2,250,000 Shares
ALMOST FAMILY, INC.
Common Stock
UNDERWRITING AGREEMENT
Exhibit 1.1
April 11, 2008
JEFFERIES & COMPANY, INC.
520 Madison Avenue
New York, New York 10022
Ladies and Gentlemen:
Introductory. Almost
Family, Inc., a Delaware corporation (the “
Company ”),
proposes to issue and sell to Jefferies & Company, Inc.
(“ Jefferies ” or the “ Underwriter ”) an aggregate of
2,250,000 shares of its common stock (the “
Common Stock ”),
par value $0.10 per share (the “ Firm Shares ”). In addition, the Company has granted to the
Underwriter an option to purchase up to an additional 337,500
shares (the “ Optional
Shares ”) of Common Stock as
provided in Section 2. The Firm Shares and, if and to the extent
such option is exercised, the Optional Shares are collectively
called the “ Offered
Shares .”
The Company has prepared and filed with the
Securities and Exchange Commission (the “
Commission ”) a
shelf registration statement on Form S-3 (File
No. 333-143459), which contains a form of prospectus (the
“ Base Prospectus
”) to be used in connection with the public
offering and sale of the Offered Shares. Such registration
statement, as amended, including the financial statements, exhibits
and schedules thereto, in the form in which it was declared
effective by the Commission under the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder
(collectively, the “ Securities
Act ”), including all documents
incorporated or deemed to be incorporated by reference therein and
any information deemed to be a part thereof at the time of
effectiveness pursuant to Rule 430(B) under the Securities Act
or the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder (collectively, the
“ Exchange Act
”), is called the “
Registration Statement .” Any registration statement filed by the Company
pursuant to Rule 462(b) under the Securities Act is called the
“ Rule 462(b) Registration
Statement ,” and from and after the
date and time of filing of the Rule 462(b) Registration Statement
the term “Registration Statement” shall include the
Rule 462(b) Registration Statement. Such prospectus, in the form
first used by the Underwriter to confirm sales of the Offered
Shares or in the form first made available to the Underwriter by
the Company to meet requests of purchasers pursuant to Rule 173
under the Securities Act, is called the “
Prospectus .” The
preliminary prospectus supplement dated March 28, 2008 describing
the Offered Shares and the offering thereof, together with the Base
Prospectus, is called the “ Preliminary Prospectus ,” and
the Preliminary Prospectus and any other preliminary prospectus
supplement to the Base Prospectus that describes the Offered Shares
and the offering thereof and is used prior to the filing of the
Prospectus (as defined below), together with the Base Prospectus,
is called a “ preliminary
prospectus .” As used herein, the
term “ Prospectus
” shall mean the final prospectus supplement
to the Base Prospectus that describes the Offered Shares and
the
offering thereof (the “ Final Prospectus Supplement ”),
together with the Base Prospectus, in the form first used by the
Underwriter to confirm sales of the Offered Sharesor in the form
first made available to the Underwriter by the Company to meet
requests of purchasers pursuant to Rule 173 under the Securities
Act. As used herein, “ Applicable
Time ” is 9:00 am (New York time)
on April 11, 2008. As used herein, “ free writing prospectus ” has
the meaning set forth in Rule 405 under the Securities Act, and
“ Time of Sale Prospectus
” means the preliminary prospectus, as amended
or supplemented immediately prior to the Applicable Time, together
with the free writing prospectuses, if any, identified in
Schedule A hereto, and each “road show” (as
defined in Rule 433 under the Securities Act), if any, related to
the offering of the Shares contemplated hereby that is a
“written communication” (as defined in Rule 405 under
the Securities Act) (each such road show, a “
Road Show ”). As
used herein, the terms “Registration Statement,”
“Rule 462(b) Registration Statement”,
“Preliminary Prospectus” “preliminary
prospectus,” “Base Prospectus,” “Time of
Sale Prospectus” and “Prospectus” shall include
the documents incorporated and deemed to be incorporated by
reference therein. All references in this Agreement to the
Registration Statement, the 462(b) Registration Statement, any
Preliminary Prospectus, a preliminary prospectus, the Base
Prospectus or the Prospectus, or any amendments or supplements to
any of the foregoing, shall include any copy thereof filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval System (“ EDGAR
”).
