EXHIBIT 1.1
______________ Shares
ODIMO INCORPORATED
Common Stock
UNDERWRITING AGREEMENT
_______ , 2005
CIBC World Markets Corp.
Xxxxxxxxxxx & Co. Inc.
as Representatives of the several
Underwriters named in Schedule I hereto
c/o CIBC World Markets Corp.
000 0xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Odimo Incorporated, a Delaware corporation (the "COMPANY") and the
persons listed on Schedule II hereto (the "SELLING STOCKHOLDERS"), propose,
subject to the terms and conditions contained herein, to sell to you and the
other underwriters named on Schedule I to this Agreement (the "UNDERWRITERS"),
for whom you are acting as Representatives (the "REPRESENTATIVES"), an aggregate
of ________ shares (the "FIRM SHARES") of the Company's common stock, par value
$0.001 per share (the "COMMON STOCK"). Of the _____ Firm Shares, _____ are to be
issued and sold by the Company and _____ are to be sold by the Selling
Stockholders. The respective amounts of the Firm Shares to be purchased by each
of the several Underwriters are set forth opposite their names on Schedule I
hereto. In addition, the Selling Stockholders propose to grant to the
Underwriters an option to purchase on one occasion up to an additional
___________ shares (the "OPTION SHARES") of Common Stock from the Selling
Stockholders for the purpose of covering over-allotments in connection with the
sale of the Firm Shares. The Firm Shares and the Option Shares are collectively
called the "SHARES."
The Company has prepared and filed in conformity with the requirements
of the Securities Act of 1933, as amended (the "SECURITIES ACT"), and the
published rules and regulations thereunder (the "RULES") adopted by the
Securities and Exchange Commission (the "COMMISSION") a Registration Statement
(as hereinafter defined) on Form S-1
(No. 333-117400), including a preliminary prospectus relating to the Shares, and
such amendments thereof as may have been required to the date of this Agreement.
Copies of such Registration Statement (including all amendments thereof) and of
the related Preliminary Prospectus (as hereinafter defined) have heretofore been
delivered by the Company to you. The term "PRELIMINARY PROSPECTUS" means any
preliminary prospectus included at any time as a part of the Registration
Statement or filed with the Commission by the Company pursuant to Rule 424(a) of
the Rules. The term "REGISTRATION STATEMENT" as used in this Agreement means the
initial registration statement (including all exhibits and financial schedules
thereto), as amended at the time and on the date it becomes effective (the
"EFFECTIVE DATE"), including the information (if any) contained in the form of
final prospectus filed with the Commission pursuant to Rule 424(b) of the Rules
and deemed to be part thereof at the time of effectiveness pursuant to Rule 430A
of the Rules. If the Company has filed an abbreviated registration statement to
register additional Shares pursuant to Rule 462(b) under the Rules (the "462(B)
REGISTRATION STATEMENT"), then any reference herein to the Registration
Statement shall also be deemed to include such 462(b) Registration Statement.
The term "PROSPECTUS" as used in this Agreement means the prospectus in the form
included in the Registration Statement at the time of effectiveness or, if Rule
430A of the Rules is relied on, the term Prospectus shall also include the final
prospectus filed with the Commission pursuant to Rule 424(b) of the Rules.
The Company and the Selling Stockholders understand that the
Underwriters propose to make a public offering of the Shares, as set forth in
and pursuant to the Prospectus, as soon after the Effective Date and the date of
this Agreement as the Representatives deem advisable. The Company and the
Selling Stockholders hereby confirm that the Underwriters and dealers have been
authorized to distribute or cause to be distributed each Preliminary Prospectus
and are authorized to distribute the Prospectus (as from time to time amended or
supplemented if the Company furnishes amendments or supplements thereto to the
Underwriters).
1. SALE, PURCHASE, DELIVERY AND PAYMENT FOR THE SHARES. On the basis of
the representations, warranties and agreements contained in, and subject to the
terms and conditions of, this Agreement:
(a) The Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at a purchase price of $_____
per share (the "INITIAL PRICE"), the number of Firm Shares set forth
opposite the name of such Underwriter under the column "Number of Firm
Shares to Be Purchased from the Company" on Schedule I to this
Agreement, subject to adjustment in accordance with Section 9 hereof.
The Selling Stockholders agree to sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to purchase
from the Selling Stockholders, at the Initial Price, the number of Firm
Shares set forth opposite the name of such Underwriter under the column
"Number of Firm Shares to Be Purchased from the Selling Stockholders"
on Schedule I to this Agreement, subject to adjustment in accordance
with Section 9 hereof.
(b) The Selling Stockholders hereby grant to the several
Underwriters an option to purchase, severally and not jointly, all or
any part of the Option Shares at the Initial Price. The number of
Option Shares to be purchased by each Underwriter shall be the same
percentage (adjusted by the Representatives to eliminate fractions) of
the total
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number of Option Shares to be purchased by the Underwriters as such
Underwriter is purchasing of the Firm Shares. Such option may be
exercised only to cover over-allotments in the sales of the Firm Shares
by the Underwriters and may be exercised in whole or in part at any
time on or before 12:00 noon, New York City time, on the business day
before the Firm Shares Closing Date (as defined below), and thereafter
within 30 days after the date of this Agreement, upon written,
facsimile or telegraphic notice, or verbal or telephonic notice
confirmed by written, facsimile or telegraphic notice, by the
Representatives to the Company no later than 12:00 noon, New York City
time, on the business day before the Firm Shares Closing Date or at
least two business days before the Option Shares Closing Date (as
defined below), as the case may be, setting forth the number of Option
Shares to be purchased and the time and date (if other than the Firm
Shares Closing Date) of such purchase.
(c) Payment of the purchase price for, and delivery of
certificates for, the Firm Shares shall be made at the offices of CIBC
World Markets Corp., Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, at 10:00 a.m., New York City time, on the third business day
following the date of this Agreement or at such time on such other
date, not later than ten (10) business days after the date of this
Agreement, as shall be agreed upon by the Company and the
Representatives (such time and date of delivery and payment are called
the "FIRM SHARES CLOSING DATE"). In addition, in the event that any or
all of the Option Shares are purchased by the Underwriters, payment of
the purchase price, and delivery of the certificates, for such Option
Shares shall be made at the above-mentioned offices, or at such other
place as shall be agreed upon by the Representatives and the Company,
on the date of delivery as specified in the notice from the
Representatives to the Company (such time and date of delivery and
payment is called the "OPTION SHARES CLOSING DATE"). The Firm Shares
Closing Date and the Option Shares Closing Date, if any, are called,
individually, a "CLOSING DATE" and, together, the "CLOSING DATES."
(d) Payment shall be made to the Company and the Custodian on
behalf of the Selling Stockholders by wire transfer of immediately
available funds to the accounts specified by the Company and the
Custodian against delivery of the Shares to the Representatives for the
respective accounts of the Underwriters through the facilities of
Depositary Trust Corporation ("DTC"), unless the Representatives
otherwise instruct.
(e) The Shares shall be registered in such names and shall be
in such denominations as the Representatives shall request at least two
full business days before the Firm Shares Closing Date or, in the case
of Option Shares, on the day of notice of exercise of the option as
described in Section 1(b) and shall be delivered by or on behalf of the
Company to the Representatives through the facilities of DTC for the
account of such Underwriter, unless the Representatives otherwise
instruct. The Company will cause the certificates representing the
Shares to be made available for checking and packaging, at such place
as is designated by the Representatives, on the full business day
before the Firm Shares Closing Date (or the Option Shares Closing Date
in the case of the Option Shares).
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2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Firm Shares Closing Date and as of each Option Shares Closing Date (if any), as
follows:
(a) On the Effective Date, the Registration Statement
complied, and on the date of the Prospectus, the date any
post-effective amendment to the Registration Statement becomes
effective, the date any supplement or amendment to the Prospectus is
filed with the Commission and each Closing Date, the Registration
Statement and the Prospectus (and any amendment thereof or supplement
thereto) will comply, in all material respects, with the requirements
of the Securities Act and the Rules and the Exchange Act and the rules
and regulations of the Commission thereunder. The Registration
Statement did not, as of the Effective Date, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading; and on the Effective Date and the
other dates referred to above neither the Registration Statement nor
the Prospectus, nor any amendment thereof or supplement thereto, will
contain any untrue statement of a material fact or will omit to state
any material fact required to be stated therein or necessary in order
to make the statements therein not misleading. When any related
preliminary prospectus was first filed with the Commission (whether
filed as part of the Registration Statement or any amendment thereto or
pursuant to Rule 424(a) of the Rules) and when any amendment thereof or
supplement thereto was first filed with the Commission, such
preliminary prospectus as amended or supplemented complied in all
material respects with the applicable provisions of the Securities Act
and the Rules and did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading. If
applicable, each Preliminary Prospectus and the Prospectus delivered to
the Underwriters for use in connection with this offering was identical
to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T. If Rule 434 is used, the Company will comply with the
requirements of Rule 434 and the Prospectus shall not be "materially
different," as such term is used in Rule 434, from the Prospectus
included in the Registration Statement at the time it became effective.
Notwithstanding the foregoing, none of the representations and
warranties in this paragraph 2(a) shall apply to statements in, or
omissions from, the Registration Statement or the Prospectus made in
reliance upon, and in conformity with, information herein or otherwise
furnished in writing by the Representatives on behalf of the several
Underwriters for use in the Registration Statement or the Prospectus.
With respect to the preceding sentence, the Company acknowledges that
the only information furnished in writing by the Representatives on
behalf of the several Underwriters for use in the Registration
Statement or the Prospectus is the statements contained in the fourth
and tenth paragraphs and the last sentence of the fifteenth paragraph
under the caption "Underwriting" in the Prospectus.
(b) The Registration Statement is effective under the
Securities Act and no stop order preventing or suspending the
effectiveness of the Registration Statement or suspending or preventing
the use of the Prospectus has been issued by the Commission and no
proceedings for that purpose have been instituted or are, to the
Company's knowledge, threatened under the Securities Act. Any required
filing of the Prospectus and
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any supplement thereto pursuant to Rule 424(b) of the Rules has been or
will be made in the manner and within the time period required by such
Rule 424(b).
(c) The financial statements of the Company (including all
notes and schedules thereto) included in the Registration Statement and
Prospectus present fairly the financial position of the Company and its
consolidated subsidiaries at the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; and such financial
statements and related schedules and notes thereto, and the unaudited
financial information filed with the Commission as part of the
Registration Statement, have been prepared in conformity with generally
accepted accounting principles, consistently applied throughout the
periods involved. The summary and selected financial data included in
the Prospectus present fairly the information shown therein as at the
respective dates and for the respective periods specified and have been
presented on a basis consistent with the consolidated financial
statements set forth in the Prospectus and other financial information.
The pro forma financial information included in the Registration
Statement and the Prospectus present fairly the information shown
therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
(d) Deloitte & Touche LLP, whose audit reports are filed with
the Commission as a part of the Registration Statement, are and, during
the periods covered by their audit reports, were independent public
accountants as required by the Securities Act and the Rules.
(e) The Company and each of its subsidiaries, including each
entity (corporation, partnership, joint venture, association or other
business organization) controlled directly or indirectly by the
Company, is duly organized, validly existing and in good standing under
the laws of their respective jurisdictions of incorporation or
organization. The Company and each of its subsidiaries is duly
qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which the nature of the business
conducted by it or location of the assets or properties owned, leased
or licensed by it requires such qualification, except for such
jurisdictions where the failure to so qualify individually or in the
aggregate would not have a material adverse effect on the assets,
properties, condition, financial or otherwise, or in the results of
operations, business affairs or business prospects of the Company and
its subsidiaries considered as a whole (a "MATERIAL ADVERSE EFFECT");
and, to the Company's knowledge, no proceeding has been instituted in
any such jurisdiction revoking, limiting or curtailing, or seeking to
revoke, limit or curtail, such power and authority or qualification.
The Company does not own, lease or license any asset or property or
conduct any business outside the United States of America.
(f) The Company and each of its subsidiaries has all requisite
corporate power and authority, and all necessary authorizations,
approvals, consents, orders, licenses, certificates and permits of and
from all governmental or regulatory bodies or any other person or
entity (collectively, the "PERMITS"), to own, lease and license its
assets and properties and conduct its business, all of which are valid
and in full force and effect,
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except where the lack of such Permits, individually or in the
aggregate, would not have a Material Adverse Effect. The Company and
each of its subsidiaries has fulfilled and performed in all material
respects all of its material obligations with respect to such Permits
and no event has occurred that allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other
material impairment of the rights of the Company thereunder. Except as
may be required under the Securities Act and state and foreign Blue Sky
laws, no other Permits are required to enter into, deliver and perform
this Agreement and to issue and sell the Shares.
(g) The Company and each of its subsidiaries owns or possesses
legally enforceable rights to use all patents, patent rights,
inventions, trademarks, trademark registrations and applications, trade
names, service marks, Internet domain names, copyrights, copyright
registrations and applications, software, licenses, know-how and other
similar rights and proprietary knowledge (collectively, "INTANGIBLES")
necessary for the conduct of its business. Neither the Company nor any
of its subsidiaries has received any notice of, or is aware of, any
infringement of or conflict with asserted rights of others with respect
to any Intangibles.
(h) The Company and each of its subsidiaries has good and
marketable title in fee simple to all real property, and good and
marketable title to all other property owned by it, in each case free
and clear of all liens, encumbrances, claims, security interests and
defects, except such as do not materially affect the value of such
property and do not materially interfere with the use made or proposed
to be made of such property by the Company and its subsidiaries. All
property held under lease by the Company and its subsidiaries is held
by them under valid, existing and enforceable leases, free and clear of
all liens, encumbrances, claims, security interests and defects, except
such as are not material and do not materially interfere with the use
made or proposed to be made of such property by the Company and its
subsidiaries.
(i) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, (i) there
has not been any Material Adverse Effect; (ii) neither the Company nor
any of its subsidiaries has sustained any loss or interference with its
assets, businesses or properties (whether owned or leased) from fire,
explosion, earthquake, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or any court or legislative or
other governmental action, order or decree which would have a Material
Adverse Effect; and (iii) since the date of the latest balance sheet
included in the Registration Statement and the Prospectus, neither the
Company nor its subsidiaries has (A) issued any securities or incurred
any liability or obligation, direct or contingent, for borrowed money,
except such liabilities or obligations incurred in the ordinary course
of business, (B) entered into any transaction not in the ordinary
course of business or (C) declared or paid any dividend or made any
distribution on any shares of its stock or redeemed, purchased or
otherwise acquired or agreed to redeem, purchase or otherwise acquire
any shares of its capital stock.
(j) There is no document, contract or other agreement required
to be described in the Registration Statement or Prospectus or to be
filed as an exhibit to the Registration Statement which is not
described or filed as required by the Securities Act or the Rules.
