___ Shares
Common Stock
($0.001 Par Value)
A.G. Edwards &
Sons, Inc.
As Representative of the Several Underwriters
c/o A.G. Edwards & Sons, Inc.
One North Jefferson Avenue
St. Louis, Missouri 63103
The undersigned,
Cardica, Inc., a Delaware corporation (the “Company”)
hereby addresses you as the representative (the
“Representative”) of each of the persons, firms and
corporations listed on Schedule I hereto (collectively, the
“Underwriters”) and hereby confirms its agreement with
the several Underwriters as follows:
1.
Description of Shares . The Company proposes to issue and
sell to the Underwriters ___ shares of its Common Stock, par value
$0.001 per share (such ___shares of Common Stock are herein
collectively referred to as the “Firm Shares”). Solely
for the purpose of covering over-allotments in the sale of the Firm
Shares, the Company further proposes to grant to the Underwriters
the right to purchase up to an additional
shares of Common Stock (the “Option Shares”), as
provided in Section 3 of this Agreement. The Firm Shares and
the Option Shares are herein sometimes referred to as the
“Shares” and are more fully described in the Prospectus
hereinafter defined.
2.
Purchase, Sale and Delivery of Firm Shares . On the basis of
the representations, warranties and agreements herein contained,
but subject to the terms and conditions herein set forth, the
Company agrees to sell to the Underwriters, and each such
Underwriter agrees, severally and not jointly, (a) to purchase
from the Company at a purchase price of $ per share, the
number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto and (b) to purchase from
the Company any additional number of Option Shares which such
Underwriter may become obligated to purchase pursuant to
Section 3 hereof.
The Company will
deliver definitive certificates for the Firm Shares at the office
of A.G. Edwards & Sons, Inc., 55 Water Street, New York, New
York 10041 (“Edwards’ Office”), or such other
place as you and the Company may mutually agree upon, for the
accounts of the
Underwriters
against payment to the Company of the purchase price for the Firm
Shares sold by it to the several Underwriters by wire transfer of
immediately available funds payable to the order of the Company,
and delivered to One North Jefferson Avenue, St. Louis, Missouri
63103, or at such other place as may be agreed upon between you and
the Company (the “Place of Closing”), at 10:00 a.m.,
New York time, on
, 2006, or at such other time and date not later than five full
business days thereafter as you and the Company may agree, such
time and date of payment and delivery being herein called the
“Closing Date.”
The certificates
for the Firm Shares so to be delivered will be made available to
you for inspection at Edwards’ Office (or such other place as
you and the Company may mutually agree upon) at least one full
business day prior to the Closing Date and will be in such names
and denominations as you may request at least forty-eight hours
prior to the Closing Date.
It is understood
that an Underwriter, individually, may (but shall not be obligated
to) make payment on behalf of the other Underwriters whose funds
shall not have been received prior to the Closing Date for Shares
to be purchased by such Underwriter. Any such payment by an
Underwriter shall not relieve the other Underwriters of any of
their obligations hereunder.
It is understood
that the Underwriters propose to offer the Shares to the public
upon the terms and conditions set forth in the Registration
Statement hereinafter defined.
The Company
acknowledges and agrees that the Underwriters have acted, and are
acting, solely in the capacity of an arm’s-length contractual
counterparty to the Company with respect to the offering of the
Shares contemplated hereby (including in connection with
determining the terms of the offering) and not as a financial
advisor or a fiduciary to, or an agent of, the Company or any other
person. Additionally, none of the Underwriters has advised, or is
advising, the Company or any other person as to any legal, tax,
investment, accounting or regulatory matters in any jurisdiction
with respect to the transactions contemplated hereby. The Company
shall consult with its own advisors concerning such matters and
shall be responsible for making its own independent investigation
and appraisal of the transactions contemplated hereby, and the
Underwriters shall have no responsibility or liability to the
Company with respect thereto. Any review by the Underwriters of the
Company, the transactions contemplated hereby or other matters
relating to such transactions has been and will be performed solely
for the benefit of the Underwriters and has not been and shall not
be on behalf of the Company or any other person. It is understood
that the offering price was arrived at through arm’s-length
negotiations between the Underwriters. The Company acknowledges and
agrees that the Underwriters are acting as independent contractors,
and any duties of the Underwriters arising out of this Agreement
and the transactions completed hereby shall be contractual in
nature and expressly set forth herein. Notwithstanding anything in
this Underwriting Agreement to the contrary, the Company
acknowledges that the Underwriters may have financial interests in
the success of the offering contemplated hereby that are not
limited to the difference between the price to the public and the
purchase price paid to the Company by the Underwriters for the
Shares and the Underwriters
2
have no
obligation to disclose, or account to the Company for, any of such
additional financial interests. The Company hereby waives and
releases, to the fullest extent permitted by law, any claims that
the Company may have against the Underwriters with respect to any
breach or alleged breach of fiduciary duty.
