Exhibit 1.01
DOVEBID, INC.
_____Shares of Common Stock, Par Value $0.001 Per Share
Underwriting Agreement
____________, 2002
X.X. Xxxxxx Securities Inc.
Xxxxxx Xxxxxx Partners LLC
US Bancorp Xxxxx Xxxxxxx Inc.
Pacific Crest Securities Inc.
As Representatives of the
several Underwriters listed
in Schedule 1 hereto
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx, 0/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
DoveBid, Inc., a Delaware corporation (the "Company"), proposes to issue
and sell to the several Underwriters listed in Schedule 1 hereto (the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"), an aggregate of [________] shares of Common Stock, par value
$ 0.001 per share, of the Company (the "Underwritten Shares") and, at the option
of the Underwriters, up to an additional [________] shares of Common Stock, par
value $0.001 per share, of the Company (the "Option Shares"). The Underwritten
Shares and the Option Shares are herein referred to as the "Shares". The shares
of Common Stock, par value $0.001 per share, of the Company to be outstanding
after giving effect to the sale of the Shares are herein referred to as the
"Stock".
US Bancorp Xxxxx Xxxxxxx ("Xxxxx Xxxxxxx") has agreed to reserve a portion
of the Shares to be purchased by it under this Agreement for sale to the
Company's directors, officers, employees and business associates and other
parties related to the Company (collectively, "Participants"), as set forth in
the Prospectus under the heading "Underwriting" (the "Directed Share Program").
The Shares to be sold by Xxxxx Xxxxxxx and its affiliates pursuant to the
Directed Share Program are referred to hereinafter as the "Directed Shares". Any
Directed Shares not orally confirmed for purchase by any Participant by the end
of the first business day on which the Shares are traded publicly will be
offered to the public by the Underwriters as set forth in the Prospectus.
The Company hereby confirms its agreement with the several Underwriters
concerning the purchase and sale of the Shares, as follows:
1. Registration Statement. The Company has prepared and filed with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of
1933, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Securities Act"), a registration statement (File No.
333-90068) including a prospectus, relating to the Shares. Such registration
statement, as amended at the time it becomes effective, including the
information, if any, deemed pursuant to Rule 430A under the Securities Act to be
part of the registration statement at the time of its effectiveness ("Rule 430
Information"), is referred to herein as the "Registration Statement"; and as
used herein, the term "Preliminary Prospectus" means each prospectus included in
such registration statement (and any amendments thereto) before it becomes
effective, any prospectus filed with the Commission pursuant to Rule 424(a)
under the Securities Act and the prospectus included in the Registration
Statement at the time of its effectiveness that omits Rule 430A Information, and
the term "Prospectus" means the prospectus in the form first used to confirm
sales of the Shares. If the Company has filed an abbreviated registration
statement 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.
2. Purchase of the Shares by the Underwriters. (a) The Company agrees to
issue and sell the Shares to the several Underwriters as provided in this
Agreement, and each Underwriter, on the basis of the representations, warranties
and agreements set forth herein and subject to the conditions set forth herein,
agrees, severally and not jointly, to purchase from the Company the respective
number of Underwritten Shares set forth opposite such Underwriter's name in
Schedule 1 hereto (or such increased number determined in accordance with
Section 9 hereof) at a price per share (the "Purchase Price") of $[_____].
In addition, the Company agrees to issue and sell the Option Shares to the
several Underwriters as provided in this Agreement, and the Underwriters, on the
basis of the representations, warranties and agreements set forth herein and
subject to the conditions set forth herein, shall have the option to purchase,
severally and not jointly, from the Company the Option Shares at the Purchase
Price.
If any Option Shares are to be purchased, the number of Option Shares to be
purchased by each Underwriter shall be the number of Option Shares which bears
the same ratio to the aggregate number of Option Shares being purchased as the
number of Underwritten Shares set forth opposite the name of such Underwriter in
Schedule 1 hereto (or such number increased as set forth in Section 9 hereof)
bears to the aggregate number of Underwritten Shares being purchased from the
Company by the several Underwriters, subject, however, to such adjustments to
eliminate any fractional Shares as the Representatives in their sole discretion
shall make, provided that such adjustments do not have the effect of causing the
number of Shares thereunder to exceed the total number of shares covered by the
Registration Statement.
The Underwriters may exercise the option to purchase the Option Shares at
any time (but not more than once) on or before the thirtieth day following the
date of this Agreement, by written notice from the Representatives to the
Company. Such notice shall set forth the aggregate number of Option Shares as to
which the option is being
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exercised and the date and time when the Option Shares are to be delivered and
paid for which may be the same date and time as the Closing Date (as hereinafter
defined) but shall not be earlier than the Closing Date nor later than the tenth
full business day (as hereinafter defined) after the date of such notice (unless
such time and date are postponed in accordance with the provisions of Section 9
hereof). Any such notice shall be given at least two Business Days prior to the
date and time of delivery specified therein.
(b) The Company understands that the Underwriters intend to make a public
offering of the Shares as soon after the effectiveness of this Agreement as in
the judgment of the Representatives is advisable, and initially to offer the
Shares on the terms set forth in the Prospectus. The Company acknowledges and
agrees that the Underwriters may offer and sell Shares to or through any
affiliate of an Underwriter and that any such affiliate may offer and sell
Shares purchased by it to or through any Underwriter.
(c) Payment for the Shares shall be made by wire transfer in immediately
available funds to the account specified by the Company to the Representatives
in the case of the Underwritten Shares, at the offices of Fenwick & West, Palo
Alto, California at 10:00 A.M. New York City time on [___________], 2002, or at
such other time or place on the same or such other date, not later than the
fifth business day thereafter, as the Representatives and the Company may agree
upon in writing or, in the case of the Option Shares, on the date and at the
time and place specified by the Representatives in the written notice of the
Underwriters' election to purchase such Option Shares. The time and date of such
payment for the Underwritten Shares is referred to herein as the "Closing Date"
and the time and date for such payment for the Option Shares, if other than the
Closing Date, are herein referred to as the "Additional Closing Date".
Payment for the Shares to be purchased on the Closing Date or the
Additional Closing Date, as the case may be, shall be made against delivery to
the Representatives for the respective accounts of the several Underwriters of
the Shares to be purchased on such date in definitive form registered in such
names and in such denominations as the Representatives shall request in writing
not later than two full business days prior to the Closing Date or the
Additional Closing Date, as the case may be, with any transfer taxes payable in
connection with the sale of the Shares duly paid by the Company. The
certificates for the Shares will be made available for inspection and packaging
by the Representatives at the office of X.X. Xxxxxx Securities Inc. set forth
above not later than 1:00 P.M., New York City time, on the business day prior to
the Closing Date or the Additional Closing Date, as the case may be.
3. Representations and Warranties of the Company. The Company represents
and warrants to each Underwriter that:
(a) Preliminary Prospectus. 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, complied in all material
respects with the Securities Act (except, in the case of the initially filed
Preliminary Prospectus, for the omission of an initial public offering price
range) and did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
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necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the
Company makes no representation and warranty with respect to any statements or
omissions made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by such Underwriter through
the Representatives expressly for use in any Preliminary Prospectus.
(b) Registration Statement and Prospectus. No order suspending the
effectiveness of the Registration Statement has been issued by the Commission
and no proceeding for that purpose has been initiated or, to the Company's
knowledge, threatened by the Commission; as of the applicable effective date of
the Registration Statement and any post-effective amendment thereto, the
Registration Statement complied and will comply in all material respects with
the Securities Act, and did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and as of the
applicable filing date of the Prospectus and any amendment or supplement thereto
and as of the Closing Date and as of the Additional Closing Date, as the case
may be, the Prospectus will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided that the Company makes no
representation and warranty with respect to any statements or omissions made in
reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement and the
Prospectus and any amendment or supplement thereto.
(c) Financial Statements. The financial statements and the related notes
thereto included in the Registration Statement and the Prospectus comply in all
material respects with the applicable requirements of the Securities Act and the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "Exchange Act"), as applicable, and
present fairly the financial position of the Company and its subsidiaries as of
the dates indicated and the results of their operations and the changes in their
cash flows for the periods specified; such financial statements have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods covered thereby, and the supporting
schedules included in the Registration Statement present fairly the information
required to be stated therein; the other financial information included in the
Registration Statement and the Prospectus has been derived from the accounting
records of the Company and its subsidiaries and presents fairly the information
shown thereby and the pro forma financial information and the related notes
thereto included in the Registration Statement and the Prospectus has been
prepared in accordance with the applicable requirements of the Securities Act
and the Exchange Act, as applicable, and the assumptions underlying such pro
forma financial information are reasonable and are set forth in the Registration
Statement and the Prospectus.