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Each description of a contract, document or other agreement in the
Registration Statement and the Prospectus accurately reflects in all
material respects the terms of the underlying contract, document or
other agreement. Each contract, document or other agreement described
in the Registration Statement and Prospectus or listed in the Exhibits
to the Registration Statement is in full force and effect and is valid
and enforceable by and against the Company or its subsidiary, as the
case may be, in accordance with its terms. Neither the Company nor any
of its subsidiaries, if a subsidiary is a party, nor, to the Company's
knowledge, any other party is in default in the observance or
performance of any term or obligation to be performed by it under any
such agreement, and no event has occurred which with notice or lapse of
time or both would constitute such a default, in any such case which
default or event, individually or in the aggregate, would have a
Material Adverse Effect. No default exists, and no event has occurred
which with notice or lapse of time or both would constitute a default,
in the due performance and observance of any term, covenant or
condition, by the Company or its subsidiary, if a subsidiary is a party
thereto, of any other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or its
properties or business or a subsidiary or its properties or business
may be bound or affected which default or event, individually or in the
aggregate, would have a Material Adverse Effect.
(k) The statistical and market related data included in the
Registration Statement are based on or derived from sources that the
Company believes to be reliable and accurate.
(l) Neither the Company nor any of its subsidiaries is in
violation of any term or provision of its certificate of incorporation
or bylaws. Neither the Company nor any of its subsidiaries is in
violation of any franchise, license, permit, judgment, decree, order,
statute, rule or regulation, where the consequences of such violation,
individually or in the aggregate, would have a Material Adverse Effect.
(m) This Agreement has been duly authorized, executed and
delivered by the Company.
(n) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the
transactions contemplated hereby (including, without limitation, the
issuance and sale by the Company of the Shares): will (i) violate any
provision of the certificate of incorporation or bylaws of the Company
or any of its subsidiaries, or (ii) give rise to a right to terminate
or accelerate the due date of any payment due under, or conflict with
or result in the breach of any term or provision of, or constitute a
default (or an event which with notice or lapse of time or both would
constitute a default) under, or require any consent or waiver under, or
result in the execution or imposition of any lien, charge or
encumbrance upon any properties or assets of the Company or its
subsidiaries pursuant to the terms of, any indenture, mortgage, deed of
trust or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which either the Company or its
subsidiaries or any of their properties or businesses is bound, or any
franchise, license, permit, judgment, decree, order, statute, rule or
regulation applicable to the Company or any of its subsidiaries,
7
except for such consents or waivers which have already been obtained
and are in full force and effect.
(o) The Company has authorized and outstanding capital stock
as set forth under the caption "Capitalization" in the Prospectus. The
certificates evidencing the Shares are in due and proper legal form and
have been duly authorized for issuance by the Company. All of the
issued and outstanding shares of Common Stock have been duly and
validly issued and are fully paid and nonassessable. There are no
statutory preemptive or other similar rights to subscribe for or to
purchase or acquire any shares of Common Stock of the Company or any of
its subsidiaries or any such rights pursuant to its certificate of
incorporation or bylaws or any agreement or instrument to or by which
the Company or any of its subsidiaries is a party or bound. The Shares,
when issued and sold pursuant to this Agreement, will be duly and
validly issued, fully paid and nonassessable and none of them will be
issued in violation of any preemptive or other similar right. Except as
disclosed in the Registration Statement and the Prospectus, there is no
outstanding option, warrant or other right calling for the issuance of,
and there is no commitment, plan or arrangement to issue, any share of
stock of the Company or any of its subsidiaries or any security
convertible into, or exercisable or exchangeable for, such stock. The
Common Stock and the Shares conform in all material respects to all
statements in relation thereto contained in the Registration Statement
and the Prospectus. All outstanding shares of capital stock of each of
the Company's subsidiaries have been duly authorized and validly
issued, and are fully paid and nonassessable and are owned directly by
the Company or by another wholly-owned subsidiary of the Company free
and clear of any security interests, liens, encumbrances, equities or
claims, other than those described in the Prospectus.
(p) No holder of any security of the Company has any right,
which has not been waived, to have any security owned by such holder
included in the Registration Statement or to demand registration of any
security owned by such holder for a period of 180 days after the date
of this Agreement. Each director and executive officer of the Company
and each stockholder of the Company listed on Schedule III has
delivered to the Representatives his or her written lock-up agreement
in the form attached to this Agreement as Exhibit A hereto ("LOCK-UP
AGREEMENT").
(q) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and
performance of this Agreement and the issuance and sale of the Shares
by the Company. This Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes a legal, valid
and binding obligation of the Company enforceable against the Company
in accordance with its terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles.
(r) There is not pending or, to the knowledge of the Company,
threatened any action, suit, proceeding, inquiry or investigation,
governmental or otherwise, to which the Company is a party, or to which
its properties or assets are subject, before or brought by any court,
arbitrator or governmental agency or body, that, if determined
adversely to the
8
Company could reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect or that seeks to restrain, enjoin,
prevent the consummation of or otherwise challenge the issuance or sale
of the Shares to be sold hereunder or the application of the proceeds
therefrom or the other transactions described in the Registration
Statement.
(s) Neither the Company nor any of its subsidiaries is
involved in any labor dispute nor, to the Company's knowledge, is any
such dispute threatened, which dispute could have a Material Adverse
Effect. The Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers or
contractors which could have a Material Adverse Effect. The Company is
not aware of any threatened or pending litigation between the Company
or its subsidiaries and any of its executive officers which, if
adversely determined, could reasonably be expected to have a Material
Adverse Effect and has no reason to believe that such officers will not
remain in the employment of the Company.
(t) No transaction has occurred between or among the Company
and any of its officers or directors, shareholders or any affiliate or
affiliates of any such officer or director or shareholder that is
required to be described in and is not described in the Registration
Statement and the Prospectus.
(u) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or which might reasonably be
expected to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation
of the price of the Common Stock or any security of the Company to
facilitate the sale or resale of any of the Shares.
(v) The Company and each of its subsidiaries has filed all
Federal, state, local and foreign tax returns which are required to be
filed through the date hereof, which returns are true and correct in
all material respects or has received timely extensions thereof, and
has paid all taxes shown on such returns and all assessments received
by it to the extent that the same are material and have become due.
There are no tax audits or investigations pending, which if adversely
determined would have a Material Adverse Effect; nor, to the knowledge
of the Company, are there any material proposed additional tax
assessments against the Company or any of its subsidiaries.
(w) The Shares have been duly authorized for quotation on the
National Association of Securities Dealers Automated Quotation
("NASDAQ") National Market System, subject to official notice of
issuance. A registration statement on Form 8-A has been filed pursuant
to Section 12 of the Exchange Act, which registration statement
complies in all material respects with the Exchange Act.
(x) The Company has taken no action designed to, or reasonably
likely to have the effect of, terminating the registration of the
Common Stock under the Exchange Act or the quotation of the Common
Stock on the Nasdaq National Market, nor has the Company received any
notification that the Commission or the Nasdaq National Market is
contemplating terminating such registration or quotation.
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(y) The books, records and accounts of the Company and its
subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the results of
operations of, the Company and its subsidiaries. The Company and each
of its subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally
accepted accounting principles and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with
management's general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(z) The Company is in compliance in all material respects with
all applicable effective provisions of the Xxxxxxxx-Xxxxx Act and is
actively taking steps to ensure that it will be in compliance with
other applicable provisions of the Xxxxxxxx-Xxxxx Act upon the
effectiveness of such provisions. There has been no failure on the part
of the Company or any of the Company's directors or officers, in their
capacities as such, to comply with any provision of the Xxxxxxxx-Xxxxx
Act of 2002 and the rules and regulations promulgated in connection
therewith, including Section 402 related to loans.
(aa) The Company has established and maintains disclosure
controls and procedures (as such term is defined in Rule 13a-15 under
the Exchange Act) which (i) are designed to ensure that material
information relating to the Company is made known to the Company's
principal executive officer and its principal financial officer by
others within the Company, particularly during the periods in which the
periodic reports required under the Exchange Act are being prepared,
and (ii) are effective in all material respects to perform the
functions for which they were established.
(bb) The Company is not aware of (i) any significant
deficiency or material weakness in the design or operation of internal
control over financial reporting which are reasonably likely to
adversely affect the Company's ability to record, process, summarize
and report financial information or (ii) any fraud, whether or not
material, that involves management or other employees who have a
significant role in the Company's internal control over financial
reporting.
(cc) Except as described in the Prospectus, there are no
material off-balance sheet transactions (as defined in Regulation S-K
Item 303(a)(4)(ii)), arrangements, 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.
(dd) The Company's board of directors has validly appointed an
audit committee whose composition satisfies the requirements of Rule
4350(d)(2) of the Rules of the National Association of Securities
Dealers, Inc. (the "NASD RULES") and the board
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of directors or the audit committee has adopted a charter that
satisfies the requirements of Rule 4350(d)(1) of the NASD Rules.
(ee) The Company and its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks
and in such amounts as are customary in the businesses in which they
are engaged or propose to engage after giving effect to the
transactions described in the Prospectus; all policies of insurance and
fidelity or surety bonds insuring the Company or any of its
subsidiaries or the Company's or its subsidiaries' respective
businesses, assets, employees, officers and directors are in full force
and effect; the Company and each of its subsidiaries are in compliance
with the terms of such policies and instruments in all material
respects; and neither the Company nor any subsidiary of the Company has
any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business at a cost that is not materially greater than the current
cost. Neither the Company nor any of its subsidiaries has been denied
any insurance coverage which it has sought or for which it has applied.
(ff) Each approval, consent, order, authorization,
designation, declaration or filing of, by or with any regulatory,
administrative or other governmental body necessary in connection with
the execution and delivery by the Company of this Agreement and the
consummation of the transactions herein contemplated required to be
obtained or performed by the Company (except such additional steps as
may be required by the National Association of Securities Dealers, Inc.
(the "NASD") or may be necessary to qualify the Shares for public
offering by the Underwriters under the state securities or Blue Sky
laws) has been obtained or made and is in full force and effect.
(gg) There are no affiliations with the NASD among the
Company's officers, directors or, to the Company's knowledge, any five
percent or greater stockholder of the Company, except as set forth in
the Registration Statement or otherwise disclosed in writing to the
Representatives.
(hh) (i) The Company and each of its subsidiaries are in
compliance in all material respects with all rules, laws and regulation
relating to the use, treatment, storage and disposal of toxic
substances and protection of health or the environment ("ENVIRONMENTAL
LAW") which are applicable to its business; (ii) neither the Company
nor its subsidiaries has received any notice from any governmental
authority or third party of an asserted claim under Environmental Laws;
(iii) the Company and each of its subsidiaries have received all
permits, licenses or other approvals required of it under applicable
Environmental Laws to conduct its business and are in compliance with
all terms and conditions of any such permit, license or approval; (iv)
to the Company's knowledge, no facts currently exist that will require
the Company or any of its subsidiaries to make future material capital
expenditures to comply with Environmental Laws; and (v) no property
which is or has been owned, leased or occupied by the Company or its
subsidiaries has been designated as a Superfund site pursuant to the
Comprehensive Environmental Response, Compensation of Liability Act of
1980, as amended (42 U.S.C. Section 9601, et. seq.) ("CERCLA") or
otherwise designated as a
11
contaminated site under applicable state or local law. Neither the
Company nor any of its subsidiaries has been named as a "potentially
responsible party" under the CERCLA.
(ii) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the
course of which the Company identifies and evaluates associated costs
and liabilities (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws, or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company
has reasonably concluded that such associated costs and liabilities
could not, singly or in the aggregate, have a Material Adverse Effect.
(jj) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of proceeds thereof
as described in the Prospectus, will not be an "investment company"
within the meaning of the Investment Company Act of 1940, as amended
(the "INVESTMENT COMPANY ACT").
(kk) The Company or any other person associated with or acting
on behalf of the Company including, without limitation, any director,
officer, agent or employee of the Company or its subsidiaries, has not,
directly or indirectly, while acting on behalf of the Company or its
subsidiaries (i) used any corporate funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political
activity; (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political
parties or campaigns from corporate funds; (iii) violated any provision
of the Foreign Corrupt Practices Act of 1977, as amended; or (iv) made
any other unlawful payment.
(ll) The operations of the Company and its subsidiaries are
and have been conducted at all times in compliance with applicable
financial record keeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines
issued, administered or enforced by any governmental agency
(collectively, the "MONEY LAUNDERING LAWS") and no action, suit or
proceeding by or before any court or governmental agency, authority or
body or any arbitrator involving the Company or any of it subsidiaries
with respect to the Money Laundering Laws is pending, or to the best
knowledge of the Company, threatened.
(mm) Neither the Company nor any of its subsidiaries nor, to
the knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries is currently
subject to any United States sanctions administered by the Office of
Foreign Assets Control of the United States Treasury Department
("OFAC"); and the Company will not directly or indirectly use the
proceeds of the offering, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or
other person or entity, for the purpose of financing the activities of
any person currently subject to any United States sanctions
administered by OFAC.
12
(nn) Except as described in the Prospectus, the Company has
not sold or issued any shares of Common Stock during the six-month
period preceding the date of the Prospectus, including any sales
pursuant to Rule 144A under, or Regulations D or S of, the Securities
Act, other than shares issued pursuant to employee benefit plans,
qualified stock options plans or other employee compensation plans or
pursuant to outstanding options, rights or warrants.
(oo) The Company has fulfilled its obligations, if any, under
the minimum funding standards of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx
Employee Retirement Income Security Act of 1974 ("ERISA") and the
regulations and published interpretations thereunder with respect to
each "plan" as defined in Section 3(3) of ERISA and such regulations
and published interpretations in which its employees are eligible to
participate and each such plan is in compliance in all material
respects with the presently applicable provisions of ERISA and such
regulations and published interpretations. No "Reportable Event" (as
defined in ERISA) has occurred with respect to any "Pension Plan" (as
defined in ERISA) for which the Company could be reasonably likely to
have any liability.
(pp) Each of the Company, its directors and officers has not
distributed and will not distribute prior to the later of (i) the Firm
Shares Closing Date, or the Option Shares Closing Date, and (ii)
completion of the distribution of the Shares, any offering material in
connection with the offering and sale of the Shares other than any
Preliminary Prospectus, the Prospectus, the Registration Statement and
other materials, if any, permitted by the Securities Act.
(qq) (i) "PRIVACY STATEMENTS" means, collectively, any
and all of the Company's privacy statements and policies published on
the Company's websites or products or otherwise made available by the
Company regarding the collection, retention, use, and distribution of
the personal information of individuals, including, without limitation,
from visitors or users of any of the Company's websites or products
("INDIVIDUALS").
(ii) The Company: (x) complies with the Privacy
Statements as applicable to any given set of personal
information collected by the Company from Individuals; (y)
complies in all material respects with all applicable United
States and foreign laws and regulations regarding the
collection, retention, use, transfer, or disclosure of
personal information; and (z) takes reasonable measures to
protect and maintain the confidential nature of the personal
information provided to the Company by Individuals, in
accordance with the terms of the applicable Privacy
Statements.
(iii) To the Company's knowledge, no claims or
controversies have arisen regarding the Privacy Statements or
the implementation thereof.
