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EXHIBIT 1.1
EXECUTION
COPY
$200,000,000
Sonosite,
Inc.
3.75% Convertible Senior
Notes due July 15, 2014
Underwriting
Agreement
July 10,
2007
J.P. Morgan Securities Inc.
As
Representative of the
several
Underwriters listed
in Schedule 1
hereto
c/o J.P. Morgan Securities
Inc.
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
Sonosite, Inc., a Washington
corporation (the “ Company ”), proposes to issue
and sell to the several Underwriters listed in Schedule 1 hereto
(the “ Underwriters ”), for whom you are acting
as representative (the “ Representative ”), an
aggregate of $200,000,000 principal amount of its 3.75% Convertible
Senior Notes due 2014 (the “ Firm Securities ”),
and, at the option of the Underwriters, up to an additional
aggregate of $25,000,000 principal amount of its 3.75% Convertible
Senior Notes due 2014 (the “ Additional Securities
”). The Firm Securities and the Additional Securities are
herein referred to as the “ Securities .” The
Securities will be issued pursuant to a Supplemental Indenture to
be dated as of July 16, 2007 (the “ Indenture
”) between the Company and Wells Fargo Bank, National
Association (the “ Trustee ”). The Securities
will be convertible into shares (the “ Underlying
Securities ”) of common stock of the Company, par value
$0.01 per share (the “ Common Stock ”), in
accordance with the terms of the Indenture. The Common Stock will
have attached thereto rights (the “ Rights ”) to
purchase Series A Participating Cumulative Preferred Stock. The
Rights are to be issued pursuant to a Rights Agreement, as amended
(the “ Rights Agreement ”) dated as of
April 6, 1998 between the Company and EquiServe Trust Company,
N.A. as successor in interest to First Chicago Trust
Company.
The Company hereby confirms
its agreement with the several Underwriters concerning the purchase
and sale of the Securities, as follows:
1. Registration
Statement . The Company has prepared and filed with the
Securities and Exchange Commission (the “ Commission
”) under the Securities Act of 1933, as amended,
and the rules and regulations of the
Commission thereunder (collectively, the “ Securities
Act ”), a registration statement (File
No. 333-143105) including a prospectus, relating to certain
debt and equity securities to be issued by the Company from time to
time. Such registration statement, as amended at the time it
becomes effective, including the information, if any, deemed
pursuant to Rule 430A, 430B or 430C under the Securities Act to be
part of the registration statement at the time of its effectiveness
(“ Rule 430 Information ”), is referred to
herein as the “ Registration Statement ”; and as
used herein, the term “ Preliminary Prospectus ”
means each prospectus included in such registration statement (and
any amendments thereto) before it becomes effective, any prospectus
filed with the Commission pursuant to Rule 424(a) under the
Securities Act and the prospectus included in the Registration
Statement at the time of its effectiveness that omits Rule 430
Information, and the term “ Prospectus ” means
the prospectus in the form first used (or made available upon
request of purchasers pursuant to Rule 173 under the Securities
Act) in connection with confirmation of sales of the Securities. If
the Company has filed an abbreviated registration statement
pursuant to Rule 462(b) under the Securities Act (the “
Rule 462 Registration Statement ”), then any reference
herein to the term “Registration Statement” shall be
deemed to include such Rule 462 Registration Statement. Any
reference in this Agreement to the Registration Statement, any
Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Securities Act, as
of the effective date of the Registration Statement or the date of
such Preliminary Prospectus or the Prospectus, as the case may be
and any reference to “amend”, “amendment”
or “supplement” with respect to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after such date
under the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission thereunder (collectively,
the “ Exchange Act ”) that are deemed to be
incorporated by reference therein. Capitalized terms used but not
defined herein shall have the meanings given to such terms in the
Registration Statement and the Prospectus.
At or prior to the time when
sales of the Securities were first made (the “ Time of
Sale ”), the Company had prepared the following
information (collectively with the information set forth on Annex
B, the “ Time of Sale Information ”): a
Preliminary Prospectus dated July 9, 2007, and each
“free-writing prospectus” (as defined pursuant to Rule
405 under the Securities Act) listed on Annex B hereto.
2. Purchase of the
Securities by the Underwriters . (a) The Company agrees to
issue and sell the Securities to the several Underwriters as
provided in this Agreement, and each Underwriter, on the basis of
the representations, warranties and agreements set forth herein and
subject to the conditions set forth herein, agrees, severally and
not jointly, to purchase from the Company the respective principal
amount of Securities set forth opposite such Underwriter’s
name in Schedule 1 hereto at a price (the “ Purchase
Price ”) equal to 97.0% of the principal amount thereof
plus accrued interest, if any, from July 16, 2007 to the date
of payment and delivery.
