EXHIBIT 1.01
[_______] Shares
AT HOME CORPORATION
Series A Common Stock, $.01 par value
UNDERWRITING AGREEMENT
___________, 1997
_______, 1997
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Alex. Xxxxx & Sons Incorporated
Xxxxxxxxx & Xxxxx LLC
as Representatives of the several Underwriters
named in Scheduled I hereto
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
At Home Corporation, a Delaware corporation (the "Company"), proposes to
issue and sell to the several Underwriters (as defined below) an aggregate of
[___________] shares of its Series A Common Stock ($.01 per share par value)
(the "Firm Shares"). The Company also proposes to issue and sell to the several
Underwriters not more than an additional [___________] shares of its Series A
Common Stock ($.01 per share par value) (the "Additional Shares"), if and to the
extent that you as Managers of the offering shall have determined to exercise,
on behalf of the Underwriters, the right to purchase such shares of Common Stock
granted to the Underwriters in Article II hereof. The Firm Shares and the
Additional Shares are hereinafter collectively referred to as the "Shares." The
shares of Series A Common Stock ($.01 per share par value) of the Company to be
outstanding after giving effect to the sales contemplated hereby are hereinafter
referred to as the "Series A Common Stock." All shares of Common Stock of the
Company outstanding after the issuance of Series A Common Stock, together with
the shares of Series A Common Stock, are hereinafter collectively referred to as
the "Common Stock".
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to the
Shares. The registration statement as amended at the time it becomes effective,
including the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933, as amended (the "Securities Act"), is hereinafter
referred to as the "Registration Statement;" the prospectus in the form first
used to confirm sales of Shares is hereinafter referred to as the "Prospectus."
If the Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the Securities
Act (the "Rule 462 Registration Statement"), then any reference herein to the
term "Registration Statement" shall be deemed to include such Rule 462
Registration Statement.
As part of the offering contemplated by this Agreement, Xxxxxx Xxxxxxx &
Co. Incorporated ("Xxxxxx Xxxxxxx") has agreed to reserve out of the Shares set
forth opposite its name on Schedule I to this Agreement, up to ___________
shares, for sale to the Company's, employees, officers, and directors and other
parties associated with the Company (collectively, "Participants"), as set forth
in the Prospectus under the heading "Underwriting" (the "Directed Share
Program"). The Shares to be
sold by Xxxxxx Xxxxxxx pursuant to the Directed Share Program (the "Directed
Shares") will be sold by Xxxxxx Xxxxxxx pursuant to this Agreement at the public
offering price. Any Directed Shares not orally confirmed for purchase by any
Participants by the end of the first business day after the date on which this
Agreement is executed will be offered to the public by Xxxxxx Xxxxxxx as set
forth in the Prospectus.
I.
The Company represents and warrants to and agrees with each of the
Underwriters that:
(a) The Registration Statement has become effective, no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) The Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) the Registration Statement and the Prospectus
comply and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iii) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph (b) do not apply
to statements or omissions in the Registration Statement or the Prospectus
based upon information relating to any Underwriter furnished to the Company
in writing by such Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has
the corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the Company
and the Subsidiary (as defined below), taken as a whole.
(d) The Company has only one subsidiary, athome net (the
"Subsidiary"), which has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a material adverse
effect on the Company and the Subsidiary, taken as a whole. All of the
issued shares of capital stock of the Subsidiary have been duly and validly
authorized and issued, are fully paid and non-assessable, and are owned
directly by the Company, free and clear of all liens, encumbrances,
equities or claims. The
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Company does not own, directly or indirectly, an interest in any corporation,
partnership, business, trust or other entity required to be set forth in Exhibit
21.01 to the Registration Statement.
(e) The Company and the Subsidiary have good and marketable title in fee
simple to all real property and good and marketable title to all personal
property owned by them which is material to the business of the Company and the
Subsidiary, taken as a whole, 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 the
Subsidiary, and any real property and buildings held under lease by the Company
and the Subsidiary 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 the Subsidiary, in each case except as described in or contemplated by the
Prospectus.
(f) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(g) The shares of Common Stock outstanding prior to the issuance of the
Shares to be sold by the Company have been duly authorized and are validly
issued, fully paid and non-assessable. Except as set forth in the Prospectus,
neither the Company nor the Subsidiary has outstanding any options to purchase,
or any preemptive rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into, or any contracts or commitments to
issue or sell, shares of its capital stock or any such options, rights,
convertible securities or obligations. All outstanding shares of capital stock
of the Company and options and other rights to acquire capital stock have been
issued in compliance with the registration and qualification provisions of all
applicable federal and state securities laws and were not issued in violation of
any preemptive rights, rights of first refusal or other similar rights.
(h) The Shares have been duly authorized and, when issued and delivered
in accordance with the terms of this Agreement, will be validly issued, fully
paid and non-assessable, and the issuance of such Shares will not be subject to
any preemptive rights, rights of first refusal or similar rights.
(i) This Agreement has been duly authorized, executed and delivered by
the Company.