All references in this Agreement to financial
statements and schedules and other information which are
“ contained ,” “ included
” or “ stated ” in the Registration
Statement, the Rule 462(b) Registration Statement, the Preliminary
Prospectus, any preliminary prospectus, the Base Prospectus, the
Time of Sale Prospectus or the Prospectus (and all other references
of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is
or is deemed to be incorporated by reference in the Registration
Statement or the Prospectus, as the case may be; and all references
in this Agreement to amendments or supplements to the Registration
Statement, the Rule 462(b) Registration Statement, the Preliminary
Prospectus, any preliminary prospectus, the Base Prospectus, the
Time of Sale Prospectus or the Prospectus, as the case may be, and
all references in this Agreement to amendments or supplements to
the Registration Statement, the Rule 462(b) Registration Statement,
the Preliminary Prospectus, any preliminary prospectus, the Base
Prospectus, the Time of Sale Prospectus or the Prospectus shall be
deemed to mean and include the filing of any document under the
Exchange Act which is or is deemed to be incorporated by reference
in the Registration Statement, the Rule 462(b) Registration
Statement, the Preliminary Prospectus, any preliminary prospectus,
the Base Prospectus, the Time of Sale Prospectus or the Prospectus,
as the case may be.
The Company hereby confirms its agreements with the
Underwriter as follows:
Section 1. Representations and Warranties of the
Company . The Company hereby represents,
warrants and covenants to the Underwriter, as of the date of this
Agreement, as of the First Closing Date (as hereinafter defined)
and as of each Option Closing Date (as hereafter defined), if any,
and covenants with the Underwriter, as follows:
(a) Compliance with
Registration Requirements. The Registration Statement and any
Rule 462(b) Registration Statement have been declared
effective by the Commission under the Securities Act. The Company
has complied to the Commission’s satisfaction with all
requests of the Commission for additional or supplemental
information. No stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration
Statement is in effect and no proceedings for such purpose have
been instituted or are
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pending or, to the best knowledge of the Company,
are contemplated or threatened by the Commission.
Each preliminary prospectus and the Prospectus when
filed complied in all material respects with the Securities Act
and, if filed by electronic transmission pursuant to EDGAR (except
as may be permitted by Regulation S-T under the Securities
Act), was identical to the copy thereof delivered to the
Underwriter for use in connection with the offer and sale of the
Offered Shares. Each of the Registration Statement, any
Rule 462(b) Registration Statement and any post-effective
amendment thereto, at the time it became effective and at all
subsequent times, complied and will comply in all material respects
with the Securities 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 to make the statements
therein not misleading. As of the Applicable Time, the Time of Sale
Prospectus did not, and at the time of each sale of the Offered
Shares and at the First Closing Date (as defined in Section 2(b)),
the Time of Sale Prospectus, as then amended or supplemented by the
Company, if applicable, will not, contain any untrue statement of a
material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading. The Prospectus, as amended or
supplemented, as of its date and at all subsequent times, did not
and 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. The representations and warranties
set forth in the three immediately preceding sentences do not apply
to statements in or omissions from the Registration Statement, any
Rule 462(b) Registration Statement, or any post-effective
amendment thereto, or the Prospectus or the Time of Sale
Prospectus, or any amendments or supplements thereto, made in
reliance upon and in conformity with information relating to the
Underwriter furnished to the Company in writing by the Underwriter
expressly for use therein, it being understood and agreed that the
only such information furnished by the Underwriter to the Company
consists of the information described in Section 9(b) below. There
are no contracts or other documents required to be described in the
Time of Sale Prospectus or the Prospectus or to be filed as
exhibits to the Registration Statement which have not been
described or filed as required.
The Company is not an “ineligible
issuer” in connection with the offering of the Offered Shares
pursuant to Rules 164, 405 and 433 under the Securities Act. Any
free writing prospectus that the Company is required to file
pursuant to Rule 433(d) under the Securities Act has been, or will
be, filed with the Commission in accordance with the requirements
of the Securities Act. Each free writing prospectus that the
Company has filed, or is required to file, pursuant to Rule 433(d)
under the Securities Act or that was prepared by or behalf of or
used or referred to by the Company complies or will comply in all
material respects with the requirements of Rule 433 under the
Securities Act including timely filing with the Commission or
retention where required and legending, and each such free writing
prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Offered
Shares did not, does not and will not include any information that
conflicted, conflicts with or will conflict with the information
contained in the Registration Statement, the Prospectus or any
preliminary prospectus, including any document incorporated by
reference therein. Except for the free writing prospectuses, if
any, identified in Schedule A hereto, and electronic road shows, if
any, furnished to you before first use, the Company has not
prepared, used or referred to, and will not, without your prior
consent, prepare, use or refer to, any free writing
prospectus.