On the basis of the
representations and warranties contained in this Agreement, and
subject to its terms and conditions, the Company agrees to sell to
the several Underwriters the Additional Securities, and the
Underwriters shall have the right to purchase in whole, or
from
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time to time in part, the Additional
Securities from the Company at the Purchase Price plus accrued
interest, if any, from the Closing Date (as defined below) to the
date of payment and delivery, solely to cover
over-allotments.
If any Additional Securities
are to be purchased, the principal amount of Additional Securities
to be purchased by each Underwriter shall be the principal amount
of Additional Securities which bears the same ratio to the
aggregate principal amount of Additional Securities being purchased
as the principal amount of Firm Securities set forth opposite the
name of such Underwriter in Schedule 1 hereto (or such principal
amount increased as set forth in Section 10 hereof) bears to
the aggregate principal amount of Firm Securities being purchased
from the Company by the several Underwriters, subject, however, to
such adjustments as the Representative in its sole discretion may
make in order to ensure that the principal amount of Additional
Securities purchased by each Underwriter is a multiple of
$1,000.
The Underwriters may exercise
the option to purchase the Additional Securities at any time in
whole, or from time to time in part, on or before the thirtieth day
following the date of this Agreement, by written notice from the
Representative to the Company. Such notice shall set forth the
aggregate principal amount of Additional Securities as to which the
option is being exercised and the date and time when the Additional
Securities are to be delivered and paid for (an “
Additional Closing Date ”), which may be the same date
and time as the Closing Date (as hereinafter defined) but shall not
be earlier than the Closing Date nor later than the tenth full
business day (as hereinafter defined) after the date of such notice
(unless such time and date are postponed in accordance with the
provisions of Section 10 hereof).
(b) The Company understands
that the Underwriters intend to make a public offering of the
Securities as soon after the effectiveness of this Agreement as in
the judgment of the Representative is advisable, and initially to
offer the Securities on the terms set forth in the Prospectus. The
Company acknowledges and agrees that the Underwriters may offer and
sell Securities to or through any affiliate of an Underwriter and
that any such affiliate may offer and sell Securities purchased by
it to or through any Underwriter.
(c) Payment for the
Securities shall be made by wire transfer in immediately available
funds to the account specified by the Company to the Representative
at 10:00 A.M. New York City time on July 16, 2007, or at such
other time or place on the same or such other date, not later than
the fifth business day thereafter, as the Representative and the
Company may agree upon in writing. The time and date of such
payment is referred to herein as the “ Closing Date
.”
As used herein, the term
“ Business Day ” means any day other than a day
on which banks are permitted or required to be closed in New York
City.
Payment for the Securities
shall be made against delivery to the nominee of The Depository
Trust Company for the respective accounts of the several
Underwriters of the Securities of one or more global notes
(collectively, the “ Global Notes ”)
representing the Securities, with any transfer taxes payable in
connection with the transfer to the Underwriters of the Securities
duly paid by the Company. The Global Notes will be made available
for inspection by the Representatives at the office of J.P. Morgan
Securities Inc. at the address set
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forth above not later than 1:00 P.M.,
New York City time, on the Business Day immediately prior to the
Closing Date.
(d) The Company acknowledges
and agrees that the Underwriters are acting solely in the capacity
of an arm’s length contractual counterparty to the Company
with respect to the offering of Securities contemplated hereby
(including in connection with determining the terms of the
offering) and not as financial advisors or fiduciaries to, or
agents of, the Company or any other person. Additionally, neither
the Representative nor any other Underwriter is advising the
Company or any other person as to any legal, tax, investment,
accounting or regulatory matters in any jurisdiction. 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 will be performed solely for the
benefit of the Underwriters and shall not be on behalf of the
Company.
3. Representations and
Warranties of the Company . The Company represents and warrants
to each Underwriter that:
(a) Preliminary
Prospectus. No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, complied in
all material respects with the Securities Act and did not contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; provided that the
Company makes no representation or warranty with respect to any
statements or omissions made in reliance upon and in conformity
with information relating to any Underwriter furnished to the
Company in writing by such Underwriter through the Representative
expressly for use in any Preliminary Prospectus.
