__________ Shares
Common Stock
($0.001 Par Value)
UNDERWRITING AGREEMENT
November __, 2004
UNDERWRITING AGREEMENT
_________, 2004
UBS Securities LLC ("UBS")
Deutsche Bank Securities Inc. ("DBSI")
Xxxxxx Xxxxxx Partners
Pacific Growth Equities, LLC
As Representatives of the several Underwriters ("Representatives")
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Deutsche Bank Securities Inc.
00 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
ZipRealty, Inc., a Delaware corporation (the "COMPANY"),
proposes to issue and sell to the underwriters named in Schedule A annexed
hereto (the "UNDERWRITERS"), for whom you are acting as representatives, an
aggregate of ___________ shares (the "FIRM SHARES") of Common Stock, $0.001 par
value (the "COMMON STOCK"), of the Company. In addition, solely for the purpose
of covering over-allotments, the Company proposes to grant to the Underwriters
the option to purchase from the Company up to an additional ____________ shares
of Common Stock (the "ADDITIONAL SHARES"). The Firm Shares and the Additional
Shares are hereinafter collectively sometimes referred to as the "SHARES." The
Shares are described in the Prospectus which is referred to below.
The Company hereby acknowledges that in connection with the
proposed offering of the Shares, it has requested DBSI to administer a directed
share program (the "DIRECTED SHARE PROGRAM") under which up to _______ Firm
Shares, or 5% of the Firm Shares to be purchased by the Underwriters (the
"RESERVED SHARES"), shall be reserved for sale by DBSI at the initial public
offering price to the Company's officers, directors, employees and consultants
and other persons having a relationship with the Company as designated by the
Company, (the "DIRECTED SHARE PARTICIPANTS") as part of the distribution of the
Shares by the Underwriters, subject to the terms of this Agreement, the
applicable rules, regulations and interpretations of the National Association of
Securities Dealers ("NASD") and all other applicable laws, rules and
regulations. The number of Shares available for sale to the general public will
be reduced to the extent that Directed Share Participants purchase Reserved
Shares. The Underwriters may offer any Reserved Shares not purchased by Directed
Share Participants to the general public on the same basis as the other Shares
being issued and sold hereunder. The Company has supplied DBSI with names,
addresses and telephone numbers of the individuals or other entities which the
Company has designated to be participants in the Directed
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Share Program. It is understood that any number of those designated to
participate in the Directed Share Program may decline to do so.
The Company has filed, in accordance with the provisions of
the Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (File No. 333-115657)
including a prospectus, relating to the Shares. The Company has furnished to
you, for use by the Underwriters and by dealers, copies of one or more
preliminary prospectuses (each such preliminary prospectus is herein called a
"PRELIMINARY PROSPECTUS") relating to the Shares. Except where the context
otherwise requires, the registration statement, as amended when it became or
becomes effective, including all documents filed as a part thereof, and
including any information contained in a prospectus subsequently filed with the
Commission pursuant to Rule 424(b) under the Act and deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430(A)
under the Act and also including any registration statement filed pursuant to
Rule 462(b) under the Act, is herein called the "REGISTRATION STATEMENT," and
the prospectus, in the form filed by the Company with the Commission pursuant to
Rule 424(b) under the Act on or before the second business day after the date
hereof (or such earlier time as may be required under the Act) or, if no such
filing is required, the form of final prospectus included in the Registration
Statement at the time it became effective, is herein called the "PROSPECTUS." As
used herein, "business day" shall mean a day on which the New York Stock
Exchange is open for trading.
The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the representations and
warranties and subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule A attached hereto, subject to adjustment in accordance with Section 8
hereof, in each case at a purchase price of $______ per Share. The Company is
advised by you that the Underwriters intend (i) to make a public offering of
their respective portions of the Firm Shares as soon after the effective date of
the Registration Statement as in your judgment is advisable and (ii) initially
to offer the Firm Shares upon the terms set forth in the Prospectus. You may
from time to time increase or decrease the public offering price after the
initial public offering to such extent as you may determine.
In addition, the Company hereby grants to the several
Underwriters the option to purchase, and upon the basis of the representations
and warranties and subject to the terms and conditions herein set forth, the
Underwriters shall have the right to purchase, severally and not jointly, from
the Company, ratably in accordance with the number of Firm Shares to be
purchased by each of them, all or a portion of the Additional Shares as may be
necessary to cover over-allotments made in connection with the offering of the
Firm Shares, at the same purchase price per share to be paid by the Underwriters
to the Company for the Firm Shares. This option may be exercised by UBS and DBSI
on behalf of the several Underwriters at any time and from time to time on or
before the thirtieth day following the date of the Prospectus, by written notice
to the Company. Such notice shall set forth the aggregate number of Additional
Shares as to which the option is being exercised, and the date and time when the
Additional Shares are to be delivered (such date and time being herein referred
to as the "additional time of purchase"); provided, however, that the additional
time of purchase shall not be
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earlier than the time of purchase (as defined below) nor earlier than the second
business day after the date on which the option shall have been exercised nor
later than the tenth business day after the date on which the option shall have
been exercised. The number of Additional Shares to be sold to each Underwriter
shall be the number which bears the same proportion to the aggregate number of
Additional Shares being purchased as the number of Firm Shares set forth
opposite the name of such Underwriter on Schedule A hereto bears to the total
number of Firm Shares (subject, in each case, to such adjustment as you may
determine to eliminate fractional shares), subject to adjustment in accordance
with Section 8 hereof.
2. Payment and Delivery. Payment of the purchase price for the Firm
Shares shall be made to the Company by Federal Funds wire transfer, against
delivery of the certificates for the Firm Shares to you through the facilities
of The Depository Trust Company ("DTC") for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York
City time, on _______________, 2004 (unless another time shall be agreed to by
you and the Company or unless postponed in accordance with the provisions of
Section 8 hereof). The time at which such payment and delivery are to be made is
hereinafter sometimes called "THE TIME OF PURCHASE." Electronic transfer of the
Firm Shares shall be made to you at the time of purchase in such names and in
such denominations as you shall specify.
Payment of the purchase price for the Additional Shares shall
be made at the additional time of purchase in the same manner and at the same
office as the payment for the Firm Shares. Electronic transfer of the Additional
Shares shall be made to you at the additional time of purchase in such names and
in such denominations as you shall specify.
Deliveries of the documents described in Section 6 hereof with
respect to the purchase of the Shares shall be made at the offices of O'Melveny
& Xxxxx LLP, 0000 Xxxx Xxxx Xxxx, Xxxxx Xxxx, XX 00000, at 9:00 A.M., New York
City time, on the date of the closing of the purchase of the Firm Shares or the
Additional Shares, as the case may be.
3. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has been declared effective
under the Act; no stop order of the Commission preventing or suspending
the use of any Preliminary Prospectus or the effectiveness of the
Registration Statement has been issued and no proceedings for such
purpose have been instituted or, to the Company's knowledge, are
contemplated by the Commission; each Preliminary Prospectus, at the
time of filing thereof, complied in all material respects to the
requirements of the Act and the last Preliminary Prospectus distributed
in connection with the offering of the Shares did not, as of its date,
and does not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading; the Registration Statement complied
when it became effective, complies and will comply, at the time of
purchase and any additional time of purchase, in all material respects
with the requirements of the Act and the Prospectus will comply, as of
its date and at the time of purchase and any additional times of
purchase, in all material respects with the requirements of the Act and
any statutes, regulations, contracts or other documents
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that are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
have been and will be so described or filed; the conditions to the use
of Form S-1 have been satisfied; the Registration Statement did not
when it became effective, does not and will not, at the time of
purchase and any additional time of purchase, contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading and the Prospectus will not, as of its date and at the time
of purchase and any additional time of purchase, contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no warranty or representation
with respect to any statement contained in the last Preliminary
Prospectus, the Registration Statement or the Prospectus in reliance
upon and in conformity with information concerning an Underwriter and
furnished in writing by or on behalf of such Underwriter through you to
the Company expressly for use in the last Preliminary Prospectus, the
Registration Statement or the Prospectus; and the Company has not
distributed and will not distribute any offering material in connection
with the offering or sale of the Shares other than the Registration
Statement, the then most recent Preliminary Prospectus and the
Prospectus;
(b) as of the date of this Agreement, the Company has an
authorized and outstanding capitalization as set forth in the section
of the Registration Statement and the Prospectus entitled
"Capitalization" and, as of the time of purchase and the additional
time of purchase, as the case may be, the Company shall have an
authorized and outstanding capitalization as set forth in the section
of the Registration Statement and the Prospectus entitled
"Capitalization" (subject, in each case, to the issuance of shares of
Common Stock upon exercise of stock options and warrants disclosed as
outstanding in the Registration Statement and the Prospectus and grant
of options under existing stock option plans described in the
Registration Statement and the Prospectus); all of the issued and
outstanding securities, including the Common Stock, of the Company have
been duly authorized and validly issued and are fully paid and
non-assessable, have been issued in compliance with all federal and
state securities laws and were not issued in violation of any
preemptive right, resale right, right of first refusal or similar
right;
(c) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with full corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Registration Statement and the Prospectus, to execute and deliver this
Agreement and to issue, sell and deliver the Shares as contemplated
herein;
(d) the Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so
qualified or in good standing would not, individually or in the
aggregate, have a material adverse effect on the business, properties,
financial condition, results of operation or prospects of the Company
(a "MATERIAL ADVERSE EFFECT");
-6-
(e) the Company has no subsidiaries (as defined in the Act);
the Company does not own, directly or indirectly, any shares of stock
or any other equity or long-term debt securities of any corporation or
have any equity interest in any firm, partnership, joint venture,
association or other entity; complete and correct copies of the
certificates of incorporation and the by-laws of the Company and all
