NBC INTERNET, INC.
CLASS A COMMON STOCK
$0.0001 PAR VALUE PER SHARE
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UNDERWRITING AGREEMENT
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February __, 2000
Xxxxxxx, Xxxxx & Co.,
Bear, Xxxxxxx & Co. Inc.
Xxxxxxxxx & Xxxxx LLC
Deutsche Bank Securities, Inc.
FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
Xxxxx & Company Incorporated
Banc of America Securities LLC
Gruntal & Co., L.L.C.
Xxxxxxx Xxxxx Barney Inc
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Xxxxx & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
NBC Internet, 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
3,650,000 shares and, at the election of the Underwriters, up to 390,000
additional shares of Class A Common Stock, $0.0001 par value per share ("Stock")
of the Company and Xxxxx Xxxxx (the "Principal Selling Stockholder") and CNET
Investments II, Inc. (the "Other Selling Stockholder") named in Schedule II
hereto (the Principal Selling Stockholder and the Other Selling Stockholder are
collectively referred to herein as the "Selling Stockholders") propose, subject
to the terms and conditions stated herein, to sell to the Underwriters an
aggregate of 950,000 shares, and the Principal Selling Stoclkholder proposes, at
the election of the Underwriters, to sell up to 300,000 additional shares of
Stock. The aggregate of 4,600,000 shares to be sold by the Company and the
Selling Stockholders is herein called the "Firm Shares" and the aggregate of
690,000 additional shares to be sold by the Company and the Principal Selling
Stockholder is herein called the "Optional Shares". The Firm Shares and the
Optional Shares that the Underwriters elect to purchase pursuant to Section 2
hereof are herein collectively called the "Shares".
1. (a) The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(i) A registration statement on Form S-1 (File No.
333-94655) (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 made available 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, to the Company's knowledge,
threatened by the Commission. Any preliminary prospectus included
in the Initial Registration Statement 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";
(ii) 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 Xxxxxxx, Xxxxx & Co. expressly for use
therein or by a Selling Stockholder expressly for use in the
preparation of the answers therein:
(iii) The Registration Statement conforms, and the
Prospectus and any further amendments or supplements to the
Registration Statement or 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 effective date as to the Registration
Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement
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;
PROVIDED,
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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 Xxxxxxx, Sachs & Co. expressly for use
therein or by a Selling Stockholder expressly for use in the
preparation of the answers therein;
(iv) Neither the Company nor any of its subsidiaries 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 (except for the grant of
stock options or issuances of stock upon the exercise of options
or warrants or pursuant to stock plans) or long-term debt (except
such changes in long-term debt as do not exceed $500,000) of the
Company or any of its subsidiaries or any material adverse
change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations
of the Company and its subsidiaries taken as a whole, otherwise
than as set forth or contemplated in the Prospectus;
(v) The Company and its subsidiaries do not own any real
property. 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 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 interfere with the use
made and proposed to be made of such property and buildings by
the Company and its subsidiaries;
(vi) 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 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 be so
qualified or in good standing shall not have a material adverse
effect on the business, prospects, results of operations or
financial condition 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;
(vii) 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 in all
material respects 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 issued to the Company have
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been duly and validly authorized and issued, are fully paid and
non-assessable and (except for directors' qualifying) are owned
directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims;
(viii) The unissued 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 in all material
respects to the description of the Stock contained in the
Prospectus;
(ix) The issue and sale of the Shares to be sold 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, except where such breach or violation could not
reasonably be expected to have a Material Adverse Effect, 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 Company
or any of its subsidiaries or any of their properties, except
where such breach or violation could not reasonably be expected
to have a Material Adverse Effect; 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 under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the
Underwriters;
