2,250,000 Shares Avatar Holdings Inc. Common Stock, par value $1.00 per share UNDERWRITING AGREEMENT
Exhibit 1.1
2,250,000 Shares
Common Stock, par value $1.00 per share
September 23, 2009
Barclays Capital Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Avatar Holdings Inc., a Delaware corporation (the “Company”), proposes to sell to you as the
sole underwriter (the “Underwriter”), 2,250,000 shares (the “Firm Stock”) of the Company’s common
stock, par value $1.00 per share (the “Common Stock”). In addition, the Company proposes to grant
to the Underwriter an option to purchase up to 337,500 additional shares of the Common Stock on the
terms set forth in Section 2 (the “Option Stock”) of this agreement (this “Agreement”). The Firm
Stock and the Option Stock, if purchased, are hereinafter collectively called the “Stock.” This is
to confirm the agreement concerning the purchase of the Stock from the Company by the Underwriter.
1. Representations, Warranties and Agreements of the Company. The Company represents,
warrants and agrees that:
(a) A registration statement on Form S-3 relating to the Stock has (i) been prepared by
the Company in conformity with the requirements of the Securities Act of 1933, as amended
(the “Securities Act”), and the rules and regulations (the “Rules and Regulations”) of the
Securities and Exchange Commission (the “Commission”) thereunder; (ii) been filed with the
Commission under the Securities Act; and (iii) become effective under the Securities Act.
Copies of such registration statement and any amendment thereto have been delivered by the
Company to you as the Underwriter. As used in this Agreement:
(i) “Applicable Time” means 9:30 a.m. (New York City time), on September 23,
2009;
(ii) “Effective Date” means any date as of which any part of such registration
statement relating to the Stock became, or is deemed to have become, effective under
the Securities Act in accordance with the Rules and Regulations;
(iii) “Issuer Free Writing Prospectus” means each “free writing prospectus” (as
defined in Rule 405 of the Rules and Regulations) prepared by or
Annex B-1
on behalf of the
Company or used or referred to by the Company in connection with the offering of the
Stock;
(iv) “Preliminary Prospectus” means any preliminary prospectus relating to the
Stock included in such registration statement or filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations, including any preliminary prospectus
supplement thereto relating to the Stock;
(v) “Pricing Disclosure Package” means, as of the Applicable Time, the most
recent Preliminary Prospectus, together with the information included in Schedule 2
hereto and each Issuer Free Writing Prospectus filed or used by the Company on or
before the Applicable Time, other than a road show that is an Issuer Free Writing
Prospectus under Rule 433 of the Rules and Regulations;
(vi) “Prospectus” means the final prospectus relating to the Stock, including
any prospectus supplement thereto relating to the Stock, as filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations; and
(vii) “Registration Statement” means, collectively, the various parts of such
registration statement, each as amended as of the Effective Date for such part,
including any Preliminary Prospectus or the Prospectus and all exhibits to such
registration statement.
Any reference to any Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include any documents incorporated by reference therein pursuant to Form S-3 under the
Securities Act as of the date of such Preliminary Prospectus or the Prospectus, as the case
may be. Any reference to the “most recent Preliminary Prospectus” shall be deemed to refer
to the latest Preliminary Prospectus included in the Registration Statement or filed
pursuant to Rule 424(b) prior to or on the date hereof (including, for purposes hereof, any
documents incorporated by reference therein prior to or on the date hereof). Any reference
to any amendment or supplement to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any document filed under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), after the date of such Preliminary Prospectus or the
Prospectus, as the case may be, and incorporated by reference in such Preliminary Prospectus
or the Prospectus, as the case may be; and any reference to any amendment to the
Registration Statement shall be deemed to include any annual report of the Company on Form
10-K filed with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act after
the Effective Date that is incorporated by reference in the Registration Statement. The
Commission has not issued any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending the effectiveness of the Registration Statement,
and no proceeding or examination for such purpose has been instituted, or, to the Company’s
knowledge, threatened by the Commission.
(b) The Company was not at the time of initial filing of the Registration Statement and
at the earliest time thereafter that the Company or another offering participant made a bona
fide offer (within the meaning of Rule 164(h)(2) of the Rules and
Regulations) of the Stock,
is not on the date hereof and will not be on the applicable Delivery Date an “ineligible
issuer” (as defined in Rule 405). The Company has been since the time of initial filing of
the Registration Statement and continues to be eligible to use Form S-3 for the offering of
the Stock.
(c) The Registration Statement conformed and will conform in all material respects on
the Effective Date and on the applicable Delivery Date, and any amendment to the
Registration Statement filed after the date hereof will conform in all material respects
when filed, to the requirements of the Securities Act and the Rules and Regulations. The
most recent Preliminary Prospectus conformed, and the Prospectus will conform, in all
material respects when filed with the Commission pursuant to Rule 424(b) and on the
applicable Delivery Date to the requirements of the Securities Act and the Rules and
Regulations. The documents incorporated by reference in any Preliminary Prospectus or the
Prospectus conformed, and any further documents so incorporated will conform, when filed
with the Commission, in all material respects to the requirements of the Exchange Act or the
Securities Act, as applicable, and the rules and regulations of the Commission thereunder.
(d) The Registration Statement did not, as of the Effective Date, contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; provided that no representation
or warranty is made as to information contained in or omitted from the Registration
Statement in reliance upon and in conformity with written information furnished to the
Company by the Underwriter specifically for inclusion therein, which information is
specified in Section 8(e).
(e) The Prospectus will not, as of its date and on the applicable Delivery Date,
contain an untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that no representation or
warranty is made as to information contained in or omitted from the Prospectus in reliance
upon and in conformity with written information furnished to the Company by the Underwriter
specifically for inclusion therein, which information is specified in Section 8(e).
(f) The documents incorporated by reference in any Preliminary Prospectus or the
Prospectus did not, and any further documents filed and incorporated by reference therein,
through the last Delivery Date, will not, when filed with the Commission, contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(g) The Pricing Disclosure Package did not, as of the Applicable Time, contain an
untrue statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they were
made, not misleading; provided that no representation or warranty is made as to information
contained in or omitted from the Pricing Disclosure Package in reliance upon
and in
conformity with written information furnished to the Company by the Underwriter specifically
for inclusion therein, which information is specified in Section 8(e).
(h) Each Issuer Free Writing Prospectus (including, without limitation, any road show
that is a free writing prospectus under Rule 433), when considered together with the Pricing
Disclosure Package as of the Applicable Time, did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they were made,
not misleading.
(i) Each Issuer Free Writing Prospectus conformed or will conform in all material
respects to the requirements of the Securities Act and the Rules and Regulations on the date
of first use, and the Company has complied with any filing requirements applicable to such
Issuer Free Writing Prospectus pursuant to the Rules and Regulations. The Company has not
made any offer relating to the Stock that would constitute an Issuer Free Writing Prospectus
without the prior written consent of the Underwriter. The Company has retained in
accordance with the Rules and Regulations all Issuer Free Writing Prospectuses that were not
required to be filed pursuant to the Rules and Regulations.
(j) Each “significant subsidiary” (as defined under Regulation S-X of the Rules and
Regulations) of the Company (each, a “Subsidiary” and collectively, the “Subsidiaries”) is
listed on Schedule 3 to this Agreement. Each Subsidiary is duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization and is qualified to
transact business as a foreign corporation in each jurisdiction in which qualification is
required, except where failure to so qualify would neither have nor reasonably be expected
to have a material adverse effect on the condition (financial or otherwise), results of
operations, stockholders’ equity, properties, business or prospects of the Company and its
Subsidiaries taken as a whole (a “Material Adverse Effect”); each of the Company and its
Subsidiaries has all power and authority necessary to own or hold its properties and to
conduct the businesses in which it is engaged. The Company does not own or control,
directly or indirectly, any subsidiary other than the subsidiaries listed in Exhibit 21 to
the Company’s Annual Report on Form 10-K for the most recent fiscal year and certain other
subsidiaries that, when considered in the aggregate, would not constitute a “significant
subsidiary” (as defined under Regulation S-X of the Rules and Regulations).