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(b) Offering Materials
Furnished to Underwriters. The Company has delivered to the
Underwriter one complete copy of the Registration Statement, each
amendment thereto and any Rule 462(b) Registration Statement and of
each consent and certificate of experts filed as a part thereof and
preliminary prospectuses, the Time of Sale Prospectus, the
Prospectus, as amended or supplemented, and any free writing
prospectus reviewed and consented to by the Underwriter, in such
quantities and at such places as the Underwriter has reasonably
requested for each of the Underwriter.
(c) Distribution of
Offering Material By the Company. The Company has not distributed
and will not distribute, prior to the later of (i) the expiration
or termination of the option granted to the Underwriter in Section
2 and (ii) the completion of the Underwriter’s distribution
of the Offered Shares, any offering material in connection with the
offering and sale of the Offered Shares other than a preliminary
prospectus, the Time of Sale Prospectus, the Prospectus, any free
writing prospectus reviewed and consented to by the Underwriter, or
the Registration Statement.
(d) The Underwriting
Agreement. This Agreement has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the
Company.
(e) Authorization of
the Offered Shares. The Offered Shares have been duly authorized
for issuance and sale pursuant to this Agreement and, when issued
and delivered by the Company pursuant to this Agreement, will be
validly issued, fully paid and nonassessable, and the issuance and
sale of the Offered Shares is not subject to any preemptive rights,
rights of first refusal or other similar rights to subscribe for or
purchase the Offered Shares.
(f) No Applicable
Registration or Other Similar Rights. There are no persons with
registration or other similar rights to have any equity or debt
securities registered for sale under the Registration Statement or
included in the offering contemplated by this Agreement.
(g) No Material Adverse
Change. Except as otherwise disclosed in the Time of Sale
Prospectus, subsequent to the respective dates as of which
information is given in the Time of Sale Prospectus: (i)
there has been no material adverse change, or any development that
could reasonably be expected to result in a material adverse
change, in the condition, financial or otherwise, or in the
earnings, business, operations or prospects, whether or not arising
from transactions in the ordinary course of business, of the
Company and its subsidiaries, considered as one entity (any such
change, a “ Material Adverse
Change ”); (ii) the Company
and its subsidiaries, considered as one entity, have not incurred
any material liability or obligation, indirect, direct or
contingent, not in the ordinary course of business nor entered into
any material transaction or agreement not in the ordinary course of
business; and (iii) there has been no dividend or distribution
of any kind declared, paid or made by the Company or, except for
dividends paid to the Company or other subsidiaries, any of its
subsidiaries on any class of capital stock or repurchase or
redemption by the Company or any of its subsidiaries of any class
of capital stock.
(h) Independent
Accountants. Each of Ernst & Young LLP and Rivero, Gordimer and
Company, PA has expressed opinions with respect to the financial
statements (which term as used in this Agreement includes the
related notes thereto) filed with the Commission as a part of the
Registration Statement and included in the Preliminary Prospectus,
the Prospectus and Time of Sale Prospectus (each, an “
Applicable Prospectus ”
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and collectively, the “ Applicable Prospectuses ”), and
each of Ernst & Young LLP and Rivero, Gordimer and Company, PA
are (i) independent public or certified public accountants as
required by the Securities Act and the Exchange Act and
(ii) in compliance with the applicable requirements relating
to the qualification of accountants under Rule 2-01 of Regulation
S-X, and Ernst & Young LLP is a registered public accounting
firm as defined by the Public Company Accounting Oversight Board
(the “ PCAOB ”) whose registration has not been suspended or revoked
and who has not requested such registration to be
withdrawn.