(x) Neither the Company nor any of its subsidiaries is in
violation of its Certificate of Incorporation or By-laws or in
breach 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
breach or violation could not reasonably be expected to have a
Material Adverse Effect;
(xi) The statements set forth in the Prospectus under the
caption "Description of Capital Stock", 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 and complete in all material respects;
(xii) 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
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have a Material Adverse Effect; and, to the Company's knowledge,
no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(xiii) The Company is not and, after giving effect to the
offering and sale of the Shares, will not be subject to
registration as an "investment company", as such term is defined
in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(xiv) 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;
(xv) Ernst & Young LLP, who have certified certain
financial statements of the Company and its subsidiaries and
certain financial statements of Xxxx.xxx, Inc., Paralogic
Corporation, Global Bridges Technologies, Inc., Pagecount, Inc.,
Paralogic Software Corporation and Mighty Mail Networks, Inc.,
and KPMG LLP, who have certified certain financial statements of
Snap! LLC and NBC Multimedia Division, and PricewaterhouseCoopers
LLP, who have certified certain financial statements of
LiquidMarket, Inc., are each independent public accountants as
required by the Act and the rules and regulations of the
Commission thereunder;
(xvi) The Company owns, or possesses adequate rights to
use, all material patents necessary for the conduct of its
business: to the Company's knowledge, no valid United States
patent is or would be infringed by the activities of the Company,
except as would not have a Material Adverse Effect; there are no
actions, suits or judicial proceedings pending relating to
patents or proprietary information to which the Company is a
party or of which any property of the Company is subject, and, to
the knowledge of the Company, no actions, suits or judicial
proceedings are threatened by governmental authorities or, except
as set forth in the Prospectus, others, in each case except as
would not result in any Material Adverse Effect, or, to the
Company's knowledge, in any development which the Company
reasonably expects to cause a Material Adverse Effect. The
Company is not aware of any claim by others that the Company is
infringing or otherwise violating the patents or other
intellectual property of others and is not aware of any rights of
third parties to any of the Company's patent applications,
licensed patents or licenses which could affect materially the
use thereof by the Company; and
(xvii) 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 taken as a whole has been or 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 has had or will have a Material Adverse
Effect. 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 data or in the
operation of mechanical or electrical systems of any kind is not
functioning or will not function, in the case of dates or time
periods occurring after December 31, 1999, at least as
effectively as in the case of dates or time periods occurring
prior to January 1, 2000.
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(b) Each of the Selling Stockholders severally represents and
warrants to, and agrees with, each of the Underwriters and the Company that with
repspect to that Selling Stockholder:
(i) All consents, approvals, authorizations and orders
necessary for the execution and delivery by such Selling
Stockholder of this Agreement and the Power of Attorney and the
Custody Agreement hereinafter referred to, and for the sale and
delivery of the Shares to be sold by such Selling Stockholder
hereunder, have been obtained; and such Selling Stockholder has
full right, power and authority to enter into this Agreement, the
Power-of-Attorney and the Custody Agreement and to sell, assign,
transfer and deliver the Shares to be sold by such Selling
Stockholder hereunder;
(ii) The sale of the Shares to be sold by such Selling
Stockholder hereunder and the compliance by such Selling
Stockholder with all of the provisions of this Agreement, the
Power of Attorney and the Custody Agreement and the consummation
of the transactions herein and therein 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
statute, indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which such Selling Stockholder
is a party or by which such Selling Stockholder is bound or to
which any of the property or assets of such Selling Stockholder
is subject, nor will such action result in any violation of the
provisions of the Certificate of Incorporation or By-laws of such
Selling Stockholder if such Selling Stockholder is a corporation,
or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over such Selling
Stockholder or the property of such Selling Stockholder, except
in each case as would not adversely affect the ability of such
Selling Stockholder to consummate the transactions contemplated
by this Agreement;
(iii) Such Selling Stockholder has, and immediately prior
to each Time of Delivery (as defined in Section 4 hereof) such
Selling Stockholder will have, good and valid title to the Shares