(b) Time of Sale
Information . The Time of Sale Information, at the Time of Sale
did not, and at the Closing Date will not, contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided that the Company makes no representation or
warranty with respect to any statements or omissions made in
reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by such Underwriter
through the Representative expressly for use in such Time of Sale
Information. No statement of material fact included in the
Prospectus has been omitted from the Time of Sale Information and
no statement of material fact included in the Time of Sale
Information that is required to be included in the Prospectus has
been omitted therefrom.
(c) Issuer Free Writing
Prospectus. Other than the Preliminary Prospectus and the
Prospectus, the Company (including its agents and representatives,
other than the Underwriters in their capacity as such) has not
made, used, prepared, authorized, approved or referred to and will
not prepare, make, use, authorize, approve or refer to any
“written communication” (as defined in
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Rule 405 under the Securities Act) that
constitutes an offer to sell or solicitation of an offer to buy the
Securities (each such communication by the Company or its agents
and representatives (other than a communication referred to in
clause (i) below) an “ Issuer Free Writing
Prospectus ”) other than (i) any document not
constituting a prospectus pursuant to Section 2(a)(10)(a) of
the Securities Act or Rule 134 under the Securities Act or
(ii) the documents listed on Annex B hereto and other written
communications approved in writing in advance by the
Representative. Each such Issuer Free Writing Prospectus complied
in all material respects with the Securities Act, has been filed in
accordance with the Securities Act (to the extent required thereby)
and, when taken together with the Preliminary Prospectus
accompanying, or delivered prior to delivery of, or filed prior to
the first use of such Issuer Free Writing Prospectus, did not, and
at the Closing Date will not, contain any untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that
the Company makes no representation or warranty with respect to any
statements or omissions made in any such Issuer Free Writing
Prospectus in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Representative expressly for use in
any Issuer Free Writing Prospectus.
(d) Registration Statement
and Prospectus. The Registration Statement has been declared
effective by the Commission. No order suspending the effectiveness
of the Registration Statement has been issued by the Commission and
no proceeding for that purpose or pursuant to Section 8A of
the Securities Act against the Company or related to the offering
has been initiated or, to the Company’s knowledge, threatened
by the Commission; as of the applicable effective date of the
Registration Statement and any amendment thereto, the Registration
Statement complied and will comply in all material respects with
the Securities Act and the Trust Indenture Act of 1939, as amended,
and the rules and regulations of the Commission thereunder
(collectively, the “ Trust Indenture Act ”), and
did not and will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein not
misleading; and as of the date of the Prospectus and any amendment
or supplement thereto and as of the Closing Date, the Prospectus
will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided that the Company makes no representation and
warranty with respect to (i) that part of the Registration
Statement that constitutes the Statement of Eligibility and
Qualification (Form T-1) of the Trustee under the Trust Indenture
Act or (ii) any statements or omissions made in reliance upon
and in conformity with information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the
Representative expressly for use in the Registration Statement and
the Prospectus and any amendment or supplement thereto.
(e) Incorporated
Documents. The documents incorporated by reference in the
Registration Statement, the Prospectus and the Time of Sale
Information, when they became effective or were filed with the
Commission , as the case may be, conformed in all material respects
to the requirements of the Securities Act or the Exchange Act, as
applicable, and none of such documents contained any untrue
statement of a material fact or omitted to state a
material
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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 any
further documents so filed and incorporated by reference in the
Registration Statement, the Prospectus or the Time of Sale
Information, when such documents become effective or are filed with
the Commission, as the case may be, will conform in all material
respects to the requirements of the Securities Act or the Exchange
Act, as applicable, and will not contain any 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.
(f) Financial
Statements. The financial statements and the related notes
thereto of the Company and its consolidated subsidiaries included
or incorporated by reference in the Registration Statement, the
Time of Sale Information and the Prospectus comply in all material
respects with the applicable requirements of the Securities Act and
the Exchange Act, as applicable, and present fairly in all material
respects the financial position of the Company and its subsidiaries
as of the dates indicated and the results of their operations and
the changes in their cash flows for the periods specified; such
financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent
basis throughout the periods covered thereby, and the supporting
schedules included or incorporated by reference in the Registration
Statement present fairly in all material respects the information
required to be stated therein; and the other financial information
included or incorporated by reference in the Registration
Statement, the Time of Sale Information and the Prospectus has been
derived from the accounting records of the Company and its
subsidiaries and presents fairly in all material respects the
information shown thereby.