(j) The execution and delivery by the Company of, and the performance by
the Company of its obligations under, this Agreement will not contravene any
provision of applicable law or the certificate of incorporation or by-laws of
the Company or the Subsidiary or any agreement or other instrument binding upon
the Company or the Subsidiary that is material to the Company and the
Subsidiary, taken as a whole, or any judgement, order or decree of any
governmental body, agency or court having jurisdiction over the Company or the
Subsidiary, and no consent, approval, authorization or order of or
qualification with any governmental body or governmental agency is required for
the performance by the Company of its obligations under this
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Agreement, except as may be required by the securities or Blue Sky laws of the
various states and foreign jurisdictions in connection with the offer and sale
of the Shares by the Underwriters or by the rules and regulations of the NASD.
(k) There has not occurred any material adverse change, or development
involving a prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and the
Subsidiary, taken as a whole, from that set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement).
(l) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, (i) the Company and the
Subsidiary have not incurred any material liability or obligation, direct or
contingent, nor entered into any material transaction not in the ordinary course
of business; (ii) the Company has not purchased any of its outstanding capital
stock, nor declared, paid or otherwise made any dividend or distribution of any
kind on its capital stock other than ordinary and customary dividends; and (iii)
there has not been any material change in the capital stock, short-term debt or
long-term debt of the Company and the Subsidiary, except in each case as
described in or contemplated by the Prospectus.
(m) There are no legal or governmental proceedings pending or, to the
best of the Company's knowledge, threatened to which the Company or the
Subsidiary is a party or to which any of the properties of the Company or the
Subsidiary is subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or any statutes,
regulations, contracts or other documents that are required to be described in
the Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required
(n) Each of the Company and the Subsidiary has all necessary consents,
authorizations, approvals, orders, certificates and permits of and from, and has
made all declarations and filings with, all federal, state, local, foreign and
other governmental or regulatory authorities, all self-regulatory organizations
and all courts and other tribunals, to own, lease, license and use its
properties and assets and to conduct its business in the manner described in the
Prospectus, except to the extent that the failure to obtain or file would not
have a material adverse effect on the Company and the Subsidiary taken as a
whole. Neither the Company nor the Subsidiary has received any notice of
proceedings related to the revocation or modification of any such consent,
authorization, approval, order, certificate or permit which, singly or in the
aggregate, if the subject of any unfavorable decision, ruling or finding, would
result in a material adverse change in the condition, financial or otherwise, or
in the earnings, business or operations of the Company and the Subsidiary, taken
as a whole, except as described in or contemplated by the Prospectus.
(o) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 or Rule 462 under the Securities Act, complied when so
filed in all material respects with the Securities Act and the rules and
regulations of the Commission thereunder, except for the omission of a price
range and other information derived therefrom.
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(p) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described in
the Prospectus will not be, an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended.
(q) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to file a registration statement under
the Securities Act with respect to any securities of the Company or to require
the Company to include such securities with the Shares registered pursuant to
the Registration Statement.
(r) The Company and the Subsidiary are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; neither the Company nor the Subsidiary has been refused any insurance
coverage sought or applied for; and neither the Company nor the Subsidiary has
any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that
would not materially and adversely affect the condition, financial or otherwise,
or the earnings, business or operations of the Company and the Subsidiary, taken
as a whole, except as described in or contemplated by the Prospectus.
(s) The Company and the Subsidiary (i) are in compliance with any and
all applicable foreign, federal, state and local laws and regulations relating
to the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants (collectively,
"Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions
of any such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a material
adverse effect on the Company and the Subsidiary, taken as a whole.
(t) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with Environmental
Laws or any permit, licenses or approval, any related constraints on operating
activities and any potential liabilities to third parties) which would, singly
or in the aggregate, have a material adverse effect on the Company and the
Subsidiary, taken as a whole.
(u) Except as disclosed in the Prospectus, (i) the Company and the
Subsidiary own or possess, or can acquire on reasonable terms, adequate licenses
or other rights to use all material patents, copyrights, trademarks, service
marks, trade names, technology and know-how currently employed by them to
conduct their respective business in the manner described in the Prospectus,
(ii) neither the Company nor the Subsidiary has received any notice of
infringement or conflict with (and neither the Company nor the Subsidiary knows
of any infringement or conflict with) asserted rights of others with respect to
any patents, copyrights, trademarks, service
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marks, trade names, trade secrets, technology or know-how which could reasonably
be expected to result in any material adverse effect upon the Company and the
Subsidiary, taken as a whole, and (iii) the discoveries, inventions, products or
processes of the Company and the Subsidiary referred to in the Prospectus do
not, to the best knowledge of the Company or the Subsidiary, infringe or
conflict with any right or patent of any third party, or any discovery,
invention, product or process which is the subject of a published patent
application filed by any third party, known to the Company or the Subsidiary
which could reasonably be expected to have a material adverse effect on the
Company and the Subsidiary, taken as a whole.
(v) Each of the Company and the Subsidiary maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(w) No material labor dispute with the employees of the Company or the
Subsidiary exists, except as described in or contemplated by the Prospectus, or,
to the best knowledge of the Company, is imminent; and, without conducting any
independent investigation, the Company is not aware of any existing, threatened
or imminent labor disturbance by the employees of any of its principal
suppliers, manufacturers or contractors that could reasonably be expected to
have a material adverse effect on the Company and the Subsidiary, taken as a
whole.