to be sold by such Selling Stockholder hereunder, free and clear
of all liens, encumbrances, equities or claims for which such
Selling Stockholder has received notice; and, assuming the
Underwriters purchased the Shares to be sold by such Selling
Stockholder for value, in good faith and without notice of any
adverse claims within the meaning of the Uniform Commercial Code,
good and valid title to such Shares, free and clear of all liens,
encumbrances, equities or claims, will pass to the several
Underwriters;
(iv) In the case of the Principal Selling Stockholder,
during the period beginning from the date hereof and continuing
to and including the date 90 days after the date of the
Prospectus and in the case of the Other Selling Stockholder,
during the period beginning from the date hereof and continuing
and including the date [270] 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 of such
Selling Shareholder, 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;
(v) Such Selling Stockholder has not taken and will not
take, directly or indirectly, any action which is designed to or
which has constituted or which might
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reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares;
(vi) To the extent that any statements or omissions made
in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto are made in
reliance upon and in conformity with written information
furnished to the Company by such Selling Stockholder expressly
for use therein, such Preliminary Prospectus and the Registration
Statement did, and the Prospectus and any further amendments or
supplements to the Registration Statement and the Prospectus,
when they become effective or are filed with the Commission, as
the case may be, will conform in all material respects to the
requirements of the Act and the rules and regulations of the
Commission thereunder and will not contain any untrue statement
of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading;
(vii) In order to document the Underwriters' compliance
with the reporting and withholding provisions of the Tax Equity
and Fiscal Responsibility Act of 1982 with respect to the
transactions herein contemplated, such Selling Stockholder will
deliver to you prior to or at the First Time of Delivery (as
hereinafter defined) a properly completed and executed United
States Treasury Department Form W-9 (or other applicable form or
statement specified by Treasury Department regulations in lieu
thereof);
(viii) Certificates in negotiable form representing all of
the Shares to be sold by such Selling Stockholder hereunder have
been placed in custody under a Custody Agreement, in the form
heretofore furnished to you (the "Custody Agreement"), duly
executed and delivered by such Selling Stockholder to [Name of
Custodian], as custodian (the "Custodian"), and such Selling
Stockholder has duly executed and delivered a Power of Attorney,
in the form heretofore furnished to you (the "Power of
Attorney"), appointing the persons indicated in Schedule II
hereto, and each of them, as such Selling Stockholder's
attorneys-in-fact (the "Attorneys-in-Fact") with authority to
execute and deliver this Agreement on behalf of such Selling
Stockholder, to determine the purchase price to be paid by the
Underwriters to the Selling Stockholders as provided in Section 2
hereof, to authorize the delivery of the Shares to be sold by
such Selling Stockholder hereunder and otherwise to act on behalf
of such Selling Stockholder in connection with the transactions
contemplated by this Agreement and the Custody Agreement; and
(ix) The Shares represented by the certificates held in
custody for such Selling Stockholder under the Custody Agreement
are subject to the interests of the Underwriters hereunder; the
arrangements made by such Selling Stockholder for such custody,
and the appointment by such Selling Stockholder of the
Attorneys-in-Fact by the Power of Attorney, are to that extent
irrevocable; the obligations of the Selling Stockholders
hereunder shall not be terminated by operation of law, whether by
the death or incapacity of any individual Selling Stockholder or,
in the case of an estate or trust, by the death or incapacity of
any executor or trustee or the termination of such estate or
trust, or in the case of a partnership or corporation, by the
dissolution of such partnership or corporation, or by the
occurrence of any other event; if any individual Selling
Stockholder or any such executor or trustee should die or become
incapacitated, or if
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any such estate or trust should be terminated, or if any such
partnership or corporation should be dissolved, or if any other
such event should occur, before the delivery of the Shares
hereunder, certificates representing the Shares shall be
delivered by or on behalf of the Selling Stockholders in
accordance with the terms and conditions of this Agreement and of
the Custody Agreements; and actions taken by the
Attorneys-in-Fact pursuant to the Powers of Attorney shall be as
valid as if such death, incapacity, termination, dissolution or
other event had not occurred, regardless of whether or not the
Custodian, the Attorneys-in-Fact, or any of them, shall have
received notice of such death, incapacity, termination,
dissolution or other event.