amendments thereto have been delivered to you, and except as set forth
in the exhibits to the Registration Statement no changes therein will
be made subsequent to the date hereof and prior to the time of purchase
or, if later, the additional time of purchase;
(f) the Shares have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and non-assessable and free of
statutory and contractual preemptive rights, resale rights, rights of
first refusal and similar rights;
(g) the capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof contained
in the Registration Statement and the Prospectus and the certificates
for the Shares are in due and proper form and the holders of the Shares
will not be subject to personal liability solely by reason of being
such holders;
(h) this Agreement has been duly authorized, executed and
delivered by the Company;
(i) the Company is not in breach or violation of or in default
under (nor has any event occurred which with notice, lapse of time or
both would result in any breach or violation of, constitute a default
under or give the holder of any indebtedness (or a person acting on
such holder's behalf) the right to require the repurchase, redemption
or repayment of all or a part of such indebtedness under) its
respective charter or by-laws, or any indenture, mortgage, deed of
trust, bank loan or credit agreement or other evidence of indebtedness,
or any license, lease, contract or other agreement or instrument to
which the Company is a party or by which it or any of its properties
may be bound or affected, in each case except where any such breach,
violation or default would not, individually or in the aggregate, have
a Material Adverse Effect; and the execution, delivery and performance
of this Agreement, the issuance and sale of the Shares and the
consummation of the transactions contemplated hereby will not conflict
with, result in any breach or violation of or constitute a default
under (nor constitute any event which with notice, lapse of time or
both would result in any breach or violation of or constitute a default
under) the charter or by-laws of the Company, or any indenture,
mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any license, lease, contract or other
agreement or instrument to which the Company is a party or by which it
or any of its properties may be bound or affected, or any federal,
state, local or foreign law, regulation or rule or any decree, judgment
or order applicable to the Company, except to the extent any such
breach or violation of or default under any such indenture, mortgage,
deed of trust, bank loan or credit agreement or other evidence of
indebtedness, or any license, lease, contract or other agreement or
instrument would not, individually or in the aggregate, have a Material
Adverse Effect; the Company's real estate brokerage activities do not
breach or violate, any federal, state, local or foreign law, regulation
or rule or any decree, judgment or order applicable to such activities
(the Company has duly consulted with its in-house attorneys
-7-
in connection with making this representation and warranty), in each
case except where any such breach or violation would not, individually
or in the aggregate, have a Material Adverse Effect;
(j) no approval, authorization, consent or order of or filing
with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency is required in connection
with the issuance and sale of the Shares or the consummation by the
Company of the transactions contemplated hereby other than registration
of the Shares under the Act, which has been or will be effected, and
any necessary qualification under the securities or blue sky laws of
the various jurisdictions in which the Shares are being offered by the
Underwriters or under the rules and regulations of the NASD;
(k) except as set forth in the Registration Statement and the
Prospectus, or waived in writing: (A) (i) no person has the right,
contractual or otherwise, to cause the Company to issue or sell to it
any shares of Common Stock or shares of any other capital stock or
other equity interests of the Company, (ii) no person has any
preemptive rights, resale rights, rights of first refusal or other
rights to purchase any shares of Common Stock or shares of any other
capital stock or other equity interests of the Company, and (iii) no
person has the right to act as an underwriter or as a financial advisor
to the Company in connection with the offer and sale of the Shares, in
the case of each of the foregoing clauses (i), (ii) and (iii), whether
as a result of the filing or effectiveness of the Registration
Statement or the sale of the Shares as contemplated thereby or
otherwise; and (B) no person has the right, contractual or otherwise,
to cause the Company to register under the Act any shares of Common
Stock or shares of any other capital stock or other equity interests of
the Company, or to include any such shares or interests in the
Registration Statement or the offering contemplated thereby, whether as
a result of the filing or effectiveness of the Registration Statement
or the sale of the Shares as contemplated thereby or otherwise;
(l) the Company has all necessary licenses, authorizations,
consents and approvals and has made all necessary filings required
under any federal, state, local or foreign law, regulation or rule, and
has obtained all necessary authorizations, consents and approvals from
other persons, in order to conduct its business, except where the
failure to have any such licenses, authorizations, consents or
approvals or to have made any such filings would, individually or in
the aggregate, have a Material Adverse Effect; the Company is a duly
licensed real estate broker in Arizona, California, Georgia, Illinois,
Maryland, Massachusetts, Texas, Virginia, Washington and Washington,
D.C. and all such licenses are in full force and effect, and the
Company is not required to have a real estate broker license in any
other jurisdiction; all of the Company's sales agents are duly licensed
real estate agents and Realtors in each jurisdiction in which such
employee operates, and each such license is in full force and effect;
the Company is not in violation of any federal, state, local or foreign
law, regulation or rule applicable to the Company and relating to real
estate transactions, the operation of a real estate brokerage firm, or
the representation of buyers or sellers in real estate transactions,
except where any such violations would not, individually or in the
aggregate, have a Material Adverse Effect; the Company is not in
violation of, or in default under, nor has it received notice of any
proceedings relating to revocation or modification of, any such
license, authorization, consent or approval or any federal, state,
local or foreign law, regulation or rule
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or any decree, order or judgment applicable to the Company, except
where such violation, default, revocation or modification would not,
individually or in the aggregate, have a Material Adverse Effect;
(m) all legal or governmental proceedings, affiliate
transactions, off-balance sheet transactions, contracts, licenses,
agreements, leases or documents of a character required to be described
in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement have been so described or filed
as required;
(n) there are no actions, suits, claims, investigations or
proceedings pending or threatened or, to the Company's knowledge,
contemplated to which the Company or any of its directors or officers
is or would be a party or of which any of its properties is or would be
subject at law or in equity, before or by any federal, state, local or
foreign governmental or regulatory commission, board, body, authority
or agency, except any such action, suit, claim, investigation or
proceeding which would not result in a judgment, decree or order
having, individually or in the aggregate, a Material Adverse Effect or
preventing consummation of the transactions contemplated hereby; there
are no material legal or governmental proceedings pending before or by
any federal, state, or local governmental or regulatory commission,
board, body, authority or agency relating to the Company's business
practices and real estate brokerage activities and, to the Company's
knowledge (including, without limitation, after due inquiry of its
in-house attorneys), no such proceedings are threatened or contemplated
by governmental authorities or others;
(o) PricewaterhouseCoopers LLP, whose report on the financial
statements of the Company is filed with the Commission as part of the
Registration Statement and the Prospectus, are independent public
accountants as required by the Act;
(p) the audited financial statements included in the
Registration Statement and the Prospectus, together with the related
notes and schedules, present fairly the financial position of the
Company as of the dates indicated and the results of operations and
cash flows of the Company for the periods specified and have been
prepared in compliance with the requirements of the Act and in
conformity with generally accepted accounting principles applied on a
consistent basis during the periods involved; any pro forma financial
statements or data included in the Registration Statement and the
Prospectus comply with the requirements of Regulation S-X of the Act
and the assumptions used in the preparation of such pro forma financial
statements and data are reasonable, the pro forma adjustments used
therein are appropriate to give effect to the transactions or
circumstances described therein and the pro forma adjustments have been
properly applied to the historical amounts in the compilation of those
statements and data; the other financial and statistical data set forth
in the Registration Statement and the Prospectus are accurately
presented and prepared on a basis consistent with the financial
statements and books and records of the Company; there are no financial
statements (historical or pro forma) that are required to be included
in the Registration Statement and the Prospectus that are not included
as required; and the Company does not have any material liabilities or
obligations, direct or contingent (including any off-balance sheet
obligations), not disclosed in the Registration Statement and the
Prospectus; except as disclosed in the Prospectus, there are no
material off-balance sheet transactions, arrangements,
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obligations (including contingent obligations) or any other
relationships with unconsolidated entities or other persons, that may
have a material current or future effect on the Company's financial
condition, changes in financial condition, results of operations,
liquidity, capital expenditures, capital resources, or significant
components of revenues or expenses;
(q) subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, there has
not been (i) any material adverse change, or any development involving
a prospective material adverse change, in the business, prospects,
properties, management, financial condition or results of operations of
the Company, (ii) any transaction which is material to the Company,
(iii) any obligation, direct or contingent (including any off-balance
sheet obligations), incurred by the Company, which is material to the
Company, (iv) any change in the capital stock or outstanding
indebtedness of the Company or (v) any dividend or distribution of any
kind declared, paid or made on the capital stock of the Company;
(r) the Company has obtained for the benefit of the
Underwriters the agreement (a "Lock-Up Agreement"), in the form set
forth as Exhibit A hereto, of each of its directors and officers and
holders of an aggregate of at least __% of the Company's Common Stock
(including all shares of Common Stock issuable pursuant to any security
convertible into or exercisable or exchangeable for Common Stock, or
any warrant or other right to purchase Common Stock or any such
security);
(s) the Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company" or
an entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(t) the Company has good and marketable title to all property
(real and personal) described in the Registration Statement and in the
Prospectus as being owned by it, free and clear of all liens, claims,
security interests or other encumbrances; all the property described in
the Registration Statement and the Prospectus as being held under lease
by the Company is held thereby under valid and enforceable leases;
(u) the Company owns, or has obtained valid and enforceable
licenses for, or other rights to use, the inventions, patent
applications, patents, trademarks (both registered and unregistered),
