Exhibit 10.1
OVERSTOCK.COM,
INC.
2,734,152 Shares of Common Stock,
$0.0001 par value per share
PLACEMENT AGENCY
AGREEMENT
December 15, 2006
W.R. Hambrecht + Co., LCC
539 Bryant Street
San Francisco, CA 94107
Dear Sir or Madam:
Overstock.com, Inc., a Delaware
corporation (the “Company”), proposes to issue and sell
2,734,152 shares (the “Shares”) of common stock, par
value $0.0001 per share (the “Common Stock”), to
certain investors (collectively, the
“Investors”). The Company desires to engage you
as its Placement Agent (the “Placement Agent”) in
connection with such issuance and sale. The Shares are more
fully described in the Registration Statement (as hereinafter
defined).
The Company hereby confirms as
follows its agreements with the Placement Agent.
1.
Agreement to Act as Placement Agent . On the basis of
the representations, warranties and agreements of the Company
herein contained and subject to all the terms and conditions of
this Agreement, the Placement Agent agrees to act as the
Company’s exclusive placement Agent in connection with the
issuance and sale, on a best efforts basis, by the Company of the
Shares to the Investors. The Company shall pay to the
Placement Agent 1% of the proceeds received by the Company from the
sale of the Shares as set forth on the cover page of the Prospectus
(as hereinafter defined).
2.
Closing . The closing (the “Closing”)
shall take place at the office of the Company at 6350 South 3000
East, Salt Lake City, Utah 84121. All actions taken at the
Closing shall be deemed to have occurred
simultaneously.
3.
Representations and Warranties of the Company . The
Company represents and warrants and covenants to the Placement
Agent that:
(a)
The Company has filed with the Securities and Exchange Commission
(the “Commission”) a registration statement on Form S-3
(Registration No. 333-122904), which has become effective, relating
to the Common Stock and certain other securities of the Company,
under the Securities Act of 1933, as amended (the
“Act”), and the
rules and
regulations (collectively referred to as the “Rules and
Regulations”) of the Commission promulgated thereunder.
As used in this Agreement:
(i)
“Applicable Time” means 9:00 a.m. (New York City time)
on the date of this Agreement;
(ii)
“Effective Date” means any date as of which the
Registration Statement became, or is deemed to have become,
effective under the Act in accordance with the Rules and
Regulations;
(iii)
“Issuer Free Writing Prospectus” means each
“free writing prospectus” (as defined in Rule 405 of
the Rules and Regulations) prepared by or on behalf of the Company
or used or referred to by the Company in connection with the
offering of the Shares;
(iv)
“Preliminary Prospectus” means any preliminary
prospectus relating to the Shares included in the Registration
Statement or filed with the Commission pursuant to Rule 424(b) of
the Rules and Regulations;
(v)
“Pricing Disclosure Materials” means, as of the
Applicable Time, the most recent Preliminary Prospectus, together
with each Issuer Free Writing Prospectus filed or used by the
Company on or before the Applicable Time;
(vi)
“Prospectus” means the final prospectus supplement
relating to the Shares as filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations; and
(vii)
“Registration Statement” means, collectively, the
various parts of such registration statement, each as amended as of
the Effective Date for such part, including any Preliminary
Prospectus or the Prospectus and all exhibits to such registration
statement, and including all documents incorporated therein by
reference.
(b)
The Registration Statement has heretofore become effective under
the Act or, with respect to any registration statement to be filed
to register the offer and sale of Shares pursuant to Rule 462(b)
under the Act, will be filed with the Commission and become
effective under the Act no later than 10:00 p.m., New York City
time, on the date of determination of the public offering price for
the Shares; no stop order of the Commission preventing or
suspending the use of any 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.
(c)
The Registration Statement, at the time it became effective,
as of the date hereof, and at the Closing Date conformed and will
conform in all material respects to the requirements of the Act and
the Rules and Regulations. The Prospectus will conform, when filed
with the Commission pursuant to Rule 424(b) and on the Closing Date
to the requirements of the Act and the Rules and
Regulations.
(d)
The Registration Statement did not, as of the Effective Date,
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading.
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(e)
The Prospectus will not, as of its date and on the Closing Date,
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; provided ,
however , that the Company makes no representation or
warranty with respect to any statement contained in the Prospectus
in reliance upon and in conformity with information concerning the
Placement Agent and furnished in writing by the Placement Agent to
the Company expressly for use in the Prospectus, as set forth in
Section 8(b).
(f)
The Pricing Disclosure Materials did not, as of the Applicable
Time, 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, except that the price of the
Shares, number of Shares to be sold, and disclosures directly
relating thereto will be included on the cover page of the
Prospectus; provided , however , that the Company
makes no representation or warranty with respect to any statement
contained in the Pricing Disclosure Materials in reliance upon and
in conformity with information concerning the Placement Agent and
furnished in writing by a Placement Agent to the Company expressly
for use in the Pricing Disclosure Materials, as set forth in
Section 8(b).
