant's default) whether the same be
the date hereinabove set forth for the expiration of the term or any prior or
subsequent date, a proportionate share of said additional rent for the
comparative year during which such expiration or termination occurs shall
immediately become due and payable by Tenant to Landlord, if it was not
theretofore already billed and paid. The said proportionate share shall be based
upon the length of time that this lease shall have been in existence during such
comparative year. Landlord shall promptly cause statements of said additional
rent for that comparative year to be prepared and furnished to lessee. Landlord
and Tenant shall thereupon make appropriate adjustments of amounts then owing.
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7. Landlord's and Tenant's obligations to make the adjustments
referred to in subdivision (6) above shall survive any expiration or termination
of this lease.
8. Any delay or failure of lessor in billing any tax
escalation hereinabove provided shall not constitute a waiver of or in any way
impair the continuing obligation of lessee to pay such tax escalation hereunder.
SERVICES.
25. [omitted]
JURY WAIVER.
26. Landlord and Tenant hereby waive trial by jury in any action,
proceeding or counterclaim involving any matter whatsoever arising out of or in
any way connected with this lease, the relationship of landlord and tenant,
Tenant's use or occupancy of the premises (except for personal injury or
property damage) or involving the right to any statutory relief or remedy.
Tenant will not interpose any counterclaim or any nature in any summary
proceeding.
NO WAIVER, ETC.
27. No act or omission of Landlord or its agents shall constitute an
actual or constructive eviction, unless Landlord shall have first received
written notice of Tenant's claim and shall have had a reasonable opportunity to
verify such claim.* In the event that any payment herein provided for by Tenant
to Landlord shall become overdue for a period in excess of ten (10) days,** then
at Landlord's option a "late charge" shall become due and payable to Landlord,
as additional rent, from the date it was due until payment is made at the
following rates: for individual and partnership Tenants, said late charge shall
be computed at the maximum legal rate of interest; for corporate or governmental
entity Tenants the late charge shall be computed at two percent per month unless
there is an applicable maximum legal rate of interest which then shall be used.
No act or omission of Landlord or its agents shall constitute an acceptance of a
surrender of the premises, except a writing signed by Landlord. The delivery of
keys to Landlord or its agents shall not constitute a termination of this lease
or a surrender of the premises. Acceptance by Landlord of less than the rent
herein provided shall at Landlord's option be deemed on account of earliest rent
remaining unpaid. No endorsement on any check, or letter accompanying rent,
shall be deemed an accord and satisfaction, and such check may be cashed without
prejudice to Landlord. No waiver of any provision of this lease by Landlord
shall be effective, unless such waiver be in writing signed by Landlord. This
lease contains the entire agreement between the parties, and no modification
thereof shall be binding unless in writing and signed by the party concerned.
Tenant shall comply with the rules and regulations printed in this lease, and
any reasonable modifications thereof or additions thereto. Landlord shall not be
liable to Tenant for the violation of such rules and regulations by any other
tenant. Failure of Landlord to enforce any provision of this lease, or any rule
or regulations, shall not be construed as the waiver of any subsequent violation
of a provision of this lease, or any rule or
- -------------------------------
* (Not to exceed two days)
** after written notice by Landlord
13
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regulation. This lease shall not be affected by nor shall Landlord in any way be
liable for the closing, darkening or bricking up of windows in the premises, for
any reason, including as the result of construction on any property of which the
premises are not a part or by Landlord's own acts.
28. [omitted]
NOTICES.
29. Any bill, notice or demand from Landlord to Tenant, may be
delivered personally at the premises or sent by registered or certified mail.
Such bill, notice or demand shall be deemed to have been given at the time of
delivery or mailing.* Any notice from Tenant to Landlord must be sent by
registered or certified mail to the last address designated in writing by
Landlord.
WATER.
30. Tenant shall pay the amount of Landlord's cost for all water used
by Tenant for any purpose other than ordinary lavatory uses, and any sewer rent
or tax based thereon. Landlord may install a water meter to measure Tenant's
water consumption for all purposes and Tenant agrees to pay for the installation
and maintenance thereof and for water consumed as shown on said meter. If water
is made available to Tenant in the building or the demised premises through a
meter which also supplies other premises, or without a meter, then Tenant shall
pay to Landlord $None per month for water.
SPRINKLER SYSTEM.