trade names, copyrights, trade secrets and other proprietary
information described in the Registration Statement and the Prospectus
as being owned or licensed by it or which are necessary for the conduct
of its business (collectively, "INTELLECTUAL PROPERTY"); the Company
has not infringed any patent, trademark, copyright, trade secret or
other proprietary rights of others; the Company has taken all
reasonable steps necessary to secure interests in its Intellectual
Property from its employees and contractors; none of the technology
employed by the Company has been obtained or is being used by the
Company in violation of any contractual obligation binding on the
Company or any of its officers, directors or employees or otherwise in
violation of the rights of others; (i) there are no third parties who
have or, to the Company's knowledge, will be able to establish rights
to any Intellectual Property, except for the ownership rights of the
owners of the Intellectual Property which is
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licensed to the Company; (ii) to the Company's knowledge, there is no
infringement by third parties of any Intellectual Property; (iii) there
is no pending or threatened action, suit, proceeding or claim by others
challenging the Company's rights in or to any Intellectual Property,
and the Company is unaware of any facts which could form a reasonable
basis for any such claim; (iv) there is no pending or threatened
action, suit, proceeding or claim by others challenging the validity or
scope of any Intellectual Property, and the Company is unaware of any
facts which could form a reasonable basis for any such claim; (v) there
is no pending or threatened action, suit, proceeding or claim by
others, and the Company has not received any written or oral
communications from a third party claiming, that the Company infringes
or otherwise violates, or by conducting the business of the Company as
described in the Prospectus would infringe or otherwise violate, any
patent, trademark, copyright, trade secret or other proprietary rights
of others, and the Company is unaware of any facts which could form a
reasonable basis for any such claim; (vi) to the Company's knowledge,
there is no patent or patent application that contains claims that
interfere with the issued or pending claims of any of the Intellectual
Property; and (vii) to the Company's knowledge, there is no prior art
that may render any patent application owned by the Company of the
Intellectual Property unpatentable that has not been disclosed to the
U.S. Patent and Trademark Office;
(v) the Company is not engaged in any unfair labor practice;
except for matters which would not, individually or in the aggregate,
have a Material Adverse Effect, (i) there is (A) no unfair labor
practice complaint pending or, to the Company's knowledge, threatened
against the Company before the National Labor Relations Board, and no
grievance or arbitration proceeding arising out of or under collective
bargaining agreements is pending or threatened, (B) no strike, labor
dispute, slowdown or stoppage pending or, to the Company's knowledge,
threatened against the Company and (C) no union representation dispute
currently existing concerning the employees of the Company, and (ii) to
the Company's knowledge, (A) no union organizing activities are
currently taking place concerning the employees of the Company and (B)
there has been no violation of any federal, state, local or foreign law
relating to discrimination in the hiring, promotion or pay of
employees, any applicable wage or hour laws or any provision of the
Employee Retirement Income Security Act of 1974 ("ERISA") or the rules
and regulations promulgated thereunder concerning the employees of the
Company;
(w) the Company and its properties, assets and operations are
in compliance with, and hold all permits, authorizations and approvals
required under, Environmental Laws (as defined below), except to the
extent that failure to so comply or to hold such permits,
authorizations or approvals would not, individually or in the
aggregate, have a Material Adverse Effect; there are no past, present
or, to the Company's knowledge, reasonably anticipated future events,
conditions, circumstances, activities, practices, actions, omissions or
plans that could reasonably be expected to give rise to any material
costs or liabilities to the Company under, or to interfere with or
prevent compliance by the Company with, Environmental Laws; except as
would not, individually or in the aggregate, have a Material Adverse
Effect, the Company (i) is not the subject of any investigation, (ii)
has not received any notice or claim, (iii) is not a party to or, to
its knowledge, affected by any pending or threatened action, suit or
proceeding, (iv) is not bound by any judgment, decree or order or (v)
has not entered into any agreement, in each case relating to any
alleged violation of any
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Environmental Law or any actual or alleged release or threatened
release or cleanup at any location of any Hazardous Materials (as
defined below) (as used herein, "ENVIRONMENTAL LAW" means any federal,
state, local or foreign law, statute, ordinance, rule, regulation,
order, decree, judgment, injunction, permit, license, authorization or
other binding requirement, or common law, relating to health, safety or
the protection, cleanup or restoration of the environment or natural
resources, including those relating to the distribution, processing,
generation, treatment, storage, disposal, transportation, other
handling or release or threatened release of Hazardous Materials, and
"HAZARDOUS MATERIALS" means any material (including, without
limitation, pollutants, contaminants, hazardous or toxic substances or
wastes) that is regulated by or may give rise to liability under any
Environmental Law);
(x) all tax returns required to be filed by the Company have
been filed, and all taxes and other assessments of a similar nature
(whether imposed directly or through withholding) including any
interest, additions to tax or penalties applicable thereto due or
claimed to be due from such entities have been paid, other than those
that are immaterial in amount or that are being contested in good faith
and for which adequate reserves have been provided;
(y) the Company maintains insurance covering its properties,
operations, personnel and businesses as is reasonable and customary;
such insurance insures against such losses and risks to an extent which
is adequate in accordance with customary industry practice to protect
the Company and its business; all such insurance is fully in force on
the date hereof and will be fully in force at the time of purchase and
any additional time of purchase;
(z) the Company has not sustained since the date of the last
audited financial statements included in the Registration Statement and
the Prospectus any loss or interference with its respective business
from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental
action, order or decree;
(aa) the Company has not sent or received any communication
regarding termination of, or intent not to renew, any of the contracts
or agreements referred to or described in, or filed as an exhibit to,
the Registration Statement, and no such termination or non-renewal has
been threatened by the Company or, to the Company's knowledge, any
other party to any such contract or agreement;
(bb) the Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (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 existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences;
-12-
(cc) The Company's Board of Directors has validly appointed an
audit committee whose composition satisfies the requirements of NASD
Rule 4350(d)(2) (without regard to any exemptions or transition periods
available thereunder or under Rule 10A-3 under the Exchange Act) and
the Board of Directors and/or the audit committee has adopted a charter
that satisfies the requirements of Rule 4350(d)(1) of the NASD Rules;
the charter of the audit committee was adopted within the past twelve
months; neither the Board of Directors nor the audit committee has been
informed, nor is any director of the Company aware, of (i) any
significant deficiencies or material weaknesses in the design or
operation of the Company's internal controls over financial reporting
which are reasonably likely to adversely affect the Company's ability
to record, process, summarize and report financial information or any
material weakness in the Company's internal controls, or (ii) any
fraud, whether or not material, that involves management or other
employees of the Company who have a significant role in the Company's
internal controls over financial reporting;
(dd) the Company has established and maintains disclosure
controls and procedures (as such term is defined in Rule 13a-15 and
15d-15 under the Exchange Act); such disclosure controls and procedures
are designed to ensure that material information relating to the
Company, including its consolidated subsidiaries, is made known to the
Company's chief executive officer and its chief financial officer by
others within those entities, have been evaluated for effectiveness
within the last 90 days, and such disclosure controls and procedures
are effective to perform the functions for which they were established;
(ee) the Company has provided you true, correct, and complete
copies of all documentation pertaining to any extension of credit in
the form of a personal loan made, directly or indirectly, by the
Company to any director or executive officer of the Company, or to any
family member or affiliate of any director or executive officer of the
Company; and since July 30, 2002, the Company has not, directly or
indirectly, extended credit, arranged to extend credit, or renewed any
extension of credit, in the form of a personal loan or made any
material modification, including any renewal thereof, to any term of
any personal loan that violates, or upon filing of the Registration
Statement violated, the requirements of Section 402 of the
Xxxxxxxx-Xxxxx Act of 2002;
(ff) any statistical and market-related data included in the
Registration Statement and the Prospectus are based on or derived from
sources that the Company believes to be reliable and accurate, and the
Company has obtained the written consent to the use of such data from
such sources to the extent required;
(gg) neither the Company nor, to the Company's knowledge, any
employee or agent of the Company has made any payment of funds of the
Company or received or retained any funds in violation of any law, rule
or regulation;
(hh) neither the Company nor any of its respective directors,
officers, affiliates or controlling persons has taken or will take,
directly or indirectly, any action designed, or which has constituted
or might reasonably be expected to cause or result in, under the
Exchange Act or otherwise, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Shares; the Company acknowledges that the Underwriters
-13-
may engage in passive market making transactions in the Shares on the
Nasdaq National Market ("NASDAQ") in accordance with Regulation M under
the Exchange Act;
(ii) to the Company's knowledge after due inquiry of its
directors, executive officers and five percent (5%) or greater
securityholders, there are no affiliations or associations between any
member of the NASD and any of the Company's executive officers,
directors or five percent (5%) or greater securityholders, except as
set forth in the Registration Statement and the Prospectus;
(jj) the Registration Statement, the Prospectus and any
preliminary prospectus comply, and any further amendments or
supplements thereto will comply, with any applicable laws or
regulations of any foreign jurisdiction in which the Prospectus or any
preliminary prospectus is distributed in connection with the Directed
Share Program; and no approval, authorization, consent or order of or
filing with any governmental or regulatory commission, board, body,
authority or agency, other than those obtained, is required in
connection with the offering or sale of the Reserved Shares in any
jurisdiction where the Reserved Shares are being offered or sold;
(kk) the Company has not offered, or caused the Underwriters
to offer, Shares to any person pursuant to the Directed Share Program
with the intent to influence unlawfully (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 any of
their respective products or services; and
(ll) the Company has filed a listing application with the
Nasdaq Stock Market, Inc. to list the Shares and the Shares have been
approved for listing on Nasdaq subject to official notice of issuance.