(k) The Company has a duly authorized and validly issued outstanding capitalization as
set forth in the “Capitalization” section of each of the most recent Preliminary Prospectus
and the Prospectus, and all of the issued shares of capital stock of the Company have been
duly authorized and validly issued, are fully paid and non-assessable, conform in all
material respects to the
description thereof
contained in the most recent Preliminary
Prospectus and were issued in compliance with federal and state securities laws and not in
violation of any preemptive right, resale right, right of first
refusal or similar right. All of the Company’s options and other rights to purchase or
exchange any securities for shares of the Company’s capital stock have been duly authorized
and validly issued, conform in all material respects to the description thereof contained in
the most recent Preliminary Prospectus and were issued in compliance with federal and state
securities laws. All of the issued shares of capital stock of each Subsidiary of the
Company have been duly authorized and validly issued, are fully paid and non-assessable and
are owned directly or indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims, except for such liens, encumbrances, equities or claims as could not, in
the aggregate, reasonably be expected to have a Material Adverse Effect.
(l) The shares of the Stock to be issued and sold by the Company to the Underwriter
hereunder have been duly authorized and, upon payment and delivery in accordance with this
Agreement, will be validly issued, fully paid and non-assessable, will conform in all
material respects to the description thereof contained in the most recent Preliminary
Prospectus, will be issued in compliance with federal and state securities laws and will be
free of statutory and contractual preemptive rights, rights of first refusal and similar
rights.
(m) The Company has all requisite corporate power and authority to execute, deliver and
perform its obligations under this Agreement. This Agreement has been duly and validly
authorized, executed and delivered by the Company.
(n) The execution, delivery and performance of this Agreement by the Company, the
consummation of the transactions contemplated hereby and the application of the proceeds
from the sale of the Stock as described under “Use of Proceeds” in the most recent
Preliminary Prospectus will not (i) conflict with or result in a breach or violation of any
of the terms or provisions of, impose any lien, charge or encumbrance upon any property or
assets of the Company and its Subsidiaries, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement, license or other agreement or instrument to which
the Company or any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound or to which any of the property or assets of the Company or any of its
Subsidiaries is subject; (ii) result in any violation of the provisions of the charter or
by-laws (or similar organizational documents) of the Company or any of its Subsidiaries; or
(iii) result in any violation of any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any of its
Subsidiaries or any of their properties or assets, except in the cases of (i) and (iii)
could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
(o) No consent, approval, authorization or order of, or filing or registration with,
any court or governmental agency or regulatory body having jurisdiction over the Company or
any of its Subsidiaries or any of their properties or assets is required for the execution,
delivery and performance of this Agreement by the Company, the consummation of the
transactions contemplated hereby, the application of the proceeds from the sale of the Stock
as described under “Use of Proceeds” in the most recent Preliminary Prospectus, except for
the registration of the Stock under the Securities Act
and such consents, approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act, applicable state securities laws in connection with the
purchase and sale of the Stock by the Underwriter, and such as may be required by the
bylaws
or rules of the Financial Industry Regulatory Authority, Inc. or The NASDAQ Stock Market
LLC.
(p) There are no contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the Company owned or to
be owned by such person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the Company under the
Securities Act.
(q) The Company has not sold or issued any securities that would be integrated with the
offering of the Stock contemplated by this Agreement pursuant to the Securities Act, the
Rules and Regulations or the interpretations thereof by the Commission.
(r) Except as disclosed in the most recent Preliminary Prospectus, neither the Company
nor any of its Subsidiaries has sustained, since the date of the latest audited financial
statements included or incorporated by reference in the most recent Preliminary Prospectus,
any loss or interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or governmental
action, order or decree, and since such date, neither the Company nor any of its
Subsidiaries has been in material default in the payment of principal or interest on any
long-term debt obligation and there has not been any change in the capital stock or
long-term debt of the Company or any of its Subsidiaries, or any adverse change, or any
development involving a prospective adverse change, in or affecting the condition (financial
or otherwise), results of operations, stockholders’ equity, properties, management, business
or prospects of the Company and its Subsidiaries taken as a whole other than the sale of the
Stock contemplated hereby or options, restricted stock units or stock units issued pursuant
to employee or director equity incentive plans approved by Company’s stockholders, in each
case except as could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(s) Except as disclosed in the most recent Preliminary Prospectus, since the date as of
which information is given in the most recent Preliminary Prospectus, the Company has not
(i) incurred any liability or obligation, direct or contingent, other than liabilities and
obligations that were incurred in the ordinary course of business, (ii) entered into any
material transaction not in the ordinary course of business or (iii) declared or paid any
dividend on its capital stock.
(t) The historical financial statements (including the related notes and supporting
schedules) included or incorporated by reference in the most recent Preliminary Prospectus
comply as to form in all material respects with the requirements of Regulation S-X under the
Securities Act and present fairly, in all material respects, the
financial condition, results of operations and cash flows of the entities purported to
be shown thereby at the dates and for the periods indicated and have been prepared in
conformity with accounting principles generally accepted in the United States applied on
a
consistent basis throughout the periods involved; provided, however, that
the unaudited financial statements are subject to normal year-end audit adjustments (which
are not expected to be material) and do not contain all footnotes required under generally
accepted accounting principles.
(u) Ernst & Young LLP, who have certified certain financial statements of the Company
and its consolidated Subsidiaries, whose report appears in the most recent Preliminary
Prospectus or is incorporated by reference therein and who have delivered the initial letter
referred to in Section 7(f) hereof, are independent public accountants as required by the
Securities Act and the Rules and Regulations, and were independent public accountants as
required by the Securities Act and the Rules and Regulations during the periods covered by
the financial statements on which they reported contained or incorporated by reference in
the most recent Preliminary Prospectus.
(v) The statistical and market-related data included in the most recent Preliminary
Prospectus and the consolidated financial statements of the Company and its subsidiaries
included or incorporated by reference in the most recent Preliminary Prospectus are based on
or derived from sources that the Company believes to be reliable and accurate in all
material respects.
(w) Neither the Company nor any Subsidiary is, and as of the applicable Delivery Date
and, after giving effect to the offer and sale of the Stock and the application of the
proceeds therefrom as described under “Use of Proceeds” in the most recent Preliminary
Prospectus and the Prospectus, none of them will be, (i) an “investment company” within the
meaning of such term under the Investment Company Act of 1940, as amended (the “Investment
Company Act”), and the rules and regulations of the Commission thereunder or (ii) a
“business development company” (as defined in Section 2(a)(48) of the Investment Company
Act).
(x) Except as disclosed in the most recent Preliminary Prospectus, there are no legal
or governmental proceedings pending to which the Company or any of its Subsidiaries is a
party or of which any property or assets of the Company or any of its Subsidiaries is the
subject that could, in the aggregate, reasonably be expected to have a Material Adverse
Effect or could, in the aggregate, reasonably be expected to have a material adverse effect
on the performance of this Agreement or the consummation of the transactions contemplated
hereby; and to the Company’s knowledge, no such proceedings are threatened or contemplated
by governmental authorities or others.
(y) No relationship, direct or indirect, exists between or among the Company, on the
one hand, and the directors, officers, stockholders, customers or suppliers of the Company,
on the other hand, that is required to be described under the Act or by the Rules and
Regulations in the most recent Preliminary Prospectus which is not so described.