(x) All outstanding shares of Common Stock, and all securities
convertible into or exercisable or exchangeable for Common Stock, are subject to
valid, binding and enforceable agreements (collectively, the "Lock-up
Agreements") that restrict the holders thereof from selling, making any short
sale of, granting any option for the purchase of, or otherwise transferring or
disposing of, any of such shares of Common Stock, or any such securities
convertible into or exercisable or exchangeable for Common Stock, for a period
of 180 days after the date of the Prospectus without the prior written consent
of the Company or Xxxxxx Xxxxxxx & Co. Incorporated.
(y) The Company (i) has notified each holder of a currently outstanding
option issued under either the 1996 Incentive Stock Option Plan No. 1 or the
1996 Incentive Stock Option Plan No. 2 (collectively, the "Option Plan") and
each person who has acquired shares of Common Stock pursuant to the exercise of
any option granted under the Option Plan that pursuant to the terms of the
Option Plan, none of such options or shares may be sold or otherwise transferred
or disposed of for a period of 180 days after the date of the initial public
offering of the Shares and (ii) has imposed a stop-transfer instruction with the
Company's transfer agent in order to enforce the foregoing lock-up provision
imposed pursuant to the Option Plan.
(z) As of the date the Registration Statement becomes effective, the
Series A Common Stock will be authorized for listing on the Nasdaq National
Market upon official notice of issuance.
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(aa) The Company has complied with all provisions of Section
517.075, Florida Statutes, relating to doing business with the Government
of Cuba or any person or affiliate located in Cuba.
Furthermore, the Company represents and warrants to Xxxxxx Xxxxxxx
that (i) the Registration Statement, the Prospectus and any preliminary
prospectus comply, and any further amendments or supplements thereto will
comply, with any applicable laws or regulations of foreign jurisdictions in
which the Prospectus or any preliminary prospectus, as amended or supplemented,
if applicable, are distributed in connection with the Directed Share Program,
and that (ii) no authorization, approval, consent, license, order, registration
or qualification of or with any government, governmental instrumentality or
court, other that such as have been obtained, is necessary under the securities
laws and regulations of foreign jurisdictions in which the Directed Shares are
offered outside the United States.
II.
The Company hereby agrees to sell to the several Underwriters, and
each Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees, severally
and not jointly, to purchase from the Company the respective numbers of Firm
Shares set forth in Schedule I hereto opposite the name of such Underwriter at
$_______ a share (the "Purchase Price").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters the Additional Shares, and the Underwriters shall have a
one-time right to purchase, severally and not jointly, up to [________________]
Additional Shares at the Purchase Price. If, you, on behalf of the
Underwriters, elect to exercise such option, you shall so notify the Company in
writing not later than 30 days after the date of this Agreement, which notice
shall specify the number of Additional Shares to be purchased by the
Underwriters and the date on which such shares are to be purchased. Such date
may be the same as the Closing Date (as defined below) but not earlier than the
Closing Date nor later than ten business days after the date of such notice.
Additional Shares may be purchased as provided in Article IV hereof solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. If any Additional Shares are to be purchased, each Underwriter
agrees, severally and not jointly, to purchase the number of Additional Shares
(subject to such adjustments to eliminate fractional shares as you may
determine) that bears the same proportion to the total number of Additional
Shares to be purchased as the number of Firm Shares set forth in Schedule I
hereto opposite the name of such Underwriter bears to the total number of Firm
Shares.
The Company hereby agrees that, without the prior written consent of
Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the Underwriters, it will not,
during the period ending 180 days after the date of the Prospectus, (1) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, or (2) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall
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not apply to (i) the Shares to be sold hereunder and (ii) the Company's issuance
of Common Stock upon the exercise of warrants and stock options that are
presently outstanding and described as such in the Prospectus, or any other
issuances of Common Stock hereafter under the option or equity incentive plans
described in the Prospectus, and (iii) the Company's issuance of Common Stock
under the employee stock purchase plan described in the Prospectus.
III.
The Company is advised by you that the Underwriters propose to make a
public offering of their respective portions of the Shares as soon after the
Registration Statement and this Agreement have become effective as in your
judgment is advisable. The Company is further advised by you that the Shares are
to be offered to the public initially at $___________ a share (the "Public
Offering Price") and to certain dealers selected by you at a price that
represents a concession not in excess of $_____ a share under the Public
Offering Price, and that any Underwriter may allow, and such dealers may
reallow, a concession, not in excess of $________ a share, to any Underwriter or
to certain other dealers.
IV.
Payment for the Firm Shares shall be made to the Company in Federal or
other funds immediately available in New York City against delivery of such Firm
Shares for the respective accounts of the several Underwriters at 10:00 A.M.,
New York City time, on [_____________, 1997], or at such other time on the same
or such other date, not later than [_____________, 1997], as shall be designated
in writing by you. The time and date of such payment are hereinafter referred
to as the "Closing Date".
Payment for Additional Shares shall be made to the Company in Federal
or other funds immediately available in New York City against delivery of such
Additional Shares for the respective accounts of the several Underwriters at
10:00 A.M., New York City time, on the date specified in the notice described in
Article II or at such other time on the same or on such other date, in any event
not later than [____________, 1997] as shall be designated in writing by you.
The time and date of such payment are hereinafter referred to as the "Option
Closing Date."
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
V.