A.G. Edwards &
Sons, Inc., without compensation will act as “qualified
independent underwriter” (in such capacity, the
“QIU”) within the meaning of Rule 2720 of the
Conduct Rules of the NASD in connection with the offering of the
Shares. The Company will indemnify and hold harmless the QIU
against any losses, claims, damages or liabilities, joint or
several, to which the QIU may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon the
QIU’s acting (or alleged failing to act) as such
“qualified independent underwriter” and will reimburse
the QIU for any legal or other expenses reasonably incurred by the
QIU in connection with investigating or defending 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 is the result of gross negligence or willful misconduct of
the QIU.
3.
Purchase, Sale and Delivery of the Option Shares . The
Company hereby grants an option to the Underwriters to purchase up
to [___] Option Shares on the same terms and conditions as the Firm
Shares; provided, however, that such option may be exercised only
for the purpose of covering any over-allotments which may be made
by them in the sale of the Firm Shares. No Option Shares shall be
sold or delivered unless the Firm Shares previously have been, or
simultaneously are, sold and delivered.
The option is
exercisable on behalf of the several Underwriters by you, as
Representative, at any time, and from time to time, before the
expiration of 30 days from the date of the Prospectus (or, if
such 30th day shall be a Saturday or Sunday or a holiday, on the
next day thereunder when The Nasdaq National Market is open for
trading), for the purchase of all or part of the Option Shares
covered thereby, by notice given by you to the Company in the
manner provided in Section 13 hereof, setting forth the number
of Option Shares as to which the Underwriters are exercising the
option, and the date of delivery of said Option Shares, which date
shall not be more than five business days after such notice unless
otherwise agreed to by the parties. You may terminate the option at
any time, as to any unexercised portion thereof, by giving written
notice to the Company to such effect.
You, as
Representative, shall make such allocation of the Option Shares
among the Underwriters as may be required to eliminate purchases of
fractional Shares.
Delivery of the
Option Shares with respect to which the option shall have been
exercised shall be made to or upon your order at Edwards’
Office (or at such other place as you and the Company may mutually
agree upon), against payment by you of the per share purchase price
specified in Section 2(a) multiplied by the number of Option Shares
specified in the notice given by you to the Company by wire
transfer of immediately available funds. Such payment and delivery
shall be made at 10:00 a.m., New York time, on the date
designated in the notice given by you as above provided for (which
may be the same as the Closing Date), unless some other date
and
3
time are agreed
upon, which date and time of payment and delivery are called the
“Option Closing Date.” The certificates for the Option
Shares so to be delivered will be made available to you for
inspection at Edwards’ Office at least one full business day
prior to the Option Closing Date and will be in such names and
denominations as you may request at least forty-eight hours prior
to the Option Closing Date. On the Option Closing Date, the Company
shall provide the Underwriters such representations, warranties,
agreements, opinions, letters, certificates and covenants with
respect to the Option Shares as are required to be delivered on the
Closing Date with respect to the Firm Shares.
4.
Representations, Warranties and Agreements of the Company .