(g) No Material Adverse
Change. Since the date of the most recent financial statements
of the Company included or incorporated by reference in the
Registration Statement, the Time of Sale Information and the
Prospectus, (i) there has not been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries,
or any dividend or distribution of any kind declared, set aside for
payment, paid or made by the Company on any class of capital stock,
or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the business,
properties, management, financial position, stockholders’
equity, results of operations or prospects of the Company and its
subsidiaries taken as a whole; (ii) neither the Company nor
any of its subsidiaries has entered into any transaction or
agreement that is material to the Company and its subsidiaries
taken as a whole or incurred any liability or obligation, direct or
contingent, that is material to the Company and its subsidiaries
taken as a whole; and (iii) neither the Company nor any of its
subsidiaries has sustained 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 disturbance or
dispute or any action, order or decree of any court or arbitrator
or governmental or regulatory authority, except in each case as
otherwise disclosed in the Registration Statement, the Time of Sale
Information and the Prospectus.
(h) Organization and Good
Standing. The Company is duly organized and validly existing
under the laws of the state of Washington. Each of the
Company’s subsidiaries have been duly organized and are
validly existing and in good standing under the laws of their
respective
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jurisdictions of organization (to the
extent such jurisdictions recognize such concept, it being
understood that the state of Washington does not recognize such
concept), are duly qualified to do business and are in good
standing in each jurisdiction in which their respective ownership
or lease of property or the conduct of their respective businesses
requires such qualification, and have all power and authority
necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged, except where the failure
to be so qualified or have such power or authority would not,
individually or in the aggregate, reasonably be expected to have a
material adverse effect on the business, properties, management,
financial position, stockholders’ equity, results of
operations or prospects of the Company and its subsidiaries taken
as a whole or on the performance by the Company of its obligations
under the Securities (a “ Material Adverse Effect
”). The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than
(i) the subsidiaries listed in Exhibit 21.1 to the
Company’s Annual Report on Form 10-K for the year ended
December 31, 2006, (ii) SonoSite India Pte Limited,
(iii) SonoSite Italy S.r.l. and (iv) SonoSite Singapore
Pte. Ltd.
(i) Capitalization.
The Company has an authorized capitalization as set forth in the
Registration Statement, the Time of Sale Information and the
Prospectus under the heading “Capitalization”; all the
outstanding shares of capital stock of the Company have been duly
and validly authorized and issued and are fully paid and
non-assessable and are not subject to any pre-emptive or similar
rights; except as described in or expressly contemplated by each of
the Time of Sale Information and the Prospectus, there are no
outstanding rights (including, without limitation, pre-emptive
rights), warrants or options to acquire, or instruments convertible
into or exchangeable for, any shares of capital stock or other
equity interest in the Company or any of its subsidiaries, or any
contract, commitment, agreement, understanding or arrangement of
any kind relating to the issuance of any capital stock of the
Company or any such subsidiary, any such convertible or
exchangeable securities or any such rights, warrants or options;
the capital stock of the Company conforms in all material respects
to the description thereof contained in the Registration Statement,
the Time of Sale Information and the Prospectus; and all the
outstanding shares of capital stock or other equity interests of
each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable (except,
in the case of any foreign subsidiary, for directors’
qualifying shares and except as otherwise described in each of the
Registration Statement, the Time of Sale Information and the
Prospectus) and are owned directly or indirectly by the Company,
free and clear of any lien, charge, encumbrance, security interest,
restriction on voting or transfer or any other claim of any third
party.
(j) Stock Options.
Except as described in each of the Time of Sale Information and the
Prospectus, with respect to the stock options (the “ Stock
Options ”) granted pursuant to the stock-based
compensation plans of the Company and its subsidiaries (the “
Company Stock Plans ”), (i) each grant of a Stock
Option was made in accordance with the terms of the Company Stock
Plans, the Exchange Act and all other applicable laws and
regulatory rules or requirements, including the rules of The Nasdaq
Global Market and any other exchange on which Company securities
are traded, and (ii) each such grant was properly accounted
for in accordance with GAAP in the financial statements (including
the related notes) of the Company and disclosed in the
Company’s filings with the Commission in accordance with the
Exchange Act and all other applicable laws. The Company has not
knowingly granted, and there is no and has been no
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policy or practice of the Company of
granting, Stock Options prior to, or otherwise coordinating the
grant of Stock Options with, the release or other public
announcement of material information regarding the Company or its
subsidiaries or the results of their operations or prospects,
except as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(k) Due Authorization.