2. Subject to the terms and conditions herein set forth, (a) the
Company and each of the Selling Stockholders agree, severally and not jointly,
to sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company and each of the Selling
Stockholders, at a purchase price per share of $.............., the number of
Firm Shares (to be adjusted by you so as to eliminate fractional shares)
determined by multiplying the aggregate number of Firm Shares to be sold by the
Company and each of the Selling Stockholders as set forth opposite their
respective names in Schedule II hereto by a fraction, the numerator of which is
the aggregate number of Firm Shares to be purchased by such Underwriter as set
forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the aggregate number of Firm Shares to be purchased by
all of the Underwriters from the Company and all of the Selling Stockholders
hereunder 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
and the Principal Selling Stockholder agree, severally and not jointly, to sell
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company and the Principal Selling
Stockholders, 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 and the Principal Selling Stockholder, as and to the extent
indicated in Schedule II hereto, hereby grant, severally and not jointly, to the
Underwriters the right to purchase at their election up to 690,000 Optional
Shares, at the purchase price per share set forth in the paragraph above, for
the sole purpose of covering sales of shares in excess of the number of Firm
Shares. Any such election to purchase Optional Shares shall be made in
proportion to the maximum number of Optional Shares to be sold by the Company
and the Principal Selling Stockholder as set forth in Schedule II hereto
initially with respect to the Optional Shares to be sold by the Company and then
among the Selling Stockholders in proportion to the maximum number of Optional
Shares to be sold by the Principal Selling Stockholder as set forth in Schedule
II hereto. Any such election to purchase Optional Shares may be exercised only
by written notice from you to the Company and the Attorneys-in-Fact, given
within a period of 30 calendar days after the date of this Agreement and 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 and the Attorneys-in-Fact otherwise agree in
writing, 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 Xxxxxxx, Xxxxx & Co. may request upon at least forty-eight hours' prior
notice to the Company and the Selling Stockholders shall be delivered by or on
behalf of the Company and the Selling Stockholders to Xxxxxxx, 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 of Federal (same-day) funds to the
account specified by the Company and the Custodian to Xxxxxxx, Xxxxx & Co. at
least forty-eight hours in advance. 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 time, on ............., 2000 or such
other time and date as Xxxxxxx, Sachs & Co, the Company and the Principal
Selling Stockholder may agree upon in writing, and, with respect to the Optional
Shares, 9:30 a.m., New York time, on the date specified by Xxxxxxx, Xxxxx & Co.
in the written notice given by Xxxxxxx, Sachs & Co. of the Underwriters'
election to purchase such Optional Shares, or such other time and date as
Xxxxxxx, Xxxxx & Co., the Company and the Principal Selling Stockholder 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(k) hereof, will be delivered at the offices
of Xxxxxxxx & Xxxxxxxx LLP, 000 Xxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
(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 .......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 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 with
copies thereof; to
9
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 reasonably 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 under the Act 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 events 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 under the Act 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) 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 of the Commission thereunder (including, at the option of the
Company, Rule 158);
(e) 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 (i) pursuant to employee stock
option plans or employee stock purchase plans existing on, or upon the
conversion or exchange of convertible or exchangeable securities outstanding as
of, the date of this
10
Agreement, (ii) pursuant to an outstanding warrant to purchase 244,004 shares of
Class A Common Stock issued to ValueVision International, Inc. and (iii)
pursuant to an acquisition transaction, strategic investment in the Company or a
business combination which may or may not involve a change in control of the
Company PROVIDED that any recipient of Stock of the Company pursuant to such an
acquisition transaction, strategic investment, or business combination agrees to
receive and hold such securities subject to the provisions of Subsection
1(b)(iv) hereof, without your prior written consent;
(f) 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), to make available to its stockholders
consolidated summary financial information of the Company and its consolidated
subsidiaries for such quarter in reasonable detail;
(g) During a period of three years from the effective date of
the Registration Statement, to make available to you copies of all reports or
other communications (financial or other) furnished to stockholders, and to make
available to you 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
(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);
(h) 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";
(i) To use its reasonable best efforts to list for quotation the
Shares on the National Association of Securities Dealers Automated Quotations
National Market System ("Nasdaq"); and
(j) 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.