(a) The Company represents and warrants to and agrees with
each Underwriter as of the date hereof and as of the Closing Date
and each Option Closing Date, if any, that:
(i) A registration
statement (Registration No. 333-129497) on Form S-1 with
respect to the Shares, including a preliminary prospectus, and such
amendments to such registration statement as may have been required
to the date of this Agreement, has been prepared by the Company
pursuant to and in conformity with the requirements of the
Securities Act of 1933, as amended (the “ 1933 Act
”), and the rules and regulations thereunder (the “
1933 Act Rules and Regulations ”) of the Securities
and Exchange Commission (the “ SEC ”) and has
been filed with the SEC under the 1933 Act. Copies of such
registration statement, including any amendments thereto, each
related preliminary prospectus (meeting the requirements of
Rule 430 or 430A of the 1933 Act Rules and Regulations)
contained therein, and the exhibits, financial statements and
schedules thereto have heretofore been delivered by the Company to
you. If such registration statement has become effective under the
1933 Act, a final prospectus containing information permitted to be
omitted at the time of effectiveness by Rule 430A of the 1933
Act Rules and Regulations will be filed promptly by the Company
with the SEC in accordance with Rule 424(b) of the 1933 Act Rules
and Regulations. The term “Registration Statement” as
used herein means the registration statement as amended at the time
it becomes effective under the 1933 Act (the “ Effective
Date ”), including financial statements and all exhibits
and, if applicable, the information deemed to be included by
Rule 430A of the 1933 Act Rules and Regulations. If an
abbreviated registration statement is prepared and filed with the
SEC in accordance with Rule 462(b) under the 1933 Act (an “
Abbreviated Registration Statement ”), the term
“Registration Statement” as used in this Agreement
includes the Abbreviated Registration Statement.
4
The term
“ Prospectus ” as used herein means (i) the
prospectus in the form first used to confirm sales of Shares (or in
the form first made available to the Underwriters by the Company to
meet the requests of purchasers pursuant to Rule 173 under the
Securities Act). The term “ Preliminary Prospectus
” as used herein shall mean each preliminary prospectus as
contemplated by Rule 430 or 430A of the 1933 Act Rules and
Regulations included at any time in the Registration Statement. For
purposes of this Agreement, “ free writing prospectus
” has the meaning set forth in Rule 405 under the
Securities Act, “ Time of Sale Prospectus ”
means the preliminary prospectus together with the free writing
prospectuses, if any, each identified in Schedule II
hereto and “ broadly available road show ” means
a “bona fide electronic road show” as defined in
Rule 433(h)(5) under the Securities Act that has been made
available without restriction to any person. The Preliminary
Prospectus, if any, and the Prospectus delivered to the
Underwriters for use in connection with the offering of the Shares
and the Time of Sale Prospectus will be identical to the respective
version thereof created to be transmitted to the SEC for filing via
the Electronic Data Gathering Analysis and Retrieval System
(“ EDGAR ”), except to the extent permitted by
Regulation S-T. For purposes of this Agreement, the words
“amend,” “amendment,”
“amended,” “supplement” or
“supplemented” with respect to the Registration
Statement or the Prospectus shall mean amendments or supplements to
the Registration Statement or the Prospectus, as the case may
be.
(ii) Neither the
SEC nor any state or other jurisdiction or other regulatory body
has issued, and neither is, to the knowledge of the Company,
threatening to issue, any stop order under the 1933 Act or other
order suspending the effectiveness of the Registration Statement
(as amended or supplemented) or preventing or suspending the use of
any Preliminary Prospectus, Time of Sale Prospectus or the
Prospectus or suspending the qualification or registration of the
Shares for offering or sale in any jurisdiction nor instituted or,
to the knowledge of the Company, threatened to institute
proceedings for any such purpose. No proceeding under
Section 8A of the 1933 Act shall have commenced or to the
knowledge of the Company be threatened related to the use of any
Preliminary Prospectus, Time of Sale Prospectus, the Prospectus or
the offering of the Shares. Each Preliminary Prospectus at its date
of issue, the Registration Statement, the Time of Sale Prospectus
and the Prospectus and any amendments or supplements thereto,
contain or will contain, as the case may be, all statements which
are required to be stated therein by, and in all material respects
conform or will conform, as the case may be, to the requirements
of, the 1933 Act and the 1933 Act Rules and Regulations. Neither
the Registration Statement nor any amendment thereto, as of the
applicable effective date, contains or will contain, as the case
may be, any untrue statement of a material fact or omits or will
omit to state any material fact required to be stated therein or
necessary to make the statements therein, not misleading, and
neither any Preliminary Prospectus, the
5
Time of Sale
Prospectus, the Prospectus nor any supplement thereto contains or
will contain, as the case may be, any untrue statement of a
material fact or omits or will omit to state any 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, and each broadly available road show, if any,
when considered together with the Time of Sale Prospectus, does not
contain any untrue statement of material fact or omit to state a
material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representation or
warranty as to information contained in or omitted from the
Registration Statement, the Prospectus or the Time of Sale
Prospectus, or any such amendment or supplement, in reliance upon,
and in conformity with, written information furnished to the
Company relating to the Underwriters by or on behalf of the
Underwriters expressly for use in the preparation thereof (as
provided in Section 14 hereof). There is no contract,
agreement, understanding or arrangement, whether written or oral,
or document required to be described in the Registration Statement,
Time of Sale Prospectus or Prospectus or to be filed as an exhibit
to the Registration Statement which is not described or filed as
required.