In addition, any certificate signed by any officer of the
Company and delivered to the Underwriters or counsel for the Underwriters in
connection with the offering of the Shares shall be deemed to be a
representation and warranty by the Company as to matters covered thereby, to
each Underwriter.
4. Certain Covenants of the Company. The Company hereby agrees:
(a) to furnish such information as may be required and
otherwise to cooperate in qualifying the Shares for offering and sale
under the securities or blue sky laws of such states or other
jurisdictions as you may designate and to maintain such qualifications
in effect so long as you may request for the distribution of the
Shares; provided that the Company shall not be required to qualify as a
foreign corporation or to consent to the service of process under the
laws of any such jurisdiction (except service of process with respect
to the offering and sale of the Shares); and to promptly advise you of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose;
-14-
(b) to make available to the Underwriters in New York City, as
soon as practicable after the Registration Statement becomes effective,
and thereafter from time to time to furnish to the Underwriters, as
many copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendments or
supplements thereto after the effective date of the Registration
Statement) as the Underwriters may request for the purposes
contemplated by the Act; in case any Underwriter is required to deliver
a prospectus after the nine-month period referred to in Section
10(a)(3) of the Act in connection with the sale of the Shares, the
Company will prepare, at its expense, promptly upon request such
amendment or amendments to the Registration Statement and the
Prospectus as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Act;
(c) if, at the time this Agreement is executed and delivered,
it is necessary for the Registration Statement or any post-effective
amendment thereto to be declared effective before the Shares may be
sold, the Company will endeavor to cause the Registration Statement or
such post-effective amendment to become effective as soon as possible
and the Company will advise you promptly and, if requested by you, will
confirm such advice in writing, (i) when the Registration Statement and
any such post-effective amendment thereto has become effective, and
(ii) if Rule 430A under the Act is used, when the Prospectus is filed
with the Commission pursuant to Rule 424(b) under the Act (which the
Company agrees to file in a timely manner under such Rule);
(d) to advise you promptly, confirming such advice in writing,
of any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information
with respect thereto, or of notice of institution of proceedings for,
or the entry of a stop order, suspending the effectiveness of the
Registration Statement and, if the Commission should enter a stop order
suspending the effectiveness of the Registration Statement, to use its
best efforts to obtain the lifting or removal of such order as soon as
possible; to advise you promptly of any proposal to amend or supplement
the Registration Statement or the Prospectus and to provide you and
Underwriters' counsel copies of any such documents for review and
comment a reasonable amount of time prior to any proposed filing and to
file no such amendment or supplement to which you shall reasonably
object in writing;
(e) subject to Section 4(d) hereof, to file promptly all
reports and any definitive proxy or information statement required to
be filed by the Company with the Commission in order to comply with the
Exchange Act subsequent to the date of the Prospectus and for so long
as the delivery of a prospectus is required in connection with the
offering or sale of the Shares; and to provide you with a copy of such
reports and statements and other documents to be filed by the Company
pursuant to Section 13, 14 or 15(d) of the Exchange Act during such
period a reasonable amount of time prior to any proposed filing, and to
promptly notify you of such filing;
(f) if necessary or appropriate, to file a registration
statement pursuant to Rule 462(b) under the Act;
-15-
(g) to advise the Underwriters promptly of the happening of
any event within the time during which a prospectus relating to the
Shares is required to be delivered under the Act which could require
the making of any change in the Prospectus then being used so that the
Prospectus would not include an untrue statement of material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they are made, not
misleading, and, during such time, subject to Section 4(d) hereof, to
prepare and furnish, at the Company's expense, to the Underwriters
promptly such amendments or supplements to such Prospectus as may be
necessary to reflect any such change;
(h) to make generally available to its security holders, and
to deliver to you (unless such document is publicly available on the
Commission's website through the XXXXX database maintained by the
Commission), an earnings statement of the Company (which will satisfy
the provisions of Section 11(a) of the Act) covering a period of twelve
months beginning after the effective date of the Registration Statement
(as defined in Rule 158(c) under the Act) as soon as is reasonably
practicable after the termination of such twelve-month period but not
later than fifteen months after the effective date of the Registration
Statement;
(i) to furnish to its stockholders as soon as practicable
after the end of each fiscal year an annual report (including a balance
sheet and statements of income, shareholders' equity and cash flow of
the Company for such fiscal year, accompanied by a copy of the
certificate or report thereon of nationally recognized independent
certified public accountants);
(j) to furnish to you four copies of the Registration
Statement, as initially filed with the Commission, and of all
amendments thereto (including all exhibits thereto) and sufficient
copies of the foregoing (other than exhibits) for distribution of a
copy to each of the other Underwriters;
(k) to furnish to you promptly and, upon request, to each of
the other Underwriters for a period of five years from the date of this
Agreement (i) copies of any reports, proxy statements, or other
communications which the Company shall send to its stockholders or
shall from time to time publish or publicly disseminate, (ii) copies of
all annual, quarterly and current reports filed with the Commission on
Forms 10-K, 10-Q and 8-K, or such other similar forms as may be
designated by the Commission, (iii) copies of documents or reports
filed with any national securities exchange on which any class of
securities of the Company is listed, and (iv) such other information as
you may reasonably request regarding the Company, in any case unless
such document or information is publicly available on the Commission's
website through the XXXXX database maintained by the Commission;
(l) to furnish to you as early as practicable prior to the
time of purchase and any additional time of purchase, as the case may
be, but not later than two business days prior thereto, a copy of the
latest available unaudited interim and monthly consolidated financial
statements, if any, of the Company which have been read by the
Company's independent certified public accountants, as stated in their
letter to be furnished pursuant to Section 6(c) hereof;
-16-
(m) to apply the net proceeds from the sale of the Shares in
the manner set forth under the caption "Use of Proceeds" in the
Prospectus;
(n) to pay all costs, expenses, fees and taxes in connection
with (i) the preparation and filing of the Registration Statement, each
Preliminary Prospectus, the Prospectus, and any amendments or
supplements thereto, and the printing and furnishing of copies of each
thereof to the Underwriters and to dealers (including costs of mailing
and shipment), (ii) the registration, issue, sale and delivery of the
Shares including any stock or transfer taxes and stamp or similar
duties payable upon the sale, issuance or delivery of the Shares to the
Underwriters, (iii) the producing, word processing and/or printing of
this Agreement, any Agreement Among Underwriters, any dealer
agreements, any Powers of Attorney and any closing documents (including
compilations thereof) and the reproduction and/or printing and
furnishing of copies of each thereof to the Underwriters and (except
closing documents) to dealers (including costs of mailing and
shipment), (iv) the qualification of the Shares for offering and sale
under state or foreign laws and the determination of their eligibility
for investment under state or foreign law as aforesaid (including the
legal fees and filing fees and other disbursements of counsel for the
Underwriters) and the printing and furnishing of copies of any blue sky
surveys or legal investment surveys to the Underwriters and to dealers,
(v) any listing of the Shares on any securities exchange or
qualification of the Shares for quotation on Nasdaq and any
registration thereof under the Exchange Act, (vi) any filing for review
of the public offering of the Shares by the NASD, including the legal
fees and filing fees and other disbursements of counsel to the
Underwriters, (vii) the fees and disbursements of any transfer agent or
registrar for the Shares, (viii) the costs and expenses of the Company
relating to presentations or meetings undertaken in connection with the
marketing of the offering and sale of the Shares to prospective
investors and the Underwriters' sales forces, including, without
limitation, expenses associated with the production of road show slides
and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations, travel, lodging and other
expenses incurred by the officers of the Company and any such
consultants, and the Company's allocable portion of the cost of any
aircraft chartered in connection with the road show, (ix) the offer and
sale of the Reserved Shares, including all costs and expenses of DBSI
and the Underwriters, including the fees and disbursements of counsel
for the Underwriters, and (x) the performance of the Company's other
obligations hereunder;
(o) not to sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose
of or agree to dispose of, directly or indirectly, any Common Stock or
securities convertible into or exchangeable or exercisable for Common
Stock or warrants or other rights to purchase Common Stock or any other
securities of the Company that are substantially similar to Common
Stock, or file or cause to be declared effective a registration
statement under the Act relating to the offer and sale of any shares of
Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock or other rights to purchase Common Stock
or any other securities of the Company that are substantially similar
to Common Stock for a period of 180 days after the date hereof (the
"LOCK-UP PERIOD"), without the prior written consent of UBS and DBSI,
except for (i) the registration of the Shares and the sales to the
Underwriters pursuant to this Agreement, (ii) issuances of Common Stock
upon the exercise of options or warrants disclosed as outstanding in
the Registration Statement and the Prospectus, (iii) the issuance of
employee stock options
-17-
to purchase capital stock that is not sellable during the Lock-Up
Period pursuant to stock option plans described in the Registration
Statement and the Prospectus, and (iv) the filing of a registration
statement on Form S-8 relating to stock option plans described in the
Registration Statement and the Prospectus;; in addition, if (1) during
the period that begins on the date that is 15 calendar days plus 3
business days before the last day of the 180-day restricted period and
ends on the last day of the 180-day restricted period, the Company
issues a earnings release or material news or a material event relating
to the Company occurs, or (2) prior to the expiration of the 180-day
restricted period, the Company announces that it will release earnings
results during the 16-day period beginning on the last day of the
180-day period, the restrictions imposed by this section shall continue
to apply until the expiration of the date that is 15 calendar days plus
3 business days after the date on which the issuance of the earnings
release or the material news or material event occurs;
(p) to use its best efforts to cause the Common Stock to be
listed for quotation on Nasdaq;
(q) to maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a registrar for the
Common Stock;
(r) to ensure that the Reserved Shares will be restricted from
sale, transfer, assignment, pledge or hypothecation for such period and
to such extent as may be required by the NASD and its rules; and to
comply with all applicable securities and other applicable laws, rules
and regulations in each jurisdiction in which the Reserved Shares are
offered in connection with the Directed Share Program; and
(s) not to take, directly or indirectly, any action designed
to cause or result in, or that constitutes or might reasonably be
expected to constitute, the stabilization or manipulation of the price
of any securities of the Company.