6. The Company and each of the Selling Stockholders covenant and
agree with one another and with the several Underwriters (a) 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
reasonable expenses in connection with the qualification of the Shares for
offering and sale under state securities laws as 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 the Nasdaq; (v) the filing fees incident to, and the reasonable
fees and
11
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 reasonable costs and expenses
incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section; and (b) each Selling
Stockholder will pay or cause to be paid all costs and expenses incident to
the performance of such Selling Stockholder's obligations hereunder which are
not otherwise specifically provided for in this Section, including (i) any
fees and expenses of counsel for such Selling Stockholder, (ii) such Selling
Stockholder's pro rata share of the fees and expenses of the
Attorneys-in-Fact and the Custodian, and (iii) all expenses and taxes
incident to the sale and delivery of the Shares to be sold by such Selling
Stockholder to the Underwriters hereunder. It is understood, however, that
the Company shall bear, and the Selling Stockholders shall not be required to
pay or to reimburse the Company for, the cost of any other matters not
directly relating to the sale and purchase of the Shares pursuant to this
Agreement, and 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 and of the Selling Stockholders herein are, at and as of such Time
of Delivery, true and correct, the condition that the Company and the Selling
Stockholders shall have performed all of its and their 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) Xxxxxxx, Phleger & Xxxxxxxx LLP, counsel for the
Underwriters, shall have furnished to you such written opinion or opinions (a
draft of each such opinion is attached as Annex II(a) hereto), dated such Time
of Delivery, with respect to the matters covered in paragraphs (i), (ii) (but
only with respect to the Shares), (vii) and (xi) 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) Xxxxxxxx & Xxxxxxxx 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 power and authority (corporate and other)
to own its properties and conduct its business as described in
the Prospectus;
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(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 are fully paid and non-assessable; and the Shares
conform in all material respects 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 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 be so
qualified and in good standing 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) Each subsidiary of the Company that is a significant
subsidiary as defined under 1-02(w) of Regulation S-X (each a
"Subsidiary") has been duly incorporated and is validly existing
as a corporation in good standing under the laws of its
jurisdiction of incorporation; and all of the issued shares of
capital stock issued to the Company of each such Subsidiary have
been duly and validly authorized and issued, are fully paid and
non-assessable, and (except for directors' qualifying shares) are
owned directly or indirectly by the Company, free and clear of
all liens, encumbrances, equities or claims (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 or its Subsidiaries,
provided that such counsel shall state that they believe that
both you and they are justified in relying upon such opinions and
certificates);
(v) [The Company does not own any real property. Any real
property and buildings listed as an attachment to such counsel's
opinion 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 interfere with the
use made and proposed to be made of such property and buildings
by the Company and its subsidiaries (in giving the opinion in
this clause, such counsel may state that no examination of record
titles for the purpose of such opinion has been made, and that
they are relying upon a general review of the titles of the
Company and its Subsidiaries, upon opinions of local counsel and
abstracts, reports and policies of title companies rendered or
issued at or subsequent to the time of acquisition of such
property by the Company or its subsidiaries, upon opinions of
counsel to the lessors of such property and, in respect of
matters of fact, upon certificates of officers of the Company or
its Subsidiaries, provided that such counsel shall state that
they believe that both you and they are justified in relying upon
such opinions, abstracts, reports, policies and certificates)];
(vi) To such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental
proceedings pending or threatened against the Company or any of
its Subsidiaries which are of a character required to be
disclosed in the Registration Statement or the Prospectus;
(vii) This Agreement has been duly authorized, executed
and delivered by the Company;
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(viii) The issue and sale of the Shares being delivered at
such Time of Delivery to be sold 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 result in a material 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, 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 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;
(ix) 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;
(x) To such counsel's knowledge, neither the Company nor
any of its Subsidiaries is in violation of its Certificate of
Incorporation or By-laws;
(xi) The statements set forth in the Prospectus under the
caption "Description of Capital Stock", 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 and complete in all material respects;
(xii) The Company is not an "investment company", as such
term is defined in the Investment Company Act; and
(xiii) The Prospectus and the related Registration
Statement and any further amendments and supplements thereto made
by the Company prior to such Time of Delivery (other than the
financial statements and related schedules and financial data
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; although they do
not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Prospectus or the
related Registration Statement, except for those referred to in
the opinion in subsection (xi) of this Section 7(c), they have no
reason to believe that, as of its effective date, the
Registration Statement or any further amendment thereto made by
the Company prior to such Time of Delivery (other than the
financial statements and related schedules and
financial data therein, as to which such counsel need express
no opinion) 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, as of its date, the Prospectus or any
further amendment or supplement thereto made by the Company
prior to such Time of Delivery (other than the financial
statements and related schedules and
14
financial data therein, as to which such counsel need express
no opinion) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading or that, as of such
Time of Delivery, either the Prospectus or the related
Registration Statement or any further amendment or supplement
thereto made by the Company prior to such Time of Delivery (other
than the financial statements and related schedules and financial
data therein, as to which such counsel need express no opinion)
contains an untrue statement of a material fact or omits to state
a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; and they do 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 Prospectus or the related Registration Statement which are
not filed or described as required.