(iii) This
Agreement has been duly authorized, executed and delivered by the
Company and constitutes a valid and legally binding obligation of
the Company enforceable against the Company in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors’ rights
generally and by general principles of equity (the
“Exceptions”).
(iv) The Company
has been duly organized and is validly existing as a corporation in
good standing under the laws of the state of Delaware, with full
corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Prospectus
and Time of Sale Prospectus and to execute and deliver, and perform
the Company’s obligations under, this Agreement; the Company
is duly qualified to do business as a foreign corporation in good
standing in each state or other jurisdiction in which its ownership
or leasing of property or conduct of business legally requires such
qualification, except where the failure to be so qualified,
individually or in the aggregate, would not have a Material Adverse
Effect. The term “Material Adverse Effect” as used
herein means any material adverse effect on the condition
(financial or other), net worth, business, affairs, management,
prospects, results of operations or cash flow of the
Company.
(v) The Company
has not sustained since the date of the latest audited financial
statements included in the Prospectus and Time of Sale Prospectus
any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or
governmental
6
action, order
or decree. otherwise than as set forth in the Prospectus and Time
of Sale Prospectus and, since the respective dates as of which
information is given in the Prospectus and Time of Sale Prospectus,
there has not been any change in the capital stock or long-term
debt of the Company or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders’ equity or results of operations of the Company,
otherwise than as set forth in the Prospectus and Time of Sale
Prospectus.
(vi) The issuance
and sale of the Shares and the execution, delivery and performance
by the Company of this Agreement, and the consummation of the
transactions herein contemplated, will not conflict with or result
in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any properties or assets of
the Company under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company is
a party or by which the Company is bound or to which any of the
properties or assets of the Company is subject, except to such
extent as, individually or in the aggregate, does not have a
Material Adverse Effect, nor will such action result in any
violation of the provisions of the Company’s certificate of
incorporation or bylaws or any statute, rule, regulation or other
law, or any order or judgment, of any court or governmental agency
or body having jurisdiction over the Company or any of its
properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the execution, delivery
and performance of this Agreement, the issuance and sale of the
Shares or the consummation of the transactions contemplated hereby,
except such as have been, or will be prior to the Closing Date,
obtained under the 1933 Act or as may be required by the National
Association of Securities Dealers, Inc. (the “NASD”)
and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or blue
sky laws in connection with the purchase and distribution of the
Shares by the Underwriters.
(vii) The Company
has duly and validly authorized capital stock as set forth in the
Prospectus and Time of Sale Prospectus; all outstanding shares of
Common Stock of the Company and the Shares conform, or when issued
will conform, to the description thereof in the Prospectus and Time
of Sale Prospectus and have been, or, when issued and paid for in
the manner described herein will be, duly authorized, validly
issued, fully paid and non-assessable; and the issuance of the
Shares to be purchased from the Company hereunder is not subject to
preemptive or other similar rights, or any restriction upon the
voting or transfer thereof pursuant to applicable law or the
Company’s certificate of incorporation, by-laws or governing
documents or any agreement to which the Company is a party or by
which it is bound. All corporate action required to be taken by the
Company for the authorization, issuance and sale of the Shares has
been duly and validly taken. Except as disclosed in the Prospectus
and Time of Sale Prospectus, there are no
7
outstanding
subscriptions, rights, warrants, options, calls, convertible
securities, commitments of sale or rights related to or entitling
any person to purchase or otherwise to acquire any shares of, or
any security convertible into or exchangeable or exercisable for,
the capital stock of, or other ownership interest in, the
Company.