31. If there shall be a "sprinkler system" in the demised premises for
any period during this lease, Tenant shall pay $None per month for sprinkler
supervisory service. If such sprinkler system is damaged by any negligent act of
Tenant or its agents, employees, licensees or visitors, Tenant shall restore the
system to good working condition at its own expense. If the New York Board of
Fire Underwriters, the New York Fire Insurance Exchange, the Insurance Services
Office or any governmental authority requires the installation or any alteration
to a sprinkler system by reason of Tenant's particular manner of use of the
premises, including any alteration necessary to obtain the full allowance for a
sprinkler system in the fire insurance rate of landlord, or for any other
reason, Tenant shall make such installation or alteration promptly, and at its
own expense.
HEAT, ELEVATOR, ETC.
32. Landlord shall provide elevator service during all usual business
hours including Saturdays until 1 P.M., except on Sundays, State holidays,
Federal holidays, or Building Service Employees Union Contract holidays.
Landlord shall furnish heat to the premises during the same hours on the same
days in the cold season in each year. Landlord may remove Tenant's
- ------------------
* Landlord shall send a copy of any notice sent to Tenant alleging a
default under this lease to Loeb & Loeb, LLP, 345 Park Avenue, New York, New
York 10154; Attention: Scott I. Schneider Esq.
14
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extraordinary refuse from the building and Tenant shall pay the cost thereof. If
the elevators in the building are manually operated, Landlord may convert to
automatic elevators at any time, without in any way affecting Tenant's
obligations hereunder.
SECURITY DEPOSIT.
33. Tenant has deposited with Landlord the sum of $30,710.29 as
security for the performance by Tenant of the terms of this lease. Landlord may
use any part of the Security to satisfy any default of Tenant and any expenses
arising from such default, including but not limited to any damages or rent
deficiency before or after re-entry by Landlord. Tenant shall, upon demand,
deposit with Landlord the full amount so used, in order that Landlord shall have
the full security deposit on hand at all times during the term of this lease. If
Tenant shall comply fully with the terms of this lease, the security shall be
returned to Tenant after the date fixed as the end of the lease. In the event of
a sale or lease of the building containing the premises, Landlord may transfer
the security to the purchaser or tenant, and Landlord shall thereupon be
released from all liability for the return of the security. This provision shall
apply to every transfer or assignment of the security to a new Landlord. Tenant
shall have no legal power to assign or encumber the security herein described.
ELECTRICITY.
34. Terms and conditions with respect to electricity rent inclusion, or
with respect to sub-metering, as the case may be, and general conditions with
respect to either, are set forth in Article 41 in the Rider annexed to and made
part of this lease.
RENT CONTROL.
35. In the event the fixed annual rent or additional rent or any part
thereof provided to be paid by Tenant under the provisions of this lease during
the demised term shall become uncollectible or shall be reduced or required to
be reduced or refunded by virtue of any Federal, State, County or City law,
order or regulation, or by any direction of a public officer or body pursuant to
law, or the orders, rules, code or regulations of any organization or entity
formed pursuant to law, whether such organization or entity be public or
private, then Landlord, at its option, may at any time thereafter terminate this
lease, by not less than thirty (30) days' written notice to Tenant, on a date
set forth in said notice, in which event this lease and the term hereof shall
terminate and come to an end on the date fixed in said notice as if the said
date were the date originally fixed herein for the termination of the demised
term. Landlord shall not have the right so to terminate this lease if Tenant
within such period of thirty (30) days shall in writing lawfully agree that the
rentals herein reserved are a reasonable rental and agree to continue to pay
said rentals, and if such agreement by Tenant shall then be legally enforceable
by Landlord.
SHORING.
36. Tenant shall permit any person authorized to make an excavation on
land adjacent to the building containing the premises to do any work within the
premises necessary to preserve the wall of the building from injury or damage,
and Tenant shall have no claim against Landlord for damages or abatement of rent
by reason thereof.
15
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EFFECT OF CONVEYANCE, ETC.
37. If the building containing the premises shall be sold, transferred
or leased, or the lease thereof transferred or sold, Landlord shall be relieved
of all future obligations and liabilities hereunder and the purchaser,
transferee or tenant of the building shall be deemed to have assumed and agreed
to perform all such obligations and liabilities of Landlord hereunder.
RIGHTS OF SUCCESSORS AND ASSIGNS.
38. This lease shall bind and inure to the benefit of the heirs,
executors, administrators, successors, and, except as otherwise provided herein,
the assigns of the parties hereto. If any provision of any Article of this lease
or the application thereof to any person or circumstances shall, to any extent,
be invalid or unenforceable, the remainder of that Article, or the application
of such provision to persons or circumstances other than those as to which it is
held invalid or unenforceable, shall not be affected thereby, and each provision
of said Article and of this lease shall be valid and be enforced to the fullest
extent permitted by law.