The obligations of the Company to sell the Shares to the Underwriters
and the several obligations of the Underwriters to purchase and pay for the
Shares on the Closing Date are subject to the
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condition that the Registration Statement shall have become effective not later
than 5:30 P.M. (New York City time) on the date hereof.
The several obligations of the Underwriters hereunder are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any of the Company's securities by
any "nationally recognized statistical rating organization," as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act, and
(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise, or
in the earnings, business or operations, of the Company and the Subsidiary,
taken as a whole, from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement)
that, in your judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by the chief executive officer
and the chief financial officer of the Company on behalf of the Company, to
the effect set forth in clause (a) above, and to the effect that the
representations and warranties of the Company contained in this Agreement are
true and correct in all material respects as of the Closing Date and that the
Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or before
the Closing Date.
The officers signing and delivering such certificate may rely upon
the best of their knowledge as to proceedings threatened.
(c) You shall have received on the Closing Date an opinion of Fenwick &
West LLP counsel for the Company, dated the Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly existing as
a corporation in good standing under the laws of the State of Delaware,
has the corporate power and corporate authority to own its property and
to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in ____________,
____________, ____________. All of the issued shares of capital stock of
the Subsidiary have been duly and validly authorized and issued, are
fully paid and non-assessable and, to such counsel's knowledge, are
owned directly by the Company, free and clear of all liens,
encumbrances, equities or claims;
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(ii) the Subsidiary has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and corporate authority to own its
property and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in ________, ________,
________;
(iii) the authorized capital stock of the Company conforms in all
material respects as to legal matters to the description thereof contained in
the Prospectus;
(iv) the shares of Common Stock outstanding prior to the issuance of the
Shares have been duly authorized, are validly issued and non-assessable, and to
such counsel's knowledge, are fully paid;
(v) the Shares have been duly authorized, and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and, to such counsel's knowledge, the
issuance of such Shares will not be subject to any preemptive rights, rights of
first refusal or similar rights;
(vi) to such counsel's knowledge, no shares of Common Stock are required
pursuant to any agreement or other right to be registered under the Registration
Statement, and no person or entity has any right to cause Common Stock to be
registered under the Registration Statement, which rights have not been validly
waived;
(vii) this Agreement has been duly authorized, executed and delivered by
the Company;
(viii) the execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement will not contravene any
provision of the certificate of incorporation or by-laws of the Company or the
Subsidiary, to such counsel's knowledge, any agreement or other instrument
binding upon the Company or the Subsidiary that is material to the Company and
the Subsidiary (where such agreements and instruments have been identified to
such counsel by the Company as all material agreements and instruments binding
on the Company and the Subsidiary), taken as a whole, or, to such counsel's
knowledge, any judgement, order or decree of any governmental body, agency or
court having jurisdiction over the Company or the Subsidiary that specifically
refers to or is binding on the Company, and no consent, approval, authorization
or order of or qualification with any governmental body or governmental agency
is required for the performance by the Company of its obligations under this
Agreement, except such as may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of the Shares by the
Underwriters or the rules and regulations of the NASD (as to which such counsel
need not express any opinion);
(ix) the statements (1) in the Prospectus under the captions "Risk
Factors--Shares Eligible for Future Sale," "Dividend Policy," "Certain
Transactions," "Description of Capital Stock," "Shares Eligible for Future Sale"
and, to the extent such
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statements summarize this Agreement, "Underwriters" and (2) in the
Registration Statement in Items 14 and 15, in each case insofar as such
statements constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly present the information called
for with respect to such legal matters, documents and proceedings and
fairly summarize the matters referred to therein;
(x) such counsel does not know of any legal, regulatory or
governmental proceeding pending or threatened to which the Company or
the Subsidiary is a party or to which any of the properties of the
Company or the Subsidiary is subject that are required to be described
in the Registration Statement or the Prospectus and are not so described
or of any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the Prospectus
or, in the case of contracts or other documents, to be filed as exhibits
to the Registration Statement that are not described of filed as
required;
(xi) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the net proceeds
therefrom as described in the Prospectus will not be, and "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended;
(xii) to such counsel's knowledge: (1) based solely on oral
advice of the Staff of the Commission, the Registration Statement has
become effective under the Securities Act; (2) no stop order proceedings
with respect to the Registration Statement have been instituted or are
pending or threatened under the Securities Act and nothing has come to
such counsel's attention to lead it to believe that such proceedings are
contemplated; and (3) are required filing of the Prospectus and any
supplement thereto pursuant to Rule 424(b) under the Securities Act has
been made in the manner and within the time period required by such Rule
424(b);
(xiii) based on a letter from Nasdaq Stock Market, the Shares to
be sold under this Agreement to the Underwriters are duly authorized for
quotation on the Nasdaq National Market; and
(xiv) In addition to the matters set forth above, counsel
rendering the foregoing opinion shall also include a statement to the effect
that nothing has come to the attention of such counsel that causes it to believe
that (i) the Registration Statement (except as to the financial statements, the
notes thereto and the other financial and statistical data contained therein, as
to which such counsel need not express any opinion or belief) at the date the
Registration Statement became effective contained any 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, (2) the Prospectus
(except as to the financial statements, the notes thereto and the other
financial and statistical data contained therein, as to which such counsel need
not express any opinion or belief) as of its date contained or contains any
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or (3) the Registration
Statement or the Prospectus (except as to the financial statements, the notes
thereto and the other financial and statistical data contained therein, as to
which such counsel need not express
-11-
any opinion or belief) did not comply as to form in all material respects with
the Securities Act and the applicable rules and regulations thereunder.