(d) No Material Adverse Change. Since the date of the most recent
financial statements of the Company included in the Registration Statement and
the Prospectus, (i)
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there has not been any material change in the capital stock or long-term debt of
the Company or any of its subsidiaries, or any dividend or distribution of any
kind declared, set aside for payment, paid or made by the Company on any class
of capital stock, or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the business, properties,
management, financial position, stockholders' equity, results of operations or
prospects of the Company and its subsidiaries taken as a whole; (ii) neither the
Company nor any of its subsidiaries has entered into any transaction or
agreement that is material to the Company and its subsidiaries taken as a whole
or incurred any liability or obligation, direct or contingent, that is material
to the Company and its subsidiaries taken as a whole; and (iii) neither the
Company nor any of its subsidiaries has sustained 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 disturbance or dispute or
any action, order or decree of any court or arbitrator or governmental or
regulatory authority, except in each case as otherwise disclosed in the
Registration Statement and the Prospectus.
(e) Organization and Good Standing. The Company and each of its
subsidiaries have been duly organized and are validly existing and in good
standing under the laws of their respective jurisdictions of organization, are
duly qualified to do business and are in good standing in each jurisdiction in
which their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged, except where the failure to be so
qualified or have such power or authority would not, individually or in the
aggregate, have a material adverse effect on the business, properties,
management, financial position, stockholders' equity, results of operations or
prospects of the Company and its subsidiaries taken as a whole (a "Material
Adverse Effect"). The Company does not own or control, directly or indirectly,
any corporation, association or other entity other than the subsidiaries listed
in Exhibit 21 to the Registration Statement.
(f) Capitalization. The Company has an authorized capitalization as set
forth in the Prospectus under the heading "Capitalization"; all the outstanding
shares of capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable and are not subject to any
pre-emptive or similar rights other than such rights as have been satisfied or
waived; except as described in or expressly contemplated by the Prospectus,
there are no outstanding rights (including, without limitation, pre-emptive
rights), warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock or other equity interest in the
Company or any of its subsidiaries, or any contract, commitment, agreement,
understanding or arrangement of any kind relating to the issuance of any capital
stock of the Company or any such subsidiary, any such convertible or
exchangeable securities or any such rights, warrants or options; the capital
stock of the Company conforms in all material respects to the description
thereof contained in the Registration Statement and the Prospectus; and all the
outstanding shares of capital stock or other equity interests of each subsidiary
of the Company have been duly and validly authorized and issued, are fully paid
and non-assessable and are owned directly or indirectly by the Company, free and
clear of any lien, charge, encumbrance, security interest, restriction on voting
or
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transfer or any other claim of any third party ("Encumbrances"), other than such
Encumbrances as are described in the Registration Statement.
(g) Due Authorization. The Company has full right, power and authority to
execute and deliver this Agreement and to perform its obligations hereunder; and
all action required to be taken for the due and proper authorization, execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby has been duly and validly taken.
(h) Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and legally
binding agreement of the Company enforceable against the Company in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally or
by equitable principles relating to enforceability.
(i) The Shares. The Shares to be issued and sold by the Company hereunder
have been duly authorized by the Company and, when issued and delivered and paid
for as provided herein, will be duly and validly issued and will be fully paid
and nonassessable and will conform to the descriptions thereof in the
Prospectus; and the issuance of the Shares is not subject to any preemptive or
similar rights that have not been validly waived.
(j) Descriptions of the Documents. There are no contracts or documents
which are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits thereto which have not been so described
and filed as required.
(k) No Violation or Default. Neither the Company nor any of its
subsidiaries is (i) in violation of its charter or by-laws or similar
organizational documents; (ii) in default, and no event has occurred that, with
notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in 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; or
(iii) in violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory authority,
except, in the case of clauses (ii) and (iii) above, for any such default or
violation that would not, individually or in the aggregate, have a Material
Adverse Effect.
(l) No Conflicts. The execution, delivery and performance by the Company
of this Agreement, the issuance and sale of the Shares and the consummation of
the transactions contemplated by this Agreement will not (i) conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or
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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, (ii) result in any violation of the
provisions of the charter or by-laws or similar organizational documents of the
Company or any of its subsidiaries or (iii) result in the violation of any law
or statute or any judgment, order, rule or regulation of any court or arbitrator
or governmental or regulatory authority, except, in the case of clauses (i) and
(iii) above, for any such conflict, breach, violation, default or lien that
would not, individually or in the aggregate, have a Material Adverse Effect.
(m) No Consents Required. No consent, approval, authorization, order,
registration or qualification of or with any court or arbitrator or governmental
or regulatory authority is required for the execution, delivery and performance
by the Company of this Agreement, the issuance and sale of the Shares and the
consummation of the transactions contemplated by this Agreement, except for the
registration of the Shares under the Securities Act and such consents,
approvals, authorizations, orders and registrations or qualifications as may be
required under applicable state or foreign securities laws in connection with
the purchase and distribution of the Shares by the Underwriters.
(n) Legal Proceedings. Except as described in the Prospectus, there are no
legal, governmental or regulatory investigations, actions, suits or proceedings
pending to which the Company or any of its subsidiaries is or may be a party or
to which any property of the Company or any of its subsidiaries is or may be the
subject that, individually or in the aggregate, if determined adversely to the
Company or any of its subsidiaries, could reasonably be expected to have a
Material Adverse Effect or materially and adversely affect the ability of the
Company to perform its obligations under this Agreement; no such investigations,
actions, suits or proceedings are, to the knowledge of the Company, threatened
or contemplated by any governmental or regulatory authority or threatened by
others; and (i) there are no current or pending legal, governmental or
regulatory actions, suits or proceedings that are required under the Securities
Act to be described in the Prospectus that are not so described and (ii) there
are no statutes, regulations or contracts or other documents that are required
under the Securities Act to be filed as exhibits to the Registration Statement
or described in the Registration Statement or the Prospectus that are not so
filed or described.
(o) Independent Accountants. Each of (i) Ernst & Young LLP, who have
certified certain financial statements of the Company and its subsidiaries,
TradeOut, Inc., AccuVal Associates, Incorporated, Liquitec Industries,
Incorporated, Greenwich Industrial Services, LLC, Haltek Electronics dba Test
Lab, Xxxxxxx Xxxxxx & Co., Xxxxxx Xxxx Associates, Inc. and its subsidiaries and
Xxxxxx Xxxxxx Team, each of which was filed with the Commission as a part of the
Registration Statement and included in the Prospectus, (ii) Virchow, Xxxxxx &
Company LLP have certified certain financial statements of ZoneTrader, Inc.,
which were filed with the Commission as a part of the Registration Statement and
included in the Prospectus, (iii) KPMG LLP, who have certified certain financial
statements of Levy/Xxxxxx, LLC and subsidiary, which were filed with the
Commission as a part of the Registration Statement and included in the
Prospectus, (iv) Xxxxx Xxxxxxxx LLP, who have certified certain financial
statements of
7
Xxxxxx Xxxx Associates, Inc. and subsidiaries and OneWeb Place, Inc., each of
which was filed with the Commission as a part of the Registration Statement and
included in the Prospectus, (v) KPMG Accountants N.V., who have certified
certain financial statements of Fairfield Industries, B.V., Haarden, which were
filed with the Commission as a part of the Registration Statement and included
in the Prospectus, and (vi) Xxxxxx Xxxxxxxx LLP, who have certified certain
financial statements of ZoneTrader, Inc. and Champion Computer Products, Inc.,
which were filed with the Commission as a part of the Registration Statement and
included in the Prospectus, are independent public accountants with respect to
the Company and its subsidiaries as required by the Securities Act.