(rr) The Company's email direct marketing activities have not
violated, in any material respect, the CAN-SPAM Act or any other
federal or state law or regulation applicable to electronic direct
marketing.
13
(ss) The following is a complete list of all entities in which
the Company owns any equity or limited liability company interest:
Xxxxxxx.xxx, Inc., a Delaware corporation; Xxxxxxx.xxx, Inc., a
Delaware corporation; Xxxxxxxxxxxxxx.xxx, Inc., a Delaware corporation;
Millennium International Jewelers, Inc., a Delaware corporation;
1-888-Watches, LLC, a Florida limited liability company; D.I.A.
Marketing, Inc., a Florida corporation; and World of Watches, LLC, an
Iowa limited liability company.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each of
the Selling Stockholders hereby represents and warrants to each Underwriter as
of the date hereof, as of the Firm Shares Closing Date and as of the Option
Shares Closing Date (if any) as follows:
(a) The Selling Stockholder has caused certificates for the
number of Shares to be sold by such Selling Stockholder hereunder to be
delivered to Xxxxxx Xxxxxxx Xxxxx & Xxxxxxx, P.A. (the "CUSTODIAN"),
endorsed in blank or with blank stock powers duly executed, with a
signature appropriately guaranteed, such certificates to be held in
custody by the Custodian for delivery, pursuant to the provisions of
this Agreement and an agreement dated _______, 2005 among the Custodian
and the Selling Stockholder substantially in the form attached hereto
as Exhibit B (the "CUSTODY AGREEMENT").
(b) The Selling Stockholder has granted an irrevocable power
of attorney substantially in the form attached hereto as Exhibit C (the
"POWER OF ATTORNEY") to the person named therein, on behalf of the
Selling Stockholder, to execute and deliver this Agreement and any
other document necessary or desirable in connection with the
transactions contemplated hereby and to deliver the Shares to be sold
by each Selling Stockholder pursuant hereto.
(c) This Agreement, the Custody Agreement, the Power of
Attorney and the Lock-Up Agreement have each been duly authorized,
executed and delivered by or on behalf of the Selling Stockholder and,
assuming due authorization, execution and delivery by the other parties
thereto, constitutes the valid and legally binding agreement of each
Selling Stockholder, enforceable against the Selling Stockholder in
accordance with its terms.
(d) The execution and delivery by the Selling Stockholder of
this Agreement, the Custody Agreement, the Power of Attorney and the
Lock-Up Agreement, and the performance by the Selling Stockholder of
its obligations thereunder, including the sale and delivery of the
Shares to be sold by the Selling Stockholder and the consummation of
the transactions contemplated herein and compliance by the Selling
Stockholder with its obligations hereunder, do not and will not,
whether with or without the giving of notice or the passage of time or
both, (i) violate or contravene any provision of the charter or bylaws
or other organizational instrument of the Selling Stockholder, if
applicable, or any applicable law, statute, regulation, or filing or
any agreement or other instrument binding upon the Selling Stockholder
or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Selling Stockholder, (ii) conflict
with or constitute a breach of, or a default under, or result in the
creation or imposition of any tax, lien, charge or encumbrance upon the
shares to be sold by the Selling Stockholder or any property or assets
of the Selling Stockholder pursuant to the terms of any agreement
14
or instrument to which the Selling Stockholder is a party or by which
the Selling Stockholder may be bound or to which any of the property or
assets of the Selling Stockholder is subject, or (iii) require any
consent, approval, authorization or order of or registration or filing
with any court or governmental agency or body having jurisdiction over
it, except such as may be required by the Blue Sky laws of the various
states in connection with the offer and sale of the Shares which have
been or will be effected in accordance with this Agreement.
(e) The Selling Stockholder has, and on the Firm Shares
Closing Date and the Option Shares Closing Date, if applicable, will
have, valid and marketable title to the Shares to be sold by the
Selling Stockholder free and clear of any lien, claim, security
interest or other encumbrance, including, without limitation, any
restriction on transfer, except as otherwise described in the
Registration Statement and Prospectus.
(f) The Selling Stockholder has, and on the Firm Shares
Closing Date and the Option Shares Closing Date, if applicable, will
have, full legal right, power and authority, and any approval required
by law, to sell, assign, transfer and deliver the Shares to be sold by
the Selling Stockholder in the manner provided by this Agreement.
(g) Upon delivery of and payment for the Shares to be sold by
the Selling Stockholder pursuant to this Agreement, assuming each
Underwriter has no notice of any adverse claim, the several
Underwriters will receive valid and marketable title to such Shares
free and clear of any lien, claim, mortgage, pledge, security interest
or other encumbrance.
(h) All information relating to the Selling Stockholder
furnished in writing by the Selling Stockholder expressly for use in
the Registration Statement and Prospectus is, and on each Closing Date
will be, true, correct, and complete, and does not, and on each Closing
Date will not, contain any untrue statement of a material fact or omit
to state any material fact necessary to make such information not
misleading.
(i) The Selling Stockholder has reviewed the Registration
Statement and Prospectus and, although the Selling Stockholder has not
independently verified the accuracy or completeness of all the
information contained therein, nothing has come to the attention of the
Selling Stockholder that would lead the Selling Stockholder to believe
that (i) on the Effective Date, the Registration Statement contained
any untrue statement of a material fact or omitted to state any
material fact required to be stated therein in order to make the
statements made therein not misleading or (ii) on the Effective Date,
the Prospectus contained, or, on any Closing Date, contains, any untrue
statement of a material fact or omitted or omits to state any material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, misleading.
(j) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to or that might reasonably
be expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Shares.
15
(k) The Selling Stockholder has no actual knowledge that any
representation or warranty of the Company set forth in Section 2 above
is untrue or inaccurate in any material respect.
(l) The representations and warranties of the Selling
Stockholder in the Custody Agreement are, and on each Closing Date will
be, true and correct.
4. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters under this Agreement are several and not joint. The respective
obligations of the Underwriters to purchase the Shares are subject to each of
the following terms and conditions:
(a) Notification that the Registration Statement has become
effective shall have been received by the Representatives and the
Prospectus shall have been timely filed with the Commission in
accordance with Section 5(a) of this Agreement.
(b) No order preventing or suspending the use of any
preliminary prospectus or the Prospectus shall have been or shall be in
effect and no order suspending the effectiveness of the Registration
Statement shall be in effect and no proceedings for such purpose shall
be pending before or threatened by the Commission, and any requests for
additional information on the part of the Commission (to be included in
the Registration Statement or the Prospectus or otherwise) shall have
been complied with to the satisfaction of the Commission and the
Representatives. If the Company has elected to rely upon Rule 430A,
Rule 430A information previously omitted from the effective
Registration Statement pursuant to Rule 430A shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) within
the prescribed time period and the Company shall have provided evidence
satisfactory to the Underwriters of such timely filing, or a
post-effective amendment providing such information shall have been
promptly filed and declared effective in accordance with the
requirements of Rule 430A. If the Company has elected to rely upon Rule
434, a term sheet shall have been transmitted to the Commission for
filing pursuant to Rule 424(b) within the prescribed time period.
(c) The representations and warranties of the Company and the
Selling Stockholders contained in this Agreement and in the
certificates delivered pursuant to Section 4(e) shall be true and
correct when made and on and as of each Closing Date as if made on such
date. The Company and the Selling Stockholders shall have performed all
covenants and agreements and satisfied all the conditions contained in
this Agreement required to be performed or satisfied by them at or
before such Closing Date.
(d) On or prior to the Firm Shares Closing Date, the Board of
Directors and stockholders of the Company shall have approved and
adopted an amended and restated certificate of incorporation and
amended and restated bylaws in the forms filed with the Commission as
exhibits 3.01 and 3.02 to the Registration Statement, respectively, and
such amended and restated certificate of incorporation shall have been
filed with the Secretary of State of the State of Delaware, and become
effective.
16
(e) The Representatives shall have received on each Closing
Date a certificate, addressed to the Representatives and dated such
Closing Date, of the chief executive or chief operating officer and the
chief financial officer or chief accounting officer of the Company to
the effect that: (i) the representations, warranties and agreements of
the Company in this Agreement were true and correct when made and are
true and correct as of such Closing Date; (ii) the Company has
performed all covenants and agreements and satisfied all conditions
contained herein; (iii) they have carefully examined the Registration
Statement and the Prospectus and, to their knowledge, (A) as of the
Effective Date, the Registration Statement and Prospectus did not
include any untrue statement of a material fact and did not 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, and (B) since the Effective Date, no
event has occurred which should have been set forth in a supplement or
otherwise required an amendment to the Registration Statement or the
Prospectus; and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and, to their knowledge, no
proceedings for that purpose have been instituted or are pending under
the Securities Act.
(f) The Representatives shall have received on each Closing
Date a certificate, addressed to the Representatives and dated such
Closing Date, of each Selling Stockholder, to the effect that: (i) the
representations, warranties and agreements of such Selling Stockholder
in this Agreement were true and correct when made and are true and
correct as of such Closing Date; (ii) such Selling Stockholder has
performed all covenants and agreements and satisfied all conditions
contained herein; and (iii) such Selling Stockholder has carefully
examined the Registration Statement and the Prospectus and, in the
opinion of such Selling Stockholder, (A) with respect to the
information relating to such Selling Stockholder, as of the Effective
Date, the Registration Statement and Prospectus did not include any
untrue statement of a material fact and did not 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, and (B) since the Effective Date no event has
occurred with respect to such Selling Stockholder which should have
been set forth in a supplement or otherwise required an amendment to
the Registration Statement or the Prospectus.
(g) The Representatives shall have received, at the time this
Agreement is executed and on each Closing Date a signed letter from
Deloitte & Touche LLP addressed to the Representatives and dated,
respectively, the date of this Agreement and each such Closing Date, in
form and substance reasonably satisfactory to the Representatives
containing statements and information of the type ordinarily included
in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
(h) The Representatives shall have received on each Closing
Date from Berman, Rennert, Xxxxx & Xxxxxxx, P.A., counsel for the
Company, an opinion, addressed to the Representatives and dated such
Closing Date, and stating in effect that:
17
(i) Each of the Company and its subsidiaries has been
duly organized and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its
incorporation. Each of the Company and its subsidiaries is
duly qualified to transact business and is in good standing as
a foreign corporation in each jurisdiction in which the
character or location of its assets or properties or the
nature of its business makes such qualification necessary,
except where the failure to so qualify or to be in good
standing, individually or in the aggregate, would not have a
Material Adverse Effect.
(ii) Each of the Company and its subsidiaries has all
requisite corporate power and authority to own, lease and
operate its properties and to conduct its business as now
being conducted and as described in the Registration Statement
and the Prospectus and, with respect to the Company, to enter
into and perform its obligations under this Agreement and to
issue and sell the Shares.
(iii) The authorized, issued and outstanding capital
stock of the Company is as set forth in the Registration
Statement and the Prospectus under the caption
"Capitalization" as of the dates stated therein and, since
such dates, there has been no change in the capital stock of
the Company except for subsequent issuances, if any, pursuant
to this Agreement or pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectus or
pursuant to the exercise of convertible securities or options
referred to in the Prospectus; all of the outstanding shares
of capital stock of the Company have been duly and validly
authorized and issued and are fully paid and nonassessable and
none of them was issued in violation of any preemptive or
other similar right. The Shares to be issued and sold by the
Company pursuant to this Agreement have been duly authorized
for issuance and sale to the Underwriters pursuant to this
Agreement and, when issued and delivered by the Company
pursuant to this Agreement against payment of the
consideration set forth herein, will be validly issued, fully
paid and nonassessable, and no holder of the Shares is or will
be subject to personal liability by reason of being such a
holder. The issuance and sale of the Shares by the Company is
not subject to any preemptive or other similar rights of any
security holder of the Company. To the best of such counsel's
knowledge, except as disclosed in the Registration Statement
and the Prospectus, there are no preemptive or other rights to
subscribe for or to purchase or any restriction upon the
voting or transfer of any securities of the Company pursuant
to the Company's certificate of incorporation or bylaws or
other governing documents or any agreements or other
instruments to which the Company is a party or by which it is
bound. The sale of the Shares by the Selling Stockholders is
not subject to any preemptive or other similar rights of any
security holders of the company. To the best of such counsel's
knowledge, except as disclosed in the Registration Statement
and the Prospectus, there is no outstanding option, warrant or
other right calling for the issuance of, and no commitment,
plan or arrangement to issue, any share of stock of the
Company or any security convertible into, exercisable for, or
exchangeable for stock of the Company. The Common Stock, the
Shares and the Preferred Stock conform in all material
respects to the descriptions thereof contained in the
Registration
18
Statement and the Prospectus. The form of certificate used to
evidence the Common Stock complies in all material respects
with all applicable statutory requirements, with any
applicable requirements of the certificate of incorporation or
Bylaws of the Company and the requirements of the Nasdaq
National Market. To the best of such counsel's knowledge,
there are no persons with registration rights or other similar
rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company
under the Securities Act.
(iv) All necessary corporate action has been duly and
validly taken by the Company to authorize the execution,
delivery and performance of this Agreement and the issuance
and sale of the Shares. This Agreement has been duly and
validly authorized, executed and delivered by the Company.
(v) Neither the execution, delivery and performance
of this Agreement by the Company nor the consummation of any
of the transactions contemplated hereby (including, without
limitation, the issuance and sale by the Company of the
Shares) nor the execution, delivery or performance of any
other agreement or instrument entered into or to be entered
into by the Company in connection with the transactions
contemplated by the Registration Statement and the Prospectus
will give rise to a right to terminate or accelerate the due
date of any payment due under, or conflict with or result in
the breach of any term or provision of, or constitute a
default (or any event which with notice or lapse of time, or
both, would constitute a default) under, or require consent or
waiver under, or result in the execution or imposition of any
lien, charge, claim, security interest or encumbrance upon any
properties or assets of the Company or any subsidiary pursuant
to the terms of, any indenture, mortgage, deed trust, note or
other agreement or instrument of which such counsel is aware
and to which the Company or any subsidiary is a party or by
which either the Company or any subsidiary or any of its
assets or properties or businesses is bound, or any franchise,
license, permit, judgment, decree, order, statute, rule or
regulation, domestic or foreign, of which such counsel is
aware or violate any provision of the charter or bylaws of the
Company or any subsidiary.
(vi) No consent, approval, authorization, license,
registration, qualification or order of any court or
governmental agency or regulatory body is required for the due
authorization, execution, delivery or performance of this
Agreement by the Company or the consummation of the
transactions contemplated hereby or thereby, except such as
have been obtained under the Securities Act and such as may be
required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the
several Underwriters.
(vii) To the best of such counsel's knowledge, there
is no action, suit, proceeding or other investigation, before
any court or before or by any public body or board pending or
threatened against, or involving the assets, properties or
businesses of, the Company which is required to be disclosed
in the Registration
19
Statement and the Prospectus and is not so disclosed or which
could reasonably be expected to have a Material Adverse
Effect.