The opinion of Fenwick & West LLP described in this paragraph (c)
above shall be rendered to the Underwriters at the request of the Company,
and shall so state therein.
(d) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, counsel for the Underwriters,
dated the Closing Date, covering the matters referred to in subparagraphs
(v), (vii), (ix) (but only as to the statements in the Prospectus under
"Description of Capital Stock" and "Underwriters"), (xi) and (xiv) of
paragraph (c) above.
With respect to subparagraph (xiv) of paragraph (c) above, Fenwick &
West LLP and Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx may state that their opinion and
belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
and reviewed and discussion of the contents thereof, but are without independent
check or verification except as specified.
(e) The Underwriters shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to the Underwriters,
from Ernst & Young LLP, independent public accountants, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in the Registration Statement
and the Prospectus; provided that the letter delivered on the Closing Date
shall use a "cut-off date" not earlier than the date hereof.
(f) The Lock-Up Agreements, each substantially in the form of Exhibit
A hereto, between the Underwriters and certain stockholders, officers and
directors of the Company relating to sales and certain other dispositions
of shares of Common Stock or certain other securities, delivered to you on
or before the date hereof, shall be in full force and effect on the Closing
Date.
(g) The shares of Series A Common Stock of the Company shall have
received approval for listing, upon official notice of issuance, on the
Nasdaq National Market.
All the agreements, opinions, certificates and letters mentioned above
or elsewhere in this Agreement shall be deemed in compliance with the provisions
hereof only if Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, counsel for the Underwriters,
shall be reasonably satisfied that they comply in form and scope.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the delivery to you on the Option Closing Date
of such documents as they may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of the Additional
Shares and other matters related to the issuance of the Additional Shares.
-12-
VI.
In further consideration of the agreements of the Underwriters herein
contained, the Company covenants with each Underwriter as follows:
(a) To furnish to you, without charge, four (4) signed copies of the
Registration Statement (including exhibits thereto) and for delivery to each
other Underwriter a conformed copy of the Registration Statement (without
exhibits thereto), and to furnish to you in New York City, without charge,
prior to 5:00 P.M. New York City time on the business day next succeeding
the date of this Agreement and during the period mentioned in paragraph (c)
below, as many copies of the Prospectus and any supplements and amendments
thereto or to the Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the reasonable opinion of Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, counsel for the Underwriters, the Prospectus is required
by law to be delivered in connection with sales by an Underwriter or dealer,
any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, or if, in the reasonable opinion
of counsel for the Underwriters, it is necessary to amend or supplement the
Prospectus to comply with applicable law, forthwith to prepare, file with
the Commission and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses you will furnish to the Company) to
which Shares may have been sold by you on behalf of the Underwriters and to
any other dealers upon request, either amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the Prospectus
is delivered to a purchaser, be misleading or so that the Prospectus, as
amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdiction as you shall reasonably
request.
(e) To make generally available to the Company's security holders
and to you as soon as practicable an earning statement covering the twelve-
month period ending September 30, 1998 that satisfies the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
(f) During a period of three years from the effective date of the
Registration Statement, the Company will furnish to you copies of (i) all
reports to its stockholders and (ii) all
-13-
reports, financial statements and proxy or information statements filed by the
Company with the Commission or any national securities exchange.
(g) The Company will apply the proceeds from the sale of the Shares as set
forth under in "Use of Proceeds" in the Prospectus.
(h) The Company will use its best efforts to obtain and maintain in effect
the quotation of the Shares on the Nasdaq National Market and will take all
necessary steps to cause the Shares to be included on the Nasdaq National Market
as promptly as practicable and to maintain such inclusion for a period of three
years after the date hereof or until such earlier date as the Shares shall be
listed for regular trading privileges on another national securities exchange
approved by you.
(i) The Company will file with the Commission such reports on Form SR as
may be required pursuant to Rule 463 under the Securities Act.
(j) The Company will comply with all registration, filing and reporting
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), which may from time to time be applicable to the Company.
(k) The Company will comply with all provisions of all undertakings
contained in the Registration Statement.
(l) Prior to the Closing Date, the Company will not, directly or
indirectly, issue any press release or other communication and will not hold any
press conference with respect to the Company, or its financial condition,
results of operations, business, properties, assets, or prospects or this
offering, without your prior written consent.
(m) The Company agrees: (i) to enforce the terms of each Lock-up Agreement
and (ii) issue stop-transfer instructions to the transfer agent for the Common
Stock with respect to any transaction or contemplated transaction that would
constitute a breach of or default under the applicable Lock-up Agreement. In
addition, except with the prior written consent of Xxxxxx Xxxxxxx, the Company
agrees (i) not to amend or terminate, or waive any right under, any Lock-up
Agreement, or take any other action that would directly or indirectly have the
same effect as an amendment or termination, or waiver of any right under, any
Lock-up Agreement, that would permit any holder of shares of Common Stock, or
securities convertible into or exercisable or exchangeable for Common Stock, to
sell, make any short sale of, grant any option for the purchase of, or otherwise
transfer or dispose of, any of such shares of Common Stock or other securities
prior to the expiration of 180 days after the date of the Prospectus, an (ii)
not to consent to any sale, short sale, grant of an option for the purchase of,
or other disposition or transfer of shares of Common Stock, or securities
convertible into or exercisable or exchangeable for Common Stock, subject to a
Lock-up Agreement.