(p) Title to Real and Personal Property. The Company and its subsidiaries
have good and marketable title in fee simple to, or have valid rights to lease
or otherwise use, all items of real and personal property that are material to
the respective businesses of the Company and its subsidiaries, in each case free
and clear of all liens, encumbrances, claims and defects and imperfections of
title except those that (i) do not materially interfere with the use made and
proposed to be made of such property by the Company and its subsidiaries or (ii)
could not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(q) Title to Intellectual Property. The Company and its subsidiaries own
or possess adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service xxxx
registrations, copyrights, licenses and know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures) necessary for the conduct of their respective businesses,
except where the failure to so own or possess such rights would not individually
or in the aggregate, have a Material Adverse Effect. To the Company's knowledge,
the conduct of their respective businesses will not conflict in any material
respect with any such rights of others, and the Company and its subsidiaries
have not received any notice of any claim of infringement or conflict with any
such rights of others that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(r) No Undisclosed Relationships. No relationship, direct or indirect,
exists between or among the Company or any of its subsidiaries, on the one hand,
and the directors, officers, stockholders, customers or suppliers of the Company
or any of its subsidiaries, on the other, that is required by the Securities Act
to be described in the Registration Statement and the Prospectus and that is not
so described.
(s) Investment Company Act. 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" or an entity
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, and the rules and regulations of the Commission
thereunder (collectively, "Investment Company Act").
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(t) Taxes. The Company and its subsidiaries have paid all material
federal, state, local and foreign taxes and filed all material tax returns
required to be paid or filed through the date hereof; and except as otherwise
disclosed in the Prospectus, there is no tax deficiency that has been, or could
reasonably be expected to be, asserted against the Company or any of its
subsidiaries or any of their respective properties or assets that would
reasonably be expected to have a Material Adverse Effect.
(u) Licenses and Permits. The Company and its subsidiaries possess all
licenses, certificates, permits and other authorizations issued by, and have
made all declarations and filings with, the appropriate federal, state, local or
foreign governmental or regulatory authorities that are necessary for the
ownership or lease of their respective properties or the conduct of their
respective businesses as described in the Registration Statement and the
Prospectus, except where the failure to possess or make the same would not,
individually or in the aggregate, have a Material Adverse Effect; and except as
described in the Prospectus, neither the Company nor any of its subsidiaries has
received notice of any revocation or modification of any such license,
certificate, permit or authorization or has any reason to believe that any such
license, certificate, permit or authorization will not be renewed in the
ordinary course.
(v) No Labor Disputes. No material labor disturbance by or dispute with
employees of the Company or any of its subsidiaries exists or, to the knowledge
of the Company, is contemplated or threatened that could have a Material Adverse
Effect.
(w) Compliance With Environmental Laws. The Company and its subsidiaries
(i) are in compliance with any and all applicable federal, state, local and
foreign laws, rules, regulations, decisions and orders 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 and are in compliance with all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses; and (iii) have not received notice of any actual or
potential liability for the investigation or remediation of any disposal or
release of hazardous or toxic substances or wastes, pollutants or contaminants,
except in any such case for any such failure to comply, or failure to receive
required permits, licenses or approvals, or liability as would not, individually
or in the aggregate, have a Material Adverse Effect.
(x) Payment of Tariffs and Other Duties. To the Company's knowledge, the
Company has paid all material tariff, custom, import, export and other duties
required to be paid by it (if any) in connection with the exportation of
products from the country of manufacture, the importation of products into the
United States, the exportation of products from the United States and the
importation of products into another country and has provided all appropriate
authorities with the requisite information, all of which, to the Company's
knowledge, is true and correct, necessary for the proper determination of the
foregoing.
(y) Compliance With ERISA. Each employee benefit plan, within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended
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("ERISA"), that is maintained, administered or contributed to by the Company or
any of its affiliates for employees or former employees of the Company and its
affiliates has been maintained in compliance with its terms and the requirements
of any applicable statutes, orders, rules and regulations, including but not
limited to ERISA and the Internal Revenue Code of 1986, as amended (the "Code")
in all material respects; no prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to
any such plan excluding transactions effected pursuant to a statutory or
administrative exemption; and for each such plan that is subject to the funding
rules of Section 412 of the Code or Section 302 of ERISA, no "accumulated
funding deficiency" as defined in Section 412 of the Code has been incurred,
whether or not waived, and the fair market value of the assets of each such plan
(excluding for these purposes accrued but unpaid contributions) exceeds the
present value of all benefits accrued under such plan determined using
reasonable actuarial assumptions except as would not have a Material Adverse
Effect.
(z) Accounting Controls. The Company and its subsidiaries maintain systems
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.
(aa) Insurance. The Company and its subsidiaries have insurance covering
their respective properties, operations, personnel and businesses, including
business interruption insurance, which insurance is in amounts and insures
against such losses and risks as it reasonably believes are adequate to protect
the Company and its subsidiaries and their respective businesses; and neither
the Company nor any of its subsidiaries has (i) received notice from any insurer
or agent of such insurer that capital improvements or other expenditures are
required or necessary to be made in order to continue such insurance or (ii) 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 at
reasonable cost from similar insurers as may be necessary to continue its
business.
(bb) No Unlawful Payments. Neither the Company nor any of its subsidiaries
nor, to the knowledge of the Company, any director, officer, agent, employee or
other person associated with or acting on behalf of the Company or any of its
subsidiaries has (i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political activity;
(ii) made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or is in
violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv)
made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
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(cc) No Restrictions on Subsidiaries. Except as disclosed in the Prospectus
and pursuant to the Senior Secured Credit Agreement dated March 29, 2002 between
the Company and Comerica Bank-California, no subsidiary of the Company is
currently prohibited, directly or indirectly, under any agreement or other
instrument to which it is a party or is subject, from paying any dividends to
the Company, from making any other distribution on such subsidiary's capital
stock, from repaying to the Company any loans or advances to such subsidiary
from the Company or from transferring any of such subsidiary's properties or
assets to the Company or any other subsidiary of the Company.
(dd) No Broker's Fees. Except as disclosed in the Prospectus, neither the
Company nor any of its subsidiaries is a party to any contract, agreement or
understanding with any person (other than this Agreement) that would give rise
to a valid claim against the Company or any of its subsidiaries or any
Underwriter for a brokerage commission, finder's fee or like payment in
connection with the offering and sale of the Shares.
(ee) No Registration Rights. Except as disclosed in the Prospectus, no
person has the right to require the Company or any of its subsidiaries to
register any securities for sale under the Securities Act by reason of the
filing of the Registration Statement with the Commission or the issuance and
sale of the Shares.
(ff) Business With Cuba. The Company has complied with all provisions of
Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida) relating to
doing business with the Government of Cuba or with any person or affiliate
located in Cuba.
(gg) Forward-Looking Statements. No forward-looking statement (as defined
in Section 27A of the Securities Act and Section 21E of the Exchange Act)
contained in the Registration Statement and the Prospectus has been made or
reaffirmed without a reasonable basis or has been disclosed other than in good
faith.
(hh) Statistical and Market Data. Other than the statistical information
sourced to the Bureau of Economic Analysis provided by X.X. Xxxxxx Securities
Inc., as to which the Company makes no representation, nothing has come to the
attention of the Company that has caused the Company to believe that the
statistical and market-related data included in the Registration Statement and
the Prospectus is not based on or derived from sources that are reliable and
accurate in all material respects.
(ii) The Registration Statement, the Prospectus and each Preliminary
Prospectus comply, and any 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.
(jj) No consent, approval, authorization or order of, or qualification
with, any governmental body or agency, other than those obtained, is required in
connection with the offering of the Directed Shares in any jurisdiction where
the Directed Shares are being offered.
11
(kk) The Company has not offered, or caused Xxxxx Xxxxxxx to offer, Shares
to any person pursuant to the Directed Share Program with the specific intent to
unlawfully influence (i) a customer or supplier of the Company to alter the
customer's or supplier's level or type of business with the Company, or (ii) a
trade journalist or publication to write or publish favorable information about
the Company or its products.
4. Further Agreements of the Company. The Company covenants and agrees
with each Underwriter that:
(a) Effectiveness of the Registration Statement. The Company will use its
reasonable best efforts to cause the Registration Statement to become effective
at the earliest possible time and, if required, will file the final Prospectus
with the Commission within the time periods specified by Rule 424(b) and Rule
430A under the Securities Act and the Company will furnish copies of the
Prospectus to the Underwriters in New York City prior to 10:00 A.M., New York
City time, on the business day next succeeding the date of this Agreement in
such quantities as the Representatives may reasonably request.