5. Reimbursement of Underwriters' Expenses. If the Shares are not
delivered for any reason other than the termination of this Agreement pursuant
to the fifth paragraph of Section 8 hereof or the default by one or more of the
Underwriters in its or their respective obligations hereunder, the Company
shall, in addition to paying the amounts described in Section 4(n) hereof,
reimburse the Underwriters for all of their out-of-pocket expenses, including
the fees and disbursements of their counsel.
6. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company on the date hereof, at the time of
purchase and, if applicable, at the additional time of purchase, the performance
by the Company of its obligations hereunder and to the following additional
conditions precedent:
(a) The Company shall furnish to you at the time of purchase
and, if applicable, at the additional time of purchase, an opinion of
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, counsel for
the Company, addressed to the Underwriters, and dated the time of
purchase or the additional time of purchase, as the case may be, with
reproduced copies for
-18-
each of the other Underwriters and in form and substance satisfactory
to O'Melveny & Xxxxx LLP, counsel for the Underwriters, substantially
in the form set forth as Exhibit C hereto.
(b) You shall have received at the time of purchase and, if
applicable, at the additional time of purchase, the favorable opinion
of O'Melveny & Xxxxx LLP, counsel for the Underwriters, dated the time
of purchase or the additional time of purchase, as the case may be,
stating that:
(i) this Agreement has been duly authorized, executed and
delivered by the Company;
(ii) the Shares have been duly authorized and validly issued
and are fully paid and non-assessable;
(iii) the Shares conform to the description thereof contained
in the Registration Statement and the Prospectus;
(iv) the Registration Statement and the Prospectus (except as
to the financial statements and schedules and other financial data
contained therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of
the Act; and
(v) the Registration Statement has become effective under the
Act and, to such counsel's knowledge, no stop order proceedings with
respect thereto are pending or threatened under the Act and any
required filing of the Prospectus and any supplement thereto pursuant
to Rule 424 under the Act has been made in the manner and within the
time period required by such Rule 424.
In addition, such counsel shall state that such
counsel has participated in conferences with officers and other
representatives of the Company, representatives of the independent
public accountants of the Company and representatives of the
Underwriters at which the contents of the Registration Statement and
the Prospectus were discussed and, although such counsel is not passing
upon and does not assume responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement
or the Prospectus (except as and to the extent stated in subparagraph
(iii) above), on the basis of the foregoing nothing has come to the
attention of such counsel that causes them to believe that the
Registration Statement or any amendment thereto at the time such
Registration Statement or amendment became effective contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus or any supplement
thereto at the date of such Prospectus or such supplement, and at the
time of purchase or the additional time of purchase, as the case may
be, contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading
(it being understood that such counsel need express no opinion with
respect to the financial statements and schedules and other financial
data included in the Registration Statement or the Prospectus).
-19-
(c) You shall have received from PricewaterhouseCoopers LLP
letters dated, respectively, the date of this Agreement, the time of
purchase and, if applicable, the additional time of purchase, and
addressed to the Underwriters (with reproduced copies for each of the
Underwriters) in the forms heretofore approved by UBS and DBSI.
(d) The Company shall furnish to you at the time of purchase
and, if applicable, at the additional time of purchase, an opinion of
each of Xxxxxxx Coie LLP, Opinion of Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx,
PLLC, and Squire, Xxxxxxx and Xxxxxxx L.L.P. as to the matters
indicated for each such counsel on Exhibit D hereto, in each case in
form and substance satisfactory to O'Melveny & Xxxxx LLP, counsel for
the Underwriters.
(e) No Prospectus or amendment or supplement to the
Registration Statement or the Prospectus shall have been filed to which
you reasonably object in writing.
(f) The Registration Statement shall become effective not
later than 5:30 P.M. New York City time, on the date of this Agreement
and, if Rule 430A under the Act is used, the Prospectus shall have been
filed with the Commission pursuant to Rule 424(b) under the Act at or
before 5:30 P.M., New York City time, on the second full business day
after the date of this Agreement and any registration statement
pursuant to Rule 462(b) under the Act required in connection with the
offering and sale of the Shares shall have been filed and become
effective no later than 10:00 p.m., New York City time, on the date of
this Agreement.
(g) Prior to the time of purchase, and, if applicable, the
additional time of purchase, (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued
under the Act or proceedings initiated under Section 8(d) or 8(e) of
the Act; (ii) the Registration Statement and all amendments thereto
shall not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and (iii) the Prospectus
and all amendments or supplements thereto shall not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they are made, not
misleading.
(h) Between the time of execution of this Agreement and the
time of purchase or the additional time of purchase, as the case may
be, no material adverse change or any development involving a
prospective material adverse change in the business, prospects,
properties, management, financial condition or results of operations of
the Company shall occur or become known.
(i) The Company will, at the time of purchase and, if
applicable, at the additional time of purchase, deliver to you a
certificate of its Chief Executive Officer and its Chief Financial
Officer in the form attached as Exhibit B hereto.
(j) You shall have received signed Lock-up Agreements referred
to in Section 3(r) hereof.
-20-
(k) The Company shall have furnished to you such other
documents and certificates, including documents and certificates as to
the accuracy and completeness of any statement in the Registration
Statement and the Prospectus as of the time of purchase and, if
applicable, the additional time of purchase, as you may reasonably
request.
(l) The Shares shall have been approved for quotation on
Nasdaq, subject only to notice of issuance at or prior to the time of
purchase or the additional time of purchase, as the case may be.
7. Effective Date of Agreement; Termination. This Agreement shall
become effective (i) if Rule 430A under the Act is not used, when you shall have
received notification of the effectiveness of the Registration Statement, or
(ii) if Rule 430A under the Act is used, when the parties hereto have executed
and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of UBS and DBSI or any group
of Underwriters (which may include UBS or DBSI) which has agreed to purchase in
the aggregate at least 50% of the Firm Shares, if (x) since the time of
execution of this Agreement or the earlier respective dates as of which
information is given in the Registration Statement and the Prospectus, there has
been any material adverse change or any development involving a prospective
material adverse change in the business, prospects, properties, management,
financial condition or results of operations of the Company, which would, in the
judgment of UBS and DBSI or in the judgment of such group of Underwriters, make
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares on the terms and in the manner contemplated in the
Registration Statement and the Prospectus, or (y) since execution of this
Agreement, there shall have occurred: (i) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange, the American
Stock Exchange or Nasdaq; (ii) a suspension or material limitation in trading in
the Company's securities on Nasdaq; (iii) a general moratorium on commercial
banking activities declared by either federal or New York State authorities or a
material disruption in commercial banking or securities settlement or clearance
services in the United States; (iv) an outbreak or escalation of hostilities or
acts of terrorism involving the United States or a declaration by the United
States of a national emergency or war; or (v) any other calamity or crisis or
any change in financial, political or economic conditions in the United States
or elsewhere, if the effect of any such event specified in clause (iv) or (v) in
the judgment of UBS and DBSI or in the judgment of such group of Underwriters
makes it impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares on the terms and in the manner contemplated in the
Registration Statement and the Prospectus, or (z) since the time of execution of
this Agreement, there shall have occurred any downgrading, or any notice or
announcement shall have been given or made of (i) any intended or potential
downgrading or (ii) any watch, review or possible change that does not indicate
an affirmation or improvement in the rating accorded any securities of or
guaranteed by the Company by any "nationally recognized statistical rating
organization," as that term is defined in Rule 436(g)(2) under the Act.
If UBS and DBSI or any group of Underwriters elects to
terminate this Agreement as provided in this Section 7, the Company and each
other Underwriter shall be notified promptly in writing.
-21-
If the sale to the Underwriters of the Shares, as contemplated
by this Agreement, is not carried out by the Underwriters for any reason
permitted under this Agreement or if such sale is not carried out because the
Company shall be unable to comply with any of the terms of this Agreement, the
Company shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 4(n), 5 and 9 hereof), and the
Underwriters shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 9 hereof) or to one another
hereunder.
8. Increase in Underwriters' Commitments. Subject to Sections 6 and 7
hereof, if any Underwriter shall default in its obligation to take up and pay
for the Firm Shares to be purchased by it hereunder (otherwise than for a
failure of a condition set forth in Section 6 hereof or a reason sufficient to
justify the termination of this Agreement under the provisions of Section 7
hereof) and if the number of Firm Shares which all Underwriters so defaulting
shall have agreed but failed to take up and pay for does not exceed 10% of the
total number of Firm Shares, the non-defaulting Underwriters shall take up and
pay for (in addition to the aggregate number of Firm Shares they are obligated
to purchase pursuant to Section 1 hereof) the number of Firm Shares agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such
Shares shall be taken up and paid for by such non-defaulting Underwriters in
such amount or amounts as you may designate with the consent of each Underwriter
so designated or, in the event no such designation is made, such Shares shall be
taken up and paid for by all non-defaulting Underwriters pro rata in proportion
to the aggregate number of Firm Shares set opposite the names of such
non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its
obligations hereunder, the Company agrees with the non-defaulting Underwriters
that it will not sell any Firm Shares hereunder unless all of the Firm Shares
are purchased by the Underwriters (or by substituted Underwriters selected by
you with the approval of the Company or selected by the Company with your
approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and the
Prospectus and other documents may be effected.