(viii) The
statements set forth in the Prospectus and Time of Sale Prospectus
describing the Shares and this Agreement, insofar as they purport
to describe the provisions of the laws and documents referred to
therein, are accurate, complete and fair.
(ix) The Company
is in possession of all franchises, grants, authorizations,
licenses, certificates, permits, easements, consents, orders and
approvals (“Permits”) from all state, federal, foreign
and other regulatory authorities, and has satisfied the
requirements imposed by regulatory bodies, administrative agencies
or other governmental bodies, agencies or officials, that are
required for the Company lawfully to own, lease and operate its
properties and conduct its businesses as described in the
Prospectus and Time of Sale Prospectus, and, the Company is
conducting its business in compliance with all of the Permits,
laws, rules and regulations of each jurisdiction in which it
conducts its business, including without limitation all applicable
rules and regulations of the Food and Drug Administration (the
“FDA”), and all applicable laws, statutes, ordinances,
rules or regulations (including, without limitation, the Federal
Food, Drug and Cosmetic Act, as amended and similar foreign laws
and regulations) enforced by the FDA or equivalent foreign
authorities, in each case with such exceptions, individually or in
the aggregate, as would not have a Material Adverse Effect; the
Company has filed all notices, reports, documents or other
information (“Notices”) required to be filed under
applicable laws, rules and regulations, in each case, with such
exceptions, individually or in the aggregate, as would not have a
Material Adverse Effect; and, except as otherwise specifically
described in the Prospectus and Time of Sale Prospectus, the
Company has not received any notification from any court or
governmental body, authority or agency, relating to the revocation
or modification of any such Permit or, to the effect that any
additional authorization, approval, order, consent, license,
certificate, permit, registration or qualification
(“Approvals”) from such regulatory authority is needed
to be obtained by any of them, in any case where it could be
reasonably expected that obtaining such Approvals or the failure to
obtain such Approvals, individually or in the aggregate, would have
a Material Adverse Effect.
(x) The Company
has filed all necessary federal, state and foreign income and
franchise tax returns and paid all taxes shown as due thereon; all
such tax returns are complete and correct in all material respects;
all tax liabilities are adequately provided for on the books of the
Company except to such extent as would not have a Material Adverse
Effect; the Company has made all necessary payroll tax payments and
are current and up-to-date; and the Company has no knowledge of any
tax proceeding or action pending or threatened against the Company
which, individually or in the aggregate, would have a Material
Adverse Effect.