(z) Neither the Company nor any Subsidiary is a party to any collective bargaining
agreement or employs any member of a union. The Company and each Subsidiary believe that
their relations with their employees are good. No executive
officer of the Company (as
defined in Rule 501(f) promulgated under the Securities Act) has notified the Company that
such officer intends to leave the Company or otherwise terminate such officer’s employment
with the Company. No labor problem or dispute with the employees of the Company or any of
its Subsidiaries exists or, to the knowledge of the Company, is threatened or imminent, and
the Company is not aware of any existing or imminent labor disturbance by the employees of
any of its or its Subsidiaries’ principal suppliers, contractors or customers, which
problem, dispute or labor disturbance could result, individually or in the aggregate, in a
Material Adverse Effect, whether or not arising from transactions in the ordinary course of
business.
(aa) Each material employee benefit plan, within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that is maintained,
administered or contributed to by the Company or any of its Affiliates for employees or
former employees of the Company and its Subsidiaries, or to which the Company or any of its
Subsidiaries has any liability thereunder (a “Company Benefit Plan”), has been maintained in
material compliance with its terms and the requirements of any applicable statutes, orders,
rules and regulations, including but not limited to ERISA and the Internal Revenue Code of
1986, as amended (the “Code”); no action, dispute, claim, suit or proceeding is pending or,
to the knowledge of the Company, threatened with respect to any Company Benefit Plan (other
than claims for benefits in the ordinary course) that could result in a material liability
to the Company; no prohibited transaction, within the meaning of Section 406 of ERISA or
Section 4975 of the Code, has occurred that could result in a material liability to the
Company with respect to any such plan excluding transactions effected pursuant to a
statutory or administrative exemption; and for each such plan that is subject to the funding
rules of Section 412 of the Code or Section 302 of ERISA, no “accumulated funding
deficiency” as defined in Section 412 of the Code has been incurred, whether or not waived,
and the fair market value of the assets of each such plan (excluding for these purposes
accrued but unpaid contributions) exceeds the present value of all benefits accrued under
such plan determined using reasonable actuarial assumptions.
(bb) (i) The Company and each of its Subsidiaries have filed all federal, state, local
and foreign income and franchise tax returns required to be filed through the date hereof,
subject to permitted extensions; (ii) The Company and each of its Subsidiaries have paid all
taxes required to be paid in connection with subsection (i) above; (iii) No tax deficiency
has been determined adversely to the Company or any of its Subsidiaries, and (iv) The
Company and each of its Subsidiaries have no knowledge of any tax deficiencies, except as
could not, in the cases of clauses (ii), (iii) and (iv), in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(cc) There are no transfer taxes or other similar fees or charges under Federal law or
the laws of any state, or any political subdivision thereof, required to be paid in
connection with the execution and delivery of this Agreement or the issuance by the Company
or sale by the Company of the Stock.
(dd) Except as disclosed in the most recent Preliminary Prospectus, neither the Company
nor any of its Subsidiaries (i) is in violation of its charter or by-laws (or similar
organizational documents), (ii) is in default, and no event has occurred that, with
notice or lapse of time or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, license or other agreement or instrument to which it is a party or by
which it is bound or to which any of its properties or assets is subject or (iii) is in
violation of any statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over it or its property or assets or has failed to obtain
any license, permit, certificate, franchise or other governmental authorization or permit
necessary to the ownership of its property or to the conduct of its business, except in the
case of clauses (ii) and (iii), to the extent any such conflict, breach, violation or
default could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(ee) Except as disclosed in the most recent Preliminary Prospectus, there is and has
been no failure on the part of the Company and any of the Company’s directors or officers,
in their capacities as such, to comply with the provisions of the Xxxxxxxx-Xxxxx Act of 2002
and the rules and regulations promulgated in connection therewith.
(ff) The Company maintains a system of internal accounting controls sufficient to
provide reasonable assurances that, in reference to the Company and its Subsidiaries on a
consolidated basis, (a) transactions are executed in accordance with management’s general or
specific authorization; (b) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (c) access to assets is permitted only in accordance
with management’s general or specific authorization; and (d) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences. The Company has established and maintains disclosure
controls and procedures (as defined in Rules 13a-15 and 15d-15 under the Exchange Act) that
are designed to ensure that material information relating to the Company and its
Subsidiaries is made known to the Company’s principal executive officer and the Company’s
principal financial officer or persons performing similar functions by others within the
Company or any Subsidiary, and such disclosure controls and procedures are reasonably
effective to perform the functions for which they were established subject to the
limitations of any such control system. The audit committee of the Company’s Board of
Directors has been advised by the Company’s outside auditors (and the Company has, in turn,
advised the Underwriter) of (i) any significant deficiencies in the design or operation of
internal controls which are reasonably likely to adversely affect the Company’s ability to
record, process, summarize, and report financial data; and (ii) any fraud, whether or not
material, that involves management or other employees who have a significant role in the
Company’s internal controls; and since the date of the most recent evaluation of such
disclosure controls and procedures, there have been no significant changes in internal
controls or in other factors that are reasonably likely to materially affect internal
controls, including any corrective actions with regard to significant deficiencies and
material weaknesses.
(gg) The Company and each of its Subsidiaries have such permits, licenses, patents,
franchises, certificates of need and other approvals or authorizations of
governmental or regulatory authorities (“Permits”) as are currently necessary under
applicable law to own their properties and conduct their businesses in the manner described
in the most recent Preliminary Prospectus, except for any of the foregoing that could not,
in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as
disclosed in the most recent Preliminary Prospectus, each of the Company and its
Subsidiaries has fulfilled and performed all of its obligations with respect to the 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 impairment of the rights of the
holder or any such Permits, except for any of the foregoing as set forth in this sentence
that could not reasonably be expected to have a Material Adverse Effect.
(hh) Except as disclosed in the most recent Preliminary Prospectus, (a) the Company and
each Subsidiary owns or has obtained valid and enforceable licenses or options for the
material inventions, patent applications, patents, trademarks (both registered and
unregistered), trade and service xxxx registrations, trade names, copyrights, licenses,
inventions, trade secrets, technology, know-how and other intellectual property
(collectively, the “Intellectual Property”) necessary for the conduct of its respective
business as currently conducted or as proposed to be conducted in the most recent
Preliminary Prospectus; and (b) (i) there are no third parties who have any ownership rights
or other claims to any Intellectual Property that is owned by, or has been licensed to, the
Company or any Subsidiary for the products and services of the Company and its Subsidiaries
described in the most recent Preliminary Prospectus that would preclude the Company or any
Subsidiary from conducting its business as currently conducted and have or reasonably be
expected to have a Material Adverse Effect, except for the ownership rights of the owners of
the Intellectual Property licensed or optioned by the Company or any Subsidiary; (ii) there
are currently no sales of any products or the provision of services that would constitute an
infringement by third parties of any Intellectual Property owned, licensed or optioned by
the Company or any Subsidiary, which infringement would have or reasonably be expected to
have a Material Adverse Effect; (iii) there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others challenging the rights of the Company
or any Subsidiary in or to any Intellectual Property owned, licensed or optioned by the
Company or any Subsidiary, other than claims that would neither have nor reasonably be
expected to have a Material Adverse Effect; (iv) there is no pending or, to the Company’s
knowledge, threatened action, suit, proceeding or claim by others challenging the validity
or scope of any Intellectual Property owned, licensed or optioned by the Company or any
Subsidiary, other than actions, suits, proceedings and claims that would neither have nor
reasonably be expected to have a Material Adverse Effect; and (v) there is no pending or, to
the Company’s knowledge, threatened action, suit, proceeding or claim by others that the
Company or any Subsidiaries infringes or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary right of others, other than actions, suits,
proceedings and claims that would neither have nor reasonably be expected to have a Material
Adverse Effect.