The term "UNDERWRITER" as used in this Agreement shall refer
to and include any Underwriter substituted under this Section 8 with like effect
as if such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Firm Shares which the defaulting
Underwriter or Underwriters agreed to purchase exceeds 10% of the total number
of Firm Shares which all Underwriters agreed to purchase hereunder, and if
neither the non-defaulting Underwriters nor the Company shall make arrangements
within the five business day period stated above for the purchase of all the
Firm Shares which the defaulting Underwriter or Underwriters agreed to purchase
hereunder, this Agreement shall terminate without further act or deed and
without any liability on the part of the Company to any non-defaulting
Underwriter (except to the extent provided in Section 4(n) and Section 9 hereof)
and without any liability on the part of any non-defaulting Underwriter to the
Company (except to the extent provided in Section 9 hereof) or to each other.
Nothing in this paragraph, and no
-22-
action taken hereunder, shall relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
9. Indemnity and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless
each Underwriter, its partners, directors and officers, and any person who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, and the successors and assigns of all of the foregoing
persons, from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation) which, jointly or severally,
any such Underwriter or any such person may incur under the Act, the Exchange
Act, the common law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or in the Registration Statement as amended by any post-effective
amendment thereof by the Company) or in a Prospectus (the term Prospectus for
the purpose of this Section 9 being deemed to include any Preliminary
Prospectus, the Prospectus and the Prospectus as amended or supplemented by the
Company), or arises out of or is based upon any omission or alleged omission to
state a material fact required to be stated in either such Registration
Statement or such Prospectus or necessary to make the statements made therein
not misleading, except insofar as any such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in and in conformity with information
concerning such Underwriter furnished in writing by or on behalf of such
Underwriter through you to the Company expressly for use in such Registration
Statement or such Prospectus or arises out of or is based upon any omission or
alleged omission to state a material fact in connection with such information
required to be stated in such Registration Statement or such Prospectus or
necessary to make such information not misleading, (ii) any untrue statement or
alleged untrue statement made by the Company in Section 3 hereof or the failure
by the Company to perform when and as required any agreement or covenant
contained herein, (iii) any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials provided by the Company
or based upon written information furnished by or on behalf of the Company
including, without limitation, slides, videos, films or tape recordings used in
connection with the marketing of the Shares, or (iv) the Directed Share Program,
provided that the Company shall not be responsible under this clause (iv) for
any loss, damage, expense, liability or claim that is finally judicially
determined to have resulted from the gross negligence or willful misconduct of
the Underwriters in conducting the Directed Share Program.
If any action, suit or proceeding (each, a "PROCEEDING") is
brought against an Underwriter or any such person in respect of which indemnity
may be sought against the Company pursuant to the foregoing paragraph, such
Underwriter or such person shall promptly notify the Company in writing of the
institution of such Proceeding and the Company shall assume the defense of such
Proceeding, including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses; provided, however, that
the omission to so notify the Company shall not relieve the Company from any
liability which the Company may have to any Underwriter or any such person or
otherwise. Such Underwriter or such person shall have the right to employ its or
their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such Underwriter or of such person unless the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such Proceeding or the
-23-
Company shall not have, within a reasonable period of time in light of the
circumstances, employed counsel to have charge of the defense of such Proceeding
or such indemnified party or parties shall have reasonably concluded that there
may be defenses available to it or them which are different from, additional to
or in conflict with those available to the Company (in which case the Company
shall not have the right to direct the defense of such Proceeding on behalf of
the indemnified party or parties), in any of which events such reasonable fees
and expenses shall be borne by the Company and paid as incurred (it being
understood, however, that the Company shall not be liable for the expenses of
more than one separate counsel (in addition to any local counsel) in any one
Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such Proceeding). The
Company shall not be liable for any settlement of any Proceeding effected
without its written consent but if settled with the written consent of the
Company, the Company agrees to indemnify and hold harmless any Underwriter and
any such person from and against any loss or liability by reason of such
settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, then the indemnifying party agrees that it shall be
liable for any settlement of any Proceeding effected without its written consent
if (i) such settlement is entered into more than 120 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
not have fully reimbursed the indemnified party in accordance with such request
prior to the date of such settlement and (iii) such indemnified party shall have
given the indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened Proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such Proceeding and does
not include an admission of fault, culpability or a failure to act, by or on
behalf of such indemnified party.
The Company agrees to indemnify, defend and hold harmless DBSI
and its partners, directors and officers, and any person who controls DBSI
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
and the successors and assigns of all of the foregoing persons, from and against
any loss, damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, DBSI or any such person may incur
under the Act, the Exchange Act, the common law or otherwise, insofar as such
loss, damage, expense, liability or claim (1) arises out of or is based upon (a)
any of the matters referred to in clauses (i) through (iii) of the first
paragraph of this Section 9(a), or (b) any untrue statement or alleged untrue
statement of a material fact contained in any material prepared by or with the
consent of the Company for distribution to Directed Share 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; (ii) caused by the
failure of any Directed Share Participant to pay for and accept delivery of
Reserved Shares that the Directed Share Participant has agreed to purchase; or
(iii) otherwise arises out of or is based upon the Directed Share Program,
provided that the Company shall not be responsible under this clause (iii) for
any loss, damage, expense, liability or claim that is finally judicially
determined to have resulted from the gross negligence or willful misconduct of
DBSI in conducting the Directed Share Program. The second paragraph of this
Section
-24-
9(a) shall apply equally to any Proceeding brought against DBSI or any such
person in respect of which indemnity may be sought against the Company pursuant
to the foregoing sentence.
(b) Each Underwriter severally agrees to indemnify, defend and
hold harmless the Company, its directors and officers, and any person who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, and the successors and assigns of all of the foregoing
persons, from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation) which, jointly or severally,
the Company or any such person may incur under the Act, the Exchange Act, the
common law or otherwise, insofar as such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in and in conformity with information
concerning such Underwriter furnished in writing by or on behalf of such
Underwriter through you to the Company expressly for use in the Registration
Statement (or in the Registration Statement as amended by any post-effective
amendment thereof by the Company) or in a Prospectus, or arises out of or is
based upon any omission or alleged omission to state a material fact in
connection with such information required to be stated in such Registration
Statement or such Prospectus or necessary to make such information not
misleading.
If any Proceeding is brought against the Company or any such
person in respect of which indemnity may be sought against any Underwriter
pursuant to the foregoing paragraph, the Company or such person shall promptly
notify such Underwriter in writing of the institution of such Proceeding and
such Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; provided, however, that the omission to so
notify such Underwriter shall not relieve such Underwriter from any liability
which such Underwriter may have to the Company or any such person or otherwise.
The Company or such person shall have the right to employ its own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of
the Company or such person unless the employment of such counsel shall have been
authorized in writing by such Underwriter in connection with the defense of such
Proceeding or such Underwriter shall not have, within a reasonable period of
time in light of the circumstances, employed counsel to defend such Proceeding
or such indemnified party or parties shall have reasonably concluded that there
may be defenses available to it or them which are different from or additional
to or in conflict with those available to such Underwriter (in which case such
Underwriter shall not have the right to direct the defense of such Proceeding on
behalf of the indemnified party or parties, but such Underwriter may employ
counsel and participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such Underwriter), in any of which events
such fees and expenses shall be borne by such Underwriter and paid as incurred
(it being understood, however, that such Underwriter shall not be liable for the
expenses of more than one separate counsel (in addition to any local counsel) in
any one Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such Proceeding). No
Underwriter shall be liable for any settlement of any such Proceeding effected
without the written consent of such Underwriter but if settled with the written
consent of such Underwriter, such Underwriter agrees to indemnify and hold
harmless the Company and any such person from and against any loss or liability
by reason of such settlement. Notwithstanding the foregoing sentence, if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second sentence of this paragraph, then the indemnifying party agrees
that it shall
-25-
be liable for any settlement of any Proceeding effected without its written
consent if (i) such settlement is entered into more than 60 business days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement and (iii) such
indemnified party shall have given the indemnifying party at least 30 days'
prior notice of its intention to settle. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any
pending or threatened Proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such Proceeding.
(c) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 9 or insufficient to hold an indemnified party harmless in respect of
any losses, damages, expenses, liabilities or claims referred to therein, then
each applicable indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, damages, expenses, liabilities or
claims, 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 total
proceeds from the offering (net of underwriting discounts and commissions but
before deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriters, bear to the aggregate
public offering price of the Shares. The relative fault of the Company on the
one hand and of the Underwriters on the other shall be determined by reference
to, among other things, whether the untrue statement or alleged untrue statement
of a material fact or omission or alleged omission 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. The amount paid or payable by a party as a result of the
losses, damages, expenses, liabilities and claims referred to in this subsection
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating, preparing to defend or
defending any Proceeding.