(viii) The statements in the Prospectus under the
captions "Description of Capital Stock" and "Certain
Relationships and Related Transactions," and in the
Registration Statement under Item 15 of Part II, insofar as
such statements constitute a summary of documents referred to
therein or matters of law, are accurate in all material
respects and accurately present the information with respect
to such documents and matters. Accurate copies of all
contracts and other documents required to be filed as exhibits
to, or described in, the Registration Statement have been so
filed with the Commission or are fairly described in the
Registration Statement, as the case may be.
(ix) (A) Each of the Company and its subsidiaries is
in compliance in all material respects with all applicable
Environmental Laws; (B) none of the Company or its
subsidiaries has received any notice from any governmental
authority or third party of an asserted claim under any
Environmental Law; (C) each of the Company and its
subsidiaries has received all permits, licenses or other
approvals required of it under applicable Environmental Laws
to conduct its business and is in compliance with all terms
and conditions of any such permit, license or approval, except
where such failure to receive required permits, licenses or
other approvals or failure to comply with the terms and
conditions of such permits, licenses or other approvals would
not, singly or in the aggregate, have a Material Adverse
Effect; and (D) no property which is or has been owned, leased
or occupied by the Company or its subsidiaries has been
designated as a Superfund site pursuant to the CERCLA, or
otherwise designated as a contaminated site under applicable
state or local law.
(x) The Registration Statement, all Preliminary
Prospectuses and the Prospectus and each amendment or
supplement thereto (except for the financial statements and
schedules and other financial data included therein, as to
which such counsel expresses no opinion) comply as to form in
all material respects with the requirements of the Securities
Act and the Rules.
(xi) The Registration Statement is effective under
the Securities Act, and to such counsel's knowledge no stop
order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been instituted or are threatened, pending or
contemplated. Any required filing of the Prospectus and any
supplement thereto pursuant to Rule 424(b) under the
Securities Act has been made in the manner and within the time
period required by such Rule 424(b).
(xii) The Shares have been approved for listing on
the Nasdaq National Market.
20
(xiii) The capital stock of the Company conforms in
all material respects to the description thereof contained in
the Prospectus under the caption "Description of Capital
Stock."
(xiv) The Company is not 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.
To the extent deemed advisable by such counsel, such counsel
may rely as to matters of fact on certificates of responsible officers
of the Company and public officials and on the opinions of other
counsel satisfactory to the Representatives as to matters which are
governed by laws other than the laws of the State of Florida, the
General Corporation Law of the State of Delaware and the Federal laws
of the United States; provided that such counsel shall state that in
their opinion the Underwriters and they are justified in relying on
such other opinions. Copies of such certificates and other opinions
shall be furnished to the Representatives and counsel for the
Underwriters.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of
the Company, representatives of the Representatives and representatives
of the independent certified public accountants of the Company, at
which conferences the contents of the Registration Statement and the
Prospectus and related matters were discussed and, although such
counsel is not passing upon and does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in
the Registration Statement and the Prospectus (except as specified in
the foregoing opinion), on the basis of the foregoing, no facts have
come to the attention of such counsel which lead such counsel to
believe that the Registration Statement at the time it became effective
or as of such Closing Date (except with respect to the financial
statements and notes and schedules thereto and other financial data, as
to which such counsel need express no belief) contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus as amended or
supplemented (except with respect to the financial statements, notes
and schedules thereto and other financial data, as to which such
counsel need make no statement) as of its date and as of such Closing
Date contained any untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(i) The Representatives shall have received on each Closing
Date from Akerman Senterfitt, special counsel for the Company, an
opinion, addressed to the Representatives and dated such Closing Date,
and stating in effect that:
(i) Each of the Company and its subsidiaries has been
duly organized and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its
incorporation. Each of the Company and its subsidiaries is
duly qualified to transact business and is in good standing as
a foreign corporation in each jurisdiction in which the
character or location of its assets or properties or the
nature of its business makes such qualification necessary,
except
21
where the failure to so qualify or to be in good standing,
individually or in the aggregate, would not have a Material
Adverse Effect.
(ii) Each of the Company and its subsidiaries has all
requisite corporate power and authority to own, lease and
operate its properties and to conduct its business as now
being conducted and as described in the Registration Statement
and the Prospectus and, with respect to the Company, to enter
into and perform its obligations under this Agreement and to
issue and sell the Shares.
(iii) The authorized, issued and outstanding capital
stock of the Company is as set forth in the Registration
Statement and the Prospectus under the caption
"Capitalization" as of the dates stated therein and, since
such dates, there has been no change in the capital stock of
the Company except for subsequent issuances, if any, pursuant
to this Agreement or pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectus or
pursuant to the exercise of convertible securities or options
referred to in the Prospectus; to such counsel's knowledge,
all of the outstanding shares of capital stock of the Company
have been duly and validly authorized and issued and are fully
paid and nonassessable and none of them was issued in
violation of any preemptive or other similar right. The Shares
to be issued and sold by the Company pursuant to this
Agreement have been duly authorized for issuance and sale to
the Underwriters pursuant to this Agreement and, when issued
and delivered by the Company pursuant to this Agreement
against payment of the consideration set forth herein, will be
validly issued, fully paid and nonassessable, and no holder of
the Shares is or will be subject to personal liability by
reason of being such a holder. The issuance and sale of the
Shares by the Company is not subject to any preemptive or
other similar rights of any security holder of the Company. To
such counsel's knowledge, except as disclosed in the
Registration Statement and the Prospectus, there are no
preemptive or other rights to subscribe for or to purchase or
any restriction upon the voting or transfer of any securities
of the Company pursuant to the Company's certificate of
incorporation or bylaws or other governing documents or any
agreements or other instruments to which the Company is a
party or by which it is bound. The sale of the Shares by the
Selling Stockholders is not subject to any preemptive or other
similar rights of any security holders of the company. To such
counsel's knowledge, except as disclosed in the Registration
Statement and the Prospectus, there is no outstanding option,
warrant or other right calling for the issuance of, and no
commitment, plan or arrangement to issue, any share of stock
of the Company or any security convertible into, exercisable
for, or exchangeable for stock of the Company. The Common
Stock, the Shares and the Preferred Stock conform in all
material respects to the descriptions thereof contained in the
Registration Statement and the Prospectus. The form of
certificate used to evidence the Common Stock complies in all
material respects with all applicable statutory requirements,
with any applicable requirements of the certificate of
incorporation or Bylaws of the Company and the requirements of
the Nasdaq National Market. To such counsel's knowledge,
except as disclosed in the Registration Statement and the
Prospectus, there are no persons with registration rights or
other similar rights to
22
have any securities registered pursuant to the Registration
Statement or otherwise registered by the Company under the
Securities Act.
(iv) All necessary corporate action has been duly and
validly taken by the Company to authorize the execution,
delivery and performance of this Agreement and the issuance
and sale of the Shares. This Agreement has been duly and
validly authorized, executed and delivered by the Company.
(v) Neither the execution, delivery and performance
of this Agreement by the Company nor the consummation of any
of the transactions contemplated hereby (including, without
limitation, the issuance and sale by the Company of the
Shares) nor the execution, delivery or performance of any
other agreement or instrument entered into or to be entered
into by the Company in connection with the transactions
contemplated by the Registration Statement and the Prospectus
will give rise to a right to terminate or accelerate the due
date of any payment due under, or conflict with or result in
the breach of any term or provision of, or constitute a
default (or any event which with notice or lapse of time, or
both, would constitute a default) under, or require consent or
waiver under, or result in the execution or imposition of any
lien, charge, claim, security interest or encumbrance upon any
properties or assets of the Company or any subsidiary pursuant
to the terms of, any indenture, mortgage, deed trust, note or
other agreement or instrument of which such counsel is aware
and to which the Company or any subsidiary is a party or by
which either the Company or any subsidiary or any of its
assets or properties or businesses is bound, or any franchise,
license, permit, judgment, decree, order, statute, rule or
regulation, domestic or foreign, of which such counsel is
aware or violate any provision of the charter or bylaws of the
Company or any subsidiary.
(vi) No consent, approval, authorization, license,
registration, qualification or order of any court or
governmental agency or regulatory body is required for the due
authorization, execution, delivery or performance of this
Agreement by the Company or the consummation of the
transactions contemplated hereby or thereby, except such as
have been obtained under the Securities Act and such as may be
required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the
several Underwriters.
(vii) To such counsel's knowledge, there is no
action, suit, proceeding or other investigation, before any
court or before or by any public body or board pending or
threatened against, or involving the assets, properties or
businesses of, the Company which is required to be disclosed
in the Registration Statement and the Prospectus and is not so
disclosed or which could reasonably be expected to have a
Material Adverse Effect.
(viii) The statements in the Prospectus under the
captions "Description of Capital Stock" and "Certain
Relationships and Related Transactions" and in the
Registration Statement under Item 15 of Part II, insofar
23
as such statements constitute a summary of documents referred
to therein or matters of law, are accurate in all material
respects and accurately present the information with respect
to such documents and matters. Accurate copies of all
contracts and other documents required to be filed as exhibits
to, or described in, the Registration Statement have been so
filed with the Commission or are fairly described in the
Registration Statement, as the case may be.
(ix) To such counsel's knowledge, (A) each of the
Company and its subsidiaries is in compliance in all material
respects with all applicable Environmental Laws; (B) none of
the Company or its subsidiaries has received any notice from
any governmental authority or third party of an asserted claim
under any Environmental Law; (C) each of the Company and its
subsidiaries has received all permits, licenses or other
approvals required of it under applicable Environmental Laws
to conduct its business and is in compliance with all terms
and conditions of any such permit, license or approval, except
where such failure to receive required permits, licenses or
other approvals or failure to comply with the terms and
conditions of such permits, licenses or other approvals would
not, singly or in the aggregate, have a Material Adverse
Effect; and (D) no property which is or has been owned, leased
or occupied by the Company or its subsidiaries has been
designated as a Superfund site pursuant to the CERCLA, or
otherwise designated as a contaminated site under applicable
state or local law.
(x) The Registration Statement, all Preliminary
Prospectuses and the Prospectus and each amendment or
supplement thereto (except for the financial statements and
schedules and other financial data included therein, as to
which such counsel expresses no opinion) comply as to form in
all material respects with the requirements of the Securities
Act and the Rules.
(xi) The Registration Statement is effective under
the Securities Act, and to such counsel's knowledge no stop
order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been instituted or are threatened, pending or
contemplated. Any required filing of the Prospectus and any
supplement thereto pursuant to Rule 424(b) under the
Securities Act has been made in the manner and within the time
period required by such Rule 424(b).
(xii) The Shares have been approved for listing on
the Nasdaq National Market.
(xiii) The capital stock of the Company conforms in
all material respects to the description thereof contained in
the Prospectus under the caption "Description of Capital
Stock."
(xiv) The Company is not 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.
24
To the extent deemed advisable by such counsel, such counsel
may rely as to matters of fact on certificates of responsible officers
of the Company and public officials and on the opinions of other
counsel satisfactory to the Representatives as to matters which are
governed by laws other than the laws of the State of Florida, the
General Corporation Law of the State of Delaware and the Federal laws
of the United States; provided that such counsel shall state that in
their opinion the Underwriters and they are justified in relying on
such other opinions. Copies of such certificates and other opinions
shall be furnished to the Representatives and counsel for the
Underwriters.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of
the Company, representatives of the Representatives and representatives
of the independent certified public accountants of the Company, at
which conferences the contents of the Registration Statement and the
Prospectus and related matters were discussed and, although such
counsel is not passing upon and does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in
the Registration Statement and the Prospectus (except as specified in
the foregoing opinion), on the basis of the foregoing, no facts have
come to the attention of such counsel which lead such counsel to
believe that the Registration Statement at the time it became effective
or as of such Closing Date (except with respect to the financial
statements and notes and schedules thereto and other financial data, as
to which such counsel need express no belief) contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus as amended or
supplemented (except with respect to the financial statements, notes
and schedules thereto and other financial data, as to which such
counsel need make no statement) as of its date and as of such Closing
Date contained any untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(j) The Representatives shall have received on each Closing
Date from Oblon, Spivak, McClelland, Xxxxx & Neustadt, PC, special
trademark counsel for the Company, an opinion, addressed to the
Representatives and dated such Closing Date, and stating in effect
that:
(i) The methods by which the Company and its
subsidiaries purchase and sell merchandise do not violate U.S.
Trademark Law, 15 U.S.C.ss.1051 et. seq., and do not violate
the rights of third parties.
(ii) The statements in the Prospectus under the
caption "Business--Intellectual Property," insofar as such
statements constitute a summary of documents referred to
therein or matters of law, are accurate in all material
respects and accurately present the information with respect
to such documents and matters.
(k) The Representatives shall have received on each Closing
Date from counsel for the Company reasonably acceptable to the
Representatives, an opinion, addressed to the Representatives and dated
such Closing Date, and stating in effect that the Company's
25
possession, advertising and sale of watches that have had their serial
numbers removed does not violate the laws of the States of California,
Florida, Illinois, New Jersey, New York or Texas.
(l) The Representatives shall have received on each Closing
Date from counsel for the Company reasonably acceptable to the
Representatives, an opinion, addressed to the Representatives and dated
such Closing Date, and stating in effect that the statements in the
Prospectus under the caption "Business--Government Regulation--Decoded
Watches," insofar as such statements constitute a summary of documents
referred to therein or matters of law, are accurate in all material
respects and accurately present the information with respect to such
documents and matters.
(m) The Representatives shall have received on each Closing
Date from special counsel for each of the Selling Stockholders that is
acceptable to the Representatives an opinion, addressed to the
Representatives and dated such Closing Date, and stating in effect
that:
(i) This Agreement has been duly authorized, executed
and delivered by or on behalf of each Selling Stockholder.
(ii) Each of the Custody Agreement, the Power of
Attorney and the Lock-Up Agreement has been duly authorized,
executed and delivered by each Selling Stockholder.
(iii) This Agreement, the Custody Agreement, the
Power of Attorney and the Lock-Up Agreement each constitute
the legal, valid and binding obligation of each Selling
Stockholder enforceable against each Selling Stockholder in
accordance with its terms except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable
principles.
(iv) To such counsel's knowledge, each Selling
Stockholder that is an individual has the legal right, power
and authority to enter into this Agreement and to sell,
transfer and deliver in the manner provided in this Agreement,
the Shares to be sold by such Selling Stockholder hereunder.
(v) Each Selling Stockholder that is a corporation or
other entity has the legal right, power and authority to enter
into this Agreement and to sell, transfer and deliver in the
manner provided in this Agreement, the Shares to be sold by
such Selling Stockholder hereunder.