CAPTIONS.
39. The captions herein are inserted only for convenience, and are in
no way to be construed as a part of this lease or as a limitation of the scope
of any provision of this lease.
LEASE SUBMISSION.
40. Landlord and Tenant agree that this lease is submitted to Tenant on
the understanding that it shall not be considered an offer and shall not bind
Landlord in any way unless and until (i) Tenant has duly executed and delivered
duplicate originals thereof to Landlord and (ii) Landlord has executed and
delivered one of said originals to Tenant.
SEE RIDER(S) ANNEXED HERETO AND MADE A PART HEREOF
In Witness Whereof, Landlord and Tenant have executed this lease as of
the day and year first above written.
/s/INVESTMENT PROPERTIES ASSOCIATES
C/O HELMSLEY SPEAR, INC.,
AGENTS................................(L.S.)
- -----------------------------------
Witness for Landlord
BY: /s/ IRVING SCHNEIDER.............(L.S.)
- ----------------------------------- IRVING SCHNEIDER, C.O.O.
Witness for Tenant
BY: /s/ JEFF EPSTEIN.................(L.S.)
DOUBLE CLICK, INC.
16
<PAGE>
ACKNOWLEDGEMENTS.
State of New York )
ss.:
County of New York)
On the day of , 19 , before me
personally came
to me known and known to me to be the individual described in,
and who executed, the foregoing instrument, and acknowledged
to me that he executed the same.
- -----------------------------------------------------
Notary Public
State of New York )
ss.:
County of New York)
On the day of , 19 , before me
personally came
to me known, who, being by me duly sworn, did depose and say
that he resides at No.
that he is the of the
corporation described in, and which executed, the foregoing
instrument; and that he signed h name thereto by authority
of the Board of Directors of said corporation.
- -----------------------------------------------------
Notary Public
GUARANTY.
For Value Received and in consideration of the letting of the premises within
mentioned to the within named Tenant, the undersigned do hereby covenant and
agree, to and with the Landlord and the Landlord's legal representatives, that
if default shall at any time be made by the said Tenant in the payment of the
rent and the performance of the covenants contained in the within lease, on the
Tenant's part to be paid and performed, that the undersigned will well and truly
pay the said rent, or any arrears thereof that may remain due unto said
Landlord, and also pay all damages that may arise in consequence of the
non-performance of said covenants, or either of them, without requiring notice
of any such default from the Landlord. The undersigned hereby waives all right
to trial by jury in any action or proceeding hereinafter instituted by the
Landlord, to which the undersigned may be a party.
IN WITNESS WHEREOF, the undersigned has set hand and seal this
day of 19
..........................................................................(L.S.)
..........................................................................(L.S.)
State of New York )
ss.:
County of New York)
On the day of , 19 , before me
personally came
to me known and known to me to be the individual described in,
and who executed the foregoing Guaranty and acknowledged to me
that he executed the same.
- -----------------------------------------------------
Notary Public
17
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66 REV. 9-94
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To
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- -----------------------------------------------------------
Lease
- -----------------------------------------------------------
- -----------------------------------------------------------
Date
Space
From
To
Annual Rent $
Monthly Rent $
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- -----------------------------------------------------------
HELMSLEY-SPEAR, INC.
Real Estate
Lincoln Building
60 East 42nd Street
New York, N.Y. 10165
Phone (212) 687-6400
18
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[Plan of 16th Floor]
19
<PAGE>
RIDER ANNEXED TO AND MADE
PART OF A LEASE BETWEEN
INVESTMENT PROPERTIES ASSOCIATES, LANDLORD
AND DOUBLE CLICK, INC., TENANT
ELECTRICITY
41. Tenant agrees that Landlord may furnish electricity to Tenant on a
"submetering" basis or on a "rent inclusion" basis. Electricity and electric
service, as used herein, shall mean any element affecting the generation,
transmission, and/or distribution or redistribution of electricity, including
but not limited to services which facilitate the distribution of service.