(g)
Each Issuer Free Writing Prospectus (including, without limitation,
any road show that is a free writing prospectus under Rule 433),
when considered together with the Pricing Disclosure Materials as
of the Applicable Time, did not contain an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading, except that the price of the Shares, number of Shares
to be sold, and disclosures directly relating thereto will be
included on the cover page of the Prospectus.
(h)
Each Issuer Free Writing Prospectus conformed or will conform in
all material respects to the requirements of the Act and the Rules
and Regulations on the date of first use, and the Company has
complied with any filing requirements applicable to such Issuer
Free Writing Prospectus pursuant to the Rules and
Regulations. The Company has not made any offer relating to
the Shares that would constitute an Issuer Free Writing Prospectus
without the prior written consent of the Placement Agent. The
Company has retained in accordance with the Rules and Regulations
all Issuer Free Writing Prospectuses that were not required to be
filed pursuant to the Rules and Regulations.
(i)
The Company is, and at the Closing Date will be, duly organized,
validly existing and in good standing under the laws of the State
of Delaware. The Company has, and at the Closing Date will have,
full power and authority to conduct all the activities conducted by
it, to own or lease all the assets owned or leased by it and to
conduct its business as described in the Registration Statement and
the Prospectus. The Company is, and at the Closing Date will
be, duly licensed or qualified to do business and in good standing
as a foreign organization in all jurisdictions in which the nature
of the activities conducted by it or the character of the assets
owned or leased by it makes such licensing or qualification
necessary, except where the failure to be so qualified or in good
standing or have such power or authority would not, individually or
in the aggregate, have a material adverse effect or would not
reasonably be expected to have a material adverse effect on or
affecting the business, prospects,
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properties,
management, consolidated financial position, stockholders’
equity or results of operations of the Company and its Subsidiaries
(as defined below) taken as a whole (a “Material Adverse
Effect”). Complete and correct copies of the articles
or certificate of incorporation and of the bylaws of the Company
and all amendments thereto have been delivered to the Placement
Agent, and no changes therein will be made subsequent to the date
hereof and prior to the Closing Date.
(j)
The Company’s only subsidiaries (each a
“Subsidiary” and collectively the
“Subsidiaries”) are listed on Schedule 1 to this
Agreement. Each Subsidiary that is a corporation has been
duly organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction of formation.
Each Subsidiary is duly qualified and in good standing as a foreign
corporation or other entity in each jurisdiction in which the
character or location of its properties (owned, leased or licensed)
or the nature or conduct of its business makes such qualification
necessary, except for those failures to be so qualified or in good
standing which will not have a Material Adverse Effect. All
of the shares of issued capital stock of each Subsidiary of the
Company that is a corporation have been duly authorized and validly
issued, are fully paid and non-assessable and are owned directly or
indirectly by the Company, free and clear of any lien, encumbrance,
claim, security interest, restriction on transfer,
shareholders’ agreement, voting trust or other defect of
title whatsoever. All interests of each Subsidiary that is
not a corporation have been duly authorized and validly issued and
are owned, directly or indirectly, by the Company.
(k)
The issued and outstanding shares of capital stock of the Company
have been validly issued, are fully paid and nonassessable and,
other than as set forth in the Registration Statement, are not
subject to any preemptive rights, rights of first refusal or
similar rights. The Company has an authorized, issued and
outstanding capitalization as set forth in the Prospectus as of the
dates referred to therein. The descriptions of the securities of
the Company in the Registration Statement and the Prospectus are,
and at the Closing Date will be, complete and accurate in all
respects. Except as set forth in the Registration Statement
and the Prospectus, and except for options granted in the ordinary
course of business under the Company’s incentive plans, the
Company does not have outstanding any options to purchase, or any
rights or warrants to subscribe for, or any securities or
obligations convertible into, or exchangeable for, or any contracts
or commitments to issue or sell, any shares of capital stock or
other securities.
(l)
The Company has full legal right, power and authority to enter into
this Agreement and perform the transactions contemplated
hereby. This Agreement has been authorized and validly
executed and delivered by the Company and constitutes a legal,
valid and binding agreement of the Company enforceable against the
Company in accordance with its terms, subject to the effect of
applicable bankruptcy, insolvency or similar laws affecting
creditors’ rights generally and equitable principles of
general applicability.
(m)
The issuance and sale of the Shares have been duly authorized by
the Company, and the Shares, when issued and paid for in accordance
with this Agreement, will be duly and validly issued, fully paid
and nonassessable and will not be subject to preemptive or similar
rights. The holders of the Shares will not be subject to
personal liability by reason of being such holders. The
Shares, when issued, will conform in all material respects to the
description thereof set forth in or incorporated into the
Prospectus.