(i) Preparation of the
Financial Statements. The financial statements filed with the
Commission as a part of the Registration Statement and included in
the Preliminary Prospectus, the Time of Sale Prospectus and the
Prospectus present fairly the consolidated financial position of
the Company and its subsidiaries as of and at the dates indicated
and the results of their operations and 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 involved, except as may
be expressly stated in the related notes thereto. No other
financial statements or supporting schedules are required to be
included in the Registration Statement or any Applicable
Prospectus. The financial data set forth in each Applicable
Prospectus under the captions “Prospectus Supplement
Summary--Summary Consolidated Financial Data,” and
“Capitalization” fairly present the information set
forth therein on a basis consistent with that of the audited
financial statements contained in the Registration Statement and
each Applicable Prospectus. The pro forma consolidated
financial statements of the Company and its subsidiaries and the
related notes thereto included under the caption “Prospectus
Summary--Summary Consolidated Financial Data” and elsewhere
in the Prospectus and in the Registration Statement present fairly
the information contained therein, have been prepared in accordance
with the Commission’s rules and guidelines with respect to
pro forma financial statements and have been properly
presented on the bases 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. No person who has been suspended
or barred from being associated with a registered public accounting
firm, or who has failed to comply with any sanction pursuant to
Rule 5300 promulgated by the PCAOB, has participated in or
otherwise aided the preparation of, or audited, the financial
statements, supporting schedules or other financial data filed with
the Commission as a part of the Registration Statement and included
in any Applicable Prospectus.
(j) Company’s
Accounting System. The Company and each of its subsidiaries make
and keep accurate books and records and maintain a system of
internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance
with management’s general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and
(iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is
taken with respect to any differences. There has not been and
is no material weakness in the Company’s internal
control over financial reporting (whether or not remediated) and
since December 31, 2007, there has been no change in the
Company’s internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect,
the Company’s internal control over financial
reporting.
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(k) Incorporation and
Good Standing of the Company and its Subsidiaries. Each of the
Company and its subsidiaries has been duly incorporated or
organized, as the case may be, and is validly existing as a
corporation, partnership or limited liability company, as
applicable, in good standing under the laws of the jurisdiction of
its incorporation or organization and has the power and authority
(corporate or other) to own, lease and operate its properties and
to conduct its business as described in each Applicable Prospectus
and, in the case of the Company, to enter into and perform its
obligations under this Agreement. Each of the Company and each
subsidiary is duly qualified as a foreign corporation, partnership
or limited liability company, as applicable, to transact business
and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where
failure so to qualify or to be in good standing would not result in
a Material Adverse Change. All of the issued and outstanding
capital stock or other equity or ownership interests of each
subsidiary have been duly authorized and validly issued, are fully
paid and nonassessable and are owned by the Company, directly or
through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or adverse claim. 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 to the Company’s Annual Report on Form
10-K for the year ended December 31, 2007 and (ii) such other
entities omitted from Exhibit 21 which, when such omitted entities
are considered in the aggregate as a single subsidiary, would not
constitute a “significant subsidiary” within the
meaning of Rule 1-02(w) of Regulation S-X.
(l) Capitalization and
Other Capital Stock Matters. The authorized, issued and outstanding
capital stock of the Company is as set forth in each Applicable
Prospectus under the caption “Capitalization” (other
than for subsequent issuances, if any, pursuant to employee benefit
plans described in the Time of Sale Prospectus or upon the exercise
of outstanding options described in each Applicable Prospectus).
The Shares (including the Offered Shares) conform in all material
respects to the description thereof contained in the Time of Sale
Prospectus. All of the issued and outstanding Shares have been duly
authorized and validly issued, are fully paid and nonassessable
and, to the knowledge of the Company, have been issued in
compliance with federal and state securities laws. None of the
outstanding Shares was issued in violation of any preemptive
rights, rights of first refusal or other similar rights to
subscribe for or purchase securities of the Company. There are no
authorized or outstanding options, warrants, preemptive rights,
rights of first refusal or other rights to purchase, or equity or
debt securities convertible into or exchangeable or exercisable
for, any capital stock of the Company or any of its subsidiaries
other than those accurately described in each Applicable
Prospectus. The description of the Company’s stock option,
stock bonus and other stock plans or arrangements, and the options
or other rights granted thereunder, set forth in each Applicable
Prospectus accurately and fairly presents the information required
to be shown with respect to such plans, arrangements, options and
rights.
Except as described in each Applicable Prospectus,
the Company has not sold or issued any Shares during the six-month
period preceding the date of the Prospectus, including any sales
pursuant to Rule 144A under, or Regulations D or S of, the
Securities Act other than Shares issued pursuant to employee
benefit plans, qualified stock options plans or other employee
compensation plans or pursuant to outstanding options, rights or
warrants.