(a) Submetering: If and so long as Landlord provides
electricity to the demised premises on a submetering basis, Tenant covenants and
agrees to purchase the same from Landlord or Landlord's designated agent at
charges, terms and rates set, from time to time, during the term of this lease
by Landlord but not more than those specified in the service classification in
effect on January 1, 1970 pursuant to which Landlord then purchased electric
current from the public utility corporation serving the part of the city where
the building is located; provided however, said charges shall be increased in
the same percentage as any percentage increase in the billing to Landlord for
electricity for the entire building, by reason of increase in Landlord's
electric rates or service classifications, subsequent to January 1, 1970, and so
as to reflect any increase in Landlord's electric charges, including changes in
market prices for electricity from utilities and/or other providers, in fuel
adjustments, or by taxes or charges of any kind imposed on Landlord's
electricity purchases or redistribution, or for any other such reason,
subsequent to said date. Any such percentage increase in Landlord's billing for
electricity due to changes in rates, service classifications, or market prices,
shall be computed by the application of the average consumption (energy and
demand) of electricity for the entire building for the twelve (12) full months
immediately prior to the rate and/or service classification change, or any
changed methods of or rules on billing for same, applied on a consistent basis
to the new rate and/or service classification or market price, and to the
service classification and rate in effect on January 1, 1970. If the average
consumption of electricity for the entire building for said prior twelve (12)
months cannot reasonably be applied and used with respect to changed methods of
or rules on billing, then the percentage shall be computed by the use of the
average consumption (energy and demand) for the entire building for the first
three (3) months after such change, projected to a full twelve (12) months, so
as to reflect the different seasons, and that same consumption, so projected,
shall be applied to the service classification and rate in effect on January 1,
1970. Where more than one meter measures the service of Tenant in the building,
the service rendered through each meter may be computed and billed separately in
accordance with the rates herein specified. Bills therefore shall be rendered at
such times as Landlord may elect and the amount, as computed from a meter, shall
be deemed to be, and be paid as, additional rent. In the event that such bills
are not paid within five (5) days after the same are rendered, Landlord may,
without further notice, discontinue the service of electric current to the
demised premises without releasing Tenant from any liability under this lease
and without Landlord
20
<PAGE>
or Landlord's agent incurring any liability for any damage or loss sustained by
lessee by such discontinuance of service. If any tax is imposed upon Landlord's
receipt from the sale, resale or redistribution of electricity or gas or
telephone service to Tenant by any Federal, State, or Municipal authority,
Tenant covenants and agrees that where permitted by law, Tenant's pro-rata share
of such taxes shall be passed on to and included in the bill of and paid by,
Tenant to Landlord.
(b) Rent Inclusion: If and so long as Landlord provides
electricity to the demised premises on a rent inclusion basis, Tenant agrees
that the fixed annual rent shall be increased by the amount of the Electricity
Rent Inclusion Factor ("ERIF"), as hereinafter defined. Tenant acknowledges and
agrees (i) that the fixed annual rent hereinabove set forth in this lease does
not yet, but is to include an ERIF of $3.15 per rentable square foot to
compensate Landlord for electrical wiring and other installations necessary for,
and for its obtaining and making available to Tenant the redistribution of
electric current as an additional service; and (ii) that said ERIF, which shall
be subject to periodic adjustments as hereinafter provided, has been partially
based upon an estimate of the Tenant's connected electrical load, in whatever
manner delivered to Tenant, which shall be deemed to be the demand (KW), and
hours of use thereof, which shall be deemed to be the energy (KWH), for ordinary
lighting and light office equipment and the operation of the usual small
business machines, including Xerox or other copying machines (such lighting and
equipment are hereinafter called "Ordinary Equipment") during ordinary business
hours ("ordinary business hours" shall be deemed to mean 50 hours per week),
with Landlord providing an average connected load of 4'/2 watts of electricity
for all purposes per rentable square foot. Any installation and use of equipment
other than Ordinary Equipment and/or any connected load and/or energy usage by
Tenant in excess of the foregoing shall result in adjustment of the ERIF as
hereinafter provided. For purposes of this lease the rentable square foot area
of the presently demised premises shall be deemed to be 12,223 square feet.