(d) The respective counsel for each of the Selling Stockholders,
as indicated in Schedule II hereto, each shall have furnished to you their
written opinion with respect to each of the Selling Stockholders for whom they
are acting as counsel (a draft of each such opinion is attached as Annex II(c)
hereto), dated such Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) A Power-of-Attorney and a Custody Agreement have been
duly executed and delivered by such Selling Stockholder and
constitute valid and binding agreements of such Selling
Stockholder in accordance with their terms;
(ii) This Agreement has been duly executed and delivered
by or on behalf of such Selling Stockholder; and the sale of the
Shares to be sold by such Selling Stockholder hereunder and the
compliance by such Selling Stockholder with all of the provisions
of this Agreement, the Power-of-Attorney and the Custody
Agreement and the consummation of the transactions herein and
therein contemplated will, to such counsel's knowledge, not
result in a material breach or violation of any terms or
provisions of, or constitute a default under, any statute,
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which such
Selling Stockholder is a party or by which such Selling
Stockholder is bound or to which any of the property or assets of
such Selling Stockholder is subject, nor will such action result
in any violation of the provisions of the Certificate of
Incorporation or By-laws of such Selling Stockholder if such
Selling Stockholder is a corporation or any order, rule or
regulation known to such counsel of any court or governmental
agency or body having jurisdiction over such Selling Stockholder
or the property of such Selling Stockholder;
(iii) To such counsel's knowledge, no consent, approval,
authorization or order of any court or governmental agency or
body is required for the consummation of the transactions
contemplated by this Agreement in connection with the Shares to
be sold by such Selling Stockholder hereunder, except any such
consent, approval, authorization or order which has been duly
obtained and is in full force and effect, such as have been
obtained under the Act and such as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of such Shares by the Underwriters;
15
(iv) Immediately prior to such Time of Delivery, such
Selling Stockholder had good and valid title to the Shares to be
sold at such Time of Delivery by such Selling Stockholder under
this Agreement, free and clear of all liens, encumbrances,
equities or claims, and full right, power and authority to sell,
assign, transfer and deliver the Shares to be sold by such
Selling Stockholder hereunder; and
(v) Good and valid title to such Shares, free and clear of
all liens, encumbrances, equities or claims, has been transferred
to each of the several Underwriters who have purchased such
Shares in good faith and without notice of any such lien,
encumbrance, equity or claim or any other adverse claim within
the meaning of the Uniform Commercial Code.
In rendering the opinion in paragraph (iv), such counsel may rely upon
a certificate of such Selling Stockholder in respect of matters of fact as to
ownership of, and liens, encumbrances, equities or claims on, the Shares sold by
such Selling Stockholder, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such certificate;
(e) 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,
Ernst & Young 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 of Delivery is attached as Annex I(b) hereto). In addition, on the date of
the Prospectus at a time and 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, KPMG LLP shall have furnished to you a letter or
letters, dated the respective dates of delivery thereof, in form and substance
satisfactory to you, related to the financial statements of SNAP! LLC and NBC
Multimedia Division;
(f) (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 involving a
prospective change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries, 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;
(g) 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 on Nasdaq; (ii) a
suspension or material limitation in trading in the Company's securities on;
(iii) a
16
general moratorium on commercial banking activities declared by either Federal
or New York or California 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;
(h) The Shares at such Time of Delivery shall have been duly
listed for quotation on Nasdaq;
(i) The Company has obtained and delivered to the Underwriters
executed copies of an agreement from each [list stockholders who execute lock-up
agreements], substantially in the form of those agreements attached as Annex C
in form and substance satisfactory to you;
(j) 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
(k) The Company and the Selling Stockholders shall have
furnished or caused to be furnished to you at such Time of Delivery certificates
of officers of the Company and of the Selling Stockholders, respectively,
satisfactory to you as to the accuracy of the representations and warranties of
the Company and the Selling Stockholders, respectively, herein at and as of such
Time of Delivery, as to the performance by the Company and the Selling
Stockholders of all of their respective obligations hereunder to be performed at
or prior to such Time of Delivery, and as to such other matters as you may
reasonably request, and the Company shall have furnished or caused to be
furnished certificates as to the matters set forth in subsections (a) and (f) of
this Section.