(b) Delivery of Copies. The Company will deliver, without charge, (i) to
the Representatives, five signed copies of the Registration Statement as
originally filed and each amendment thereto, in each case including all exhibits
and consents filed therewith; and (ii) to each Underwriter (A) a conformed copy
of the Registration Statement as originally filed and each amendment thereto
(without exhibits) and (B) during the Prospectus Delivery Period, as many copies
of the Prospectus (including all amendments and supplements thereto) as the
Representatives may reasonably request. As used herein, the term "Prospectus
Delivery Period" means such period of time after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters a
prospectus relating to the Shares is required by law to be delivered in
connection with sales of the Shares by any Underwriter or dealer.
(c) Amendments or Supplements. Before filing any amendment or supplement
to the Registration Statement or the Prospectus, the Company will furnish to the
Representatives and counsel for the Underwriters a copy of the proposed
amendment or supplement for review and will not file any such proposed amendment
or supplement to which the Representatives reasonably objects.
(d) Notice to the Representatives. The Company will advise the
Representatives promptly, and confirm such advice in writing, (i) when the
Registration Statement has become effective; (ii) when any amendment to the
Registration Statement has been filed or becomes effective; (iii) when any
supplement to the Prospectus or any amendment to the Prospectus has been filed;
(iv) of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or the receipt of any
comments from the Commission relating to the Registration Statement or any other
request by the Commission for any additional information; (v) of the issuance by
the Commission of any order suspending the effectiveness of the Registration
Statement or preventing or suspending the use of any Preliminary Prospectus or
the Prospectus or the initiation or threatening of any proceeding for that
purpose; (vi) of the occurrence of any event within the Prospectus
12
Delivery Period as a result of which the Prospectus as then amended or
supplemented would include 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 existing when the Prospectus is delivered to a
purchaser, not misleading; and (vii) of the receipt by the Company of any notice
with respect to any suspension of the qualification of the Shares for offer and
sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose; and the Company will use its best efforts to prevent the issuance
of any such order suspending the effectiveness of the Registration Statement,
preventing or suspending the use of any Preliminary Prospectus or the Prospectus
or suspending any such qualification of the Shares and, if any such order is
issued, will obtain as soon as possible the withdrawal thereof.
(e) Ongoing Compliance of the Prospectus. If during the Prospectus
Delivery Period (i) any event shall occur or condition shall exist 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 a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances existing when the Prospectus is delivered to a
purchaser, not misleading or (ii) it is necessary to amend or supplement the
Prospectus to comply with law, the Company will immediately notify the
Underwriters thereof and forthwith prepare and, subject to paragraph (c) above,
file with the Commission and furnish to the Underwriters and to such dealers as
the Representatives may designate, such amendments or supplements to the
Prospectus as may be necessary so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances existing
when the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus will comply with law.
(f) Blue Sky Compliance. The Company will qualify the Shares for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the
Representatives shall reasonably request and will continue such qualifications
in effect so long as required for distribution of the Shares; provided that the
Company shall not be required to (i) qualify as a foreign corporation or other
entity or as a dealer in securities in any such jurisdiction where it would not
otherwise be required to so qualify, (ii) file any general consent to service of
process in any such jurisdiction or (iii) subject itself to taxation in any such
jurisdiction if it is not otherwise so subject.
(g) Earning Statement. The Company will make generally available to its
security holders and the Representatives as soon as practicable an earning
statement that satisfies the provisions of Section 11(a) of the Securities Act
and Rule 158 of the Commission promulgated thereunder covering a period of at
least twelve months beginning with the first fiscal quarter of the Company
occurring after the "effective date" (as defined in Rule 158) of the
Registration Statement.
(h) Clear Market. For a period of 180 days after the date of the initial
public offering of the Shares, the Company will not (i) offer, pledge, announce
the intention to sell, 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 Stock or any securities convertible into or
13
exercisable or exchangeable for Stock or (ii) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic consequences
of ownership of the Stock, whether any such transaction described in clause (i)
or (ii) above is to be settled by delivery of Stock or such other securities, in
cash or otherwise, without the prior written consent of the Representatives,
other than (1) the Shares to be sold hereunder, (2) any shares of Stock of the
Company issued upon the exercise of options or warrants outstanding on the date
hereof, (3) grants to employees or consultants of options to purchase shares of
Stock under existing employee stock option plans as described in the Prospectus,
provided any such options are not exercisable within such 180-day period, (4)
shares of Stock issued under the Company's 2002 Employee Stock Purchase Plan as
described in the Prospectus or (5) shares of Stock issued in exchange for stock
or assets of another corporation in connection with mergers or acquisitions,
provided such shares are not registered under the Securities Act, the recipients
thereof enter into the form of lock-up agreement with the Representatives
attached hereto as Exhibit A for the remainder of the 180 day period and the
Company does not issue in excess of an aggregate of __________ Shares pursuant
to this clause (5).
(i) Use of Proceeds. The Company will apply the net proceeds from the sale
of the Shares as described in the Prospectus under the heading "Use of
Proceeds".
(j) No Stabilization. The Company will not take, directly or indirectly,
any action designed to or that could reasonably be expected to cause or result
in any stabilization or manipulation of the price of the Shares.
(k) Exchange Listing. The Company will use its best efforts to list for
quotation the Shares on the National Association of Securities Dealers Automated
Quotations National Market (the "Nasdaq National Market").
(l) Reports. So long as the Shares are outstanding, the Company will
furnish to the Representatives, as soon as they are available, copies of all
reports or other communications (financial or other) furnished to holders of the
Shares, and copies of any reports and financial statements furnished to or filed
with the Commission or any national securities exchange or automatic quotation
system.
(m) Filings. The Company will file with the Commission such reports as may
be required by Rule 463 under the Securities Act.
(n) To place stop transfer orders on any Directed Shares that have been
sold to Participants subject to the three month restriction on sale, transfer,
assignment, pledge or hypothecation imposed by NASD Regulation, Inc. under its
Interpretative Material 2110-1 on free-riding and withholding to the extent
necessary to ensure compliance with the three month restrictions.
14
(o) To comply with all applicable securities and other laws, rules and
regulations in each jurisdiction in which the Directed Shares are offered in
connection with the Directed Share Program.
5. Conditions of Underwriters' Obligations. The obligation of each
Underwriter to purchase the Underwritten Shares on the Closing Date or the
Option Shares on the Additional Closing Date, as the case may be, as provided
herein is subject to the performance by the Company of its covenants and other
obligations hereunder and to the following additional conditions:
(a) Registration Compliance; No Stop Order. The Registration Statement (or
if a post-effective amendment thereto is required to be filed under the
Securities Act, such post-effective amendment) shall have become effective, and
the Representatives shall have received notice thereof, not later than 5:00
P.M., New York City time, on the date hereof; no order suspending the
effectiveness of the Registration Statement shall be in effect, and no
proceeding for such purpose shall be pending before or threatened by the
Commission; the Prospectus shall have been timely filed with the Commission
under the Securities Act and in accordance with Section 4(a) hereof; and all
requests by the Commission for additional information shall have been complied
with to the reasonable satisfaction of the Representatives.
(b) Representations and Warranties. The representations and warranties of
the Company contained herein shall be true and correct on the date hereof and on
and as of the Closing Date or the Additional Closing Date, as the case may be;
and the statements of the Company and its officers made in any certificates
delivered pursuant to this Agreement shall be true and correct on and as of the
Closing Date or the Additional Closing Date, as the case may be.
(c) No Downgrade. Subsequent to the execution and delivery of this
Agreement, (i) no downgrading shall have occurred in the rating accorded any
securities or preferred stock of or guaranteed by the Company or any of its
subsidiaries by any "nationally recognized statistical rating organization", as
such term is defined by the Commission for purposes of Rule 436(g)(2) under the
Securities Act and (ii) no such organization shall have publicly announced that
it has under surveillance or review, or has changed its outlook with respect to,
its rating of any securities or preferred stock of or guaranteed by the Company
or any of its subsidiaries (other than an announcement with positive
implications of a possible upgrading).
(d) No Material Adverse Change. Subsequent to the execution and delivery
of this Agreement, no event or condition of a type described in Section 3(d)
hereof shall have occurred or shall exist, which event or condition is not
described in the Prospectus (excluding any amendment or supplement thereto) and
the effect of which in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the offering, sale or delivery of
the Shares on the Closing Date or the Additional Closing Date, as the case may
be, on the terms and in the manner contemplated by this Agreement and the
Prospectus.