(ii) The Company and its Subsidiaries are (a) in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the protection of human
health and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants (“Environmental Laws”), (b) have received and are in
compliance with all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses, and (c) have not received notice
of any actual or potential liability for the investigation or remediation of any disposal or
release of hazardous or toxic substances or wastes, pollutants or contaminants, except where
such non-compliance with Environmental Laws, failure to receive required permits, licenses
or other approvals, or liability would not, individually or in the aggregate, have a
Material Adverse Effect, whether or not arising from transactions in the ordinary course of
business. Neither the Company nor any of its Subsidiaries has been named a “potentially
responsible party” under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended. 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 it 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 would not,
singly or in the aggregate, have a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business. There has been no storage, disposal,
generation, manufacture, transportation, handling or treatment of toxic wastes, hazardous
wastes or hazardous substances by the Company or to its knowledge, any Subsidiary (or, to
the knowledge of the Company, any of their predecessors in interest) at, upon or from any of
the property now or previously owned or leased by the Company or any Subsidiary in material
violation of any Environmental Law, ordinance, rule, regulation, order, judgment, decree or
permit or that would require remedial action under any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit; there has been no material spill, discharge,
leak, emission, injection, escape, dumping or release of any kind into such property or into
the environment surrounding such property of any toxic wastes, medical wastes, solid wastes,
hazardous wastes or hazardous substances due to or caused by the Company or any Subsidiary
or with respect to which the Company or any Subsidiary have knowledge; the terms “hazardous
wastes”, “toxic wastes”, “hazardous substances”, and “medical wastes” shall have the
meanings specified in applicable Environmental Laws
(jj) No Subsidiary of the Company is currently prohibited, directly or indirectly, from
paying any dividends to the Company, from making any other distribution on such Subsidiary’s
capital stock, from repaying to the Company any loans or advances to such Subsidiary from
the Company or from transferring any of such Subsidiary’s property or assets to the Company
or any other Subsidiary of the Company, except as described in the most recent Preliminary
Prospectus.
(kk) Neither the Company nor any of its subsidiaries, nor, to the knowledge of the
Company, any director, officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its subsidiaries, has (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; (ii) made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from corporate funds; (iii) violated
or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977; or
(iv) made any bribe, rebate, payoff, influence payment, kickback or 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 recordkeeping 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 its subsidiaries with respect to the Money
Laundering Laws is pending or, to the knowledge of the Company, threatened, except, in each
case, as would not reasonably be expected to have a Material Adverse Effect.
(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 U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. 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
U.S. sanctions administered by OFAC.
(nn) The Company has not distributed and, prior to the later to occur of any Delivery
Date and completion of the distribution of the Stock, will not distribute any offering
material in connection with the offering and sale of the Stock other than any Preliminary
Prospectus, the Prospectus, any Issuer Free Writing Prospectus to which the Underwriter has
consented in accordance with Section 1(i) or 5(a)(vi).
(oo) The Company has not taken and will not take, directly or indirectly, any action
designed to or that has constituted or that could reasonably be expected to cause or result
in the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the shares of the Stock.
(pp) The Company has applied for listing of the Stock and expects the Stock to be
approved for listing on The NASDAQ Stock Market.
(qq) Each of the Company and its Subsidiaries has good and marketable title to all real
property described in the most recent Preliminary Prospectus as being owned by it and good
and marketable title to the leasehold estate in the real property described therein as being
leased by it, free and clear of all liens, charges, encumbrances or restrictions, except, in
each case, as described in the most recent Preliminary Prospectus or such as would not,
individually or in the aggregate, have a Material Adverse Effect, whether or
not arising from transactions in the ordinary course of business, except as set forth
in or contemplated in the most recent Preliminary Prospectus. All leases, contracts and
agreements, including those referred to in the most recent Preliminary Prospectus to which
the Company or any of its Subsidiaries is a party or by which any of them is bound are valid
and enforceable against the Company or any such Subsidiary, are valid and enforceable
against the other party or parties thereto and are in full force and effect, except where
the failure to be valid and enforceable against the other party or other parties thereto or
to be in full force and effect would not, in the aggregate, have a Material Adverse Effect,
whether or not arising from transactions in the ordinary course of business, except as set
forth in or contemplated in the most recent Preliminary Prospectus.
(rr) The Company and each Subsidiary are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are reasonable,
including, but not limited to, insurance covering all real and personal property owned or
leased by the Company, all of which insurance is in full force and effect, except as would
neither have nor be expected to have a Material Adverse Effect. The Company and its
Subsidiaries are in compliance with the terms of such policies and instruments in all
material respects and there are no claims by the Company or any of its Subsidiaries under
any such policy or instrument as to which any insurance company is denying liability or
defending under a reservation of rights clause, which denials or defenses if resolved
adversely to the Company would result, individually or in the aggregate, in a Material
Adverse Effect. Neither the Company nor any Subsidiary has been refused any material
insurance coverage sought or applied for and has no reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires or obtain
similar coverage from similar insurers as may be necessary to continue its business at a
cost that would not have a Material Adverse Effect, whether or not arising from transactions
in the ordinary course of business.
(ss) Neither the Company nor any of is subsidiaries has or guarantees any debt
securities or preferred stock that are rated by a “nationally recognized statistical rating
organization,” as such term is defined by the Commission for purposes of Rule 436(g)(2)
under the Securities Act.
Any certificate signed by any officer of the Company and delivered to the Underwriter or
counsel for the Underwriter in connection with the offering of the Stock shall be deemed a
representation and warranty by the Company, as to matters covered thereby, to the Underwriter.
2. Purchase of the Stock by the Underwriter. On the basis of the representations and
warranties contained in, and subject to the terms and conditions of, this Agreement, the Company
agrees to sell 2,250,000 shares of the Firm Stock to the Underwriter, and the Underwriter agrees to
purchase 2,250,000 shares of the Firm Stock.
In addition, the Company grants to the Underwriter an option to purchase up to
337,500 additional shares of Option Stock. Such option is exercisable in the event that the
Underwriter sell more shares of Common Stock than the number of shares of Firm Stock in the
offering and as set forth in Section 4 hereof. The Underwriter agrees to purchase the total
number of shares of Option Stock.
The price of both the Firm Stock and any Option Stock purchased by the Underwriter shall be
$18.00 per share.
The Company shall not be obligated to deliver any of the Firm Stock or Option Stock to be
delivered on the applicable Delivery Date, except upon payment for all such Stock to be purchased
on such Delivery Date as provided herein.
3. Offering of Stock by the Underwriter. The Underwriter proposes to offer the Firm
Stock for sale upon the terms and conditions to be set forth in the Prospectus.
4. Delivery of and Payment for the Stock. Delivery of and payment for the Firm Stock
shall be made at 10:00 A.M., New York City time, on the third full business day following the date
of this Agreement or at such other date or place as shall be determined by agreement between the
Underwriter and the Company. This date and time are sometimes referred to as the “Initial Delivery
Date.” Delivery of the Firm Stock shall be made to the Underwriter for the account of the
Underwriter against payment by the Underwriter of the purchase price of the Firm Stock being sold
by the Company to or upon the order of the Company of the purchase price by wire transfer in
immediately available funds to the accounts specified by the Company. Time shall be of the essence,
and delivery at the time and place specified pursuant to this Agreement is a further condition of
the Underwriter hereunder. The Company shall deliver the Firm Stock through the facilities of DTC
unless the Underwriter shall otherwise instruct.