(vi) The execution, delivery and performance of this
Agreement, the Power of Attorney, the Custody Agreement and
the Lock-Up Agreement and the sale and delivery by each
Selling Stockholder of the Shares to be sold by such Selling
Stockholder as contemplated by this Agreement and the
consummation of the transactions contemplated in this
Agreement and in the Registration Statement and the Prospectus
and compliance by such Selling Stockholder with its
26
obligations hereunder do not and will not, whether with or
without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default under or
result in the creation or imposition of any tax, lien, charge
or encumbrance upon the Shares or any property or assets of
such Selling Stockholder pursuant to, any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note,
license, lease or other instrument or agreement to which such
Selling Stockholder is a party or by which such Selling
Stockholder may be bound, or to which any of the property or
assets of such Selling Stockholder may be subject nor will
such action result in any violation of the provisions of the
charter or bylaws of such Selling Stockholder, if applicable,
or any law, administrative regulation, judgment or order of
any governmental agency or body or any administrative or court
decree having jurisdiction over such Selling Stockholder or
any of its properties.
(vii) To such counsel's knowledge, each Selling
Stockholder has valid and marketable title to the Shares to be
sold by such Selling Stockholder pursuant to this Agreement,
free and clear of any pledge, lien, security interest, charge,
claim, equity or encumbrance of any kind, and has full right,
power and authority to sell, transfer and deliver such Shares
pursuant to this Agreement. By delivery of a certificate or
certificates therefor, each Selling Stockholder will transfer
to the Underwriters who have purchased such Shares pursuant to
this Agreement (without notice of any defect in the title of
such Selling Stockholder and who are otherwise bona fide
purchasers for purposes of the Uniform Commercial Code) valid
and marketable title to such Shares, free and clear of any
pledge, lien, security interest, charge, claim, equity or
encumbrance of any kind.
(viii) No filing with, consent, approval,
authorization, license, certificate, permit or order of any
court, governmental or regulatory agency, authority or body or
financial institution is required in connection with the
performance of this Agreement, the Custody Agreement, the
Power of Attorney or the Lock-Up Agreement by each Selling
Stockholder or the consummation of the transactions
contemplated hereby or thereby, including the delivery and
sale of the Shares to be delivered and sold by each Selling
Stockholder, except such as may be required under state
securities or blue sky laws in connection with the purchase
and distribution of the Shares by the several Underwriters.
To the extent deemed advisable by such counsel, such counsel
may rely as to matters of fact on certificates of the Selling
Stockholders and on the opinions of other counsel satisfactory to the
Representatives as to matters which are governed by laws other than the
laws of the State of Florida and the General Corporation Law of the
State of Delaware or the Federal laws of the United States; provided
that such counsel shall state that in their opinion the Underwriters
and they are justified in relying on such other opinions. Copies of
such certificates and other opinions shall be furnished to the
Representatives and counsel for the Underwriters.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of
27
the Company, representatives of the Representatives and representatives
of the independent public accountants of the Company, at which
conferences the contents of the Registration Statement and the
Prospectus and related matters were discussed. While such counsel has
not undertaken to independently verify and does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus
(except as specified in the foregoing opinion), on the basis of the
foregoing, no facts have come to the attention of such counsel which
lead such counsel to believe that the Registration Statement at the
time it became effective (except with respect to the financial
statements, notes and schedules thereto and other financial data, as to
which such counsel need express no belief) contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus as amended or
supplemented (except with respect to the financial statements, notes
and schedules thereto and other financial data, as to which such
counsel need make no statement) on the date thereof and the date of
such opinion contained any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(n) The Representatives shall have received on each Closing
Date from Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the
Representatives, an opinion, addressed to the Representatives and dated
such Closing Date, and stating in effect that:
(i) The Shares have been duly authorized by the
Company and, when delivered to and paid for by the
Underwriters in accordance with the terms of the Underwriting
Agreement, will be validly issued, fully paid and
non-assessable and, to such counsel's knowledge, will be free
and clear of any preemptive rights or any similar rights
arising under the Delaware General Corporate Law, the
Company's certificate of incorporation or bylaws or any
Applicable Contract (as defined in such opinion), except such
as have been validly waived.
(ii) This Agreement has been duly authorized,
executed and delivered by the Company.
(iii) The statements in the Prospectus under the
caption "Description of Capital Stock," insofar as such
statements purport to summarize certain provisions of the
documents referred to therein, fairly summarize such
provisions in all material respects.
(iv) The statements in the Prospectus under the
caption "Underwriting," insofar as such statements purport to
summarize certain provisions of this Agreement, fairly
summarize such provisions in all material respects.
(v) Such counsel has been orally advised by the
Commission that the Registration Statement was declared
effective under the Securities Act, and such counsel has been
orally advised by the Commission that no stop order
28
suspending the effectiveness of the Registration Statement has
been issued. Any required filing of the Prospectus and any
supplement thereto pursuant to Rule 424(b) under the
Securities Act has been made in the manner and within the time
period required by such Rule 424(b).
To the extent deemed advisable by such counsel, such counsel
may rely as to matters of fact on certificates of responsible officers
of the Company and public officials and on the opinions of other
counsel satisfactory to the Representatives as to matters which are
governed by laws other than the laws of the State of New York, the
General Corporation Law of the State of Delaware and the Federal laws
of the United States; provided that such counsel shall state that in
their opinion the Underwriters and they are justified in relying on
such other opinions. Copies of such certificates and other opinions
shall be furnished to the Representatives.
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 accountants of the
Company and representatives of the Representatives, at which the
contents of the Registration Statement and the Prospectus and related
matters were discussed. Although such counsel does not pass upon, or
assume any responsibility for, the accuracy, completeness or fairness
of the statements contained in the Registration Statement and the
Prospectus and has made no independent check or verification thereof,
on the basis of the foregoing, (i) the Registration Statement, at the
time it became effective, and the Prospectus, as of its date, appeared
on their face to be appropriately responsive in all material respects
to the requirements of the Securities Act and the Rules and Regulations
(except that in each case such counsel does not express any view as to
the financial statements, schedules and other financial information
included therein or excluded therefrom or the exhibits to the
Registration Statement and (ii) no facts have come to such counsel's
attention that have caused such counsel to believe that the
Registration Statement, at the time it became effective, contained an
untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, as of its date and as of
the date hereof, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading (except that in each case
such counsel does not express any view as to the financial statements,
schedules and other financial information included or incorporated by
reference therein or excluded therefrom or the exhibits to the
Registration Statement).
(o) All proceedings taken in connection with the sale of the
Firm Shares and the Option Shares as herein contemplated shall be
reasonably satisfactory in form and substance to the Representatives
and their counsel.
(p) The Representatives shall have received copies of the
Lock-Up Agreements executed by each director of the Company, each
officer of the Company and each other entity or person listed on
Schedule III hereto.
29
(q) The Shares shall have been approved for quotation on the
Nasdaq National Market, subject only to official notice of issuance.
(r) The Company and each Selling Stockholder shall have
furnished or caused to be furnished to the Representatives such further
certificates, documents or opinions as the Representatives shall have
reasonably requested.
5. COVENANTS OF THE COMPANY.
(a) The Company covenants and agrees as follows:
(i) The Company will use its best efforts to cause
the Registration Statement, if not effective at the time of
execution of this Agreement, and any amendments thereto, to
become effective as promptly as possible. The Company shall
prepare the Prospectus in a form approved by the
Representatives and file such Prospectus pursuant to Rule
424(b) under the Securities Act not later than the
Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by the Rules.
(ii) The Company shall promptly advise the
Representatives in writing (A) when any post-effective
amendment to the Registration Statement shall have become
effective or any supplement to the Prospectus shall have been
filed, (B) of any request by the Commission for any amendment
of the Registration Statement or the Prospectus or for any
additional information, (C) of the issuance by the Commission
of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus or the
institution or threatening of any proceeding for that purpose
and (D) 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. The Company shall not file
any amendment of the Registration Statement or supplement to
the Prospectus unless the Company has furnished the
Representatives a copy for their review prior to filing and
shall not file any such proposed amendment or supplement to
which the Representatives reasonably object. The Company shall
use its best efforts to prevent the issuance of any such stop
order and, if issued, to obtain as soon as possible the
withdrawal thereof.
(iii) If, at any time when a prospectus relating to
the Shares is required to be delivered under the Securities
Act and the Rules, any event occurs as a result of which the
Prospectus as then amended or supplemented would include any
untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the
light of the circumstances under which they were made not
misleading, or if it shall be necessary to amend or supplement
the Prospectus to comply with the Securities Act or the Rules,
the Company promptly shall prepare and file with the
Commission, subject to the second sentence of paragraph (ii)
of this Section 5(a), an amendment or
30
supplement which shall correct such statement or omission or
an amendment which shall effect such compliance.
(iv) The Company shall make generally available to
its security holders and to the Representatives as soon as
practicable, but not later than 45 days after the end of the
12-month period beginning at the end of the fiscal quarter of
the Company during which the Effective Date occurs (or 90 days
if such 12-month period coincides with the Company's fiscal
year), an earning statement (which need not be audited) of the
Company, covering such 12-month period, which shall satisfy
the provisions of Section 11(a) of the Securities Act or Rule
158 of the Rules.
(v) The Company shall furnish to the Representatives
and counsel for the Underwriters, without charge, signed
copies of the Registration Statement (including all exhibits
thereto and amendments thereof) and to each other Underwriter
a copy of the Registration Statement (without exhibits
thereto) and all amendments thereof and, so long as delivery
of a prospectus by an Underwriter or dealer may be required by
the Securities Act or the Rules, as many copies of any
preliminary prospectus and the Prospectus and any amendments
thereof and supplements thereto as the Representatives may
reasonably request. If applicable, the copies of the
Registration Statement and Prospectus and each amendment and
supplement thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the
extent permitted by Regulation S-T. Copies of the Prospectus,
in such quantities as the Representatives may reasonably
request, shall be furnished to the Representatives in New York
City, without charge, prior to 10:00 a.m., New York City time
on the second business day following the execution and
delivery of this Agreement.
(vi) The Company shall cooperate with the
Representatives and their counsel in endeavoring to qualify
the Shares for offer and sale in connection with the offering
under the laws of such jurisdictions as the Representatives
may designate and shall maintain such qualifications in effect
so long as required for the distribution of the Shares;
provided, however, that the Company shall not be required in
connection therewith, as a condition thereof, to qualify as a
foreign corporation or to execute a general consent to service
of process in any jurisdiction or subject itself to taxation
as doing business in any jurisdiction.
(vii) The Company, during the period when the
Prospectus is required to be delivered under the Securities
Act and the Rules or the Exchange Act, will file all reports
and other documents required to be filed with the Commission
pursuant to Section 13, 14 or 15 of the Exchange Act within
the time periods required by the Exchange Act and the
regulations promulgated thereunder.
(viii) Without the prior written consent of CIBC
World Markets Corp., for a period of 180 days after the date
of this Agreement, neither the
31
Company nor any of its individual directors or executive
officers shall issue, sell or register with the Commission
(other than on Form S-8 or on any successor form), or
otherwise dispose of, directly or indirectly, any equity
securities of the Company (or any securities convertible into,
exercisable for or exchangeable for equity securities of the
Company), except for the issuance of the Shares pursuant to
the Registration Statement and the issuance of shares pursuant
to the Company's existing stock option plan or bonus plan as
described in the Registration Statement and the Prospectus. In
the event that during this period, (A) any shares are issued
pursuant to the Company's existing stock option plan or bonus
plan that are exercisable during such 180 day period or (B)
any registration is effected on Form S-8 or on any successor
form relating to shares that are exercisable during such 180
period, the Company shall obtain the written agreement of such
grantee or purchaser or holder of such registered securities
that, for a period of 180 days after the date of this
Agreement, such person will not, without the prior written
consent of CIBC World Markets Corp., offer for sale, sell,
distribute, grant any option for the sale of, or otherwise
dispose of, directly or indirectly, or exercise any
registration rights with respect to, any shares of Common
Stock (or any securities convertible into, exercisable for, or
exchangeable for any shares of Common Stock) owned by such
person.
(ix) On or before completion of this offering, the
Company shall make all filings required under applicable
securities laws and by the Nasdaq National Market (including
any required registration under the Exchange Act).
(x) Prior to the Closing Date, the Company will issue
no press release or other communications directly or
indirectly and hold no press conference with respect to the
Company, the condition, financial or otherwise, or the
earnings, business affairs or business prospects of any of
them, or the offering of the Shares without the prior written
consent of the Representatives unless in the judgment of the
Company and its counsel, and after notification to the
Representatives, such press release or communication is
required by law.
(xi) The Company will apply the net proceeds from the
offering of the Shares in the manner set forth under "Use of
Proceeds" in the Prospectus.
(b) The Company agrees to pay, or reimburse if paid by the
Representatives, whether or not the transactions contemplated hereby
are consummated or this Agreement is terminated, all costs and expenses
incident to the public offering of the Shares and the performance of
the obligations of the Company under this Agreement including those
relating to: (i) the preparation, printing, filing and distribution of
the Registration Statement including all exhibits thereto, each
preliminary prospectus, the Prospectus, all amendments and supplements
to the Registration Statement and the Prospectus, and the printing,
filing and distribution of this Agreement; (ii) the preparation and
delivery of certificates for the Shares to the Underwriters; (iii) the
registration or qualification of the Shares for offer and sale under
the securities or Blue Sky laws of the various jurisdictions referred
to in Section 5(a)(vi), including the reasonable fees and disbursements
of counsel for the Underwriters in connection with such registration
and qualification and the
32
preparation, printing, distribution and shipment of preliminary and
supplementary Blue Sky memoranda; (iv) the furnishing (including costs
of shipping and mailing) to the Representatives and to the Underwriters
of copies of each preliminary prospectus, the Prospectus and all
amendments or supplements to the Prospectus, and of the several
documents required by this Section to be so furnished, as may be
reasonably requested for use in connection with the offering and sale
of the Shares by the Underwriters or by dealers to whom Shares may be
sold; (v) the filing fees of the NASD in connection with its review of
the terms of the public offering and reasonable fees and disbursements
of counsel for the Underwriters in connection with such review; (vi)
inclusion of the Shares for quotation on the Nasdaq National Market;
and (vii) all transfer taxes, if any, with respect to the sale and
delivery of the Shares by the Company to the Underwriters.
(c) The Selling Stockholders, jointly and severally, will pay
all expenses incident to the performance of their respective
obligations under, and the consummation of the transactions
contemplated by, this Agreement, including (i) any stamp duties,
capital duties and stock transfer taxes, if any, payable upon the sale
of the Shares to the Underwriters, and their transfer between the
Underwriters pursuant to an agreement between such Underwriters, and
(ii) the fees and disbursements of their respective counsel and
accountants.
6. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act against any and all losses, claims, damages and
liabilities, joint or several (including any reasonable investigation,
legal and other expenses incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim
asserted), to which they, or any of them, may become subject under the
Securities Act, the Exchange Act or other Federal or state law or
regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in
any preliminary prospectus, the Registration Statement or the
Prospectus or any amendment thereof or supplement thereto, or in any
Blue Sky application or other information or other documents executed
by the Company filed in any state or other jurisdiction to qualify any
or all of the Shares under the securities laws thereof (any such
application, document or information being hereinafter referred to as a
"BLUE SKY APPLICATION") or arise out of or are based upon 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; provided, however, that such indemnity shall not inure to
the benefit of any Underwriter (or any person controlling such
Underwriter) on account of any losses, claims, damages or liabilities
arising from the sale of the Shares to any person by such Underwriter
if such untrue statement or omission or alleged untrue statement or
omission was made in such preliminary prospectus, the Registration
Statement or the Prospectus, or such amendment or supplement thereto,
or in any Blue Sky Application in reliance upon and in conformity with
information furnished in writing to the Company by the Representatives
on behalf of any Underwriter specifically for use
33
therein. This indemnity agreement will be in addition to any liability
which the Company may otherwise have.
(b) Each of the Selling Stockholders, severally and not
jointly, agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act
against any and all losses, claims, damages and liabilities, joint or
several (including any reasonable investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding or any claim asserted), to which
they, or any of them, may become subject under the Securities Act, the
Exchange Act or other Federal or state law or regulation, at common law
or otherwise, insofar as such losses, claims, damages or liabilities
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus,
the Registration Statement or the Prospectus or any amendment thereof
or supplement thereto, or in any Blue Sky Application or arise out of
or are based upon 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, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in any preliminary prospectus,
the Registration Statement, the Prospectus or any amendment thereof or
supplement thereto or in any Blue Sky Application in reliance upon and
in conformity with written information furnished to the Company by such
Selling Stockholder expressly for use therein. Notwithstanding the
foregoing, the liability of each Selling Stockholder pursuant to the
provisions of this Section 6(b) shall be limited to an amount equal to
the aggregate gross proceeds after underwriting commissions and
discounts, but before expenses to such Selling Stockholder, from the
sale of the Shares sold by the Selling Stockholder hereunder. This
indemnity agreement will be in addition to any liability which such
Selling Stockholder may otherwise have.
(c) Each Underwriter agrees to indemnify and hold harmless the
Company, the Selling Stockholders and each person, if any, who controls
the Company or any Selling Stockholder within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, each director
of the Company, and each officer of the Company who signs the
Registration Statement, against any losses, claims, damages or
liabilities to which such party may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, the Registration Statement or
the Prospectus, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in any preliminary prospectus,
the Registration Statement or the Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representative
expressly for use therein; provided, however, that the obligation of
each Underwriter to indemnify the Company or the Selling Stockholders
(including any
34
controlling person, director or officer thereof) shall be limited to
the net proceeds received by the Company from such Underwriter.
(d) Any party that proposes to assert the right to be
indemnified under this Section will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party or
parties under this Section, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of
all papers served. No indemnification provided for in Section 6(a),
6(b) or 6(c) shall be available to any party who shall fail to give
notice as provided in this Section 6(d) if the party to whom notice was
not given was unaware of the proceeding to which such notice would have
related and was prejudiced by the failure to give such notice but the
omission so to notify such indemnifying party of any such action, suit
or proceeding shall not relieve it from any liability that it may have
to any indemnified party for contribution or otherwise than under this
Section. In case any such action, suit or proceeding shall be brought
against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and
the approval by the indemnified party of such counsel, the indemnifying
party shall not be liable to such indemnified party for any legal or
other expenses, except as provided below and except for the reasonable
costs of investigation subsequently incurred by such indemnified party
in connection with the defense thereof. The indemnified party shall
have the right to employ its counsel in any such action, but the fees
and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the employment of counsel by such
indemnified party has been authorized in writing by the indemnifying
parties, (ii) the indemnified party shall have been advised by counsel
that there may be one or more legal defenses available to it which are
different from or in addition to those available to the indemnifying
party (in which case the indemnifying parties shall not have the right
to direct the defense of such action on behalf of the indemnified
party) or (iii) the indemnifying parties shall not have employed
counsel to assume the defense of such action within a reasonable time
after notice of the commencement thereof, in each of which cases the
fees and expenses of counsel shall be at the expense of the
indemnifying parties. An indemnifying party shall not be liable for any
settlement of any action, suit, and proceeding or claim effected
without its written consent, which consent shall not be unreasonably
withheld or delayed.
7. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 6(a), 6(b) or 6(c) is due in accordance with its terms but for any
reason is unavailable to or insufficient to hold harmless an indemnified party
in respect to any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate losses,
liabilities, claims, damages and expenses (including any investigation, legal
and other expenses reasonably incurred in connection with, and any amount paid
in settlement of, any action, suit or proceeding or any claims asserted, but
after deducting any contribution received by any person entitled hereunder to
contribution from any person who may be liable for contribution) incurred by
such indemnified
35
party, as incurred, in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Stockholders on the one hand
and the Underwriters on the other hand from the offering of the Shares pursuant
to this Agreement or, if such allocation is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to above but also the relative fault of the Company and the Selling
Stockholders on the one hand and the Underwriters on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations. The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to above. The aggregate amount of losses, liabilities, claims, damages
and expenses incurred by an indemnified party and referred to above shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, (i) no Underwriter (except as
may be provided in the Agreement Among Underwriters) shall be required to
contribute any amount in excess of the amount by which the total price at which
the shares underwritten by it and distributed to the public were offered to the
public exceeds the amount of damages which such underwriter has otherwise been
required to pay by reason of any such untrue or alleged untrue statement or
omission or alleged omission; and (ii) no Selling Stockholders shall be required
to contribute any amount in excess of the aggregate net proceeds of the sale of
Shares received by such Selling Stockholders. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, each person, if
any, who controls an Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company or any Selling Stockholder, within the meaning of the
Section 15 of the Securities Act or Section 20 of the Exchange Act, shall have
the same rights to contribution as the Company or any Selling Stockholder, as
the case may be. Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against another party
or parties under this Section 7, notify such party or parties from whom
contribution may be sought, but the omission so to notify such party or parties
from whom contribution may be sought shall not relieve the party or parties from
whom contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this Section 7. No party shall be liable for
contribution with respect to any action, suit, proceeding or claim settled
without its written consent. The Underwriter's obligations to contribute
pursuant to this Section 7 are several in proportion to their respective
underwriting commitments and not joint.
8. TERMINATION.
(a) This Agreement may be terminated with respect to the
Shares to be purchased on a Closing Date by the Representatives by
notifying the Company and the Selling
36
Stockholders at any time at or before a Closing Date in the absolute
discretion of the Representatives if: (i) there has occurred any
material adverse change in the securities markets or any event, act or
occurrence that has materially disrupted, or in the opinion of the
Representatives, will in the future materially disrupt, the securities
markets or there shall be such a material adverse change in general
financial, political or economic conditions or the effect of
international conditions on the financial markets in the United States
is such as to make it, in the judgment of the Representatives,
inadvisable or impracticable to market the Shares or enforce contracts
for the sale of the Shares; (ii) there has occurred any outbreak or
material escalation of hostilities or other calamity or crisis the
effect of which on the financial markets of the United States is such
as to make it, in the judgment of the Representatives, inadvisable or
impracticable to market the Shares or enforce contracts for the sale of
the Shares; (iii) trading in the Shares or any securities of the
Company has been suspended or materially limited by the Commission or
trading generally on the New York Stock Exchange, Inc., the American
Stock Exchange, Inc. or the Nasdaq National Market has been suspended
or materially limited, or minimum or maximum ranges for prices for
securities shall have been fixed, or maximum ranges for prices for
securities have been required, by any of said exchanges or by such
system or by order of the Commission, the National Association of
Securities Dealers, Inc., or any other governmental or regulatory
authority; or (iv) a banking moratorium has been declared by any state
or Federal authority; or (v) in the judgment of the Representatives,
there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the
Prospectus, any material adverse change in the assets, properties,
condition, financial or otherwise, or in the results of operations,
business affairs or business prospects of the Company and its
subsidiaries considered as a whole, whether or not arising in the
ordinary course of business.
(b) If this Agreement is terminated pursuant to any of its
provisions, neither the Company nor the Selling Stockholders shall be
under any liability to any Underwriter, and no Underwriter shall be
under any liability to the Company or a Selling Stockholder, except
that (y) if this Agreement is terminated by the Representatives or the
Underwriters because of any failure, refusal or inability on the part
of the Company or the Selling Stockholders to comply with the terms or
to fulfill any of the conditions of this Agreement, the Company will
reimburse the Underwriters for all out-of-pocket expenses (including
the reasonable fees and disbursements of their counsel) incurred by
them in connection with the proposed purchase and sale of the Shares or
in contemplation of performing their obligations hereunder and (z) no
Underwriter who shall have failed or refused to purchase the Shares
agreed to be purchased by it under this Agreement, without some reason
sufficient hereunder to justify cancellation or termination of its
obligations under this Agreement, shall be relieved of liability to the
Company, the Selling Stockholders or to the other Underwriters for
damages occasioned by its failure or refusal.
9. SUBSTITUTION OF UNDERWRITERS. If any Underwriter shall default in
its obligation to purchase on any Closing Date the Shares agreed to be purchased
hereunder on such Closing Date, the Representatives shall have the right, within
36 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase such Shares on the terms
contained herein. If, however, the Representatives shall not have completed
37
such arrangements within such 36-hour period, then the Company shall be entitled
to a further period of 36 hours within which to procure another party or other
parties satisfactory to the Underwriters to purchase such Shares on such terms.
If, after giving effect to any arrangements for the purchase of the Shares of a
defaulting Underwriter or Underwriters by the Representatives and the Company as
provided above, the aggregate number of Shares which remains unpurchased on such
Closing Date does not exceed one-eleventh of the aggregate number of all the
Shares that all the Underwriters are obligated to purchase on such date, then
the Company shall have the right to require each non-defaulting Underwriter to
purchase the number of Shares which such Underwriter agreed to purchase
hereunder at such date and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Shares which
such Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default. In any such case, either the Representatives or the Company shall have
the right to postpone the applicable Closing Date for a period of not more than
seven days in order to effect any necessary changes and arrangements (including
any necessary amendments or supplements to the Registration Statement or
Prospectus or any other documents), and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in the opinion
of the Company and the Underwriters and their counsel may thereby be made
necessary.
If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the Representatives and
the Company as provided above, the aggregate number of such Shares which remains
unpurchased exceeds 10% of the aggregate number of all the Shares to be
purchased at such date, then this Agreement, or, with respect to the Option
Shares Closing Date, the obligations of the Underwriters to purchase and of the
Selling Stockholders to sell the Option Shares to be purchased and sold on such
date, shall terminate, without liability on the part of any non-defaulting
Underwriter to the Company or the Selling Stockholders, and without liability on
the part of the Company or the Selling Stockholders, except as provided in
Sections 5(b), 6, 7 and 8. The provisions of this Section 9 shall not in any way
affect the liability of any defaulting Underwriter to the Company or the
nondefaulting Underwriters arising out of such default. The term "UNDERWRITER"
as used in this Agreement shall include any person substituted under this
Section 9 with like effect as if such person had originally been a party to this
Agreement with respect to such Shares.
10. MISCELLANEOUS. The respective agreements, representations,
warranties, indemnities and other statements of the Company, Selling
Stockholders and the several Underwriters, as set forth in this Agreement or
made by or on behalf of them pursuant to this Agreement, shall remain in full
force and effect, regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of any Underwriter or the Company or the
Selling Stockholders or any of their respective officers, directors or
controlling persons referred to in Sections 6 and 7 hereof, and shall survive
delivery of and payment for the Shares. In addition, the provisions of Sections
5(b), 6, 7 and 8 shall survive the termination or cancellation of this
Agreement.
This Agreement has been and is made for the benefit of the
Underwriters, the Company and the Selling Stockholders and their respective
successors and assigns, and, to the extent expressed herein, for the benefit of
persons controlling any of the Underwriters, or the
38
Company, and directors and officers of the Company, and their respective
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "SUCCESSORS AND ASSIGNS" shall
not include any purchaser of Shares from any Underwriter merely because of such
purchase.
All notices and communications hereunder shall be in writing and mailed
or delivered or by telephone or telegraph if subsequently confirmed in writing,
(a) if to the Representatives, c/o CIBC World Markets Corp., 000 0xx Xxxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention: _____________, with a copy to
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000,
Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxx and Xxxxxxxx Xxxxxxxx,
and (b) if to the Company, to its agent for service as such agent's address
appears on the cover page of the Registration Statement with a copy to (i)
Xxxxxx Xxxxxxx Xxxxx & Xxxxxxx, P.A., 000 Xxxxxxxxx Xxxxxx Xxxxxx, Xxxxx 0000,
Xxxxx, Xxxxxxx 00000, Attention: Xxxxxxx Xxxxxxx and (ii) Akerman Senterfitt,
Xxx Xxxxxxxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxx, Xxxxxxx 00000-0000, Attention:
Xxxxxxx Xxxxxx, and (c) if to the Selling Stockholders to __________ with a copy
to __________.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
Please confirm that the foregoing correctly sets forth the agreement
among us.
Very truly yours,
ODIMO INCORPORATED
By
--------------------------------------
Name:
Title:
SELLING STOCKHOLDERS
By
--------------------------------------
Name:
Title: As Attorney-in-Fact acting on
behalf of each of the Selling
Stockholders named in Schedule
II to this Agreement
39
Confirmed:
CIBC WORLD MARKETS CORP.
Xxxxxxxxxxx & Co. Inc.
------------------------------------------
Acting severally on behalf of itself
and as Representative of the several
Underwriters named in Schedule I annexed
hereto.
By CIBC WORLD MARKETS CORP.
By
----------------------------------------
Name:
Title:
40
SCHEDULE I
Number of
Number of Firm Shares
Firm Shares to Be Purchased from
to Be Purchased from the Selling
Name the Company Stockholders
---- -------------------- -------------------
CIBC World Markets Corp.
Xxxxxxxxxxx & Co. Inc.
-----------------------------------
-----------------------------------------------
Total
Sch I - 1
SCHEDULE II
Number of
Firm Shares to
Name of Selling Stockholder be Sold
--------------------------- --------
GSI Commerce Solutions, Inc.
Xxx Xxxxxxx
Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx Xxxx
Xxxx Xxxxxxxxx
Xxxxxxx Xxxxxxx
Xxxx Xxxx
-------------
Total
Sch II - 1
SCHEDULE III
Lock-up Signatories
Xxxx Xxxxxx
Xxxxxx Xxxxxxxxxxx
Xxxx Xxxxxxx
Xxxx Xxxxxx
Xxxxxxx Xxxxx
Xxxxxx Xxxxxxx
Xxxxxx Xxxx
Xxxxxxxx Xxxx
Xxxxxxx Xxxxxxxx
Xxxx Xxxxxxxx
Xxxxxx Xxxxx
Lenorth Holdings SA
GSI Commerce Solutions, Inc.
Softbank Capital Partners LP
Softbank Capital LP
Softbank Capital Advisors Fund LP
STI Ventures N.V.
SDG Marketing Inc.