The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 9 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in this subsection (c) above.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by such Underwriter and distributed to
the public were offered to the public exceeds the amount of any damage which
such Underwriter has otherwise been required to pay by reason of such untrue
statement or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution
-26-
from any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 9 are several
in proportion to their respective underwriting commitments and not joint.
(d) The indemnity and contribution agreements contained in
this Section 9 and the covenants, warranties and representations of the Company
contained in this Agreement shall remain in full force and effect regardless of
any investigation made by or on behalf of any Underwriter, its partners,
directors or officers or any person (including each partner, officer or director
of such person) who controls any Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, or by or on behalf of the Company,
its directors or officers or any person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and shall
survive any termination of this Agreement or the issuance and delivery of the
Shares. The Company and each Underwriter agree promptly to notify each other of
the commencement of any Proceeding against it and, in the case of the Company,
against any of the Company's officers or directors in connection with the
issuance and sale of the Shares, or in connection with the Registration
Statement or the Prospectus.
10. Information Furnished by the Underwriters. The statements set forth
in the last paragraph on the cover page of the Prospectus and the statements set
forth in paragraphs 6 and 10 under the caption "Underwriting" in the Prospectus
with respect to (i) the amount of selling concession and reallowance and (ii)
overallotment and stabilization constitute the only information furnished by or
on behalf of the Underwriters as such information is referred to in Sections 3
and 9 hereof.
11. Notices. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention:
Syndicate Department and to Deutsche Bank Securities Inc., 00 Xxxx Xxxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: ___________, and, if to the Company,
shall be sufficient in all respects if delivered or sent to the Company at the
offices of the Company at 0000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxx, XX 00000,
Attention: Chief Financial Officer, with a copy to Xxxxxx Xxxxxxx Xxxxxxxx &
Xxxxxx, P.C., 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, XX 00000, Attention: Xxxxx X.
Xxxxxx, Esq. and Xxxxx X. Xxxxxxx, Esq.
12. Governing Law; Construction. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("CLAIM"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
13. Submission to Jurisdiction. Except as set forth below, no Claim may
be commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect
thereto. The Company hereby consents to personal jurisdiction, service and venue
in any court in which any Claim arising out of or
-27-
in any way relating to this Agreement is brought by any third party against UBS,
DBSI or any indemnified party. Each of UBS, DBSI and the Company (on its behalf
and, to the extent permitted by applicable law, on behalf of its stockholders
and affiliates) waives all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise) in any way arising
out of or relating to this Agreement. The Company agrees that a final,
non-appealable judgment in any such action, proceeding or counterclaim brought
in any such court shall be conclusive and binding upon the Company and may be
enforced in any other courts to the jurisdiction of which the Company is or may
be subject, by suit upon such judgment.
14. Parties at Interest. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters and the Company and to the
extent provided in Section 9 hereof the controlling persons, partners, directors
and officers referred to in such section, and their respective successors,
assigns, heirs, personal representatives and executors and administrators. No
other person, partnership, association or corporation (including a purchaser, as
such purchaser, from any of the Underwriters) shall acquire or have any right
under or by virtue of this Agreement.
15. Counterparts. This Agreement may be signed by the parties in one or
more counterparts which together shall constitute one and the same agreement
among the parties.
16. Successors and Assigns. This Agreement shall be binding upon the
Underwriters and the Company and their successors and assigns and any successor
or assign of any substantial portion of the Company's and any of the
Underwriters' respective businesses and/or assets.
17. Miscellaneous. UBS, an indirect, wholly owned subsidiary of UBS AG,
is not a bank and is separate from any affiliated bank, including any U.S.
branch or agency of UBS AG. Because UBS is a separately incorporated entity, it
is solely responsible for its own contractual obligations and commitments,
including obligations with respect to sales and purchases of securities.
Securities sold, offered or recommended by UBS are not deposits, are not insured
by the Federal Deposit Insurance Corporation, are not guaranteed by a branch or
agency, and are not otherwise an obligation or responsibility of a branch or
agency.
-28-
If the foregoing correctly sets forth the understanding
between the Company and the several Underwriters, please so indicate in the
space provided below for that purpose, whereupon this agreement and your
acceptance shall constitute a binding agreement between the Company and the
Underwriters, severally.
Very truly yours,
ZIPREALTY, INC.
By:______________________________________
Name:
Title:
Accepted and agreed to as of the date first above written, on behalf of
themselves and the other several Underwriters named in Schedule A
UBS SECURITIES LLC
DEUTSCHE BANK SECURITIES INC.
XXXXXX XXXXXX PARTNERS
PACIFIC GROWTH EQUITIES, LLC
By: UBS SECURITIES LLC
By: _____________________
Name:
Title:
By: _____________________
Name:
Title:
By: DEUTSCHE BANK SECURITIES INC.
By: _____________________
Name:
Title:
By: _____________________
Name:
Title:
SCHEDULE A
Number of
Underwriter Firm Shares
----------- -----------
UBS SECURITIES LLC
DEUTSCHE BANK SECURITIES INC.
XXXXXX XXXXXX PARTNERS
PACIFIC GROWTH EQUITIES, LLC
-----------
Total........................
===========
A-1
EXHIBIT A
ZipRealty, Inc.
Common Stock
($0.001 Par Value)
_____, 2004
UBS Securities LLC ("UBS")
Deutsche Bank Securities Inc. ("Deutsche")
Xxxxxx Xxxxxx Partners
Pacific Growth Equities, LLC
As Representatives of the several Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in
connection with the proposed Underwriting Agreement (the "Underwriting
Agreement") to be entered into by ZipRealty, Inc. (or its successor, the
"Company") and you, as Representatives of the several Underwriters named
therein, with respect to the public offering (the "Offering") of Common Stock,
par value $0.001 per share, of the Company (the "Common Stock").
In order to induce you to enter into the Underwriting
Agreement, the undersigned agrees that for a period of 180 days after the date
of the final prospectus relating to the Offering the undersigned will not,
without the prior written consent of UBS and Deutsche, (i) sell, offer to sell,
contract or agree to sell, hypothecate, pledge, grant any option to purchase or
otherwise dispose of or agree to dispose of, directly or indirectly, or file (or
participate in the filing of) a registration statement with the Securities and
Exchange Commission (the "Commission") in respect of, or establish or increase a
put equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder
with respect to, any Common Stock of the Company or any securities convertible
into or exercisable or exchangeable for Common Stock, or warrants or other
rights to purchase Common Stock, (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock, or warrants or other rights to purchase Common
Stock, whether any such transaction is to be settled by delivery of Common Stock
or such other securities, in cash or otherwise, or (iii) publicly announce an
intention to effect any transaction specified in clause (i) or (ii). The
foregoing sentence shall not apply to [(a) the registration of or sale to the
Underwriters of any Common Stock pursuant to the Offering and the Underwriting
Agreement,] (b) bona fide gifts, provided the recipient thereof agrees in
writing with the Underwriters to be bound by the terms of this Lock-Up Letter
Agreement, (c) dispositions to any trust for the direct or indirect benefit of
the undersigned and/or the immediate family of the undersigned, provided that
such trust agrees in writing with the Underwriters to be bound by the terms of
this Lock-Up Letter Agreement, (d) transfers by will or intestate succession
provided that the transferee agrees in writing with the Underwriters to be bound
by the terms of this Lock-
A-1
Up Letter Agreement, (e) transfers in connection with distributions to the
undersigned's partners, members or stockholders provided that the transferees
agree in writing with the Underwriters to be bound by the terms of this Lock-Up
Letter Agreement, or (f) shares of Common Stock acquired by the undersigned from
the Underwriters or in the public market after the close of the Offering,
provided, however, if, following the offering, the undersigned is subject to the
reporting requirements of Section 16 of the Securities Exchange Act of 1934, as
amended, all shares acquired by the undersigned from the Underwriters will be
subject to this Lock-up Letter Agreement. If
(1) during the period that begins on the date that is 15 calendar
days plus 3 business days before the last day of the 180-day
restricted period and ends on the last day of the 180-day
restricted period, the Company issues an earnings release or
material news or a material event relating to the Company
occurs; or
(2) prior to the expiration of the 180-day restricted period, the
Company announces that it will release earnings results during
the 16-day period beginning on the last day of the 180-day
period,
the restrictions imposed by this letter shall continue to apply until the
expiration of the date that is 15 calendar days plus 3 business days after the
date on which the issuance of the earnings release or the material news or
material event occurs.
In addition, the undersigned hereby waives any rights the
undersigned may have to require registration of Common Stock in connection with
the filing of a registration statement relating to the Offering and any rights
the undersigned may have to notice of the proposed filing of a registration
statement relating to the Offering. The undersigned further agrees that, for a
period of 180 days after the date of the final prospectus relating to the
Offering, the undersigned will not, without the prior written consent of UBS and
Deutsche, make any demand for, or exercise any right with respect to, the
registration of Common Stock of the Company or any securities convertible into
or exercisable or exchangeable for Common Stock, or warrants or other rights to
purchase Common Stock.
The undersigned also consents and agrees to the entry of stop
transfer instructions with the Company's transfer agent and registrar against
the transfer of the undersigned's securities of the Company except in compliance
with the restrictions set forth herein.
If (i) the Company notifies you in writing that it does not
intend to proceed with the Offering, (ii) the registration statement filed with
the Securities and Exchange Commission with respect to the Offering is withdrawn
or (iii) for any reason the Underwriting Agreement shall be terminated prior to
the time of purchase (as defined in the Underwriting Agreement), this Lock-Up
Letter Agreement shall be terminated and the undersigned shall be released from
its obligations hereunder.