If the cost to Landlord of electricity shall have been, or shall be,
increased or decreased subsequent to May l, 1996 (whether such change occurs
prior to or during the term of this Lease), by change in Landlord's electric
rates or service classifications, or electricity charges, including changes in
market prices, or by any increase, subsequent to the last such electric rate or
service classification change or market price change, in fuel adjustments or
charges of any kind, or by taxes, imposed on Landlord's electricity purchases or
on Landlord's electricity redistribution, or for any other such reason, then the
aforesaid ERIF portion of the fixed annual rent shall be changed in the same
percentage as any such change in cost due to changes in electric rates, service
classifications or market prices, and, also Tenant's payment obligation, for
electricity redistribution, shall change from time to time so as to reflect any
such increase in fuel adjustments or charges, and such taxes. Any such
percentage change in Landlord's cost due to change in Landlord's electric rates
or service classifications or market prices, shall be computed on the basis of
the average consumption of electricity for the building for the twelve full
months immediately prior to the rate change or other such changes in cost,
energy and demand, and any changed methods of or rules on billing for same,
applied on a consistent basis to the new electric rate or service classification
or market price and to the immediately prior existing electric rate or service
classification or market price. If the average consumption (energy and demand)
for the entire building for said prior (12) months cannot reasonably be applied
and used with respect to changed methods of or rules on billing, then the
percentage increase shall be computed by the use of the average consumption
(energy and demand) for the entire building for the first three
21
<PAGE>
(3) months after such change, projected to a full twelve (12) months, so as to
reflect the different seasons; and that same consumption, so projected, shall be
applied to the rate and/or service classification or market price which existed
immediately prior to the change. The parties agree that a reputable, independent
electrical consultant firm, selected by Landlord, ("Landlord's electrical
consultant"), shall determine the percentage change for the changes in ERIF due
to Landlord's changed costs, and that Landlord's electrical consultant may from
time to time make surveys in the demised premises of the electrical equipment
and fixtures and use of current. (i) If such survey shall reflect a connected
electrical load in the demised premises in excess of 4 1/2 watts of electricity
for all purposes per rentable square foot and/or energy usage in excess of
ordinary business hours (each such excess hereinafter called "excess
electricity") then the connected electrical load and/or the hours of use
portion(s) of the then existing ERIF shall be increased by an amount which is
equal to a fraction of the then existing ERIF, the numerator of which is the
excess electricity (i.e. excess connected load and/or excess usage) and the
denominator of which is the connected load and/or the energy usage which was the
basis of the then existing ERIF. Such fractions shall be determined by
Landlord's electrical consultant. The fixed annual rent shall then be
appropriately adjusted, effective as of the date of any such change in connected
load and/or usage, as disclosed by said survey. (ii) If such survey shall
disclose installation and use of other than Ordinary Equipment, then effective
as of the date of said survey, there shall be added to the ERIF portion of fixed
annual rent (computed and fixed as hereinbefore described) an additional amount
equal to what would be paid under the SC-4 Rate I Service Classification in
effect on May 1, 1996 (and not the time-of-day rate schedule) for such load and
usage of electricity, with the connected electrical load deemed to be the demand
(KW) and the hours of use thereof deemed to be the energy (KWH), as hereinbefore
provided, (which addition to the ERIF shall be increased or decreased by all
electricity cost changes of Landlord, as hereinabove provided, from May 1, 1996
through the date of billing).
In no event, whether because of surveys, rates or cost changes, or for
any other reason, is the originally specified $3.15 per rentable square foot
ERIF portion of the fixed annual rent (plus any net increase thereof, but not
decrease, by virtue of all electricity rate, service classification or market
price changes of Landlord subsequent to May 1, 1996) to be reduced.
(c) General Conditions: The determinations by Landlord's
electrical consultant shall be binding and conclusive on Landlord and Tenant
from and after the delivery of copies of such determinations to Landlord and
Tenant, unless, within fifteen (15) days after delivery thereof, Tenant disputes
such determination. If Tenant so disputes the determination, it shall, at its
own expense, obtain from a reputable, independent electrical consultant its own
determinations in accordance with the provisions of this Article. Tenant's
consultant and Landlord's consultant then shall seek to agree. If they cannot
agree within thirty (30) days they shall choose a third reputable electrical
consultant, whose cost shall be shared equally by the parties, to make similar
determinations which shall be controlling. (If they cannot agree on such third
consultant within ten (10) days, than either party may apply to the Supreme
Court in the County of New York for such appointment.) However, pending such
controlling determinations, Tenant shall pay to Landlord the amount of
additional rent or ERIF in accordance with the determinations of Landlord's
electrical consultant. If the controlling determinations differ from Landlord's
electrical consultant, then the parties shall promptly make adjustment for any
deficiency owed by Tenant or overage paid by Tenant.
22
<PAGE>
At the option of Landlord, Tenant agrees to purchase from Landlord or
its agents all lamps and bulbs used in the demised premises and to pay for the
cost of installation thereof. Supplementing Article 35 hereof, if all or part of
the submetering additional rent or the ERIF payable in accordance with
Subdivision (A) or (B) of this Article becomes uncollectible or reduced or
refunded by virtue of any law, order or regulation, the parties agree that, at
Landlord's option, in lieu of submetering additional rent or ERIF, and in
consideration of Tenant's use of the building's electrical distribution system
and receipt of redistributed electricity and payment by Landlord of consultant's
fees and other redistribution costs, the fixed annual rental rate(s) to be paid
under this lease shall be increased by an "alternative charge" which shall be a
sum equal to $3.15 per year per rentable square foot of the demised premises,
changed in the same percentage as any increases in the cost to Landlord for
electricity for the entire building subsequent to May 1, 1996, because of
electric rate, service classification or market pace changes, such percentage
change to be computed as in Subdivision (B) provided.