Xxxxxx Xxxxx
Xxxxxx Xxxxx
Xxxx Xxxxxxxxx
Xxxxxx Xxxxxxxxx
Xxx Xxxxxx
Xxx Xxxxxxx
Xxxxx Xxxxxx
Xxxxxx Xxxx
Xxxx Xxxxxxxxx
Xxxxxxx Xxxxxxx
Aamba Ma Family Trust
AMC BVBA Beechdrop Inc.
Data Investments LLC
Eliaz Diamonds
ePartners
SBSweden
Hope of Africa
Jewel XS
Lipton Partnership 2
Sch III - 1
Exhibit A
FORM OF LOCK-UP AGREEMENT
_____, 2005
CIBC World Markets Corp.
As Representative of the several Underwriters
c/o CIBC World Markets Corp.
CIBC World Markets Tower
World Financial Center
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: PUBLIC OFFERING OF COMMON STOCK OF ODIMO INCORPORATED
Ladies and Gentlemen:
The undersigned acknowledges that CIBC World Markets Corp., as
representative of the several underwriters (the "UNDERWRITERS"), proposes to
enter into an Underwriting Agreement (the "UNDERWRITING Agreement") with Odimo
Incorporated, a Delaware corporation (the "COMPANY"), providing for the purchase
by the Underwriters of shares (the "SHARES") of common stock of the Company, par
value $0.001 per share (the "COMMON STOCK"). The undersigned further understands
that the Company filed a Registration Statement on Form S-1 (the "REGISTRATION
STATEMENT") with the Securities and Exchange Commission (the "COMMISSION") on
July 16, 2004, for the registration of the Shares of Common Stock (including the
Shares subject to an over-allotment option on the part of the Underwriters) that
the Company intends to sell in an initial public offering (the "OFFERING").
In order to induce the Company and the Underwriters to enter into the
Underwriting Agreement and to proceed with the Offering, the undersigned
irrevocably agrees, for the benefit of the Company and the Underwriters, that,
without the prior written consent of CIBC World Markets Corp., the undersigned
will not (and will not announce or disclose any intention to) for a period of
180 days subsequent to the date of the Underwriting Agreement, directly or
indirectly,
o offer, sell, assign, transfer, pledge, encumber, agree or
contract to sell, grant an option to purchase or enter into
any transaction or device that is designed to, or could
reasonably be expected to, result in the disposition by any
person at any time in the future of, or
o enter into any swap, derivative or transaction or other
arrangement that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of,
A-1
any shares of Common Stock, any option, right or warrant to purchase shares of
Common Stock or any securities convertible into or exchangeable for Common Stock
(collectively, the "RESTRICTED SECURITIES"), that may be deemed to be
beneficially owned (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) by the undersigned on the date hereof or
hereafter acquired. These restrictions do not extend to any Shares to be sold to
the Underwriters in the Offering, or pledged as collateral or transferred as a
gift or gifts (provided that any pledgee or donee thereof agrees in writing to
be bound by the terms hereof). In addition, the undersigned agrees that, without
the prior written consent of CIBC World Markets Corp., the undersigned will not,
during the period commencing on the date hereof and ending 180 days after the
execution of the Underwriting Agreement, make any demand for or exercise any
right with respect to, the registration of any Restricted Securities.
The undersigned agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent against the transfer of any
Restricted Securities if such transfer would constitute a violation or breach of
this agreement.
The undersigned, whether or not participating in the Offering,
understands that the Company and the Underwriters will proceed with the Offering
in reliance upon the representations set forth in this agreement, and that, upon
request, the undersigned will execute any additional documents necessary in
connection with enforcement hereof. The undersigned hereby represents and
warrants that the undersigned has full power and authority to enter into this
agreement. This agreement shall be binding on the undersigned and the
successors, heirs, personal representatives and assigns of the undersigned.
Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will only be made pursuant to
an Underwriting Agreement, the terms of which are subject to negotiation between
the Company and the Underwriters. In any event, this agreement shall terminate
if the Offering has not been consummated prior to March 31, 2005.
Very truly yours,
-----------------------------------------
Signature
-----------------------------------------
Print Name and Title (if applicable)
A-2
Exhibit B
FORM OF CUSTODY AGREEMENT
for sale of shares of common stock,
par value $0.001 per share, of Odimo Incorporated
Xxxxxx Xxxxxxx Xxxxx & Xxxxxxx, P.A. (the "CUSTODIAN")
000 Xxxxxxxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
Ladies and Gentlemen:
There are delivered to you herewith certificate(s) representing shares
of common stock, par value $0.001 per share ("COMMON STOCK"), and shares of
preferred stock, par value $0.001 per share, consisting of Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred
Stock (such preferred stock, collectively the "PREFERRED STOCK") of Odimo
Incorporated, a Delaware corporation (the "COMPANY"), as set forth at the end of
this letter on the page entitled "CERTIFICATE(S) DEPOSITED." Each of the
certificates so delivered is accompanied by an executed assignment form duly
endorsed for transfer and is in negotiable form bearing the signature of the
undersigned guaranteed by a commercial bank or trust company having an office or
a correspondent in New York City, New York or by a member firm of the New York,
American or Pacific Stock Exchange. The certificate(s) are to be held by you as
Custodian for the account of the undersigned and are to be disposed of by you in
accordance with this Custody Agreement (this "CUSTODY AGREEMENT").
If the undersigned is (i) acting as trustee or in any fiduciary or
representative capacity, the undersigned has also delivered duly certified
copies of each trust agreement, will, letters testamentary or other instrument
pursuant to which the undersigned is authorized to act on behalf of the Selling
Stockholder (as defined herein); (ii) a corporation, the undersigned has also
delivered duly certified resolutions of its board of directors authorizing it to
enter into this Custody Agreement, the Underwriting Agreement (as defined
herein) and the Power of Attorney (as defined herein) and duly certified copies
of such corporation's bylaws, certificate of incorporation or other
organizational documents; or (iii) a partnership, the undersigned has also
delivered extracts of any applicable provisions of its partnership agreement
(and applicable provisions of the organizational documents or partnership
agreement(s) of the general partner(s) of such partnership) authorizing such
partnership to enter into this Custody Agreement, the Underwriting Agreement and
the Power of Attorney.
The undersigned agrees to deliver such additional documentation as you,
the Attorneys (as defined herein), the Company or the Representatives (as
defined herein) or any of their respective counsel may reasonably request to
effectuate or confirm compliance with any of the provisions hereof or of the
Power of Attorney or the Underwriting Agreement, all of the foregoing to be in
form and substance satisfactory in all respects to the party requesting such
documentation.
B-1
Concurrently with the execution and delivery of this Custody Agreement,
the undersigned has executed a power of attorney (the "POWER OF ATTORNEY")
irrevocably appointing __________ and _______________, each with full power and
authority to act alone in any matter thereunder and with full power of
substitution, the true and lawful attorneys-in-fact of the undersigned
(individually, an "ATTORNEY" and collectively, the "ATTORNEYS"), with full power
and authority in the name of, for and on behalf of, the undersigned with respect
to all matters arising in connection with the sale of the Common Stock by the
undersigned including, but not limited to entering into and performing an
underwriting agreement (the "UNDERWRITING AGREEMENT") among the Company, certain
stockholders of the Company including the undersigned (collectively, the
"SELLING STOCKHOLDERS"), and CIBC World Markets Corp. and Xxxxxxxxxxx & Co.
Inc., as representatives (the "REPRESENTATIVES") of the several underwriters to
be named in Schedule I to the Underwriting Agreement (the "UNDERWRITERS"). The
total number of shares of Common Stock (including shares of Common Stock
issuable upon conversion of the Preferred Stock) to be sold by the undersigned
to the Underwriters and set forth opposite the name of the undersigned in
Schedule II to the Underwriting Agreement is hereinafter referred to as the
"SHARES."
You are authorized and directed to hold the certificate(s) deposited
with you hereunder in your custody and, subject to the instructions of the
Attorneys, (i) to take all necessary action to cause the Shares to be
transferred on the books of the Company into such names as the Representatives,
on behalf of the several Underwriters, shall have instructed, including
surrendering the certificate(s) representing the Shares to the transfer agent
for the Common Stock for cancellation, in exchange for new certificate(s) for
shares of Common Stock registered in such names and in such denominations as the
Representatives shall have instructed; (ii) to deliver such new certificate(s)
to the Representatives, for the accounts of the several Underwriters, against
payment for such Shares at the purchase price per Share specified in the
Underwriting Agreement and to give receipt for such payment; (iii) to deposit
the same to your account as Custodian and draw upon such account to pay such
transfer taxes, if any, payable in connection with the transfer of the Shares to
the Underwriters ("TRANSFER TAXES") as you may be instructed to pay by the
Attorneys; (iv) to transmit to the undersigned in the manner set forth under
"Manner of Payment" below, within 24 hours of receiving instructions from the
Attorneys to do so, the excess, if any (the "NET PROCEEDS"), of the amount
received by you as payment for the Shares over the Transfer Taxes, if any. The
amount of such Net Proceeds is to be paid in the manner requested by the
undersigned at the end of this Custody Agreement or in such manner as you, in
accordance with the terms hereof, shall deem appropriate. Upon receipt of
instructions from the Attorneys, you shall also return to the undersigned new
certificate(s) representing the excess, if any, of the number of shares of
Common Stock represented by the certificate(s) deposited with you hereunder over
the number of Shares sold by the undersigned to the Underwriters.
Under the terms of the Power of Attorney, the authority conferred
thereby is granted and conferred subject to and in consideration of the
interests of the Attorneys, the several Underwriters, the Company and the other
Selling Stockholders (as defined in the Underwriting Agreement) and is
irrevocable and not subject to withdrawal or termination by any act of the
undersigned or by operation of law, whether by the death or incapacity of the
undersigned (or
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either or any of the undersigned) or by the occurrence of any other event or
events (including, without limitation, the termination of any trust or estate
for which the undersigned is acting as fiduciary or fiduciaries, the death or
incapacity of one or more trustees, guardians, executors or administrators under
such trust or estate or the merger, consolidation, dissolution or liquidation of
any corporation or partnership) (any of the foregoing being hereinafter referred
to as an "EVENT"). Accordingly, the certificate(s) deposited with you hereunder
and this Custody Agreement and your authority hereunder are subject to and in
consideration of the interests of the several Underwriters, the Company, the
Attorneys and the other Selling Stockholders, and this Custody Agreement and
your authority hereunder are irrevocable and are not subject to withdrawal or
termination by the occurrence of any Event. If an Event shall occur after the
execution hereof but before the delivery of the Shares to the Underwriters, then
certificate(s) representing such Shares will be delivered by you to the
Underwriters on behalf of the undersigned in accordance with the terms and
conditions of the Underwriting Agreement and this Custody Agreement and any
actions taken by you pursuant to this Custody Agreement shall be as valid as if
such Event had not occurred, regardless of whether or not you, the Attorneys,
the Underwriters or any one of them, shall have received notice of such Event.
Notwithstanding any of the foregoing provisions, if the Underwriting
Agreement shall not have been executed and delivered prior to ___________, 2005,
then, upon the written request of the undersigned to you (accompanied by written
notice of termination of the Power of Attorney addressed to each of the
Attorneys) on or after that date, you are to return to the undersigned, all
certificate(s), together with any stock powers, delivered herewith.
Until payment of the purchase price for the Shares has been made to you
by or for the account of the several Underwriters, the undersigned shall remain
the owner of all shares of Common Stock represented by the certificate(s)
deposited with you hereunder and shall have the right to vote such shares and
all other securities, if any, represented by such certificate(s) and to receive
all dividends and distributions thereon, except the right to retain custody and
dispose of such shares, which is subject to the rights of the Custodian under
this Custody Agreement, the Attorneys under the Power of Attorney and the
Underwriters under the Underwriting Agreement. The Underwriters shall not
acquire the power or the right to direct the investment of the Shares by virtue
of this Custody Agreement until the consideration therefor is paid pursuant to
the Underwriting Agreement.
You shall be entitled to act and rely upon any statement, request,
notice or instruction respecting this Custody Agreement given to you by the
Attorneys, or any one of them. Any Attorney has the authority to instruct you on
irregularities or discrepancies in the certificates representing shares of
Common Stock and any accompanying documents.
In taking any action requested or directed by the Representatives under
the terms of this Custody Agreement, you will be entitled to rely upon a writing
signed by a Vice President, Senior Vice President, Managing Director, Counsel,
Assistant General Counsel or General Counsel of CIBC World Markets Corp.
It is understood that you assume no responsibility or liability to any
person other than to deal with the certificate(s) deposited with you hereunder
and the proceeds from the sale of all or
B-3
a portion of the securities represented thereby in accordance with the
provisions of this Custody Agreement. The undersigned agrees to indemnify you
for and to hold you free from and harmless against any and all loss, claim,
damage, liability or expense incurred by you arising out of or in connection
with acting as Custodian hereunder, as well as the cost and expense of defending
against any claim of liability hereunder, which is not due to your own gross
negligence or willful misconduct.
The representations and warranties of the undersigned set forth in the
Underwriting Agreement are hereby incorporated by reference herein and the
undersigned represents and warrants that such representations and warranties are
true and correct on the date hereof as if made on the date hereof. The
representations, warranties and agreements contained herein, as well as those
contained in the Underwriting Agreement, are made for the benefit of, and may be
relied upon by, you, the other Selling Stockholders, the Attorneys, the Company,
Berman, Rennert, Xxxxx & Xxxxxxx, P.A., Akerman Senterfitt, the Underwriters and
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP and their representatives, agents and
counsel. These representations, warranties and agreements shall remain operative
and in full force and effect, and shall survive delivery of and payment for the
Shares, regardless of (i) any investigation, or statement as to the results
thereof, made by or on behalf of any of the persons listed in the preceding
sentence, (ii) acceptance of the Shares and payment for them under the
Underwriting Agreement and (iii) termination of this Custody Agreement.
This Custody Agreement shall be binding upon the undersigned and the
heirs, legal representatives, distributees, successors and assigns of the
undersigned.
This Custody Agreement may be signed in counterparts which together
shall constitute one and the same agreement.
This Custody Agreement shall be governed by the laws of the State of
New York.
Please acknowledge your acceptance hereof as Custodian, and receipt of
the certificate(s) deposited with you hereunder, by executing and returning the
enclosed copy hereof to the undersigned in care of _______ and __________.
Dated: ,
------------------------- ----
Very truly yours,
By:
-----------------------------------
Name:
Title:
B-4
Print Name(s) and Address of Selling
Stockholder(s) and Name and Title of
any Person Signing as Agent or
Fiduciary:
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
Taxpayer I.D.: ___________________
Telephone: ___________________
B-5
Instruction: If you are an individual and are married, your spouse is required
to complete this form:
SPOUSAL CONSENT
I am the spouse of ____________________ . On behalf of myself, my heirs
and legatees, I hereby join in and consent to the terms of the foregoing Custody
Agreement and agree to the sale of the shares of Common Stock of Odimo
Incorporated, registered in the name of my spouse or otherwise registered, which
my spouse proposes to sell pursuant to the Underwriting Agreement (as defined
therein).