Yours very truly,
__________________________________
Name:
A-2
EXHIBIT B
OFFICERS' CERTIFICATE
1. I have reviewed the Registration Statement and the Prospectus.
2. The representations and warranties of the Company as set forth in this
Agreement are true and correct as of the time of purchase and, if
applicable, the additional time of purchase.
3. The Company has performed all of its obligations under this Agreement
as are to be performed at or before the time of purchase and at or
before the additional time of purchase, as the case may be.
4. The conditions set forth in paragraphs (g) and (h) of Section 6 of this
Agreement have been met.
5. The financial statements and other financial information included in
the Registration Statement and the Prospectus fairly present in all
material respects the financial condition, results of operations, and
cash flows of the Company as of, and for, the periods presented in the
Registration Statement
B-1
EXHIBIT C
FORM OF XXXXXX XXXXXXX XXXXXXXX & XXXXXX, PROFESSIONAL
CORPORATION LEGAL OPINION
1. The Company is a corporation duly incorporated and validly existing under,
and by virtue of the laws of the State of Delaware, and is in good standing
under such laws. The Company has the corporate power to own and lease its
properties and assets, and to carry on its business as described in the
Prospectus. The Company is qualified to do business as a foreign corporation in
the following jurisdictions: California, Georgia, Illinois, Maryland,
Massachusetts, Texas, Virginia, Washington, and the District of Columbia
(Washington, D.C.).
2. The authorized, issued and outstanding capitalization of the Company as of
September 30, 2004 was as set forth in the Prospectus under the "Actual" column
under the caption "Capitalization." Since September 30, 2004, the Company has
not issued any capital stock except for shares of such stock issued upon the
exercise of previously issued options or warrants, and has not issued any
options, warrants, convertible securities or other rights to purchase shares of
capital stock except for options issued in the ordinary course of the Company's
business. Except as described in the Prospectus, there are no outstanding
securities of the Company convertible or exchangeable into or evidencing the
right to purchase or subscribe for any shares of capital stock of the Company
and there are no outstanding or authorized options, warrants or rights of any
character obligating the Company to issue any shares of its capital stock or any
securities convertible or exchangeable into or evidencing the right to purchase
or subscribe for any shares of such stock. The Firm Shares [and the Additional
Shares] delivered on the date hereof and all other outstanding shares of the
common stock of the Company have been duly authorized and validly issued, are
fully paid and nonassessable and free of statutory preemptive rights, and
conform in all material respects to the description thereof contained in the
Prospectus, and the stockholders of the Company have no preemptive rights
contained in the Company's Certificate of Incorporation or Bylaws, and, to our
knowledge, the stockholders of the Company do not have contractual, written
preemptive rights with the Company with respect to the Firm Shares [and the
Additional Shares].
3. Except as disclosed in the Prospectus or otherwise expressly waived in
writing, there are no contracts, agreements or understandings known to us
between the Company and any person granting such person the right to require the
Company to file a registration statement under the Securities Act with respect
to any securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities registered
pursuant to the Registration Statement.
4. The Company is not required to register as an "investment company" as such
term is defined in the Investment Company Act and after giving effect to the
receipt and use of the net proceeds from the offering will not be required to
register as an "investment company".
5. No consent, approval, authorization of, or designation, declaration or filing
with, any governmental authority on the part of the Company is required in
connection with the valid execution and delivery of the Underwriting Agreement,
or the offer, sale or issuance of the Firm Shares [and the Additional Shares],
except such as have been obtained and made under the Securities Act and the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
6. The execution and delivery by the Company of the Underwriting Agreement, the
performance of the Company of its obligations under the Underwriting Agreement,
and the issuance and sale of the Firm Shares [and the Additional Shares] do not
violate any provisions of the Certificate of Incorporation or Bylaws, or any
provision of any applicable federal or state law, rule or regulation known to us
to be customarily applicable to transactions of this nature or, to our
knowledge, any decree, judgment or order to which the Company is a party. The
execution and delivery by the Company of the Underwriting
C-1
Agreement, the performance by the Company of its obligations under the
Underwriting Agreement, and the issuance of the Firm Shares [and the Additional
Shares] do not violate, or constitute a default under, any contract or agreement
filed as an exhibit to the Registration Statement pursuant to Item 601(b)(10) of
Regulation S-K to which the Company is a party.
7. The Company has the corporate power to authorize, issue and sell the Firm
Shares [and the Additional Shares] as contemplated by the Underwriting
Agreement.
8. The Registration Statement was declared effective under the Securities Act,
and the Prospectus was filed with the Commission pursuant to Rule 424(b) under
the Securities Act on ___________. To our knowledge, no stop order suspending
the effectiveness of the Registration Statement or any part thereof has been
issued, and no proceedings for that purpose have been instituted or are pending
under the Securities Act.
9. We do not know of any legal or governmental proceedings required to be
described in the Registration Statement or the Prospectus which are not
described in all material respects therein as required nor of any contracts or
documents of a character or related party transactions required to be described
in or filed as exhibits to the Registration Statement which are not described in
all material respects therein or filed as required.
10. The information in the Prospectus under the caption "Description of Capital
Stock," "Shares Eligible for Future Sale," "Risk Factors - Risks Related to this
Offering - Our charter documents and Delaware law could prevent a takeover that
stockholders consider favorable and could also reduce the market price of our
stock" and in Part II of the Registration Statement under Item 14, in each case
insofar as such statements constitute summaries of legal matters, documents or
proceedings referred to therein, fairly present, in all material respects, the
information called for with respect to such legal matters, documents and
proceedings and fairly summarize the matters referred to therein in all material
respects.
11. The Underwriting Agreement has been duly authorized, executed and delivered
by the Company.
12. Based solely upon the Licensing Certificates, copies of which are attached
to this opinion, and the aforesaid computer searches and telephone inquiries,
the Company is licensed as a real estate broker or real estate corporation in
the following jurisdictions: Arizona, California, Georgia, Illinois,
Massachusetts, Texas, Virginia, Washington, and the District of Columbia
(Washington, D.C.).
13. The statements in the Prospectus under the caption "Business - Regulatory
Matters - Government regulation - State regulation," insofar as such statements
constitute summaries of legal matters referred to therein, fairly present and
summarize, to the extent they relate to the laws of the State of California, the
matters referred to therein in all material respects.
14. All of the outstanding securities of the Company have been issued in
compliance with all federal securities laws.
15. The certificates for the Shares are in due and proper form and the holders
of the Shares will not be subject to personal liability by reason of being such
holders.
16. To such counsel's knowledge, the Company does not have any subsidiaries.
In addition, we have participated in conferences with certain officers
and other representatives of the Company, its regulatory counsel, the
Representatives, counsel for the Underwriters and the independent certified
public accountants of the Company, at which conferences the contents of the
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Registration Statement and Prospectus and related matters were discussed.
Although we do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or Prospectus
except for those referred to in paragraphs (10) and (13) above, no facts have
come to our attention that have caused us to believe that, (i) as of its
effective date, the Registration Statement or any amendment thereto (other than
the financial statements and related schedules and the financial and statistical
data derived from such financial statements or schedules, as to which we express
no belief) contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary in order to make
the statements therein not misleading, or (ii) as of its issue date or as of the
date hereof, the Prospectus or any amendment or supplement thereto (other than
the financial statements and related schedules and the financial and statistical
data derived from such financial statements or schedules, as to which we express
no belief) contained any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. In
addition, we confirm that each of the Registration Statement, at the time it was
declared effective by the Commission under the Securities Act, and the
Prospectus, at the time it was transmitted for filing with the Commission
pursuant to Rule 424(b) under the Securities Act (other than the financial
statements and related schedules and the financial and statistical data derived
from such financial statements or schedules, as to which we express no belief),
complied as to form in all material respects with the requirements of the
Securities Act and the Rules and Regulations.
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EXHIBIT D
OTHER LEGAL OPINIONS
Opinion of Xxxxxxx Coie LLP
1. The statements in the disclosures under the heading "Business - Regulatory
Matters - Government regulation - State regulation," insofar as such statements
constitute summaries of legal matters referred to therein, fairly summarize, to
the extent they relate to the laws of the States of Arizona, Illinois and
Washington, the matters referred to therein in all material respects.
2. The statements in the disclosures under the heading "Business - Regulatory
Matters - Government regulation - Federal regulation," insofar as such
statements constitute summaries of legal matters referred to therein, fairly
summarize the matters referred to therein in all material respects.
Opinion of Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, PLLC
1. The information in the Registration Statement and the Prospectus under the
subheading "State regulation" within the heading "Business - Regulatory Matters
- Government regulation," insofar as such statements constitute a summary of
matters of law referred to therein, are accurate in all material respects and
present fairly the information required to be shown.
2. The information in the Registration Statement and the Prospectus under the
subheading "Third-party regulation" within the heading "Business - Regulatory
Matters," insofar as such statements constitute a summary of matters of law
referred to therein, are accurate in all material respects and present fairly
the information required to be shown.
3. The Company is licensed as a real estate broker or real estate corporation in
Maryland.
Opinion of Squire, Xxxxxxx & Xxxxxxx L.L.P.
1. ZipAgents, as described and as we understand them to generally function,
qualify for the "outside sales exemption" under the Fair Labor Standards Act.
2. Based on the laws currently in place in the states where ZipRealty is
currently doing business and the description of ZipAgent duties supplied to us,
it is our opinion that ZipAgents are current exempt from minimum wage and
overtime regulation in the specified jurisdictions.
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