The option granted in Section 2 will expire 30 days after the date of this Agreement and may
be exercised in whole or from time to time in part by written notice being given to the Company by
the Underwriter, provided that if such date falls on a day that is not a business day, the option
granted in Section 2 will expire on the next succeeding business day. Such notice shall set forth
the aggregate number of shares of Option Stock as to which the option is being exercised, the names
in which the shares of Option Stock are to be registered, the denominations in which the shares of
Option Stock are to be issued and the date and time, as determined by the Underwriter, when the
shares of Option Stock are to be delivered; provided, however, that this date and time shall not be
earlier than the Initial Delivery Date nor earlier than the second business day after the date on
which the option shall have been exercised nor later than the fifth business day after the date on
which the option shall have been exercised. Each date and time the shares of Option Stock are
delivered is sometimes referred to as an “Option Stock Delivery Date,” and the Initial Delivery
Date and any Option Stock Delivery Date are sometimes each referred to as a “Delivery Date.”
Delivery of the Option Stock by the Company and payment for the Option Stock by the
Underwriter shall be made at 10:00 A.M., New York City time, on the date specified in the
corresponding notice described in the preceding paragraph or at such other date or place as shall
be determined by agreement between the Underwriter and the Company. On the Option Stock Delivery
Date, the Company shall deliver or cause to be delivered the Option Stock to the Underwriter for
the account of the Underwriter against payment by the Underwriter of the purchase price of the
Option Stock being sold by the Company to or upon the order of the
Company of the purchase price by wire transfer in immediately available funds to the accounts
specified by the Company. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation the Underwriter
hereunder. The Company shall deliver the Option Stock through the facilities of DTC unless the
Underwriter shall otherwise instruct.
5. Further Agreements of the Company and the Underwriter. (a) The Company agrees:
(i) To prepare the Prospectus in a form approved by the Underwriter and to 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; to make no further amendment or any supplement to the Registration Statement or
the Prospectus prior to the last Delivery Date except as provided herein; to advise the
Underwriter , promptly after it receives notice thereof, of the time when any amendment or
supplement to the Registration Statement or the Prospectus has been filed and to furnish the
Underwriter with copies thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the
Prospectus and for so long as the delivery of a prospectus is required in connection with
the offering or sale of the Stock; to advise the Underwriter, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of the Prospectus or any Issuer Free Writing Prospectus, of
the suspension of the qualification of the Stock for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding or examination for any such purpose or of
any request by the Commission for the amending or supplementing of the Registration
Statement, the Prospectus or any Issuer Free Writing Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any order preventing
or suspending the use of the Prospectus or any Issuer Free Writing Prospectus or suspending
any such qualification, to use promptly its best efforts to obtain its withdrawal;
(ii) To furnish promptly, upon request, to the Underwriter and to counsel for the
Underwriter a copy of the signed Registration Statement as originally filed with the
Commission, and each amendment thereto filed with the Commission, including all consents and
exhibits filed therewith;
(iii) To deliver promptly, upon request, to the Underwriter such number of the
following documents as the Underwriter shall reasonably request: (A) conformed copies of
the Registration Statement as originally filed with the Commission and each amendment
thereto (in each case excluding exhibits other than this Agreement and the computation of
per share earnings), (B) each Preliminary Prospectus, the Prospectus and any amended or
supplemented Prospectus, (C) each Issuer Free Writing Prospectus and (D) any document
incorporated by reference in any Preliminary Prospectus or the Prospectus; and, if the
delivery of a prospectus is required at any time after the date hereof in connection with
the offering or sale of the Stock or any other securities relating thereto and if at such
time any events shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary to amend or
supplement the Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Securities Act or the Exchange Act,
to notify the Underwriter and, upon its request, to file such document and to prepare and
furnish without charge to the Underwriter and to any dealer in securities as many copies as
the Underwriter may from time to time reasonably request of an amended or supplemented
Prospectus that will correct such statement or omission or effect such compliance;
(iv) To file promptly with the Commission any amendment or supplement to the
Registration Statement or the Prospectus that may, in the judgment of the Company or the
Underwriter, be required by the Securities Act or requested by the Commission;
(v) At any time prior to the last Delivery Date, prior to filing with the Commission
any amendment or supplement to the Registration Statement or the Prospectus, any document
incorporated by reference in the Prospectus or any amendment to any document incorporated by
reference in the Prospectus, to furnish a copy thereof to the Underwriter and counsel for
the Underwriter and obtain the consent of the Underwriter to the filing (which consent will
not be unreasonably withheld);
(vi) Not to make any offer relating to the Stock that would constitute an Issuer Free
Writing Prospectus without the prior written consent of the Underwriter.
(vii) To comply with all applicable requirements of Rule 433 with respect to any Issuer
Free Writing Prospectus; and if at any time after the date hereof any events shall have
occurred as a result of which any Issuer Free Writing Prospectus, as then amended or
supplemented, would conflict with the information in the Registration Statement, the most
recent Preliminary Prospectus or the Prospectus or would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading, or,
if for any other reason it shall be necessary to amend or supplement any Issuer Free Writing
Prospectus, to notify the Underwriter and, upon its request, to file such document and to
prepare and furnish without charge to the Underwriter as many copies as the Underwriter may
from time to time reasonably request of an amended or supplemented Issuer Free Writing
Prospectus that will correct such conflict, statement or omission or effect such compliance;
(viii) As soon as practicable after the Effective Date and in any event not later than
16 months after the date hereof, to make generally available to the Company’s security
holders and to deliver to the Underwriter an earnings statement of the Company and its
Subsidiaries (which need not be audited) complying with Section 11(a) of the Securities Act
and the Rules and Regulations;
(ix) Promptly from time to time to take such action as the Underwriter may reasonably
request to qualify the Stock for offering and sale under the securities laws of Canada and
such other jurisdictions as the Underwriter may request and to comply with such laws so as
to permit the continuance of sales and dealings therein in such jurisdictions for as long as
may be necessary to complete the distribution of the Stock; provided that in connection
therewith the Company shall not be required to (i) qualify as a foreign corporation in any
jurisdiction in which it would not otherwise be required to so qualify, (ii) file a general
consent to service of process in any such jurisdiction or (iii) subject itself to taxation
in any jurisdiction in which it would not otherwise be subject; and
(x) For a period commencing on the date hereof and ending on the 90th day after the
date of the Prospectus (the “Lock-Up Period”), not to, directly or indirectly, (1) offer for
sale, sell, pledge or otherwise dispose of (or enter into any transaction or device that is
designed to, or could be expected to, result in the disposition by any person at any time in
the future of) any shares of Common Stock or securities convertible into or exchangeable for
Common Stock (other than the Stock and shares issued pursuant to employee benefit plans,
qualified stock option plans or other employee compensation plans existing on the date
hereof or pursuant to currently outstanding securities, options or rights not issued under
one of those plans), or sell or grant options or rights with respect to any shares of Common
Stock or securities convertible into or exchangeable for Common Stock (other than the grant
of options pursuant to option plans existing on the date hereof), (2) enter into any swap or
other derivatives transaction that transfers to another, in whole or in part, any of the
economic benefits or risks of ownership of such shares of Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of Common
Stock or other securities, in cash or otherwise, (3) file or cause to be filed a
registration statement, including any amendments, with respect to the registration of any
shares of Common Stock or securities convertible, exercisable or exchangeable into Common
Stock or any other securities of the Company (other than any registration statement on Form
S-8) or (4) publicly disclose the intention to do any of the foregoing, in each case without
the prior written consent of Barclays Capital Inc., and to cause each officer, director and
stockholder of the Company set forth on Schedule 1 hereto to furnish to the
Underwriter, prior to the Initial Delivery Date, a letter or letters, substantially in the
form of Exhibit A hereto (the “Lock-Up Agreements”); notwithstanding the foregoing,
if (1) during the last 17 days of the Lock-Up Period, the Company issues an earnings release
or material news or a material event relating to the Company occurs or (2) prior to the
expiration of the Lock-Up Period, the Company announces that it will release earnings
results during the 16-day period beginning on the last day of the Lock-Up Period, then the
restrictions imposed in this paragraph shall continue to apply until the expiration of the
18-day period beginning on the issuance of the earnings release or the announcement of the
material news or the occurrence of the material event, unless Barclays Capital Inc. waives
such extension in writing; and
(xi) To apply the net proceeds from the sale of the Stock being sold by the Company as
set forth in the Prospectus.