8
(xi) Except as
disclosed in the Prospectus and Time of Sale Prospectus, the
Company owns or possesses sufficient trademarks, trade names,
patent rights, copyrights, domain names, licenses, approvals, trade
secrets and other similar rights (collectively, “Intellectual
Property Rights”) reasonably necessary to conduct its
business as now conducted and as described in the Prospectus and
Time of Sale Prospectus. Except as disclosed in the Prospectus and
Time of Sale Prospectus, the Intellectual Property Rights owned by
the Company and, to the knowledge of the Company, the Intellectual
Property Rights licensed to the Company have not been adjudged
invalid or unenforceable, in whole or in part, and 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 such Intellectual Property Rights. Except as disclosed
in the Prospectus and Time of Sale Prospectus, there is no pending
or, to the knowledge of the Company, threatened action, suit,
proceeding or claim by others challenging the Company’s
rights in or to any Intellectual Property Rights owned or used by
the Company, and the Company is unaware of any facts which would
form a reasonable basis for any such claim. The Company has not
received any notice of a claim of infringement, misappropriation or
conflict with Intellectual Property Rights of others, which
infringement, misappropriation or conflict, if the subject of an
unfavorable decision, would have a material adverse effect on the
Company, and the Company is unaware of any facts, which form a
reasonable basis for any such claim. Except as otherwise disclosed
in the Prospectus and Time of Sale Prospectus, the Company is not a
party to or bound by any options, licenses or agreements with
respect to the Intellectual Property Rights of any other person or
entity that are required to be set forth in the Prospectus and Time
of Sale Prospectus. None of the technology or intellectual property
used by the Company in its business has been obtained or is being
used by the Company in violation of any contractual obligation
binding on the Company or, to the Company’s knowledge, any of
its officers, directors or employees or otherwise in violation of
the rights of any persons. The Company has duly and properly filed
or caused to be filed with the U. S. Patent and Trademark Office
(the “PTO”) or foreign and international patent
authorities all patent applications disclosed in the Prospectus and
Time of Sale Prospectus as owned by the Company (the ”Company
Patent Applications”). To the knowledge of the Company, the
Company has complied with the PTO’s duty of candor and
disclosure for the Company Patent Applications and has made no
material misrepresentation during prosecution of the Company Patent
Applications. Except as disclosed in the Prospectus and Time of
Sale Prospectus, to the Company’s knowledge, the Company
Patent Applications disclose patentable subject matters, and the
Company has not been notified of any inventorship challenges nor
has any interference been declared or provoked nor is any material
fact known by the Company that would preclude the issuance of
patents with respect to the Company Patent Applications or would
render such patents, if issued, invalid or
unenforceable.
9
(xii) The Company
has title in fee simple to all items of real property and title to
all personal property owned by it, in each case free and clear of
all liens, encumbrances, restrictions and defects except such as
are described in the Prospectus and Time of Sale Prospectus or do
not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such
property; and any property held under lease or sublease by the
Company is held under valid, subsisting and enforceable leases or
subleases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such
property by the Company; and the Company has no notice or knowledge
of any material claim of any sort which has been, or may be,
asserted by anyone adverse to the Company’s rights as lessee
or sublessee under any lease or sublease described above, or
affecting or questioning the Company’s rights to the
continued possession of the leased or subleased premises under any
such lease or sublease in conflict with the terms
thereof.
(xiii) Except as
described in the Prospectus and Time of Sale Prospectus, to the
Company’s knowledge, there is no factual basis for any
action, suit or other proceeding involving the Company or any of
its material assets for any failure of the Company, or any
predecessor thereof, to comply with any requirements of federal,
state or local regulation relating to air, water, solid waste
management, hazardous or toxic substances, or the protection of
health, safety or the environment, which would, individually or in
the aggregate, result in a Material Adverse Effect. Except as
described in the Prospectus and Time of Sale Prospectus, none of
the property owned or leased by the Company is, to the knowledge of
the Company, contaminated with any waste or hazardous or toxic
substances, and the Company may not be deemed an “owner or
operator” of a “facility” or “vessel”
which owns, possesses, transports, generates or disposes of a
“hazardous substance” as those terms are defined in
§9601 of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. §9601 et
seq .
(xiv) No labor
disturbance exists with the employees of the Company or is imminent
which, individually or in the aggregate, would have a Material
Adverse Effect. None of the employees of the Company is represented
by a union and, to the knowledge of the Company, no union
organizing activities are taking place. The Company has not
violated any federal, state or local law or foreign law relating to
discrimination in hiring, promotion or pay of employees, nor any
applicable wage or hour laws, or the rules and regulations
thereunder, or analogous foreign laws and regulations, which would,
individually or in the aggregate, result in a Material Adverse
Effect.
(xv) The Company
is in compliance in all material respects with all presently
applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published
interpretations thereunder (“ERISA”); no
“reportable event” (as defined in ERISA) has occurred
with respect to any “pension
10
plan” (as
defined in ERISA) for which the Company would have any liability;
the Company has not incurred and does not expect to incur liability
under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any “pension plan” or
(ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published
interpretations thereunder (the “Code”); and each
“pension plan” for which the Company would have any
liability that is intended to be qualified under Section 401(a) of
the Code is so qualified in all material respects, and nothing has
occurred, whether by action or by failure to act, which would cause
the loss of such qualification.