15
(e) Officer's Certificate. The Representatives shall have received on and
as of the Closing Date or the Additional Closing Date, as the case may be, a
certificate signed on behalf of the Company by the chief financial officer or
chief accounting officer of the Company and one additional executive officer of
the Company who is reasonably satisfactory to the Representatives (i) confirming
that such officers have carefully reviewed the Registration Statement and the
Prospectus and, to the best knowledge of such officers, the representation set
forth in Section 3(b) hereof is true and correct, (ii) confirming that the other
representations and warranties of the Company in this Agreement are true and
correct and that the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to
such Closing Date and (iii) to the effect set forth in paragraphs (a), (c) and
(d) above.
(f) Comfort Letters. (i) On the date of this Agreement and on the Closing
Date or the Additional Closing Date, as the case may be, Ernst & Young LLP shall
have furnished to the Representatives, at the request of the Company, letters,
dated the respective dates of delivery thereof and addressed to the
Underwriters, in form and substance reasonably satisfactory to the
Representatives, containing statements and information of the type customarily
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 for (i) the Company, (ii) Trade Out,
Inc., AccuVal Associates, Incorporated, Liquitec Industries, Incorporated,
Greenwich Industrial Services, LLC, Haltek Electronics dba Test Lab, Xxxxxxx
Xxxxxx & Co., Xxxxxx Xxxx Associates, Inc. and its subsidiaries and Xxxxxx
Xxxxxx Team, wholly-owned subsidiaries of the Company; provided, that the
letters delivered on the Closing Date or the Additional Closing Date, as the
case may be, shall use a "cut-off" date no more than three business days prior
to such Closing Date or such Additional Closing Date, as the case may be.
(ii) On the date of this Agreement and on the Closing Date or the
Additional Closing Date, as the case may be, Virchow Xxxxxx & Co. LLP shall have
furnished to the Representatives, at the request of the Company, letters, dated
the respective dates of delivery thereof and addressed to the Underwriters, in
form and substance reasonably satisfactory to the Representatives, containing
statements and information of the type customarily 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 for ZoneTrader, Inc., a wholly-owned subsidiary of the Company;
provided, that the letters delivered on the Closing Date or the Additional
Closing Date, as the case may be, shall use a "cut-off" date no more than three
business days prior to such Closing Date or such Additional Closing Date, as the
case may be.
(iii) On the date of this Agreement and on the Closing Date or the
Additional Closing Date, as the case may be, KPMG LLP shall have furnished to
the Representatives, at the request of the Company, letters, dated the
respective dates of delivery thereof and addressed to the Underwriters, in form
and substance reasonably satisfactory to the Representatives, containing
statements and information of the type
16
customarily 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 for Levy/Xxxxxx, LLC, a
wholly-owned subsidiary of the Company and its subsidiary; provided, that the
letters delivered on the Closing Date or the Additional Closing Date, as the
case may be, shall use a "cut-off" date no more than three business days prior
to such Closing Date or such Additional Closing Date, as the case may be.
(iv) On the date of this Agreement and on the Closing Date or the
Additional Closing Date, as the case may be, Xxxxx Xxxxxxxx LLP shall have
furnished to the Representatives, at the request of the Company, letters, dated
the respective dates of delivery thereof and addressed to the Underwriters, in
form and substance reasonably satisfactory to the Representatives, containing
statements and information of the type customarily 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 for Xxxxxx Xxxx Associates, Inc. and its subsidiaries, and OneWeb
Place, Inc., wholly-owned subsidiaries of the Company; provided, that the
letters delivered on the Closing Date or the Additional Closing Date, as the
case may be, shall use a "cut-off" date no more than three business days prior
to such Closing Date or such Additional Closing Date, as the case may be.
(v) On the date of this Agreement and on the Closing Date or the
Additional Closing Date, as the case may be, KPMG Accountants N.V. shall have
furnished to the Representatives, at the request of the Company, letters, dated
the respective dates of delivery thereof and addressed to the Underwriters, in
form and substance reasonably satisfactory to the Representatives, containing
statements and information of the type customarily 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 for Fairfield Industries, B.V., Haarden, a wholly-owned subsidiary of
the Company; provided, that the letters delivered on the Closing Date or the
Additional Closing Date, as the case may be, shall use a "cut-off" date no more
than three business days prior to such Closing Date or such Additional Closing
Date, as the case may be.
(g) Opinion of Counsel for the Company. (i) Fenwick & West LLP, counsel
for the Company, shall have furnished to the Representatives, at the request of
the Company, their written opinion, dated the Closing Date or the Additional
Closing Date, as the case may be, and addressed to the Underwriters, in form and
substance reasonably satisfactory to the Representatives, to the effect set
forth in Annex A hereto.
(ii) Each of [_________], [________] and [___________], local counsel
for each of the Company's Significant Subsidiaries (as defined in Regulation
S-X) that is not incorporated in California or Delaware, shall have furnished to
the Representatives, at the request of the Company, their written opinion with
respect to such subsidiaries, dated the Closing Date or the Additional Closing
Date, as the case may be,
17
and addressed to the Underwriters, in form and substance reasonably satisfactory
to the Representatives, to the effect set forth in Annex B hereto.
(h) Opinion of Counsel for the Underwriters. The Representatives shall
have received on and as of the Closing Date or the Additional Closing Date, as
the case may be, an opinion of Xxxxx Xxxx & Xxxxxxxx, counsel for the
Underwriters, with respect to such matters as the Representatives may reasonably
request, and such counsel shall have received such documents and information as
they may reasonably request to enable them to pass upon such matters.
(i) No Legal Impediment to Issuance. No action shall have been taken and
no statute, rule, regulation or order shall have been enacted, adopted or issued
by any federal, state or foreign governmental or regulatory authority that
would, as of the Closing Date or the Additional Closing Date, as the case may be
prevent the issuance or sale of the Shares; and no injunction or order of any
federal, state or foreign court shall have been issued that would, as of the
Closing Date or the Additional Closing Date, as the case may be, prevent the
issuance or sale of the Shares.
(j) Good Standing. The Representatives shall have received on and as of
the Closing Date or the Additional Closing Date, as the case may be,
satisfactory evidence of the good standing of the Company and its subsidiaries
in their respective jurisdictions of organization and their good standing as
foreign entities in such other jurisdictions as the Representatives may
reasonably request, in each case in writing or any standard form of
telecommunication from the appropriate Governmental Authorities of such
jurisdictions.
(k) Exchange Listing. The Shares to be delivered on the Closing Date or
Additional Closing Date, as the case may be, shall have been approved for
listing on the Nasdaq National Market, subject to official notice of issuance.
(l) Lock-up Agreements. The "lock-up" agreements, each substantially in
the form of Exhibit A hereto, between you and certain shareholders, officers and
directors of the Company relating to sales and certain other dispositions of
shares of Stock or certain other securities, delivered to you on or before the
date hereof, shall be full force and effect on the Closing Date or Additional
Closing Date, as the case may be.
(m) Additional Documents. On or prior to the Closing Date or the
Additional Closing Date, as the case may be, the Company shall have furnished to
the Representatives such further certificates and documents as the
Representatives may reasonably request.
All opinions, letters, certificates and evidence mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
6. Indemnification and Contribution. (a) Indemnification of the
Underwriters. The Company agrees to indemnify and hold harmless each
Underwriter, its affiliates, directors and officers and each person, if any, who
controls such Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, from and
18
against any and all losses, claims, damages and liabilities (including, without
limitation, legal fees and other expenses incurred in connection with any suit,
action or proceeding or any claim asserted, as such fees and expenses are
incurred), joint or several, that arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) 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 in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except insofar as such
losses, claims, damages or liabilities arise out of, or are based upon, any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with any information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the
Representatives expressly for use therein, it being understood and agreed that
the only such information furnished by any Underwriter consists of the
information described as such in subsection (b) below; provided, that with
respect to any such untrue statement in or omission from any Preliminary
Prospectus, the indemnity agreement contained in this paragraph (a) shall not
inure to the benefit of any Underwriter to the extent that the sale to the
person asserting of any such loss, claim, damage or liability was an initial
resale by such Underwriter and any such loss, claim, damage or liability of or
with respect to such Underwriter results from the fact that both (i) to the
extent required by applicable law, a copy of the Prospectus was not sent or
given to such person at or prior to the written confirmation of the sale of such
Shares to such person and (ii) the untrue statement in or omission from such
Preliminary Prospectus was corrected in the Prospectus unless, in either case,
such failure to deliver the Prospectus was a result of non-compliance by the
Company with the provisions of Section 4 hereof. The Company agrees to indemnify
and hold harmless Xxxxx Xxxxxxx and each person, if any, who controls Xxxxx
Xxxxxxx within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act (the "Xxxxx Xxxxxxx 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 action or claim) (i) caused by any untrue statement or
alleged untrue statement of a material fact contained in any material prepared
by the Company for distribution to Participants in connection with the Directed
Share Program 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 arise out of, or are based upon, any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with any information relating to the Xxxxx Xxxxxxx Entities furnished to the
Company in writing by the Xxxxx Xxxxxxx Entities; (ii) caused by the failure of
any Participant to pay for and accept delivery of Directed Shares that the
Participant agreed to purchase, provided the Xxxxx Xxxxxxx Entities have used
reasonable efforts to mitigate; or (iii) related to, arising out of, or in
connection with the Directed Share Program, other than losses, claims, damages
or liabilities (or expenses relating thereto) that are finally judicially
determined to have resulted from the bad faith or gross negligence of the Xxxxx
Xxxxxxx Entities.