Dated: , 2005
--------------------------------
--------------------------------
(Signature of Spouse)
B-6
Instruction: Complete each column as to certificate(s) to be deposited with the
Custodian.
CERTIFICATE(S) DEPOSITED
Stock Maximum Number of Shares
Certificate of Common Stock To Be Sold
No. from Certificate
--------------------------
TOTAL:
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Instruction: Indicate how you wish to receive payment for the shares of Common
Stock sold to the Underwriters. Please note that if you are selling shares of
Common Stock registered in the name of a corporation or other association or a
trust, payment will be made only to the corporation or other association or
trust. A wire transfer can be made only to an account standing in exactly the
same name as the person or entity, including the corporation or other
association or trust, that is the registered owner of the Common Stock being
sold.
MANNER OF PAYMENT
I request that payment of the net proceeds from the sale of the shares
of Common Stock of the Company to be sold by me pursuant to the Underwriting
Agreement be made in the following manner (CHECK ONE):
[ ] CHECK made payable to: ____________________________
to be sent to the following address:
------------------------------------
------------------------------------
------------------------------------
Phone: ( ) _______________________
Please send by (check one):
[ ] First class mail
[ ] Federal Express
Federal Express account number: ____________________________
[ ] or transfer to the following account:
Account No.: ___________________________
Bank____________________________________ (See attached wire transfer
(name) instructions)
________________________________________
(address)
ABA No._________________________________
Phone: ( ) _________________________
[ ] Other (please specify)
________________________________________
B-8
CUSTODIAN'S ACKNOWLEDGMENT AND RECEIPT
_____________, as Custodian, acknowledges acceptance of the duties of
the Custodian under the foregoing Custody Agreement and receipt of the
certificate(s) referred therein.
Dated: ,
------------------------ ------
[Custodian]
By:
--------------------------------
Name:
Title:
DO NOT DETACH FROM CUSTODY AGREEMENT
B-9
Exhibit C
SELLING STOCKHOLDERS'
IRREVOCABLE POWER OF ATTORNEY
for sale of shares of common stock,
par value $0.001 per share, of Odimo Incorporated
[name of Attorney 1]
[name of Attorney 2]
[Address]
Ladies and Gentlemen:
The undersigned stockholder and certain other holders of
common and preferred stock of Odimo Incorporated, a Delaware corporation (the
"COMPANY") (such holders and the undersigned being hereinafter sometimes
collectively referred to as the "Selling Stockholders"), propose to enter into
an Underwriting Agreement (the "UNDERWRITING AGREEMENT") with the Company, and
CIBC World Markets Corp. and Xxxxxxxxxxx & Co. Inc., as representatives (the
"REPRESENTATIVES") of the several underwriters to be named in Schedule I to the
Underwriting Agreement (the "UNDERWRITERS"). The Selling Stockholders propose to
sell to the Underwriters pursuant to the Underwriting Agreement certain
authorized and issued shares of the common stock, par value $0.001 per share, of
the Company (the "COMMON STOCK") owned by them. It is understood that at this
time there is no commitment on the part of the Underwriters to purchase any
shares of Common Stock and no assurance that the Underwriting Agreement will be
entered into by the Company or the Underwriters.
The undersigned hereby irrevocably constitutes and appoints
__________ and __________ each with full power and authority to act alone in any
matter hereunder and with full power of substitution, the true and lawful
attorneys-in-fact of the undersigned (individually an "ATTORNEY" and
collectively the "ATTORNEYS"), with full power and authority in the name of, for
and on behalf of, the undersigned with respect to all matters arising in
connection with the sale of Common Stock by the undersigned including, but not
limited to, the power and authority on behalf of the undersigned to take any and
all of the following actions:
1. To sell, assign, transfer and deliver to the several
Underwriters up to the number of shares of Common Stock (including shares of
Common Stock issuable upon conversion of the Preferred Stock, as defined in the
Custody Agreement) set forth on the signature page hereof, such shares of Common
Stock to be represented by certificate(s) deposited by the undersigned pursuant
to the Custody Agreement (the "CUSTODY AGREEMENT") between the undersigned and
Xxxxxx Xxxxxxx Xxxxx & Xxxxxxx, P.A., as Custodian (the "CUSTODIAN"), at a
purchase price per share, after deducting underwriting discounts and
commissions, to be paid by the Underwriters, as the Attorneys, in their sole
discretion, shall determine, but at the same price per share at which the
Company and all other Selling Stockholders (as defined in the Underwriting
Agreement) sell Common Stock to the Underwriters;
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2. To determine the number of shares of Common Stock to be
sold by the undersigned to the Underwriters, which numbers shall be no greater
but may be fewer than the corresponding numbers set forth on the signature page
hereof (such total number of shares of Common Stock as is finally determined by
the Attorneys and set forth opposite the name of the undersigned in Schedule II
to the Underwriting Agreement is hereinafter referred to as the "SHARES");
3. To execute, deliver and perform the Underwriting Agreement
in customary form with such customary representations, warranties and covenant
as the Attorneys, in their sole discretion, may deem appropriate, with full
power to make such amendments to the Underwriting Agreement as the Attorneys, in
their sole discretion, may deem advisable;
4. On behalf of the undersigned, to make the representations
and warranties and enter into the agreements contained in the Underwriting
Agreement (including, without limitation, entering into the "lock-up"
agreements);
5. (a) To instruct the Custodian on all matters pertaining to
the sale of the Shares and the delivery of certificates therefor, including: (i)
the transfer of the Shares on the books of the Company in order to effect the
sale of the Shares (including designating the name or names in which new
certificate(s) for Shares are to be issued and the denominations thereof), (ii)
the delivery to or for the account of the Underwriters of the certificate(s) for
the Shares against receipt by the Custodian of the purchase price to be paid
therefor, (iii) the payment, out of the proceeds (net of underwriting discounts
and commissions) from the sale of the Shares by the undersigned to the
Underwriters, of any expense incurred in accordance with paragraph 6 which is
not payable by the Company and any transfer taxes payable in connection with the
transfer of the Shares to the Underwriters ("TRANSFER TAXES") and (iv) the
transmission to the undersigned of the proceeds, if any, from the sale of the
Shares (after deducting all amounts payable by the undersigned pursuant to
clause (iii) above) and the return to the undersigned, of new certificate(s)
representing the excess, if any, of the number of shares of Common Stock
represented by certificate(s) deposited with the Custodian over the number of
Shares sold to the Underwriters; and (b) to amend the Custody Agreement and any
related documents in such manner as the Attorneys may determine to be not
materially adverse to the undersigned.
6. To incur or authorize the incurrence of any necessary or
appropriate expense in connection with the sale of the Shares and to determine
the amount of any Transfer Taxes;
7. To amend, modify, supplement or waive any term or provision
of, the Amended and Restated Stockholders' Agreement dated as of March 30, 2004
by and among Odimo Incorporated and the stockholders party thereto (the
"STOCKHOLDERS' AGREEMENT") and any related documents in such manner as the
Attorneys may determine to be necessary or desirable in connection with the
consummation of the transactions contemplated by the Underwriting Agreement, the
Custody Agreement and this Power of Attorney;
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8. To take any and all steps deemed necessary or desirable by
the Attorneys in connection with the registration of the Shares under the
Securities Act of 1933, as amended (the "ACT"), the Securities Exchange Act of
1934, as amended, and the securities or "blue sky" laws of various states and
jurisdictions, including, without limitation, the giving, making or filing of
such undertakings, consents to service of process and representations and
agreements and the taking of such other steps as the Attorneys may deem
necessary or desirable;
9. To retain legal counsel to represent the undersigned in
connection with any and all matters referred to herein (which counsel may, but
need not be, counsel for the Company);
10. To make, execute, acknowledge and deliver all such other
contracts, stock powers, orders, receipts, notices, instructions, certificates,
letters and other writings, including, without limitation, communications with
the Securities and Exchange Commission, state securities commissions and the
National Association of Securities Dealers, Inc. ("NASD"), and in general to do
all things and to take all actions which the Attorneys, in their sole
discretion, may consider necessary or desirable in connection with the sale of
Shares to the Underwriters and the public offering thereof, as fully as could
the undersigned if personally present and acting;
11. If necessary, to endorse (in blank or otherwise) on behalf
of the undersigned the certificate(s) representing the Shares, or a stock power
or powers attached to such certificate(s); and
12. To sign such other certificates, documents and agreements
and take any and all other actions as the Attorneys may deem necessary or
desirable in connection with the consummation of the transactions contemplated
by the Underwriting Agreement, the Custody Agreement and this Power of Attorney.
Each Attorney may act alone in exercising the rights and
powers conferred on the Attorneys in this Power of Attorney, and the act of any
Attorney shall be the act of the Attorneys. Each Attorney is hereby empowered to
determine in his or her sole discretion the time or times when, the purpose for
and the manner in which any power herein conferred upon him or her shall be
exercised, and the conditions, provisions or covenants of any instrument or
document which may be executed by him or her pursuant hereto.
The undersigned acknowledges receipt of a copy of Amendment
No. ___ to the Registration Statement on Form S-1 (the "REGISTRATION STATEMENT")
relating to the offering of the Shares and the other shares of Common Stock
(together, the "OFFERED SHARES") to be sold by the Selling Stockholders and a
copy of the draft form of the Underwriting Agreement dated _________, 2005. The
undersigned has reviewed the Registration Statement and the form of the
Underwriting Agreement and understands the obligations and agreements of the
undersigned set forth in the Underwriting Agreement. All representations and
warranties of the Selling Stockholders in the Underwriting Agreement with
respect to the undersigned will be as of the date of the execution of the
Underwriting Agreement and the Closing Dates (as determined in accordance with
the Underwriting Agreement), true and correct. All such representations and
C-3
warranties will, as provided in the Underwriting Agreement, survive the
termination of the Underwriting Agreement and the delivery of and payment for
the Shares.
Upon the execution and delivery of the Underwriting Agreement
by the Attorneys on behalf of the Selling Stockholders, the undersigned agrees
to be bound by and to perform each and every covenant and agreement contained
therein of the undersigned as a Selling Stockholder.
The undersigned agrees, if so requested, to provide an opinion
of counsel, addressed to Xxxxxx Xxxxxxx Xxxxx & Xxxxxxx, P.A. ("BRVM"), which
opinion shall expressly permit reliance thereon by BRVM, setting forth such
matters as BRVM may reasonably request in rendering its opinion pursuant to the
Underwriting Agreement and such other documentation as the Attorneys, the
Company, the Representatives or any of their respective counsel may request to
effectuate any of the provisions hereof or of the Underwriting Agreement, all of
the foregoing to be in form and substance satisfactory in all respects to the
party requesting such documentation.
This Power of Attorney and all authority conferred hereby are
granted and conferred subject to and in consideration of the interests of the
Attorneys, the several Underwriters, the Company and the other Selling
Stockholders who may become parties to the Underwriting Agreement, and for the
purposes of completing the transactions contemplated by the Underwriting
Agreement and this Power of Attorney.
This Power of Attorney is an agency coupled with an interest
and all authority conferred hereby shall be irrevocable, and shall not be
withdrawn or terminated by any act of the undersigned or by operation of law,
whether by the death or incapacity of the undersigned (or either or any of the
undersigned) or by the occurrence of any other event or events (including,
without limitation, the termination of any trust or estate for which the
undersigned is acting as a fiduciary or fiduciaries, the death or incapacity of
one or more trustees, guardians, executors or administrators under such trust or
estate or the merger, consolidation, dissolution or liquidation of any
corporation or partnership) (any of the foregoing being hereinafter referred to
as an "EVENT"). If an Event shall occur after the execution hereof but before
completion of the transactions contemplated by the Underwriting Agreement or
this Power of Attorney, then certificate(s) representing the Shares will be
delivered to the Underwriters by or on behalf of the undersigned in accordance
with the terms and conditions of the Underwriting Agreement and the Custody
Agreement and any actions taken hereunder by the Attorneys shall be as valid as
if such Event had not occurred regardless of whether or not the Custodian, the
Attorneys, the Underwriters, or any one of them, shall have received notice of
such Event.
Notwithstanding any of the foregoing provisions, if the
Underwriting Agreement shall not have been executed and delivered prior to
_________, 2005, then, upon the written notice of the undersigned on or after
that date to the Attorneys, this Power of Attorney shall terminate subject,
however, to all lawful action done or performed pursuant hereto prior to the
receipt of actual notice.
C-4
It is understood that the Attorneys assume no responsibility
or liability to any person other than to deal with the certificate(s) for shares
of Common Stock deposited with the Custodian pursuant to the Custody Agreement
and the proceeds from the sale of the Shares in accordance with the provisions
hereof. The Attorneys make no representations with respect to and shall have no
responsibility for the Registration Statement or the Prospectus nor, except as
herein expressly provided, for any aspect of the offering of Common Stock, and
the Attorneys shall not be liable for any error of judgment or for any act done
or omitted or for any mistake of fact or law except for the Attorneys' own gross
negligence or willful misconduct. The undersigned agrees to indemnify the
Attorneys for and to hold the Attorneys, jointly and severally, free from and
harmless against any and all loss, claim, damage, liability or expense incurred
by or on behalf of the Attorneys, or any of them, arising out of or in
connection with acting as Attorneys under this Power of Attorney, as well as the
cost and expense of defending against any claim of liability hereunder, which is
not due to the Attorneys' own gross negligence or willful misconduct. The
undersigned agrees that the Attorneys may consult with counsel of their choice
(which may but need not be counsel for the Company) and the Attorneys shall have
full and complete authorization and protection for any action taken or suffered
by the Attorneys, or any of them hereunder, in good faith and in accordance with
the opinion of such counsel.
It is understood that the purchase price per share of Common
Stock to be paid in connection with the offering contemplated by the Prospectus
and the Underwriting Agreement could be higher or lower than the estimated price
per share indicated in the Registration Statement.
It is understood that the Attorneys shall serve entirely
without compensation.
This Power of Attorney shall be binding upon the undersigned
and the heirs, legal representatives, distributees, successors and assigns of
the undersigned.
This Power of Attorney shall be governed by the laws of the
State of New York without regard to the conflicts of laws principles thereof.
C-5
Witness the due execution of the foregoing Power of Attorney as of the date
written below.
Maximum Number of Shares of
Common Stock to be Sold by Selling
Stockholders(s):
------------------------------
Very truly yours,
By:
--------------------------------------
Name:
Title:
DATED: , 2005
------------------------
Print Name and Address of Selling
Stockholder(s) and Name and Title of any Person
Signing as Agent or Fiduciary:
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
Telephone: ( ) ________________________
Facsimile: ( ) ________________________
C-6
ACKNOWLEDGMENT
State of )
) ss.
County of )
On this the _____ day of ________ ______ before me personally
appeared _____________________________ who acknowledged the signing of the
foregoing instrument and that the same is the free act and deed of such person
(and if such person is signing on behalf of a corporation, partnership or trust
that the same is the free act and deed of such corporation, partnership or trust
and that such person is duly authorized to sign the foregoing instrument).
WITNESS my hand and official seal.
Notary's Signature
C-7