(n) The Company will place a restrictive legend on any shares of Common
Stock acquired pursuant to the exercise, after the date hereof and prior to the
expiration of the 180-day period after the date of the initial public offering
of the Shares, of any option granted
-14-
under the Option Plan, which legend shall restrict the transfer of such shares
prior to the expiration of such 180-day period. In addition, the Company agrees
that, without the prior written consent of Xxxxxx Xxxxxxx, it will not release
any stockholder or option holder from the market standoff provision imposed by
the Company pursuant to the terms of the Option Plan earlier than 180 days after
the date of the initial public offering of the Shares.
(o) In connection with the Direct Share Program, the Company will
ensure that the Directed Shares will be restricted to the extent required by the
National Association of Securities Dealers, Inc. (the "NASD") or the NASD rules
from sale, transfer, assignment, pledge or hypothecation for a period of three
months following the date of the effectiveness of the Registration Statement.
Xxxxxx Xxxxxxx will notify the Company as to which Participants will need to be
so restricted. The Company will direct the transfer agent to place stop
transfer restrictions upon such securities for such period of time.
(p) The Company will pay all fees and disbursements of counsel
incurred by the Underwriters in connection with the Directed Share Program and
stamp duties, similar taxes or duties or other taxes, if any, incurred by the
Underwriters in connection with the Directed Share Program.
Furthermore, the Company covenants with Xxxxxx Xxxxxxx that the Company
will comply with all applicable securities and other applicable laws,
rules and regulations in each foreign jurisdiction in which the Directed
Shares are offered in connection with the Directed Share Program.
VII.
The Company agrees, whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of its obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the Company's
counsel and the Company's accountants in connection with the registration and
delivery of the Shares under the Securities Act and all other fees or expenses
in connection with the preparation and filing of the Registration Statement, any
preliminary prospectus, the Prospectus and amendments and supplements to any of
the foregoing, including all printing costs associated therewith, and the
mailing and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon, (iii) the cost of printing or producing any Blue
Sky or Legal Investment memorandum in connection with the offer and sale of the
Shares under state securities laws, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection with the
Blue Sky or Legal Investment memorandum, (iv) all filing fees and the reasonable
fees and disbursements (including filing fees) of counsel to the Underwriters
incurred in connection with the review and qualification of the offering of the
Shares by the NASD (v) all fees and expenses in connection with the preparation
and filing of the registration statement on Form 8-A relating to the Common
Stock and all costs and expenses incident to listing the Shares on the Nasdaq
National Market, (vi) the cost of printing certificates representing the Shares,
(vii) the costs and charges
-15-
of any transfer agent, registrar or depositary, (viii) the costs and expenses of
the Company relating to investor presentations on any "road show" undertaken in
connection with the marketing of the offering of the Shares, including, without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the
road show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection with the road
show, and (ix) all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise made
in this Article VII. It is understood, however, that except as provided in this
Article VII, Article VIII and the last paragraph of Article X below, the
Underwriters will pay all of their costs and expenses, including fees and
disbursements of their counsel, stock transfer taxes payable on resale of any of
the Shares by them and any advertising expenses connected with any offers they
may make.
VIII.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act, from
and against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any amendment thereof, any preliminary prospectus
or the Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein; and provided further
that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Shares, or any person controlling such Underwriter, if a copy of the Prospectus
(as then amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person at or prior to the written confirmation of the sale
of the Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses, claims,
damages or liabilities.
(b) The Company agrees to indemnify and hold harmless Xxxxxx Xxxxxxx
and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx"),
respectively, and each person, if any, who controls Xxxxxx Xxxxxxx and Xxxxxxx
Xxxxx, as the case may be, and within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act (respectively, the "Xxxxxx
Xxxxxxx Entities" and "Xxxxxxx Xxxxx Entities"), from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such
-16-
action or claim) (i) caused by any untrue statement or alleged untrue statement
of a material fact contained in the prospectus wrapper material prepared by or
with the consent of the Company for distribution in foreign jurisdictions in
connection with the Directed Share Program attached to the Prospectus or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, when considered in conjunction with the Prospectus or any
applicable preliminary prospectus, not misleading; (ii) caused by the failure
of any Participant to pay for and accept delivery of the shares which,
immediately following the effectiveness of the Registration Statement, were
subject to a properly confirmed agreement to purchase; or (iii) related to,
arising out of, or in connection with the Directed Share Program, provided
that, the Company shall not be responsible under this clause (iii) for any
losses, claim, damages or liabilities (or expenses relating thereto) that are
finally judicially determined to have resulted from the bad faith or gross
negligence of Xxxxxx Xxxxxxx Entities or Xxxxxxx Xxxxx Entities, as the case
may be.