(xvi) The Company
maintains insurance of the types and in the amounts generally
deemed adequate for its business, including, but not limited to,
directors’ and officers’ insurance, insurance covering
real and personal property owned or leased by the Company against
theft, damage, destruction, acts of vandalism and all other risks
customarily insured against, all of which insurance is in full
force and effect. The Company has not been refused any insurance
coverage sought or applied for, and the Company has no reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse
Effect.
(xvii) The Company
is not, or with the giving of notice or lapse of time or both would
not be, in default or violation with respect to its certificate of
incorporation or by-laws. The Company is not, or with the giving of
notice or lapse of time or both would not be, in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to
which the Company is a party or by which the Company is bound or to
which any of the properties or assets of the Company is subject, or
in violation of any statutes, laws, ordinances or governmental
rules or regulations or any orders or decrees to which it is
subject, which default or violation, individually or in the
aggregate, would have a Material Adverse Effect.
(xviii) Other than
as set forth in the Prospectus and Time of Sale Prospectus, there
are no legal or governmental proceedings pending to which the
Company is a party or of which any property of the Company is the
subject that, if determined adversely to the Company, would
individually or in the aggregate have a Material Adverse Effect or
which would materially and adversely affect the consummation of the
transactions contemplated hereby or which is required to be
disclosed in the Prospectus and Time of Sale Prospectus; to the
Company’s knowledge, no such proceedings are threatened or
contemplated by the Company.
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(xix) The Company
is not and, after giving effect to the offering and sale of the
Shares, will not be a “holding company,” or a
“subsidiary company” of a “holding
company,” or an “affiliate” of a “holding
company” or of a “subsidiary company,” as such
terms are defined in the Public Utility Holding Company Act of
1935, as amended (the “1935 Act”).
(xx) The Company
is not and, after giving effect to the offering and sale of the
Shares, will not be an “investment company” or an
entity “controlled” by an “investment
company,” as such terms are defined in the Investment Company
Act of 1940, as amended (the “1940 Act”).
(xxi) Ernst &
Young LLP, the accounting firm which has certified the financial
statements filed with and as a part of the Registration Statement,
is an independent registered public accounting firm within the
meaning of the 1933 Act and the 1933 Act Rules and Regulations and
the rules and regulations of the Public Company Accounting
Oversight Board (“PCAOB”) of the United States. Except
as described in the Prospectus and Time of Sale Prospectus, the
Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that:
(1) transactions are executed in accordance with
management’s general or specific authorization;
(2) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (3) access to assets is permitted only in accordance
with management’s general or specific authorization; and (4)
the recorded accounts for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect thereto. The financial statements and schedules of the
Company, including the notes thereto, filed with and as a part of
the Registration Statement, Prospectus or Time of Sale Prospectus,
accurately and fairly present in all material respects the
financial condition of the Company as of the respective dates
thereof and the results of operations and changes in financial
position and statements of cash flow for the respective periods
covered thereby, all in conformity with generally accepted
accounting principles applied on a consistent basis throughout the
periods involved except as otherwise disclosed therein. All
adjustments necessary for a fair presentation of results for such
periods have been made. The selected financial data included in the
Registration Statement, Prospectus and Time of Sale Prospectus
present fairly the information shown therein and have been compiled
on a basis consistent with that of the audited financial
statements. Any operating or other statistical data included in the
Registration Statement, Prospectus and Time of Sale Prospectus
comply in all material respects with the 1933 Act and the 1933 Act
Rules and Regulations and present fairly the information shown
therein and are based on or derived from sources which the Company
reasonably and in good faith believes are reliable and accurate,
and such data agree with the sources from which they are derived.
All non-GAAP financial information included in the Registration
Statement, Prospectus and Time of Sale Prospectus complies with the
requirements of Regulation G and Item 10 of
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Regulation S-K under the 1933 Act. The pro
forma financial statements and the related notes thereto included
in the Registration Statement, the Prospectus and Time of Sale
Prospectus present fairly the information shown therein, have been
prepared in accordance with the SEC’s rules and guidelines
with respect to pro forma financial statements and have been
properly compiled on the basis described therein, and the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions and circumstances referred to therein.