8. (a)(1) The Company and the Principal Selling Stockholder, severally
and not jointly, 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 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, 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 and the Principal Selling
Stockholder 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 Xxxxxxx, Xxxxx &
Co. expressly for use therein; PROVIDED FURTHER, that the liability of the
Principal Selling Stockholder pursuant to this Subsection 8(a)(1) shall not
exceed the product of the number of Shares sold by such Principal Selling
Stockholder and the initial public offering price of the Shares as set forth in
the Prospectus.
(a)(2)The Other Selling Stockholder will indemnify and hold
harmless each Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such
17
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 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 Other
Selling Stockholder expressly for use therein; 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 such Other Selling
Stockholder 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 Xxxxxxx, Sachs &
Co. expressly for use therein; PROVIDED FURTHER, that the liability of the Other
Selling Stockholder pursuant to this subsection 8(a)(2) shall not exceed the
product of the number of Shares sold by such Other Selling Stockholder and the
initial public offering price of the Shares as set forth in the Prospectus.
(b) Each Underwriter will indemnify and hold harmless the
Company and each Selling Stockholder against any losses, claims, damages or
liabilities to which the Company or such Selling Stockholder 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 Xxxxxxx, Xxxxx & Co.
expressly for use therein; and will reimburse the Company and each Selling
Stockholder for any legal or other expenses reasonably incurred by the Company
or such Selling Stockholder 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 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
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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. The
indemnifying party shall not be required to indemnify the indemnified party for
any amount paid or payable by the indemnified party in the settlement of any
action or proceeding without the written consent of the indemnifying party,
which consent shall not be unreasonably withheld or delayed.
(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 and the Selling Stockholders 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 and the Selling Stockholders 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 and the Selling Stockholders 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 and the Selling Stockholders 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
or the Selling Stockholders 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, each of the
Selling Stockholders 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
19
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 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 and no Selling
Stockholder shall be required to indemnify or contribute under this Section 8
any amount in excess of the product of the number of Shares sold by such Selling
Stockholder and the initial public offering price of the Shares as set forth in
the Prospectus. 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 and the Selling Stockholders
under this Section 8 shall be in addition to any liability which the Company and
the respective Selling Stockholders 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 and to each
person, if any, who controls the Company or any Selling Stockholder 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 and the Selling Stockholders 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 and
the Selling Stockholders that you have so arranged for the purchase of such
Shares, or the Company and the Selling Stockholders notify you that they have so
arranged for the purchase of such Shares, you or the Company and the Selling
Stockholders shall have the right to postpone 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 and the Selling Stockholders 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 and the Selling Stockholders 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
20
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
and the Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased exceeds one-eleventh of the
aggregate number of all of the Shares to be purchased at such Time of Delivery,
or if the Company and the Selling Stockholders 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 and the Selling Stockholders to sell
the Optional Shares) shall thereupon terminate, without liability on the part of
any non-defaulting Underwriter or the Company or the Selling Stockholders,
except for the expenses to be borne by the Company and the Selling Stockholders
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, the Selling Stockholders 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 of the Selling Stockholders, or any officer
or director or controlling person of the Company, or any controlling person of
any Selling Stockholder, and shall survive delivery of and payment for the
Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor the Selling Stockholders shall 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 or the Selling Stockholders as provided herein, the Company and any of
the Selling Stockholders failing to deliver its Shares pro rata (based on the
number of Shares to be sold by the Company and such Selling Stockholder
hereunder) 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 and
the Selling Stockholders shall then be under no further liability to any
Underwriter in respect of the Shares not so delivered 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 Xxxxxxx, Sachs & Co. on behalf of you as the
representatives; and in all dealings with any Selling Stockholder hereunder, you
and the Company shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of such Selling Stockholder made or given by any
or all of the Attorneys-in-Fact for such Selling Stockholder.