(c) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, the directors of the Company, the officers of the
Company who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the indemnity from
the Company to such Underwriter set forth in paragraph (a) of this Article VIII,
but only with reference to information relating to such Underwriter furnished to
the Company in writing by or on behalf of such Underwriter through you expressly
for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(d) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to paragraph (a), (b) or (c) of this Article VIII, such person
(the "Indemnified Party") shall promptly notify the person against whom such
indemnity may be sought (the "Indemnifying Party") in writing and the
Indemnifying Party, upon request of the Indemnified Party, shall retain counsel
reasonably satisfactory to the Indemnified Party to represent the Indemnified
Party and any others the Indemnifying Party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any Indemnified Party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the Indemnifying Party and the Indemnified Party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the Indemnifying Party
shall not, in respect of the legal expenses of any Indemnified Party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such Indemnified Parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Xxxxxx Xxxxxxx in the case of parties indemnified
pursuant to paragraph (a) of this Article VIII, and by the Company in the case
of parties indemnified pursuant to the paragraph (c) of this Article VIII.
-17-
Notwithstanding anything contained herein to the contrary, if indemnity may be
sought pursuant to paragraph (b) of this Article VIII in respect of such action
or proceeding, then in addition to such separate firm for the Indemnified
Parties, the Indemnifying Party shall be liable for the reasonable fees and
expenses of not more that one separate firm (in addition to any local counsel)
for Xxxxxx Xxxxxxx and Xxxxxxx Xxxxx for the defense of any losses, claims,
damages and liabilities arising out of the Directed Share Program, and all
persons, if any who control Xxxxxx Xxxxxxx and Xxxxxxx Xxxxx, respectively,
within the meaning of either Section 15 of the Act or Section 20 of the Exchange
Act. The Indemnifying Party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgement for the plaintiff, the Indemnifying
Party agrees to indemnify the Indemnified Party from and against any loss or
liability by reason of such settlement or judgement. Notwithstanding the
foregoing sentence, if at any time an Indemnified Party shall have requested an
Indemnifying Party to reimburse the Indemnified Party for fees and expenses of
counsel as contemplated by the second and third sentences of this paragraph, the
Indemnifying Party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Party of the
aforesaid request and (ii) such Indemnifying Party shall not have reimbursed the
Indemnified Party in accordance with such request prior to the date of such
settlement. No Indemnifying Party shall, without the prior written consent of
the Indemnified Party, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Party is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Party,
unless such settlement includes an unconditional release of such Indemnified
Party from all liability on claims that are the subject matter of such
proceeding.
(e) To the extent the indemnification provided for in paragraph (a), (b)
or (c) of this Article VIII is unavailable to an Indemnified Party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each Indemnifying Party under such paragraph, in lieu of
indemnifying such Indemnified Party thereunder, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other hand
in connection with the offering of the Shares shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Shares
(before deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate Public
Offering Price of the Shares. The relative fault of the Company on the one hand
and the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statements of a
material fact or the omission or alleged omission to state a material relates to
information supplied by the Company or by
-18-
the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute pursuant
to this Article VIII are several in proportion to the respective number of
Shares they have purchased hereunder, and not joint.
(f) The Company and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Article VIII 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 that does not take
account of the equitable considerations referred to in paragraph (e) of
this Article VIII. The amount paid or payable by an Indemnified Party as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably
incurred by such Indemnified Party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Article VIII, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The remedies provided for in this
Article VIII are not exclusive and shall not limit any rights or remedies
which may otherwise by available to any Indemnified Party at law or in
equity.
(g) The indemnity and contribution provisions contained in this
Article VIII and the representations, warranties and other statements of
the Company contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter or by or on behalf of the Company, its officers
or directors or any person controlling the Company and (iii) acceptance of
and payment for any of the Shares.
IX.
This Agreement shall be subject to termination by notice given by you
to the Company, if (a) after the execution and delivery of this Agreement and
prior to the Closing Date (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, the National Association of Securities
Dealers, Inc., the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (ii) trading of any securities of the
Company shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in New York
shall have been declared by either Federal or New York State authorities, or
(iv) there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in your judgement,
is material and adverse and (b) in the case of any of the events specified in
clauses (a)(i) through (iv), such event singly or together with any other such
event makes it, in your
-19-
judgment, impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
X.
This Agreement shall become effective upon execution and delivery
hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
that it has or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more that one-tenth of the
aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Shares set forth opposite their respective names in Schedule I bears to the
aggregate number of Firm Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may specify, to
purchase the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in no event shall the
--------
number of Shares that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Article X by an amount in excess of
one-ninth of such number of Shares without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall
fail or refuse to purchase Firm Shares and the aggregate number of Firm Shares
with respect to which such default occurs is more than one-tenth of the
aggregate number of Firm Shares to be purchased, and arrangements satisfactory
to you and the Company for the purchase of such Firm Shares are not made within
36 hours after such default, this Agreement shall terminate without liability on
the part of any non-defaulting Underwriter or the Company. In any such case
either you or the Company shall have the right to postpone the Closing Date, but
in no event for longer than seven days, in order that the required changes, if
any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. If, on the Option Closing Date, any
Underwriter or Underwriters shall fail or refuse to purchase Additional Shares
and the aggregate number of Additional Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Additional Shares to
be purchased, the non-defaulting Underwriters shall have the option to (i)
terminate their obligation hereunder to purchase Additional Shares or (ii)
purchase not less than the number of Additional Shares that such non-defaulting
Underwriters would have been obligated to purchase in the absence of such
default. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
-20-
This Agreement may be signed in two or more counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
-21-
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York.