(xxii) Except as
disclosed in the Prospectus and Time of Sale Prospectus, no holder
of any security of the Company has any right to require
registration of shares of Common Stock or any other security of the
Company because of the filing of the Registration Statement or the
consummation of the transactions contemplated hereby and, except as
disclosed in the Prospectus and Time of Sale Prospectus, no person
has the right to require registration under the 1933 Act of any
shares of Common Stock or other securities of the Company. No
person has the right, contractual or otherwise, to cause the
Company to permit such person to underwrite the sale of any of the
Shares. Except for this Agreement and the agreement between the
Company and Allen & Co. Incorporated filed as an exhibit to the
Registration Statement, there are no contracts, agreements or
understandings between the Company and any person that would give
rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder’s fee or like payment in
connection with the issuance, purchase and sale of the
Shares.
(xxiii) The
Company has not distributed and, prior to the later to occur of
(i) the Closing Date or the Option Closing Date, if any, and
(ii) completion of the distribution of the Shares, will not
distribute any offering material in connection with the offering
and sale of the Shares other than the Registration Statement, the
Preliminary Prospectus, the Prospectus and the Time of Sale
Prospectus.
(xxiv) The Company
has not taken and will not take, directly or indirectly, any action
designed to or which would reasonably be expected to cause or
result in stabilization or manipulation of the price of the
Company’s Common Stock, and the Company is not aware of any
such action taken or to be taken by affiliates of the
Company.
(xxvii) Except as
discussed with the Company’s auditors and audit committee and
as disclosed in the Prospectus, (i) there are no significant
deficiencies or material weaknesses in the design or operation of
internal control over financial reporting and (ii)
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there is, and
there has been, no fraud, whether or not material, that involves
management or other employees who have a role in the
Company’s internal control over financial
reporting.
(xxviii) Since the
date of the end of the last fiscal year for which audited financial
statements are included in the Prospectus, there have been no
significant changes in internal control over financial reporting or
in other factors that could significantly affect internal control
over financial reporting, except for any corrective actions with
regard to significant deficiencies and material
weaknesses.
(xxix) No
relationship, direct or indirect, exists between or among the
Company and any director, officer or stockholder of the Company, or
any member of his or her immediate family, or any customers or
suppliers which is required to be described in the Registration
Statement, the Prospectus and the Time of Sale Prospectus which is
not so described and described as required in material compliance
with such requirement. There are no outstanding loans, advances
(except normal advances for business expenses in the ordinary
course of business) or guarantees of indebtedness by the Company to
or for the benefit of any of the officers or directors of the
Company or any member of their respective immediate families,
except as disclosed in the Registration Statement, the Prospectus
and the Time of Sale Prospectus. As of the date of the filing of
the Registration Statement, the Company has not, in violation of
the Sarbanes-Oxley Act, directly or indirectly, extended or
maintained credit, arranged for the extension of credit, or renewed
an extension of credit, in the form of a personal loan to or for
any director or executive officer of the Company.
(xxx) To the
knowledge of the Company, no change in any laws or regulations is
pending which could reasonably be expected to be adopted and if
adopted, could reasonably be expected to have, individually or in
the aggregate with all such changes, a Material Adverse Effect,
except as set forth in or contemplated in the
Prospectus.
(xxxi) The minute
books of the Company have been made available to the Underwriters
and contain a complete summary of all meetings and other actions of
the directors and stockholders of the Company in all material
respects, and reflect all transactions referred to in such minutes
accurately in all material respects.
(xxxii) Neither
the Company, nor any director, officer, agent, employee or other
person associated with or acting on behalf of the Company, has,
directly or indirectly, used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect
unlawful payment to any foreign or domestic government official or
employee or to foreign or domestic political parties or campaigns
from corporate funds; violated or is in violation of any provision
of the Foreign Corrupt Practices Act of 1977; or made any bribe,
rebate, payoff, influence payment, kickback or other unlawful
payment.
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(xxxiii) The
operations of the Company are and have been conducted at all times
in compliance in all material respects 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
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