(b) Indemnification of the Company. Each Underwriter agrees, severally and
not jointly, to indemnify and hold harmless the Company, its directors, its
officers who
19
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the indemnity set forth in paragraph (a)
above, but only with respect to any losses, claims, damages or liabilities that
arise out of, or are based upon, any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with any
information relating to such Underwriter furnished to the Company in writing by
such Underwriter through the Representatives expressly for use in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto) or any Preliminary Prospectus, it being understood and agreed upon that
the only such information furnished by any Underwriter consists of the following
information in the Prospectus furnished on behalf of each Underwriter: the
concession and reallowance figures appearing in the _______ paragraph under the
caption "Underwriting", the information contained in the ________ paragraph
under the caption "Underwriting", and the following information in the
Prospectus furnished on behalf of _______ [insert name of Underwriter]: [insert
description of information, e.g., any material relationship described under the
caption "Underwriting"].
(c) Notice and Procedures. If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any person in respect of which indemnification may be sought
pursuant to either paragraph (a) or (b) above, such person (the "Indemnified
Person") shall promptly notify the person against whom such indemnification may
be sought (the "Indemnifying Person") in writing; provided that the failure to
notify the Indemnifying Person shall not relieve it from any liability that it
may have under this Section 6 or otherwise except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights or defenses)
by such failure. If any such proceeding shall be brought or asserted against an
Indemnified Person and it shall have notified the Indemnifying Person thereof,
the Indemnifying Person shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others entitled
to indemnification pursuant to this Section 6 that the Indemnifying Person may
designate in such proceeding and shall pay the reasonable fees and expenses of
such counsel related to such proceeding, as incurred. In any such proceeding,
any Indemnified Person 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
Person unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary; (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person; or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them.
Notwithstanding anything contained herein to the contrary, if indemnity may be
sought pursuant to the last sentence in Section 6(a) hereof 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 than one separate firm (in addition to any local counsel)
for the Xxxxx Xxxxxxx Entities for the defense of any losses, claims, damages
and liabilities arising out of the Directed Share Program. It is understood and
agreed that the Indemnifying Person shall not, in connection with any proceeding
or related proceeding in the same
20
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be paid or reimbursed as they are incurred. Any
such separate firm for any Underwriter, its affiliates, directors and officers
and any control persons of such Underwriter shall be designated in writing by
X.X. Xxxxxx Securities Inc. and any such separate firm for the Company, its
directors, its officers who signed the Registration Statement and any control
persons of the Company shall be designated in writing by the Company. The
Indemnifying Person 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, non-appealable judgment for the plaintiff, the Indemnifying
Person agrees to indemnify each Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested
that an Indemnifying Person reimburse the Indemnified Person for fees and
expenses of counsel as contemplated by this paragraph, the Indemnifying Person
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 60 days after
receipt by the Indemnifying Person of such request and (ii) the Indemnifying
Person shall not have reimbursed the Indemnified Person in accordance with such
request prior to the date of such settlement; provided that the Indemnifying
Person shall not be so liable for a settlement effected without its written
consent so long as it is reasonably contesting in good faith the amount of the
fees and expenses of counsel of the Indemnified Person that must be reimbursed.
No Indemnifying Person shall, without the written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Person is or could have been a party and
indemnification could have been sought hereunder by such Indemnified Person,
unless such settlement (x) includes an unconditional release of such Indemnified
Person, in form and substance reasonably satisfactory to such Indemnified
Person, from all liability on claims that are the subject matter of such
proceeding and (y) does not include any statement as to or any admission of
fault, culpability or a failure to act by or on behalf of any Indemnified
Person.
(d) Contribution. If the indemnification provided for in paragraphs (a)
and (b) above is unavailable to an Indemnified Person or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person 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 from the offering of the Shares or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
but also the relative fault of the Company on the one hand and the Underwriters
on the other in connection with the statements or omissions 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 shall be deemed to be in the same
respective proportions as the net proceeds (before deducting expenses) received
by the Company from the sale of the Shares and the total underwriting discounts
and commissions
21
received by the Underwriters in connection therewith, in each case as set forth
in the table on the cover of the Prospectus, bear to the aggregate offering
price of the Shares. The relative fault of the Company on the one hand and the
Underwriters on the other 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 by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) Limitation on Liability. The Company and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 6
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 (d) above.
The amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in paragraph (d) above shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such Indemnified Person in connection with
any such action or claim. Notwithstanding the provisions of this Section 6, in
no event shall an Underwriter be required to contribute any amount in excess of
the amount by which the total underwriting discounts and commissions received by
such Underwriter with respect to the offering of the Shares 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
Underwriters' obligations to contribute pursuant to this Section 6 are several
in proportion to their respective purchase obligations hereunder and not joint.
(f) Non-Exclusive Remedies. The remedies provided for in this Section 6
are not exclusive and shall not limit any rights or remedies which may otherwise
be available to any Indemnified Person at law or in equity.
7. Effectiveness of Agreement. This Agreement shall become effective upon
the later of (i) the execution and delivery hereof by the parties hereto and
(ii) receipt by the Company and the Representatives of notice of the
effectiveness of the Registration Statement (or, if applicable, any
post-effective amendment thereto).
8. Termination. This Agreement may be terminated in the absolute
discretion of the Representatives, by notice to the Company, if after the
execution and delivery of this Agreement and prior to the Closing Date or, in
the case of the Option Shares, prior to the Additional Closing Date (i) trading
generally shall have been suspended or materially limited on or by any of the
New York Stock Exchange, the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade; (ii) trading of any
securities issued or guaranteed by the Company shall have been suspended on any
exchange or in any over-the-counter market; (iii) a general moratorium on
commercial banking activities shall have been declared by federal or New
22
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, either within or outside the United States, that, in the judgment of the
Representatives, is material and adverse and makes it impracticable or
inadvisable to proceed with the offering, sale or delivery of the Shares on the
Closing Date or the Additional Closing Date, as the case may be, on the terms
and in the manner contemplated by this Agreement and the Prospectus.