(m) Stock Exchange
Listing. The Shares are registered pursuant to Section 12(b) of the
Exchange Act and are listed on the Nasdaq Global Market, and the
Company has taken no action designed to, or likely to have the
effect of, terminating the
6
registration of the Shares under the Exchange Act or
delisting the Shares from the Nasdaq Global Market, nor has the
Company received any notification that the Commission or the Nasdaq
Global Market is contemplating terminating such registration or
listing.
(n) Non-Contravention
of Existing Instruments; No Further Authorizations or Approvals
Required. Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, partnership agreement or
operating agreement or similar organizational document, as
applicable, or (ii) is in default (or, with the giving of notice or
lapse of time, would be in default) (“ Default ”) under any indenture,
mortgage, loan or credit agreement, note, contract, franchise,
lease or other instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound
(including, without limitation, any credit agreement, indenture,
pledge agreement, security agreement or other instrument or
agreement evidencing, guaranteeing, securing or relating to
indebtedness of the Company or any of its subsidiaries ), or
to which any of the property or assets of the Company or any of its
subsidiaries is subject (each, an “ Existing Instrument ”), except
for such Defaults as would not, individually or in the aggregate,
result in a Material Adverse Change. The Company’s execution,
delivery and performance of this Agreement, consummation of the
transactions contemplated hereby and by each Applicable Prospectus
and the issuance and sale of the Offered Securities (i) have
been duly authorized by all necessary corporate action and will not
result in any violation of the provisions of the charter or
by-laws, partnership agreement or operating agreement or similar
organizational document of the Company or any subsidiary, as
applicable, (ii) will not conflict with or constitute a breach
of, or Default or a Debt Repayment Triggering Event (as defined
below) 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, or require the consent of any
other party to, any Existing Instrument and (iii) will not
result in any violation of any law, administrative regulation or
administrative or court decree applicable to the Company or any
subsidiary. No consent, approval, authorization or other order of,
or registration or filing with, any court or other governmental or
regulatory authority or agency, is required for the Company’s
execution, delivery and performance of this Agreement and
consummation of the transactions contemplated hereby and by each
Applicable Prospectus, except such as have been obtained or made by
the Company and are in full force and effect under the Securities
Act, applicable state securities or blue sky laws. As used herein,
a “ Debt Repayment Triggering
Event ” means any event or
condition which gives, or with the giving of notice or lapse of
time would give, the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such
holder’s behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by
the Company or any of its subsidiaries.
(o) No Material Actions
or Proceedings. There are no legal or governmental actions, suits
or proceedings pending or, to the best of the Company’s
knowledge, threatened (i) against or affecting the Company or
any of its subsidiaries, (ii) which have as the subject
thereof any officer or director of, or property owned or leased by,
the Company or any of its subsidiaries or (iii) relating to
environmental or discrimination matters, where in any such case (A)
any such action, suit or proceeding, if determined adversely to the
Company, such subsidiary or such officer or director, would
reasonably be expected to result in a Material Adverse Change or
adversely affect the consummation of the transactions contemplated
by this Agreement or (B) any such action, suit or proceeding is or
would be material in the context of the sale of Shares. No material
labor dispute with the employees of the Company or any of its
subsidiaries, or with the employees of any principal supplier,
manufacturer, customer or contractor of the Company, exists or, to
the best of the Company’s knowledge, is threatened or
imminent.
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(p) Intellectual
Property Rights. The Company and its subsidiaries own or possess
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 their businesses as now conducted; and the
expected expiration of any of such Intellectual Property Rights
would not result in a Material Adverse Change. Neither the Company
nor any of its subsidiaries has received any notice of infringement
or conflict with asserted Intellectual Property Rights of others.
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 are not described therein. The Time of Sale
Prospectus contains in all material respects the same description
of the matters set forth in the preceding sentence contained in the
Prospectus. None of the technology employed by the Company or any
of its subsidiaries has been obtained or is being used by the
Company or any of its subsidiaries in violation of any contractual
obligation binding on the Company or any of its subsidiaries or, to
the Company’s knowledge, any of its or its
subsidiaries’ officers, directors or employees or otherwise
in violation of the rights of any persons.
(q) All Necessary
Permits, etc. Except as would not result in a Material Adverse
Change, the Company and each of its subsidiaries possess such valid
and current certificates, authorizations or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies
necessary to conduct their respective businesses, and neither the
Company nor any subsidiary has received any notice of proceedings
relating to the revocation or modification of, or non-compliance
with, any such certificate, authorization or permit.