(b) The Underwriter agrees that it:
(i) shall not include any “issuer information” (as defined in Rule 433) in any “free
writing prospectus” (as defined in Rule 405) used or referred to by the Underwriter without
the prior consent of the Company (any such issuer information with respect to whose use the
Company has given its consent, “Permitted Issuer Information”); provided that (x) no such
consent shall be required with respect to any such issuer information contained in any
document filed by the Company with the Commission prior to the use of such free writing
prospectus and (y) “issuer information,” as used in this Section 6(b)(i), shall not be
deemed to include information prepared by or on behalf of the Underwriter on the basis of or
derived from issuer information; and
(ii) will not make any offer relating to the Stock that would constitute a “free
writing prospectus,” as defined in Rule 405 required to be filed with the Commission without
the prior consent of the Company.
6. Expenses. The Company agrees, whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, to pay all costs, expenses, fees and
taxes incident to and in connection with (a) the authorization, issuance, sale and delivery of the
Stock and any stamp duties or other taxes payable in that connection, and the preparation and
printing of certificates for the Stock; (b) the preparation, printing and filing under the
Securities Act of the Registration Statement (including any exhibits thereto), any Preliminary
Prospectus, the Prospectus, any Issuer Free Writing Prospectus and any amendment or supplement
thereto; (c) the distribution of the Registration Statement (including any exhibits thereto), any
Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus and any amendment or
supplement thereto, or any document incorporated by reference therein, all as provided in this
Agreement; (d) the production and distribution of this Agreement, and any other related documents
in connection with the offering, purchase, sale and delivery of the Stock; (e) any required review
by the Financial Industry Regulatory Authority (the “FINRA”) of the terms of sale of the Stock (f)
the listing of the Stock on The NASDAQ Stock Market LLC; (g) the qualification of the Stock under
the securities laws of the several jurisdictions as provided in Section 5(a)(ix) and the
preparation, printing and distribution of a Blue Sky Memorandum (including related fees and
expenses of counsel to the Underwriter); (h) the preparation, printing and distribution of one or
more versions of the Preliminary Prospectus and the Prospectus for distribution in Canada, often in
the form of a Canadian “wrapper” (including related fees and expenses of Canadian counsel to the
Underwriter); (i) the investor presentations on any “road show” undertaken in connection with the
marketing of the Stock, including, without limitation, expenses associated with any electronic
roadshow, travel and lodging expenses of the representatives and officers of the Company and the
cost of any aircraft chartered in connection with the road show; and (j) all other costs and
expenses incident to the performance of the obligations of the Company under this Agreement;
provided that, except as provided in Section 11, the Underwriter shall pay its own costs and
expenses, including the costs and expenses of its counsel, any transfer taxes on the Stock which it
may sell and the expenses of advertising any offering of the Stock made by the Underwriter.
7. Conditions of Underwriter’s Obligations. The obligations of the Underwriter are subject
to the accuracy, when made and on each Delivery Date, of the representations and
warranties of the Company contained herein, to the performance by the Company of its
obligations hereunder, and to each of the following additional terms and conditions (the
“Closing”):
(a) The Prospectus shall have been timely filed with the Commission in accordance with
Section 5(a)(i); the Company shall have complied with all filing requirements applicable to
any Issuer Free Writing Prospectus used or referred to after the date hereof; no stop order
suspending the effectiveness of the Registration Statement or preventing or suspending the
use of the Prospectus or any Issuer Free Writing Prospectus shall have been issued and no
proceeding or examination for such purpose shall have been initiated or threatened by the
Commission; and any request of the Commission for inclusion of additional information in the
Registration Statement or the Prospectus or otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the Company on or prior to
such Delivery Date that the Registration Statement, the Prospectus or the Pricing Disclosure
Package, or any amendment or supplement thereto, contains an untrue statement of a fact
which, in the belief of Xxxxx & Xxxxxxx L.L.P., counsel for the Underwriter, is material or
omits to state a fact which, in the belief of such counsel, is material and is required to
be stated therein or is necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to the authorization,
form and validity of this Agreement, the Stock, the Registration Statement, the Prospectus
and any Issuer Free Writing Prospectus, and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Underwriter, and the Company shall have furnished to
such counsel all documents and information that they may reasonably request to enable them
to pass upon such matters.
(d) Weil, Gotshal & Xxxxxx LLP, counsel for the Company, and Xxxxxxxx X. Xxxxxxxx,
Esq., general counsel to the Company, have furnished to the Underwriter their respective
written opinions, addressed to the Underwriter and dated such Delivery Date, in form and
substance reasonably satisfactory to the Underwriter, substantially in the form attached
hereto as Exhibit B-1 and Exhibit B-2.
(e) The Underwriter shall have received from Xxxxx & Xxxxxxx L.L.P., counsel for the
Underwriter, such opinion or opinions, dated such Delivery Date, with respect to the
issuance and sale of the Stock, the Registration Statement, the Prospectus and the Pricing
Disclosure Package and other related matters as the Underwriter may reasonably require, and
the Company shall have furnished to such counsel such documents as they reasonably request
for the purpose of enabling them to pass upon such matters.
(f) At the time of execution of this Agreement, the Underwriter shall have received
from Ernst & Young LLP a letter, in form and substance satisfactory to the Underwriter,
addressed to the Board of Directors of the Company and the Underwriter
and dated the date hereof (i) confirming that they are independent public accountants
within the meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission, and (ii) stating, as of the date hereof (or, with respect to matters
involving changes or developments since the respective dates as of which specified financial
information is given in the most recent Preliminary Prospectus, as of a date not more than
three days prior to the date hereof), the conclusions and findings of such firm with respect
to the financial information and other matters ordinarily covered by accountants’ “comfort
letters” to underwriters in connection with registered public offerings.
(g) With respect to the letter of Ernst & Young LLP referred to in the preceding
paragraph and delivered to the Underwriter concurrently with the execution of this Agreement
(the “initial letter”), the Company shall have furnished to the Underwriter a letter (the
“bring-down letter”) of such accountants, addressed to the Company’s Board of Directors and
the Underwriter and dated such Delivery Date (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance with the
applicable requirements relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the respective dates as of
which specified financial information is given in the Prospectus, as of a date not more than
three days prior to the date of the bring-down letter), the conclusions and findings of such
firm with respect to the financial information and other matters covered by the initial
letter and (iii) confirming in all material respects the conclusions and findings set forth
in the initial letter.
(h) The Company shall have furnished to the Underwriter a certificate, dated such
Delivery Date, of its Chief Executive Officer or its Chief Financial Officer of the Company
stating that:
(i) The representations, warranties and agreements of the Company in Section 1
are true and correct on and as of such Delivery Date, and the Company has complied
with all its agreements contained herein and satisfied all the conditions on its
part to be performed or satisfied hereunder at or prior to such Delivery Date;
(ii) No stop order suspending the effectiveness of the Registration Statement
has been issued; and no proceedings or examination for that purpose have been
instituted or, to the knowledge of such officers, threatened; and
(iii) They have carefully examined the Registration Statement, the Prospectus
and the Pricing Disclosure Package, and, in their opinion, (A) (1) the Registration
Statement, as of the Effective Date, (2) the Prospectus, as of its date and on the
applicable Delivery Date, or (3) the Pricing Disclosure Package, as of the
Applicable Time, did not and do not contain any untrue statement of a material fact
and did not and do not omit to state a material fact required to be
stated therein or necessary to make the statements therein (except in the case
of the Registration Statement, in the light of the circumstances under which they
were made) not misleading, and (B) since the Effective Date, no event has occurred
that should have been set forth in a supplement or amendment to the Registration
Statement, the Prospectus or any Issuer Free Writing Prospectus that has not been so
set forth.