The Company has full right, power and authority to execute and
deliver this Agreement, the Securities and the Indenture
(collectively, the “ Transaction Documents ”)
and to perform its obligations hereunder and thereunder; each of
the Transaction Documents has been duly and properly authorized by
the Company and all action required to be taken for such due and
proper authorization and for the execution and delivery by the
Company of each of the Transaction Documents and the consummation
by it of the transactions contemplated thereby has been duly and
validly taken.
(l) Underwriting
Agreement. This Agreement has been executed and delivered by
the Company.
(m) Indenture. Upon
effectiveness of the Registration Statement was or will have been
duly qualified under and will conform in all material respects to
the requirements of the Trust Indenture Act and, when duly executed
and delivered in accordance with its terms by each of the parties
thereto, will constitute a valid and legally binding agreement of
the Company enforceable against the Company in accordance with its
terms, except as enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting the enforcement of
creditors’ rights generally or by equitable principles
relating to enforceability (collectively, the “
Enforceability Exceptions ”).
(n) The Securities.
The Securities have been duly authorized by the Company and, when
duly executed, authenticated, issued and delivered as provided in
the Indenture and paid for as provided herein, will be duly and
validly issued and outstanding and will constitute valid and
legally binding obligations of the Company enforceable against the
Company in accordance with their terms, subject to the
Enforceability Exceptions, and will be entitled to the benefits of
the Indenture.
(o) The Underlying
Securities. Upon issuance and delivery of the Securities in
accordance with the Agreement and the Indenture, the Securities
will be convertible at the option of the holder thereof into shares
of the Underlying Securities in accordance the terms of the
Securities; the Underlying Securities reserved for issuance upon
conversion of the Securities have been duly authorized and reserved
and, when issued upon conversion of the Securities in accordance
with the terms of the Securities, will be validly issued, fully
paid and non-assessable, and the issuance of the Underlying
Securities will not be subject to any preemptive or similar
rights.
(p) Descriptions of the
Transaction Documents. Each Transaction Document conforms in
all material respects to the description thereof contained in each
of the Registration Statement, the Time of Sale Information and the
Prospectus.
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(q) No Violation or
Default. Neither the Company nor any of its subsidiaries is
(i) in violation of its charter or by-laws or similar
organizational documents; (ii) 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 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; or (iii) in violation of any law
or statute or any judgment, order, rule or regulation of any court
or arbitrator or governmental or regulatory authority, except, in
the case of clauses (ii) and (iii) above, for any such
default or violation that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
(r) No Conflicts. The
execution, delivery and performance by the Company of each of the
Transaction Documents, the issuance and sale of the Securities
(including the issuance of the Underlying Securities upon
conversion thereof) and compliance by the Company with the terms
thereof and the consummation of the transactions contemplated by
the Transaction Documents will not (i) 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 property or assets of
the Company or any of its subsidiaries pursuant to, any indenture,
mortgage, deed of trust, loan agreement 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 the violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except, in the case of
clauses (i) and (iii) above, for any such conflict,
breach, violation or default that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
(s) No Consents
Required. No consent, approval, authorization, order,
registration or qualification of or with any court or arbitrator or
governmental or regulatory authority is required for the execution,
delivery and performance by the Company of each of the Transaction
Documents, the issuance and sale of the Securities (including the
issuance of the Underlying Securities upon conversion thereof) and
compliance by the Company with the terms thereof and the
consummation of the transactions contemplated by the Transaction
Documents, except for the registration of the Securities under the
Securities Act and such consents, approvals, authorizations, orders
and registrations or qualifications as may be required under
applicable state securities laws or the rules of the NASD in
connection with the purchase and distribution of the Securities by
the Underwriters.
(t) Legal Proceedings.
Except as described in each of the Registration Statement, the Time
of Sale Information and the Prospectus, there are no legal,
governmental or regulatory investigations, actions, suits or
proceedings pending to which the Company or any of its subsidiaries
is a party or to which any property of the Company or any of its
subsidiaries is subject that, individually or in the aggregate, if
determined adversely to the Company or any of
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its subsidiaries, could reasonably be
expected to have a Material Adverse Effect or materially and
adversely affect the ability of the Company to perform its
obligations under the Transaction Documents; no such
investigations, actions, suits or proceedings are threatened or, to
the best knowledge of the Company, contemplated by any governmental
or regulatory authority or threatened by others; and (i) there
are no current or pending legal, governmental or regulatory
actions, suits or proceedings that are required under the
Securities Act to be described in the Registration Statement or the
Prospectus that are not so described in each of the Registration
Statement, the Time of Sale Information and the Prospectus and
(ii) there are no statutes, regulations or contracts or other
documents that are required under the Securities Act to be filed as
exhibits to the Registration Statement or described in the
Registration Statement or the Prospectus that are not so filed as
exhibits to the Registration Statement or described in each of the
Registration Statement, the Time of Sale Information and the
Prospectus.