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(n)
The consolidated financial statements and the related notes
included in the Registration Statement and the Prospectus present
fairly, in all material respects, the financial condition
of the Company and its consolidated Subsidiaries as of the
dates thereof and the results of operations and cash flows at the
dates and for the periods covered thereby in conformity with
generally accepted accounting principles
(“GAAP”). No other financial statements or
schedules of the Company, any Subsidiary or any other entity are
required by the Act or the Rules and Regulations to be included in
the Registration Statement or the Prospectus.
(o)
PricewaterhouseCoopers LLC (the “Accountants”), who
have reported on such consolidated financial statements and
schedules, are registered independent public accountants with
respect to the Company as required by the Act and the Rules and
Regulations and by the rules of the Public Accounting Oversight
Board. The consolidated financial statements of the Company
and the related notes and schedules included in the Registration
Statement and the Prospectus have been prepared in conformity with
the requirements of the Act and the Rules and Regulations and
present fairly the information shown therein.
(p)
The Company is not an ineligible issuer as defined under the Act
and the Company has paid the registration fee for this offering as
required under the Act or will pay such fees within the time period
required by such rule.
(q)
The Company is, and at the Closing Date will be, in compliance with
all provisions of the Sarbanes-Oxley Act of 2002, as amended, which
are applicable to it. The Company and each Subsidiary
maintain 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.
(r)
Since the date of the most recent consolidated financial statements
of the Company included or incorporated by reference in the
Prospectus and prior to Closing, (i) there has not been and will
not have been any change in the capital stock of the Company
(except for changes in the number of outstanding shares of Common
Stock of the Company due to the issuance of shares upon the
exercise of stock options or upon the grant of restricted stock to
the Company’s directors, the issuance of shares pursuant to
the Company’s employee stock purchase plan or the
Company’s deferred compensation plan for directors) or
long-term debt of the Company or any Subsidiary or any dividend or
distribution of any kind declared, set aside for payment, paid or
made by the Company on any class of capital stock, or any material
adverse change, or any development that would reasonably be
expected to result in a material adverse change, in or affecting
the business, prospects, properties, management, consolidated
financial position, stockholders’ equity, or results of
operations of the Company and its Subsidiaries taken as a whole (a
“Material Adverse Change”) and (ii) neither the Company
nor any Subsidiary has sustained or will sustain any material
loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by
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insurance, or
from any labor disturbance or dispute or any action, order or
decree of any court or arbitrator or governmental or regulatory
authority, except in each case as otherwise disclosed in the
Registration Statement and the Prospectus.
(s)
Since the date as of which information is given in the Prospectus,
neither the Company nor any Subsidiary has entered or will enter
into any transaction or agreement, not in the ordinary course of
business, that is material to the Company and its Subsidiaries
taken as a whole or incurred or will incur any liability or
obligation, direct or contingent, not in the ordinary course of
business, that is material to the Company and its Subsidiaries
taken as a whole.
(t)
The Company and each Subsidiary has good and valid title in fee
simple to all items of real property and good and valid title to
all personal property described in the Registration Statement or
the Prospectus as being owned by them that are material to the
businesses of the Company and its Subsidiaries taken as a whole, in
each case free and clear of all liens, encumbrances and claims
except those that (i) do not materially interfere with the use made
and proposed to be made of such property by the Company and its
Subsidiaries or (ii) would not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect. Any
real property described in the Registration Statement or the
Prospectus as being leased by the Company or any Subsidiary that is
material to the business of the Company and its Subsidiaries taken
as a whole is held by them under valid, existing and enforceable
leases, except those that (A) do not materially interfere with the
use made or proposed to be made of such property by the Company and
its Subsidiaries or (B) would not be reasonably expected,
individually or in the aggregate, to have a Material Adverse
Effect.
(u)
The Company is not, nor upon completion of the transactions
contemplated herein will it be, an “investment company”
or an “affiliated person” of, or “promoter”
or “principal underwriter” for, an “investment
company,” as such terms are defined in the Investment Company
Act of 1940, as amended (the “Investment Company
Act”).
(v)
Except as disclosed in the Prospectus, there are no legal,
governmental or regulatory actions, suits or proceedings pending,
nor, to the Company’s knowledge, any legal, governmental or
regulatory investigations, to which the Company or any Subsidiary
is a party or to which any property of the Company or any
Subsidiary is the subject that, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect or
materially and adversely affect the ability of the Company to
perform its obligations under the Agreement; to the Company’s
knowledge, no such actions, suits or proceedings are threatened or
contemplated by any governmental or regulatory authority or
threatened by others; and there are no current or pending legal,
governmental or regulatory investigations, actions, suits or
proceedings that are required under the Act to be described in the
Prospectus that are not so described.