(i) Except as described in the most recent Preliminary Prospectus, (i) neither the
Company nor any of its Subsidiaries shall have sustained, since the execution of this
Agreement, any loss or interference with its business from fire, explosion, flood or other
calamity whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree or (ii) since such date there shall not have been any
change in the capital stock or long-term debt of the Company or any of its Subsidiaries or
any change, or any development involving a prospective change, in or affecting the condition
(financial or otherwise), results of operations, stockholders’ equity, properties,
management, business or prospects of the Company and its Subsidiaries taken as a whole, the
effect of which, in any such case described in clause (i) or (ii), is, in the judgment of
the Underwriter, so material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Stock being delivered on such
Delivery Date on the terms and in the manner contemplated in the Prospectus.
(j) [Reserved].
(k) Subsequent to the execution and delivery of this Agreement there shall not have
occurred any of the following: (i) trading in securities generally on the New York Stock
Exchange, the American Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter market, shall have been
suspended or materially limited or the settlement of such trading generally shall have been
materially disrupted or minimum prices shall have been established on any such exchange or
such market by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium shall have been
declared by federal or state authorities, (iii) the United States shall have become engaged
in hostilities, there shall have been an escalation in hostilities involving the United
States or there shall have been a declaration of a national emergency or war by the United
States or (iv) there shall have occurred such a material adverse change in general economic,
political or financial conditions, including, without limitation, as a result of terrorist
activities after the date hereof (or the effect of international conditions on the financial
markets in the United States shall be such), as to make it, in the judgment of the
Underwriter, impracticable or inadvisable to proceed with the public offering or delivery of
the Stock being delivered on such Delivery Date on the terms and in the manner contemplated
in the Prospectus.
(l) The NASDAQ Stock Market shall have approved the Stock for listing.
(m) The Lock-Up Agreements between the Underwriter and the officers, directors and
stockholders of the Company set forth on Schedule 1, delivered to the
Underwriter on or before the date of this Agreement, shall be in full force and effect
on such Delivery Date.
All opinions, letters, evidence and certificates mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Underwriter.
8. Indemnification and Contribution.
(a) Each of the Company and each its Subsidiaries shall jointly and severally
indemnify and hold harmless the Underwriter, its directors, officers and employees and each
person, if any, who controls the Underwriter within the meaning of Section 15 of the
Securities Act, from and against any loss, claim, damage or liability, joint or several, or
any action in respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of Stock), to which the Underwriter,
director, officer, employee or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or
is based upon, (i) any untrue statement or alleged untrue statement of a material fact
contained in (A) any Preliminary Prospectus, the Registration Statement, the Prospectus or
in any amendment or supplement thereto, (B) any Issuer Free Writing Prospectus or in any
amendment or supplement thereto, (C) any Permitted Issuer Information used or referred to in
any “free writing prospectus” (as defined in Rule 405) used or referred to by the
Underwriter or (D) any “road show” (as defined in Rule 433) not constituting an Issuer Free
Writing Prospectus (a “Non-Prospectus Road Show”) or (ii) the omission or alleged omission
to state in any Preliminary Prospectus, the Registration Statement, the Prospectus, any
Issuer Free Writing Prospectus or in any amendment or supplement thereto or in any Permitted
Issuer Information or any Non-Prospectus Road Show, any material fact required to be stated
therein or necessary to make the statements therein not misleading, and shall reimburse the
Underwriter and each such director, officer, employee or controlling person promptly upon
demand for any legal or other expenses reasonably incurred by the Underwriter, director,
officer, employee or controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement, the Prospectus, any
Issuer Free Writing Prospectus or in any such amendment or supplement thereto or in any
Permitted Issuer Information or any Non-Prospectus Road Show, in reliance upon and in
conformity with written information concerning the Underwriter furnished to the Company by
the Underwriter specifically for inclusion therein, which information consists solely of the
information specified in Section 8(e). The foregoing indemnity agreement is in addition to
any liability which the Company may otherwise have to the Underwriter or to any director,
officer, employee or controlling person of the Underwriter.
(b) The Underwriter shall indemnify and hold harmless the Company, its directors,
officers and employees, and each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the Company or any
such director, officer, employee or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or action arises
out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement, the Prospectus,
any Issuer Free Writing Prospectus or in any amendment or supplement thereto or in any
Non-Prospectus Road Show, or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement, the Prospectus, any Issuer Free Writing
Prospectus or in any amendment or supplement thereto or in any Non-Prospectus Road Show, any
material fact required to be stated therein or necessary to make the statements therein not
misleading, but in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in conformity with
written information concerning the Underwriter furnished to the Company by the Underwriter
specifically for inclusion therein, which information is limited to the information set
forth in Section 8(e). The foregoing indemnity agreement is in addition to any liability
that the Underwriter may otherwise have to the Company or any such director, officer,
employee or controlling person.
(c) Promptly after receipt by an indemnified party under this Section 8 of notice of
any claim or the commencement of any action, the indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party under this Section 8, notify
the indemnifying party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has been materially
prejudiced by such failure and, provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 8. If any such claim or action shall be
brought against an indemnified party, and it shall notify the indemnifying party thereof,
the indemnifying party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the defense of
such claim or action, the indemnifying party shall not be liable to the indemnified party
under this Section 8 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the indemnified party shall have the right to employ
counsel to represent jointly the indemnified party and those other indemnified parties and
their respective directors, officers, employees and controlling persons who may be subject
to liability arising out of any claim in respect of which indemnity may be sought under this
Section 8 if (i) the indemnified party and the indemnifying party shall have so mutually
agreed; (ii) the indemnifying party has failed within a reasonable time to retain counsel
reasonably satisfactory to the indemnified party; (iii) the indemnified party and its
directors, officers, employees and controlling
persons shall have reasonably concluded that there may be legal defenses available to
them that are different from or in addition to those available to the indemnifying party; or
(iv) the named parties in any such proceeding (including any impleaded parties) include both
the indemnified parties or their respective directors, officers, employees or controlling
persons, on the one hand, and the indemnifying party, on the other hand, and representation
of both sets of parties by the same counsel would be inappropriate due to actual or
potential differing interests between them, and in any such event the fees and expenses of
such separate counsel shall be paid by the indemnifying party. No indemnifying party shall
(i) without the prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the indemnified
parties are actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding and does not include any
findings of fact or admissions of fault or culpability as to the indemnified party, or (ii)
be liable for any settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of the
indemnifying party or if there be a final judgment for the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified party from and
against any loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for any reason be
unavailable to or insufficient to hold harmless an indemnified party under Section 8(a) or
8(b) in respect of any loss, claim, damage or liability, or any action in respect thereof,
referred to therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits received by the Company,
on the one hand, and the Underwriter, on the other, from the offering of the Stock or (ii)
if the allocation provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company, on the one hand, and the Underwriter,
on the other, with respect to the statements or omissions that resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one hand, and the
Underwriter, on the other, with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Stock purchased under this
Agreement (before deducting expenses) received by the Company, as set forth in the table on
the cover page of the Prospectus, on the one hand, and the total underwriting discounts and
commissions received by the Underwriter with respect to the shares of the Stock purchased
under this Agreement, as set forth in the table on the cover page of the Prospectus, on the
other hand. The relative fault shall be determined by reference to whether the untrue or
alleged untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the Underwriter, the intent
of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such statement
or omission. The Company and the Underwriter agree that it would not be just and equitable
if contributions pursuant to this Section 8(d) were to be determined by pro rata allocation
or by any other method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof, referred to
above in this Section 8(d) shall be deemed to include, for purposes of this Section 8(d),
any legal or other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the provisions of this
Section 8(d), the Underwriter shall not be required to contribute any amount in excess of
the amount by which the net proceeds from the sale of the Stock underwritten by it exceeds
the amount of any damages that such Underwriter has otherwise paid or become liable to pay
by reason of any untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The Underwriter confirms and the Company acknowledges and agrees that the
statements regarding delivery of shares by the Underwriter set forth on the cover page of,
and the concession and reallowance figures and the paragraph relating to stabilization by
the Underwriter appearing under the caption “Underwriting” in, the most recent Preliminary
Prospectus and the Prospectus are correct and constitute the only information concerning
such Underwriter furnished in writing to the Company by or on behalf of the Underwriter
specifically for inclusion in any Preliminary Prospectus, the Registration Statement, the
Prospectus, any Issuer Free Writing Prospectus or in any amendment or supplement thereto or
in any Non-Prospectus Road Show.