(u) Independent
Accountants. KPMG LLP, who have certified certain financial
statements of the Company and its subsidiaries, is an independent
registered public accounting firm with respect to the Company and
its subsidiaries within the applicable rules and regulations
adopted by the Commission and the Public Company Accounting
Oversight Board (United States) and as required by the Securities
Act.
(v) Title to Real and
Personal Property. Except as described in each of the
Registration Statement, the Time of Sale Information and the
Prospectus, the Company and its subsidiaries have good and
marketable title in fee simple to, or have valid rights to lease or
otherwise use, all items of real and personal property that are
material to the respective businesses of the Company taken as a
whole and its subsidiaries, in each case free and clear of all
liens, encumbrances, claims and defects and imperfections of title
except those that (i) do not materially interfere with the use
made and proposed to be made of such property by the Company and
its subsidiaries or (ii) could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse
Effect.
(w) Intellectual
Property.
(i) The Company and its
subsidiaries own or possess adequate rights to use or can acquire
on reasonable terms all material patents, patent applications,
inventions, trademarks, service marks, trade names, trademark
registrations, service mark registrations, domain names,
copyrights, licenses, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) and other intellectual property
necessary for the conduct of their respective businesses (“
Intellectual Property ”); and to the Company’s
knowledge the conduct of their respective businesses will not
conflict in any material respect with any such rights of others;
and, except as described in each of the Registration Statement, the
Time of Sale Information and the Prospectus, the Company and its
subsidiaries have not received any notice of any claim of
infringement or conflict with any such rights of others that would
reasonably be expected to be material to the Company and its
subsidiaries, taken as a whole. To the Company’s knowledge,
there are no valid and enforceable rights of third parties to the
Intellectual Property that are or would be infringed by the
business currently
- 10 -
conducted by the Company and
its subsidiaries. All Intellectual Property owned by the Company or
its subsidiaries is free and clear of all liens, encumbrances,
defects or other restrictions, except as would not, singly or in
the aggregate, reasonably be expected to have a Material Adverse
Effect; and the Company is not aware of any reasonable basis for a
finding that any of the Intellectual Property is invalid or
unenforceable. The Company and its subsidiaries have taken all
actions with governmental authorities necessary to maintain and
protect all registered Intellectual Property owned by the Company
or its subsidiaries, including payment of applicable maintenance
fees, filing of applicable statements of use, timely response to
office actions, and disclosure of any required
information.
(ii) The Company and its
subsidiaries are in compliance with all applicable federal, state,
local and foreign laws, rules, regulations, requirements, decisions
and orders relating to intellectual property.
(iii) Neither the Company nor
any of its subsidiaries is subject to any judgment, order, writ,
injunction or decree of any court or any federal, state, local,
foreign or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, or any
arbitrator, nor has it entered into or is it a party to any
contract, in each case which materially restricts or impairs their
use of any Intellectual Property.
(iv) The Company and its
subsidiaries have taken all reasonable necessary actions to protect
their rights in confidential information and trade secrets that are
material to their respective businesses, protect any confidential
information provided to them by any other person, and obtain
ownership of all works of authorship and inventions made by its
employees, consultants and contractors and which are material to
the Company business. All founders, key employees and any other
employees involved in the development of software for the Company
that is material to the Company’s business have signed
confidentiality and invention assignment agreements with the
Company.
(x) No Undisclosed
Relationships. No relationship, direct or indirect, exists
between or among the Company or any of its subsidiaries, on the one
hand, and the directors, officers, stockholders, customers,
suppliers or other affiliates of the Company or any of its
subsidiaries, on the other, that is required by the Securities Act
to be described in the Registration Statement and the Prospectus
and that is not so described in each of such documents and in the
Time of Sale Information.
(y) Investment Company
Act. The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Registration Statement, the
Time of Sale Information and the Prospectus, will not be required
to register as an “investment company” or an entity
“controlled” by an “investment company”
within the meaning of the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the “ Investment Company Act
”).