(w)
The Company and each Subsidiary has, and at the Closing Date will
have, (i) all governmental licenses, permits, consents, orders,
approvals and other authorizations necessary to carry on its
respective business as presently conducted except where the failure
to have such governmental licenses, permits, consents, orders,
approvals and other authorizations would not have a Material
Adverse Effect, (ii) complied with all laws, regulations and orders
applicable to either it or its business, except where the failure
to so
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comply would not
have a Material Adverse Effect, and (iii) performed all its
obligations required to be performed, and is not, and at the
Closing Date will not be, in default, under any indenture,
mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement, lease, contract or other agreement
or instrument (collectively, a “contract or other
agreement”) to which it is a party or by which its property
is bound or affected, except where such default would not have a
Material Adverse Effect, and, to the Company’s best
knowledge, no other party under any material contract or other
agreement to which it is a party is in default in any respect
thereunder. The Company and its Subsidiaries are not in
violation of any provision of their respective organizational or
governing documents.
(x)
The Company has all corporate power and authority to enter into
this Agreement, and to carry out the provisions and conditions
hereof, and all consents, authorizations, approvals and orders
required in connection herewith have been obtained, except such as
may be required under state securities or Blue Sky Laws or the
by-laws and rules of the National Association of Securities
Dealers, Inc. (the “NASD”) or the Nasdaq Global Market
in connection with the transactions contemplated by the Placement
Agency Agreement.
(y)
Neither the execution of this Agreement, nor the issuance, offering
or sale of the Shares, nor the consummation of any of the
transactions contemplated herein, nor the compliance by the Company
with the terms and provisions hereof will conflict with, or will
result in a breach of, any of the terms and provisions of, or has
constituted or will constitute a default under, or has resulted in
or will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any
Subsidiary pursuant to the terms of any contract or other agreement
to which the Company or its Subsidiaries may be bound or to which
any of the property or assets of the Company or its Subsidiaries is
subject, except such conflicts, breaches or defaults as may have
been waived; nor will such action result in any violation of the
provisions of the organizational or governing documents of the
Company or any Subsidiary, or any statute or any order, rule or
regulation applicable to the Company or any Subsidiary or of any
court or of any federal, state or other regulatory authority or
other government body having jurisdiction over the Company or any
Subsidiary.
(z)
There is no document or contract 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 which is not
described or filed as required. All such contracts to which
the Company is a party have been authorized, executed and delivered
by the Company, constitute valid and binding agreements of the
Company, and are enforceable against the Company in accordance with
the terms thereof, subject to the effect of applicable bankruptcy,
insolvency or similar laws affecting creditors’ rights
generally and equitable principles of general applicability, except
where the failure of any such contracts to be binding on the
Company or enforceable against it would not reasonably be expected
to have a Material Adverse Effect.
(aa)
No statement, representation or warranty made by the Company in
this Agreement or made in any certificate or document required by
this Agreement to be delivered to the Placement Agent or the
Investors was or will be, when made, inaccurate, untrue or
incorrect in any material respect.
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(bb)
The Company and its directors, officers or controlling persons have
not taken, directly or indirectly, any action intended, or which
might reasonably be expected, to cause or result, under the Act or
otherwise, in, or which has constituted, stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Common Stock.
(cc)
No holder of securities of the Company has rights to the
registration of any securities of the Company as a result of the
filing of the Registration Statement or the transactions
contemplated by this Agreement, except for such rights as have been
waived or satisfied.
(dd)
The Common Stock of the Company is quoted on the National
Association of Securities Dealers Automated Quotations Global
Market (the “Nasdaq Global Market”). The Company is,
and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with all such listing and
maintenance requirements of the Nasdaq Global Market.
(ee)
The Company is not involved in any material labor dispute nor is
any such dispute known by the Company to be threatened.
(ff)
The business and operations of the Company and each of its
Subsidiaries have been and are being conducted in compliance with
all applicable laws, ordinances, rules, regulations, licenses,
permits, approvals, plans, authorizations or requirements relating
to occupational safety and health, or pollution, or protection of
health or the environment (including, without limitation, those
relating to emissions, discharges, releases or threatened releases
of pollutants, contaminants or hazardous or toxic substances,
materials or wastes into ambient air, surface water, groundwater or
land, or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of
chemical substances, pollutants, contaminants or hazardous or toxic
substances, materials or wastes, whether solid, gaseous or liquid
in nature) of any governmental department, commission, board,
bureau, agency or instrumentality of the United States, any state
or political subdivision thereof, or any foreign jurisdiction, and
all applicable judicial or administrative agency or regulatory
decrees, awards, judgments and orders relating thereto, except
where the failure to be in such compliance will not, individually
or in the aggregate, have a Material Adverse Effect; and neither
the Company nor any of its Subsidiarie
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