9. [Reserved.]
10. Termination. The obligations of the Underwriter hereunder may be terminated by the
Underwriter by notice given to and received by the Company prior to delivery of and payment for the
Firm Stock if, prior to that time, any of the events described in Sections 7(i) or 7(k) shall have
occurred.
11. Reimbursement of Underwriter’s Expenses. If the Company shall fail to tender the Stock
for delivery to the Underwriter for any reason or (b) the Underwriter shall decline to purchase the
Stock for any reason permitted under this Agreement, the Company will reimburse the Underwriter for
all reasonable out-of-pocket expenses (including fees and disbursements of counsel) incurred by the
Underwriter in connection with this Agreement and the proposed purchase of the Stock (which shall
not exceed $75,000 without the prior written consent of the Company), and upon demand the Company
shall pay such amount thereof to the Underwriter. If this Agreement is terminated by reason of the
default of the Underwriter, the Company shall not be obligated to reimburse the Underwriter on
account of those expenses.
12. Research Analyst Independence. The Company acknowledges that the Underwriter’s research
analysts and research departments are required to be independent from its
investment banking divisions and are subject to certain regulations and internal policies, and
that the Underwriter’s research analysts may hold views and make statements or investment
recommendations and/or publish research reports with respect to the Company and/or the offering
that differ from the views of its investment banking divisions. The Company hereby waives and
releases, to the fullest extent permitted by law, any claims that the Company may have against the
Underwriter with respect to any conflict of interest that may arise from the fact that the views
expressed by its independent research analysts and research departments may be different from or
inconsistent with the views or advice communicated to the Company by the Underwriter’s investment
banking divisions. The Company acknowledges that the Underwriter is a full service securities firm
and as such from time to time, subject to applicable securities laws, may effect transactions for
its own account or the account of its customers and hold long or short positions in debt or equity
securities of the companies that may be the subject of the transactions contemplated by this
Agreement.
13. No Fiduciary Duty. The Company acknowledges and agrees that in connection with this
offering, sale of the Stock or any other services the Underwriter may be deemed to be providing
hereunder, notwithstanding any preexisting relationship, advisory or otherwise, between the parties
or any oral representations or assurances previously or subsequently made by the Underwriter: (i)
no fiduciary or agency relationship between the Company and any other person, on the one hand, and
the Underwriter, on the other, exists; (ii) the Underwriter is not acting as advisors, expert or
otherwise, to the Company, including, without limitation, with respect to the determination of the
public offering price of the Stock, and such relationship between the Company, on the one hand, and
the Underwriter, on the other, is entirely and solely commercial, based on arms-length
negotiations; (iii) any duties and obligations that the Underwriter may have to the Company shall
be limited to those duties and obligations specifically stated herein; and (iv) the Underwriter and
its affiliates may have interests that differ from those of the Company. The Company hereby waives
any claims that the Company may have against the Underwriter with respect to any breach of
fiduciary duty in connection with this offering.
14. Notices, Etc. All statements, requests, notices and agreements hereunder shall be in
writing, and:
(a) if to the Underwriter, shall be delivered or sent by mail or facsimile
transmission to Barclays Capital Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Syndicate Registration (Fax: 000-000-0000), with a copy, in the case of
any notice pursuant to Section 8(c), to the Director of Litigation, Office of the
General Counsel, Barclays Capital Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000; and
(b) if to the Company, shall be delivered or sent by mail or facsimile
transmission to the address of the Company set forth in the Registration Statement,
Attention: PK Xxxxxxxx (Fax: 000-000-0000), with a copy (which shall not constitute
notice) to: Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxx Xxxxxxxx (Fax: 000-000-0000).
Any such statements, requests, notices or agreements shall take effect at the time acceptance or
refusal to accept occurs. The Company shall be entitled to act and rely upon any request, consent,
notice or agreement given by the Underwriter.
15. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of
and be binding upon the Underwriter, the Company, and their respective successors. This Agreement
and the terms and provisions hereof are for the sole benefit of only those persons, except that (A)
the indemnities of the Company contained in this Agreement shall also be deemed to be for the
benefit of the directors, officers and employees of the Underwriter and each person or persons, if
any, who control any Underwriter within the meaning of Section 15 of the Securities Act and (B) the
indemnity agreement of the Underwriter contained in Section 8(b) of this Agreement shall be deemed
to be for the benefit of the directors of the Company, the officers of the Company who have signed
the Registration Statement and any person controlling the Company within the meaning of Section 15
of the Securities Act. Nothing in this Agreement is intended or shall be construed to give any
person, other than the persons referred to in this Section 15, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision contained herein.
16. Survival. The respective indemnities, representations, warranties and agreements of the
Company and the Underwriter contained in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall survive the delivery of and payment for the Stock
and shall remain in full force and effect, regardless of any investigation made by or on behalf of
any of them or any person controlling any of them.
17. Definition of the Terms “Business Day”. For purposes of this Agreement, “business day”
means each Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which banking
institutions in New York are generally authorized or obligated by law or executive order to close.
18. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
19. Counterparts. This Agreement may be executed in one or more counterparts and, if
executed in more than one counterpart, a complete set of which, when taken together, shall be
deemed to be one original, and shall become effective when one ore more counterparts have been
signed by each party hereto and delivered to the other parties. Facsimile and pdf signature shall
be deemed original signatures.
20. Headings. The headings herein are inserted for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement between the Company and the Underwriter,
please indicate your acceptance in the space provided for that purpose below.
| Very truly yours, Avatar Holdings Inc. |
||||
| By: | /s/ Xxxxxx Xxxxxx | |||
| Name: | Xxxxxx Xxxxxx | |||
| Title: | President and Chief Executive Officer | |||
| Avatar Properties Inc. |
||||
| By: | /s/ Xxxxxxx Xxxx | |||
| Name: | Xxxxxxx Xxxx | |||
| Title: | Executive Vice President | |||
| Frenchman’s Yacht Club Developers, LLC |
||||
| By: | /s/ Xxxxxxx Xxxx | |||
| Name: | Xxxxxxx Xxxx | |||
| Title: | Executive Vice President | |||
Accepted:
| Barclays Capital Inc. | ||||
By:
|
/s/ Xxxxx Xxxxxxxxx | |||
| Managing Director | ||||