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
21
representatives in care of Xxxxxxx, Xxxxx & Co., 00 Xxx Xxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Registration Department; if to any Selling
Stockholder shall be delivered or sent by mail, telex or facsimile transmission
to counsel for such Selling Stockholder at the applicable address set forth in
Schedule II hereto; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: General Counsel; 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 or the Selling
Stockholders by you on 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 the Selling Stockholders and, to
the extent provided in Sections 8 and 10 hereof, the officers and directors of
the Company and each person who controls the Company, any Selling Stockholder 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.
If the foregoing is in accordance with your understanding, please sign
and return to us one counterpart for the Company each of the Selling
Stockholders and each of the Representatives plus one for each counsel and the
Custodian, if any 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, the Company and
each of the Selling Stockholders. 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 and the Selling Stockholders for examination, upon
request, but without warranty on your part as to the authority of the signers
thereof.
22
Any person executing and delivering this Agreement as Attorney-in-Fact
for a Selling Stockholder represents by so doing that he has been duly appointed
as Attorney-in-Fact by such Selling Stockholder pursuant to a validly existing
and binding Power-of-Attorney which authorizes such Attorney-in-Fact to take
such action.
Very truly yours,
NBC Internet, Inc.
By: ..................................
Name: Xxxxx Xxxxx
Title: Chief Executive Officer
Xxxxx Xxxxx
CNET Investments II, Inc.
By: ..................................
Name:
Title:
As Attorney-in-Fact acting on
behalf of each of the Selling
Stockholders named in Schedule II
to this Agreement.
Accepted as of the date hereof
Xxxxxxx, Sachs & Co.
Bear, Stearms & Co. Inc.
Xxxxxxxxx & Xxxxx LLC
Deutsche Bank Securities, Inc.
FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
Xxxxx & Company Incorporated
Banc of America Securities LLC
Gruntal & Co., L.L.C.
Xxxxxxx Xxxxx Barney Inc.
By:......................................
(Xxxxxxx, Xxxxx & Co.)
On behalf of each of the Underwriters
23
SCHEDULE I
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM SHARES MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
----------- --------------- -------------------
Xxxxxxx, Sachs & Co.................................................
Bear, Xxxxxxx & Co. Inc.............................................
Xxxxxxxxx & Xxxxx LLC...............................................
Deutsche Bank Securities, Inc.......................................
FleetBoston Xxxxxxxxx Xxxxxxxx Inc..................................
Xxxxx & Company Incorporated........................................
Banc of America Securities LLC......................................
Gruntal & Co., L.L.C. ..............................................
Xxxxxxx Xxxxx Xxxxxx Inc............................................
Names of other Underwriters]....................................
--------- -------
4,600,000 690,000
========= =======
24
SCHEDULE II
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF SOLD IF
FIRMSHARES MAXIMUM OPTION
TO BE SOLD EXERCISED
-------------- -------------------
The Company........................................................ 3,650,000 390,000
The Selling Stockholder(s):
Xxxxx Xxxxx(a)........................................ 300,000 300,000
CNET Investments II, Inc. (b)......................... 650,000 0
--------- -------
Total..................................................... 4,600,000 690,000
========= =======
-----------------
(a) This Selling Stockholder is represented by Xxxxxxxx & Xxxxxxxx LLP, 000
Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx
Xxxx, and has appointed [NAMES OF ATTORNEYS-IN-FACT (NOT LESS THAN TWO)], and
each of them, as the Attorneys-in-Fact for such Selling Stockholder.
(b) This Selling Stockholder is represented by Xxxxxx & Xxxx, L.L.P., 0000 Xxxx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, Attention: Xxxxxx Xxxxxx, and has
appointed [NAMES OF ATTORNEYS-IN-FACT (NOT LESS THAN TWO)], and each of them, as
the Attorneys-in-Fact for such Selling Stockholder.
25
ANNEX I
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 furnished to the representatives of
the Underwriters (the "Representatives");
(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 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 caused 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 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
26
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, 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
27
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.
28