Landlord shall not be liable to Tenant for any loss or damage or
expense which Tenant may sustain or incur if either the quantity or character of
electric service is changed or is no longer available or suitable for Tenant's
requirements. Tenant covenants and agrees that at all times its use of electric
current shall never exceed the capacity of existing feeders to the building or
wiring installation. Tenant agrees not to connect any additional electrical
equipment to the building electric distribution system, other than lamps,
typewriters and other small office machines which consume comparable amounts of
electricity, without Landlord's prior written consent, which consent shall not
be unreasonably withheld. Any riser or risers to supply Tenant's electrical
requirements, upon written request of Tenant, will be installed by Landlord, at
the sole cost and expense of Tenant, if, in Landlord's sole judgment, the same
are necessary and will not cause permanent damage or injury to the building or
demised premises or cause or create a dangerous or hazardous condition or entail
excessive or unreasonable alterations, repairs or expense or interfere with or
disturb other tenants or occupants. In addition to the installation of such
riser or risers, Landlord will also at the sole cost and expense of Tenant,
install all other equipment proper and necessary in connection therewith subject
to the aforesaid terms and conditions. The parties acknowledge that they
understand that it is anticipated that electric rates, charges, etc., may be
changed by virtue of time-of-day rates or changes in other methods of billing,
and/or electricity purchases and the redistribution thereof, and fluctuation in
the market price of electricity, and that the references in the foregoing
paragraphs to changes in methods of or rules on billing are intended to include
any such changes. Anything hereinabove to the contrary notwithstanding, in no
event is the submetering additional rent or ERIE, or any "alternative charge",
to be less than an amount equal to the total of Landlord's payments to public
utilities and/or other providers for the electricity consumed by Tenant (and any
taxes thereon or on redistribution of same) plus 5% thereof for transmission
line loss, plus 15% thereof for other redistribution costs. The Landlord
reserves the right, at any time upon thirty (30) days' written notice, to change
its furnishing of electricity to Tenant from a rent inclusion basis to a
submetering basis, or vice versa, or to change to the distribution of less than
all the components of the existing service to Tenant. The Landlord reserves the
right to terminate the furnishing of electricity on a rent inclusion,
submetering, or any other basis at any time, upon thirty (30) days' written
notice to the Tenant, in which event the Tenant may make application directly to
the public utility and/or other providers for the Tenant's entire separate
supply of electric current and Landlord shall permit its wires and conduits, to
the extent available and safely capable, to be used for such purpose, but only
to the extent of Tenant's then authorized load. Any meters,
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risers, or other equipment or connections necessary to furnish electricity on a
submetering basis or to enable Tenant to obtain electric current directly from
such utility and/or other providers shall be installed at Tenant's sole cost and
expense. Only rigid conduit or electricity metal tubing (EMT) will be allowed.
The Landlord, upon the expiration of the aforesaid thirty (30) days' written
notice to the Tenant may discontinue furnishing the electric current but this
lease shall otherwise remain in full force and effect. If Tenant was provided
electricity on a rent inclusion basis when it was so discontinued, then
commencing when Tenant receives such direct service and as long as Tenant shall
continue to receive such service, the fixed annual rent payable under this lease
shall be reduced by the amount of the ERIF which was payable immediately prior
to such discontinuance of electricity on a rent inclusion basis.
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Dated As of September 1, 1998
BETWEEN
INVESTMENT PROPERTIES ASSOCIATES
AND
DOUBLECLICK, INC.
PAR 42 The Lessee agrees that the charge for electricity for the premises shall
be $3,208.54 per month, which ERIF shall be subject to increase because of rate
changes after the date of this lease, or based on Lessee's consumption, as
provided in Article 41.
PAR 43 This lease is prepared by the managing agent for the Lessee. It is not
binding upon either party until it is signed by the Lessee and the Lessor and
returned to the Lessee.