Very truly yours,
AT HOME CORPORATION
By:
--------------------------------------
Xxxxxx X. Xxxxxxxx
Chairman of the Board, President and
Chief Executive Officer
Accepted as of the date hereof
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Alex, Xxxxx & Sons Incorporated
Xxxxxxxxx & Xxxxx LLC
Acting severally on behalf of themselves and the
several U.S. Underwriters named in Schedule I hereto
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:
------------------------------------
Xxxxxxx X. Xxxxxxxxx, Principal
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SCHEDULE I
----------
Underwriter Number of Firm Shares
--------------------------------------------------------- To Be Purchased
------ ---------------------
Xxxxxx Xxxxxxx & Co. Incorporated.........................
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated........
Xxxx Xxxxx & Sons Incorporated............................
Xxxxxxxxx & Xxxxx LLC.....................................
Total Firm Shares.....................
-23-
EXHIBIT A
AT HOME CORPORATION
FORM OF LOCK-UP AGREEMENT
May __, 1997
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxxxx & Xxxxx LLC
Xxxx. Xxxxx & Sons Incorporated
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Xxxxxx Xxxxxxx & Co. International Limited
Xxxxxxx Xxxxx International Limited
Xxxxxxxxx & Xxxxx LLC
Xxxx. Xxxxx International
c/o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X 00 0XX
Xxxxxxx
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx
Xxxxxxx") and Xxxxxx Xxxxxxx & Co. International Limited ("MSIL"), as
Representatives of the several Underwriters, propose to enter into an
Underwriting Agreement (the "Underwriting Agreement") with At Home Corporation,
a Delaware corporation (the "Company") providing for the initial public offering
(the "Public Offering") by the several Underwriters, including Xxxxxx Xxxxxxx
and MSIL (the "Underwriters"), of Series A Common Stock, $.01 par value per
share, of the Company (the "Common Stock").
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the undersigned
hereby agrees that, without the prior written consent of Xxxxxx Xxxxxxx on
behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 180 days after the date of the final prospectus relating
to the Public Offering (the "Prospectus"), (1) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, or otherwise transfer
or dispose of, directly or indirectly, any shares of Common Stock or any
securities
Xxxxxx Xxxxxxx & Co. Incorporated
May 16, 1997
Page 2
convertible into or exercisable or exchangeable for Common Stock (collectively
the "Shares") (provided that such Shares are either now owned by the undersigned
or are hereafter acquired prior to or in connection with the Public Offering),
or (2) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Shares,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to the sale of any Shares to
the Underwriters pursuant to the Underwriting Agreement. In addition, the
undersigned agrees that, without the prior written consent to Xxxxxx Xxxxxxx on
behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 180 days after the date of the Prospectus, make any
demand for, or exercise any right with respect to, the registration of any
shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock.
Notwithstanding the foregoing, if the undersigned is an individual, he
or she may transfer any or all of the Shares either during his or her lifetime
or on death by gift, will or intestacy to his or her immediate family or to a
trust the beneficiaries of which are exclusively the undersigned and/or a member
or members of his or her immediate family; provided, however, that in any such
case, it shall be a condition to the transfer that the transferee execute an
agreement stating that the transferee is receiving and holding the Shares
subject to the provisions of this Agreement, and there shall be no further
transfer of such Shares except in accordance with this Agreement. For purposes
of this paragraph, "immediate family" shall mean spouse, lineal descendant,
father, mother, brother or sister of the transferor.
In addition, notwithstanding the foregoing, if the undersigned is a
partnership, the partnership may transfer any Shares to a partner of such
partnership or a retired partner of such partnership who retires after the date
hereof, or to the estate of any such partner or retired partner, and any partner
who is an individual may transfer any such Shares by gift, will or intestate
succession to his or her spouse or lineal descendants or ancestors; if the
undersigned is a trust, the trust may transfer any Shares to any beneficiary of
such trust or to the estate of any such beneficiary, and any beneficiary who is
an individual may transfer any such Shares by gift, will or intestate
succession to his or her spouse or lineal descendants or ancestors; and if the
undersigned is a corporation, the corporation may transfer any Shares to any
shareholder of such corporation, and any shareholder who is an individual may
transfer any such Shares by gift, will or intestate succession, to his or her
spouse or lineal descendant or ancestors; provided however, that in any case, it
shall be a condition to the transfer that the transferee execute an agreement
stating that the transferee is receiving and holding the Shares subject to the
provisions of this Agreement, and there shall be no further transfer of such
Shares except in accordance with this Agreement.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to an
agreement between the Company and the Underwriters. This Agreement shall
terminate and be of no further effect if the Registration Statement for the
Public Offering
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Xxxxxx Xxxxxxx & Co. Incorporated
May 16, 1997
Page 3
is not declared effective by the Securities and Exchange Commission by December
31, 1997. The undersigned agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent against the transfer of
securities of the Company held by the undersigned except in compliance with the
terms and conditions of this Agreement.
Very truly yours,
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(Name)
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(Address)
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