9. Defaulting Underwriter. (a) If, on the Closing Date or the Additional
Closing Date, as the case may be, any Underwriter defaults on its obligation to
purchase the Shares that it has agreed to purchase hereunder on such date, the
non-defaulting Underwriters may in their discretion arrange for the purchase of
such Shares by other persons satisfactory to the Company on the terms contained
in this Agreement. If, within 36 hours after any such default by any
Underwriter, the non-defaulting Underwriters do not arrange for the purchase of
such Shares, then the Company shall be entitled to a further period of 36 hours
within which to procure other persons satisfactory to the non-defaulting
Underwriters to purchase such Shares on such terms. If other persons become
obligated or agree to purchase the Shares of a defaulting Underwriter, either
the non-defaulting Underwriters or the Company may postpone the Closing Date or
the Additional Closing Date, as the case may be, for up to five full business
days in order to effect any changes that in the opinion of counsel for the
Company or counsel for the Underwriters may be necessary in the Registration
Statement and the Prospectus or in any other document or arrangement, and the
Company agrees to promptly prepare any amendment or supplement to the
Registration Statement and the Prospectus that effects any such changes. As used
in this Agreement, the term "Underwriter" includes, for all purposes of this
Agreement unless the context otherwise requires, any person not listed in
Schedule 1 hereto that, pursuant to this Section 9, purchases Shares that a
defaulting Underwriter agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the non-defaulting
Underwriters and the Company as provided in paragraph (a) above, the aggregate
number of Shares that remain unpurchased on the Closing Date or the Additional
Closing Date, as the case may be, does not exceed one-eleventh of the aggregate
number of Shares to be purchased on such date, then the Company shall have the
right to require each non-defaulting Underwriter to purchase the number of
Shares that such Underwriter agreed to purchase hereunder on such date plus such
Underwriter's pro rata share (based on the number of Shares that such
Underwriter agreed to purchase on such date) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the non-defaulting
Underwriters and the Company as provided in paragraph (a) above, the aggregate
number of Shares that remain unpurchased on the Closing Date or the Additional
Closing Date, as the case may be, exceeds one-eleventh of the aggregate amount
of Shares to be purchased on such date, or if the Company shall not exercise the
right described in paragraph (b) above, then this Agreement or, with respect to
any Additional Closing Date, the obligation of the Underwriters to purchase
Shares on the Additional Closing Date, as the case may be,
23
shall terminate without liability on the part of the non-defaulting
Underwriters. Any termination of this Agreement pursuant to this Section 9 shall
be without liability on the part of the Company, except that the Company will
continue to be liable for the payment of expenses as set forth in Section 10
hereof and except that the provisions of Section 6 hereof shall not terminate
and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company or any non-defaulting Underwriter for
damages caused by its default.
10. Payment of Expenses. (a) Whether or not the transactions contemplated
by this Agreement are consummated or this Agreement is terminated, the Company
will pay or cause to be paid all costs and expenses incident to the performance
of its obligations hereunder, including without limitation, (i) the costs
incident to the authorization, issuance, sale, preparation and delivery of the
Shares and any taxes payable in that connection; (ii) the costs incident to the
preparation, printing and filing under the Securities Act of the Registration
Statement, the Preliminary Prospectus and the Prospectus (including all
exhibits, amendments and supplements thereto) and the distribution thereof;
(iii) the costs of reproducing and distributing each of the Transaction
Documents; (iv) the fees and expenses of the Company's counsel and independent
accountants; (v) the fees and expenses incurred in connection with the
registration or qualification and determination of eligibility for investment of
the Shares under the laws of such jurisdictions as the Representatives may
designate and the preparation, printing and distribution of a Blue Sky
Memorandum (including the related fees and expenses of counsel for the
Underwriters); (vi) the cost of preparing stock certificates; (vii) the costs
and charges of any transfer agent and any registrar; (viii) all expenses and
application fees incurred in connection with any filing with, and clearance of
the offering by, the National Association of Securities Dealers, Inc. (ix) all
expenses incurred by the Company in connection with any "road show" presentation
to potential investors; (x) all expenses and application fees related to the
listing of the Shares on the Nasdaq National Market and (xi) all fees and
disbursements of counsel incurred by the Xxxxx Xxxxxxx Entities in connection
with the Directed Share Program and stamp duties, similar taxes or duties or
other taxes, if any, incurred by the Xxxxx Xxxxxxx Entities in connection with
the Directed Share Program.
(b) If (i) this Agreement is terminated pursuant to Section 8, (ii) the
Company for any reason fails to tender the Shares for delivery to the
Underwriters or (iii) the Underwriters decline to purchase the Shares for any
reason permitted under this Agreement, the Company agrees to reimburse the
Underwriters for all out-of-pocket costs and expenses (including the fees and
expenses of their counsel) reasonably incurred by the Underwriters in connection
with this Agreement and the offering contemplated hereby.
11. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and the officers and directors and any controlling persons referred
to in Section 6 hereof. Nothing in this Agreement is intended or shall be
construed to give any other person any
24
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein. No purchaser of Shares from any Underwriter
shall be deemed to be a successor merely by reason of such purchase.
12. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company and the Underwriters
contained in this Agreement or made by or on behalf of the Company or the
Underwriters pursuant to this Agreement or any certificate delivered pursuant
hereto shall survive the delivery of and payment for the Shares and shall remain
in full force and effect (subject to any applicable statute of limitations),
regardless of any termination of this Agreement or any investigation made by or
on behalf of the Company or the Underwriters.
13. Certain Defined Terms. For purposes of this Agreement, (a) except
where otherwise expressly provided, the term "affiliate" has the meaning set
forth in Rule 405 under the Securities Act; (b) the term "business day" means
any day other than a day on which banks are permitted or required to be closed
in New York City, and (c) the term "subsidiary" has the meaning set forth in
Rule 405 under the Securities Act.
14. Miscellaneous. (a) Authority of the Representatives. Any action by the
Underwriters hereunder may be taken by X.X. Xxxxxx Securities Inc. on behalf of
the Underwriters, and any such action taken by X.X. Xxxxxx Securities Inc. shall
be binding upon the Underwriters.
(b) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted and
confirmed by any standard form of telecommunication. Notices to the Underwriters
shall be given to the Representatives c/o X.X. Xxxxxx Securities Inc., 000 Xxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (fax: 000-000-0000); Attention:
Syndicate Department. Notices to the Xxxxx Xxxxxxx Entities shall be given to US
Bancorp Xxxxx Xxxxxxx Inc., [_______________] (Fax: [________]); Attention:
[__________]. Notices to the Company shall be given to it at 0000 X. Xxxxxxxxx
Xxxxxxxxx, Xxxxxx Xxxx, Xxxxxxxxxx 00000, (fax: 000-000-0000); Attention: Chief
Financial Officer.
(c) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(d) Counterparts. This Agreement may be signed in counterparts (which may
include counterparts delivered by any standard form of telecommunication), each
of which shall be an original and all of which together shall constitute one and
the same instrument.
(e) Amendments or Waivers. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
(f) Headings. The headings herein are included for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
25
If the foregoing is in accordance with your understanding, please indicate
your acceptance of this Agreement by signing in the space provided below.
Very truly yours,
DOVEBID, INC.
By: ____________________________
Title:
Accepted: __________, 2002
X.X. XXXXXX SECURITIES INC.
For itself and on behalf of the
several Underwriters listed
in Schedule 1 hereto.
By___________________________
Authorized Signatory
26
Schedule 1
Underwriters Number of Shares
X.X. Xxxxxx Securities Inc. .................................. [ ]
Xxxxxx Xxxxxx Partners LLC ................................... [ ]
US Bancorp Xxxxx Xxxxxxx Inc. ................................ [ ]
Pacific Crest Securities Inc. ................................ [ ]
------
Total
27
Annex A
[Form of Opinion of Counsel for the Company]
1. Based solely on oral confirmation from the Commission, the
Registration Statement was declared effective under the Securities Act as of the
date and time specified in such opinion; the Prospectus was filed with the
Commission pursuant to the subparagraph of Rule 424(b) under the Securities Act
specified in such opinion on the date specified therein; and, based solely on
oral confirmation from the Commission, no order suspending the effectiveness of
the Registration Statement has been issued and no proceeding for that purpose is
pending or, to the knowledge of such counsel, threatened by the Commission.
2. The Registration Statement and the Prospectus (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion) comply as to form in all material respects with the
requirements of the Securities Act.
3. The Company and each of its subsidiaries incorporated in California or
Delaware (the "Subsidiaries") have been duly organized and are validly existing
and in good standing under the laws of their respective jurisdictions of
organization, are duly qualified to do business and are in good standing in each
United States jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires such
qualification, and have all corporate power and authority necessary to own or
hold their respective properties and to conduct the businesses as described in
the Prospectus, except where the failure to be so qualified or have such power
or authority would not, individually or in the aggregate, have a Material
Adverse Effect.
4. The Company has an authorized capitalization as set forth in the
Prospectus under the heading "Capitalization"; all the issued and outstanding
shares of capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable; the rights, preferences and
privileges of, and the restrictions on, the capital stock of the Company conform
in all material respects to the description thereof contained in the
Registration Statement and the Prospectus; and all the issued and outstanding
shares of capital stock or other equity interests of each Subsidiary have been
duly and validly authorized and issued, are fully paid and non-assessable.
5. The Company has all corporate, power and authority to execute and
deliver the Underwriting Agreement and to perform its obligations thereunder;
and all corporate action required to be taken for the due authorization,
execution and delivery of the Underwriting Agreement and the consummation of the
transactions contemplated thereby have been duly and validly taken.
6. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
Annex A-1
7. The Underwriting Agreement conforms in all material respects to the
description thereof contained in the Registration Statement and the Prospectus.
8. The Shares to be issued and sold by the Company hereunder have been
duly authorized, and when delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be validly issued, fully paid
and non-assessable and the issuance of the Shares is not subject to any
preemptive, first refusal or similar rights to acquire or maintain percentage
ownership of the Company's securities.
9. The execution, delivery and performance by the Company of the
Underwriting Agreement, the issuance and sale of the Shares being delivered on
the Closing Date or the Additional Closing Date, as the case may be, do not (i)
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument filed as an exhibit to
the Registration Statement, (ii) result in any violation of the provisions of
the charter or by-laws or similar organizational documents of the Company or any
of the Subsidiaries or (iii) result in the violation of Delaware General
Corporation Law, California Corporate Securities Law, California General
Corporation Law or federal securities laws or any judgment, order or regulation
of any court or arbitrator or governmental or regulatory authority to which the
Company is party or by which the Company is bound except, in the case of clauses
(i) and (iii) above, for such conflict, breach or violation that would not,
individually or in the aggregate, have a Material Adverse Effect.
10. To the knowledge of such counsel, no consent, approval, authorization,
order, registration or qualification of or with any court or arbitrator or
governmental or regulatory authority is required for the execution, delivery and
performance by the Company of the Underwriting Agreement, the issuance and sale
of the Shares being delivered on the Closing Date or the Additional Closing
Date, as the case may be, except for the registration of the Shares under the
Securities Act and such consents, approvals, authorizations, orders and
registrations or qualifications as may be required by the Nasdaq Stock Market or
under applicable state securities laws in connection with the purchase and
distribution of the Shares by the Underwriters.
11. To the knowledge of such counsel, except as described in the
Prospectus, there are no legal, governmental or regulatory investigations,
actions, suits or proceedings pending to which the Company or any of its
subsidiaries is or may be a party or to which any property of the Company or any
of its subsidiaries is or may be the subject which, individually or in the
aggregate, if determined adversely to the Company or any of its subsidiaries,
could reasonably be expected to have a Material Adverse Effect.
12. The descriptions in the Prospectus of statutes, legal, governmental
and regulatory proceedings and contracts and other documents are accurate in all
material respects; the statements in the Prospectus under the headings
"Description of Capital Stock" and "Underwriting", and in the Registration
Statement in items 14 and 15, to the
Annex A-2
extent that they constitute summaries of the rights, preferences and privileges
of, or the restrictions on, the Company's stock, matters of law or regulation or
legal conclusions, fairly summarize the matters described therein in all
material respects; and, to the knowledge of such counsel, (A) there are no
current or pending legal, governmental or regulatory actions, suits or
proceedings that are required under the Securities Act to be described in the
Prospectus and that are not so described and (B) there are no statutes,
regulations or contracts and other documents that are required under the
Securities Act to be filed as exhibits to the Registration Statement or
described in the Prospectus and that have not been so filed or described.
13. 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" or an entity "controlled" by an
"investment company" within the meaning of the Investment Company Act.
Such counsel shall also state that they have participated in conferences
with representatives of the Company and with representatives of its independent
accountants and counsel at which conferences the contents of the Registration
Statement and the Prospectus and any amendment and supplement thereto and
related matters were discussed and, although such counsel assume no
responsibility for the accuracy, completeness or fairness of the Registration
Statement, the Prospectus and any amendment or supplement thereto (except as
expressly provided above), nothing has come to the attention of such counsel to
cause such counsel to believe that the Registration Statement, at the time of
its effective date (including the information, if any, deemed pursuant to Rule
430A to be part of the Registration Statement at the time of effectiveness),
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 (other than the financial statements and notes thereto, financial
statement schedules and other financial and statistical information contained
therein, as to which such counsel need express no belief) or that the Prospectus
or any amendment or supplement thereto as of its date and the Closing Date
contains any 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 (other than the financial statements
and notes thereto, financial statement schedules and other financial and
statistical information contained therein, as to which such counsel need express
no belief).
In rendering such opinion, such counsel may rely as to matters of fact on
certificates of responsible officers of the Company and public officials that
are furnished to the Underwriters and may be qualified and limited by language
customarily used in transactions of the type contemplated by this Agreement.
The opinion of Fenwick & West LLP described above shall be rendered to the
Underwriters at the request of the Company and shall so state therein.
Annex A-3
Annex B
[Form of Opinion of Counsel for the Significant Subsidiaries]
[____________] (the "Subsidiary") has been duly incorporated, is a
corporation validly existing and in good standing under the laws of
[_______________], has the corporate power and authority to own its properties
and to conduct its business as described in the Prospectus and is duly qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole. All of the issued and
outstanding shares of capital stock of the Subsidiary are owned by the Company
of record. The execution, delivery and performance by the Company of the
Underwriting Agreement, the issuance of the Shares on the Closing Date or the
Additional Closing Date, as the case may be, do not result in any violation of
the provisions of the charter or bylaws or similar organizational documents of
the Subsidiary.
Annex A-4
Exhibit A
FORM OF LOCK-UP AGREEMENT
_________________, 2002
X.X. XXXXXX SECURITIES INC.
As Representative of the Underwriters named in
Schedule I to the Underwriting Agreement
referred to below
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: DoveBid, Inc. -- Initial Public Offering
Ladies and Gentlemen:
The undersigned understands that you, as Representative of the several
Underwriters, propose to enter into an Underwriting Agreement (the "Underwriting
Agreement") with DoveBid, Inc., a Delaware corporation (the "Company"),
providing for the initial public offering (the "Initial Public Offering") by the
several Underwriters named in Schedule I to the Underwriting Agreement (the
"Underwriters"), of Common Stock, $0.001 par value per share, of the Company
(the "Securities"). Capitalized terms used herein and not otherwise defined
shall have the meanings set forth in the Underwriting Agreement.
In consideration of the Underwriters' agreement to purchase and make the
Initial Public Offering of the Securities, and for other good and valuable
consideration receipt of which is hereby acknowledged, the undersigned hereby
agrees that, without the prior written consent of X.X. Xxxxxx Securities Inc. on
behalf of the Underwriters, the undersigned will not, during the period ending
[180] days after the date of the prospectus relating to the Initial Public
Offering (the "Prospectus"), offer, pledge, announce the intention to sell,
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, $0.001 par value per share, of the Company (the "Common Stock") or any
securities convertible into or exercisable or exchangeable for Common Stock
(including without limitation, Common Stock which may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and securities which may
be issued upon exercise of a stock option or warrant) or (2) enter into any swap
or other agreement that transfers, 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. In addition, the
undersigned agrees
Exhibit A-1
that, without the prior written consent of X.X. Xxxxxx Securities Inc., on
behalf of the Underwriters, it will not, during the period 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. Any Securities
acquired by the undersigned in the open market will not be subject to this
Lock-Up Agreement. A transfer of securities to a family member or trust may be
made without the prior written consent of X.X. Xxxxxx Securities Inc., provided
that the transferee agrees to be bound in writing by the terms of this Lock-up
Agreement.
In furtherance of the foregoing, the Company, and any duly appointed
transfer agent for the registration or transfer of the securities described
herein, are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this Lock-Up Agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Agreement. All authority
herein conferred or agreed to be conferred and any obligations of the
undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned.
The undersigned understands that, if the Underwriting Agreement does not
become effective, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Common Stock to be sold thereunder, the
undersigned shall be released from all obligations under this Lock-Up Agreement.
Furthermore, this Lock-Up Agreement shall lapse and become null and void if the
Initial Public Offering shall not have occurred on or before November 30, 2002.
The undersigned understands that the Underwriters are entering into the
Underwriting Agreement and proceeding with the Initial Public Offering in
reliance upon this Lock-Up Agreement.
Exhibit A-2
This Lock-Up Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the conflict of laws
principles thereof.
Very truly yours,
By: ________________________________
Name:
Title:
Accepted as of the date first set forth above:
X.X. XXXXXX SECURITIES INC.
Acting severally on behalf of themselves and
the several Underwriters named in
Schedule I to the Underwriting Agreement
By: X.X. XXXXXX SECURITIES INC.
By: ___________________________________
Name:
Title:
Exhibit A-3