PAR 44 Lessor shall cause the public halls and public portions of the building
to be kept clean in accordance with Lessor's customary standards for the
building. Lessee shall at its own expense keep the premises clean, and in order,
to the satisfaction of the Lessor. It is expressly agreed that the Lessee shall
keep the public corridors free of all refuse and shall at no time store any
furniture, cartons, displays or any other articles in said public corridors. It
is the Lessee's sole responsibility for the removal of all its refuse. In the
event that any such item is found in the public corridor or freight halls, then
the Lessor shall have the right to remove such items to the basement and charge
Lessee for storage and moving costs for such work or arrange with a carting
company to remove such refuse for which the Lessee shall reimburse the Lessor
for such expenses. It is also agreed and understood that, so long as a freight
elevator is available to Lessee, hand trucks may not be used in the passenger
elevators by the Lessee, its invitees, or any person making deliveries to the
Lessee.
PAR 45 Except as expressly set forth herein, Lessee agrees to accept these
premises "as is" in all respects except for the repair of the existing air
conditioning units on the 16th floor as follows in sub-paragraph (A).
(A) Lessor represents and warrants to Lessee that the air conditioning system
and perimeter radiators and radiant heating serving the premises shall be in
good working order on the commencement of the lease. Lessee shall, throughout
the term of this lease, maintain a service contract on the air conditioning
system serving exclusively the premises.
Notwithstanding anything in this lease to the contrary, the Lessor shall
maintain the air conditioning system in good working order, including, without
limitation, all necessary inspections, filter changes and other general
maintenance requirements, for a period of one (1) year following the
commencement date of this lease. Further, Lessee shall not be obligated to
replace the air conditioning system or make any major repairs thereto. If
required, any such replacement or major repairs shall be performed by Lessor.
PAR 46 Notwithstanding anything in Paragraph 10 of this lease to the contrary,
if the premises or the building are damaged, and such damage materially
interferes with Lessee's ability to
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operate its business within the premises and such damage is not repaired within
sixty (60) days or, if in Lessee's reasonable opinion, such damage cannot be
repaired within sixty (60) days after the date of such damage, then Lessee may
terminate this lease by giving Lessor written notice of such termination by
certified mail return receipt requested. Further notwithstanding anything in
Paragraph 10 to the contrary, Lessor hereby waives any claims for damages or
other liability that Lessor may have against Lessee to the extent that same are
covered by Lessor's insurance or would be covered by any insurance that a
reasonably prudent owner of similar buildings in the general area of the subject
building (within which the premises are located) would carry.
PAR 47 If Lessor must make any repairs to the premises or must otherwise enter
the premises, Lessor shall use reasonable efforts to minimize any interference
with Lessee's business.
PAR 48 If there are any inconsistencies between the terms of this Rider and
those of the printed form of this lease, the terms of this rider shall control.
PAR 49 Lessee covenants, represents and warrants that Lessee has had no dealings
or communications with any broker or agent other than Cushman & Wakefield Inc.
and Helmsley Spear, Inc. (collectively, the "Brokers") in connection with the
consummation of this lease and Lessee covenants and agrees to pay, hold harmless
and to indemnify Lessor from and against any and all cost, expense (including
reasonable attorney's fees) or liability for any compensation, commissions or
charges claimed by any broker or agent with whom Lessee has had dealings or
communications with respect to this lease, other than the Brokers. Lessor
covenants and agrees to pay the Brokers and to pay, hold harmless and to
indemnify Lessee from and against any and all cost, expense (including
reasonable attorney's fees) or liability for any compensation, commissions, or
charges claimed by any broker or agent with whom Lessor has had dealings or
communications with respect to this lease.
PAR 50 Lessor agrees that Lessee may, during the term of this Lease, use,
without charge, any chase or shaft leading up to the premises for the
installation of voice and data communication cabling provided such installation
is (a) at the sole cost and expense of Lessee, and (b) performed in compliance
with all applicable laws (including the obligation to obtain any necessary
permits and furnish copies of same to Lessor upon Lessor's request therefor).
Lessee hereby agrees to indemnify Lessor and save Lessor harmless from and
against any claims or liability arising out of Lessee's installation of such
cabling.
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- ------------------------------------------------------------------------
RIDER ANNEXED TO AND MADE A PART OF LEASE BETWEEN
Investment Properties Associates LANDLORD
AND DoubleClick, Inc. TENANT
- ------------------------------------------------------------------------
RULES AND REGULATIONS REFERRED
TO IN THIS LEASE
No animals, birds, bicycles or vehicles shall be brought into or kept
in the premises. The premises shall not be used for manufacturing or commercial
repairing or for sale or display or merchandise or as a lodging place, or for
any immoral or illegal purpose, nor shall the premises be used for a public
stenographer or typist; barber or beauty shop; telephone, secretarial or
messenger service; employment, travel or tourist agency; school or classroom; or
commercial document reproduction. Tenant shall not cause or permit in the
premises any disturbing noises which may interfere with occupants of this or
neighboring buildings, any cooking or objectionable odors, or any nuisance of
any kind, or any inflammable or explosive fluid, chemical or substance.