- 11 -
(z) Taxes. The Company
and its subsidiaries have paid all material federal, state, local
and foreign taxes and filed all federal and material state or
foreign tax returns required to be paid or filed through the date
hereof; and except as otherwise disclosed in each of the
Registration Statement, the Time of Sale Information and the
Prospectus, there is no tax deficiency that has been, or could
reasonably be expected to be, asserted against the Company or any
of its subsidiaries or any of their respective properties or assets
except for any tax deficiencies that would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect.
(aa) Licenses and
Permits. The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by, and have
made all declarations and filings with, the appropriate federal,
state, local or foreign governmental or regulatory authorities that
are necessary for the ownership or lease of their respective
properties or the conduct of their respective businesses as
described in the Registration Statement, the Time of Sale
Information and the Prospectus, except where the failure to possess
or make the same would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and
except as described in each of the Registration Statement, the Time
of Sale Information and the Prospectus, neither the Company nor any
of its subsidiaries has received notice of any revocation or
modification of any such license, certificate, permit or
authorization or has any reason to believe that any such license,
certificate, permit or authorization will not be renewed in the
ordinary course.
(bb) No Labor
Disputes. No labor disturbance by or dispute with employees of
the Company or any of its subsidiaries exists or, to the best
knowledge of the Company, is contemplated or threatened and the
Company is not aware of any existing or imminent labor disturbance
by, or dispute with, the employees of any of its or its
subsidiaries’ principal suppliers, contractors or customers,
except as would not reasonably be expected to have a Material
Adverse Effect.
(cc) Compliance With
Environmental Laws. (i) The Company and its subsidiaries
(x) are, and at all prior times were, in compliance with any
and all applicable federal, state, local and foreign laws, rules,
regulations, requirements, decisions and orders relating to the
protection of human health and safety, the environment, natural
resources or hazardous or toxic substances or wastes, pollutants or
contaminants (collectively, “ Environmental Laws
”); (y) have received and are in compliance with all
permits, licenses, certificates or other authorizations or
approvals required of them under applicable Environmental Laws to
conduct their respective businesses; and (z) have not received
notice of any actual or potential liability under or relating to
any Environmental Laws, including for the investigation or
remediation of any disposal or release of hazardous or toxic
substances or wastes, pollutants or contaminants, and have no
knowledge of any event or condition that would reasonably be
expected to result in any such notice, (ii) there are no costs
or liabilities associated with Environmental Laws of or relating to
the Company or its subsidiaries, except in the case of each of
(cc)(x) and (cc)(y) above, for any such failure to comply, or
failure to receive required permits, licenses or approvals, or cost
or liability, as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and
(iii) except as described in each of the Time of Sale
Information and the Prospectus, (x) there are no proceedings
that are pending, or that are known to be contemplated, against the
Company
- 12 -
or any of its subsidiaries under any
Environmental Laws in which a governmental entity is also a party,
other than such proceedings regarding which it is reasonably
believed no monetary sanctions of $100,000 or more will be imposed,
(y) the Company and its subsidiaries are not aware of any
issues regarding compliance with Environmental Laws, or liabilities
or other obligations under Environmental Laws or concerning
hazardous or toxic substances or wastes, pollutants or
contaminants, that could reasonably be expected to have a material
effect on the capital expenditures, earnings or competitive
position of the Company and its subsidiaries and (z) none of
the Company and its subsidiaries anticipates material capital
expenditures relating to any Environmental Laws.
(dd) Compliance With
ERISA. (i) Each employee benefit plan, within the meaning
of Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended (“ ERISA ”), for which the
Company or any member of its “Controlled Group”
(defined as any organization which is a member of a controlled
group of corporations within the meaning of Section 414 of the
Internal Revenue Code of 1986, as amended (the “ Code
”)) would have any liability (each, a “ Plan
”) has been maintained in compliance with its terms and the
requirements of any applicable statutes, orders, rules and
regulations, including but not limited to ERISA and the Code;
(ii) no prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the Code, has
occurred with respect to any Plan excluding transactions effected
pursuant to a statutory or administrative exemption; (iii) for
each 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, whether or not waived, has occurred or is reasonably expected
to occur; (iv) the fair market value of the assets of each
Plan exceeds the present value of all benefits accrued under such
Plan (determined based on those assumptions used to fund such
Plan); (v) no “reportable event” (within the
meaning of Section 4043(c) of ERISA) has occurred or is
reasonably expected to occur; and (vi) neither the Company nor
any member of the Controlled Group has incurred, nor reasonably
expects to incur, any liability under Title IV of ERISA (other than
contributions to the Plan or premiums to the PBGC, in the ordinary
course and without default) in respect of a Plan (including a
“multiemployer plan”, within the meaning of
Section 4001(a)(3) of ERISA).