Canvassing, soliciting and peddling in the building are prohibited, and each
tenant shall cooperate so as to prevent the same.
The toilet rooms and other water apparatus shall not be used for any
purposes other than those for which they were constructed, and no sweepings,
rags, ink, chemicals or other unsuitable substances shall be thrown therein.
Tenant shall not throw anything out of doors, windows or skylights, or into
hallways, stairways or elevators, nor place food or objects on outside window
sills. Tenant shall not obstruct or cover the halls, stairways and elevators, or
use them for any purpose other than ingress and egress to or from tenant's
premises, nor shall skylights, windows, doors and transoms that reflect or admit
light into the building be covered or obstructed in any way.
Tenant shall not place a load upon any floor of the premises in excess
of the load per square foot which such floor was designed to carry and which is
allowed by law. Landlord reserves the right to prescribe the weight and position
of all safes in the premises. Business machines and mechanical equipment shall
be placed and maintained by tenant, at tenant's expense, only with Landlord's
consent and in settings approved by Landlord to control weight, vibration, noise
and annoyance. Smoking or carrying lighted cigars, pipes or cigarettes in the
elevators of the building is prohibited. If the premises are on the ground floor
of the building the tenant thereof at its expense shall keep the sidewalks and
curb in front of the premises clean and free from ice, snow, dirt and rubbish.
Tenant shall not move any heavy or bulky materials into or out of the
building without Landlord's prior written consent, and then only during such
hours and in such manner as Landlord shall approve. If any material or equipment
requires special handling, tenant shall employ only persons holding a Master
Rigger's License to do such work, and all such work shall comply with all legal
requirements. Landlord reserves the right to inspect all freight to be brought
into the building, and to exclude any freight which violates any rule,
regulation or other provision of this lease.
No sign, advertisement, notice or thing shall be inscribed, painted or
affixed on any part of the building, without the prior written consent of
Landlord. Landlord may remove anything installed in violation of this provision,
and Tenant shall pay the cost of such removal. Interior signs on doors and
directories shall be inscribed or affixed by Landlord at Tenant's expense.
Landlord shall control the color, size, style and location of all signs,
advertisements and notices. No advertising of any kind by Tenant shall refer to
the building, unless first approved in writing by Landlord.
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No article shall be fastened to, or holes drilled or nails or screws
driven into, the ceilings, walls, doors or other portions of the premises, nor
shall any part of the premises be painted, papered or otherwise covered, or in
any way marked or broken, without the prior written consent of Landlord.
No existing locks shall be changed, nor shall any additional locks or
bolts of any kind be placed upon any door or window by Tenant, without the prior
written consent of Landlord. At the termination of this lease, Tenant shall
deliver to Landlord all keys for any portion of the premises or building. Before
leaving the premises at any time, Tenant shall close all windows and close and
lock all doors.
No Tenant shall purchase or obtain for use in the premises any spring
water, ice, towels, food, bootblacking, barbering or other such service
furnished by any company or person not approved by Landlord. Any necessary
exterminating work in the premises shall be done at Tenant's expense, at such
times, in such manner and by such company as Landlord shall require. Landlord
reserves the right to exclude from the building, from 6:00 p.m. to 8:00 a.m.,
and at all hours on Sunday and legal holidays, all persons who do not present a
pass to the building signed by Landlord. Landlord will furnish passes to all
persons reasonably designated by Tenant. Tenant shall be responsible for the
acts of all persons to whom passes are issued at Tenant's request.
Whenever Tenant shall submit to Landlord any plan, agreement or other
document for Landlord's consent or approval, Tenant agrees to pay Landlord as
additional rent, on demand, an administrative fee equal to the sum of the
reasonable fees of any architect, engineer or attorney employed by Landlord to
review said plan, agreement or document and Landlord's administrative costs for
same.
The use in the demised premises of auxiliary heating devices, such as
portable electric heaters, heat lamps or other devices whose principal function
at the time of operation is to produce space heating, is prohibited.
In case of any conflict or inconsistency between any provisions of this
lease and any of the rules and regulations as originally or as hereafter
adopted, the provisions of this lease shall control.
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