(ee) Disclosure
Controls . The Company and its subsidiaries maintain an
effective system of “disclosure controls and
procedures” (as defined in Rule 13a-15(e) of the Exchange
Act) that is designed to ensure that information required to be
disclosed by the Company in reports that it files or submits under
the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the Commission’s rules
and forms, including controls and procedures designed to ensure
that such information is accumulated and communicated to the
Company’s management as appropriate to allow timely decisions
regarding required disclosure. The Company and its subsidiaries
have carried out evaluations of the effectiveness of their
disclosure controls and procedures as required by Rule 13a-15 of
the Exchange Act.
(ff) Accounting
Controls. The Company and its subsidiaries maintain systems of
“internal control over financial reporting” (as defined
in Rule 13a-15(f) of the Exchange Act) that comply with the
requirements of the Exchange Act and have been designed by, or
under the
- 13 -
supervision of, their respective
principal executive and principal financial officers, or persons
performing similar functions, to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles,
including, but not limited to internal accounting controls
sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with
management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Except
as disclosed in each of the Registration Statement, the Time of
Sale Information and the Prospectus there are (i) no material
weaknesses in the Company’s internal controls and
(ii) no significant deficiencies in the Company’s
internal controls that are required to be described in any of the
Registration Statement, the Time of Sale Information or the
Prospectus.
(gg) Insurance. The
Company and its subsidiaries have insurance covering their
respective properties, operations, personnel and businesses,
including business interruption insurance, which insurance is in
amounts and insures against such losses and risks as are adequate
to protect the Company and its subsidiaries and their respective
businesses; and neither the Company nor any of its subsidiaries has
(i) received notice from any insurer or agent of such insurer
that capital improvements or other expenditures are required or
necessary to be made in order to continue such insurance or
(ii) any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires
or to obtain similar coverage at reasonable cost from similar
insurers as may be necessary to continue its business.
(hh) No Unlawful
Payments. Neither the Company nor any of its subsidiaries nor,
to the best 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
Foreign Corrupt Practices Act of 1977; or (iv) made any bribe,
rebate, payoff, influence payment, kickback or other unlawful
payment.
(ii) Compliance with Money
Laundering Laws . 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 best
knowledge of the Company, threatened.
- 14 -
(jj) Compliance with
OFAC. None of the Company, any of its subsidiaries or, 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. Department of the Treasury (“
OFAC ”); and the Company will not directly or
indirectly use the proceeds of the offering of the Securities
hereunder, 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.
(kk) No Restrictions on
Subsidiaries . No subsidiary of the Company is currently
prohibited, directly or indirectly, under any agreement or other
instrument to which it is a party or is subject, 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 properties or assets to
the Company or any other subsidiary of the Company.
(ll) No Broker’s
Fees. Neither the Company nor any of its subsidiaries is a
party to any contract, agreement or understanding with any person
(other than this Agreement) that would give rise to a valid claim
against the Company or any of its subsidiaries or any Underwriter
for a brokerage commission, finder’s fee or like payment in
connection with the offering and sale of the Securities.
- 15 -
(mm) Regulatory Matters;
FDA . The Company has all necessary consents, authorizations,
approvals, orders, certificates and permits of and from, and has
made all required declarations and filings with, all federal,
state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals,
to own, lease, license and use its properties and assets and to
conduct its business in the manner described in the Time of Sale
Information and the Prospectus, including, without limitation, all
necessary U.S. Food and Drug Administration (“ FDA
”) and applicable foreign regulatory agency approvals, except
as disclosed in each of the Time of Sale Information and the
Prospectus, and except to the extent that the failure to obtain
such consents, authorizations, approvals, orders, certificates or
permits or to make such declarations or filings would not
reasonably be expected to have a Material Adverse Effect. The
Company has not received any notice of proceedings relating to the
revocation or modification of any such consent, authorization,
approval, order, certificate or permit that, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would reasonably be expected to have a Material Adverse
Effect, except as described in each of the Time of Sale Information
and the Prospectus. All the operations of the Company and, to the
Company’s knowledge, all of the manufacturing facilities and
operations of the Company’s suppliers of product components
manufactured in or imported into the United States are in
compliance in all material respects with applicable rules,
regu
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