(r) Title to
Properties. Except as would not result in a Material Adverse
Change, the Company and each of its subsidiaries has good and
marketable title to all of the real and personal property and other
assets reflected as owned in the financial statements referred to
in Section 1(i) above, in each case free and clear of any
security interests, mortgages, liens, encumbrances, equities,
adverse claims and other defects. The real property, improvements,
equipment and personal property held under lease by the Company or
any subsidiary are held under valid and enforceable leases, with
such exceptions as are not material and do not materially interfere
with the use made or proposed to be made of such real property,
improvements, equipment or personal property by the Company or such
subsidiary.
(s) Tax Law Compliance.
The Company and its consolidated subsidiaries have filed all
necessary federal, state and foreign income and franchise tax
returns or have properly requested extensions thereof and have paid
all taxes required to be paid by any of them and, if due and
payable, any related or similar assessment, fine or penalty levied
against any of them except as may be being contested in good faith
and by appropriate proceedings. The Company has made adequate
charges, accruals and reserves in the applicable financial
statements referred to in Section 1(i) above in respect of all
federal, state and foreign income and franchise taxes for all
periods as to which the tax liability of the Company or any of its
consolidated subsidiaries has not been finally
determined.
(t) Company Not an
“Investment Company”. The Company has been advised of
the rules and requirements under the Investment Company Act
of 1940, as amended (the “ Investment Company Act ”). The
Company is not, and will not be, either after receipt of payment
for the Offered Shares or after the application of the proceeds
therefrom as described under “Use of Proceeds” in each
Applicable Prospectus, an
8
“ investment
company ” within the meaning of
Investment Company Act and will conduct its business in a manner so
that it will not become subject to the Investment Company
Act.
(u) Insurance. Each of
the Company and its subsidiaries are insured by recognized,
financially sound and reputable institutions with policies in such
amounts and with such deductibles and covering such risks as are
generally deemed adequate and customary for their businesses
including, but not limited to, policies covering real and personal
property owned or leased by the Company and its subsidiaries
against theft, damage, destruction, acts of vandalism and
earthquakes and policies covering the Company and its subsidiaries
for product liability claims and clinical trial liability claims.
The Company has no reason to believe that it or any subsidiary will
not be able (i) to renew its existing insurance coverage as
and when such policies expire or (ii) to obtain comparable
coverage from similar institutions as may be necessary or
appropriate to conduct its business as now conducted and at a cost
that would not result in a Material Adverse Change. Neither of the
Company nor any subsidiary has been denied any insurance coverage
which it has sought or for which it has applied.
(v) No Price
Stabilization or Manipulation; Compliance with Regulation M. The
Company has not taken, directly or indirectly, any action designed
to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of the Shares or any
other “ reference
security ” (as defined in Rule 100
of Regulation M under the 1934 Act ( “Regulation M” )) whether
to facilitate the sale or resale of the Offered Shares or
otherwise, and has taken no action which would directly or
indirectly violate Regulation M. The Company acknowledges that the
Underwriter may engage in passive market making transactions in the
Offered Shares on the Nasdaq Global Market in accordance with
Regulation M.
(w) Related Party
Transactions. There are no business relationships or related-party
transactions involving the Company or any of its subsidiaries or
any other person required to be described in each Applicable
Prospectus which have not been described as required. (The Time of
Sale Prospectus contains in all material respects the same
description of the matters set forth in the preceding sentence
contained in the Prospectus.)
(x) S-3 Eligibility.At
the time the Registration Statement was originally declared
effective and at the time the Company’s Annual Report on
Form 10-K for the year ended December 31, 2007 (the
“ Annual Report
”) was filed with the Commission, the Company
met the then applicable requirements for use of Form S-3 under
the Securities Act.
(y) Exchange Act
Compliance. The documents incorporated or deemed to be incorporated
by reference in the Prospectus, at the time they were or hereafter
are filed with the Commission, complied and will comply in all
material respects with the requirements of the Exchange Act, and,
when read together with the other information in the Prospectus, at
the time the Registration Statement and any amendments thereto
become effective and at the First Closing Date and the applicable
Option Closing Date, as the case may be, will not contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the 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.
(z) FINRA Matters. All
of the information provided to the Underwriter or to counsel for
the Underwriter by the Company, its officers and directors and the
holders
9
of any securities (debt or equity) or options to
acquire any securities of the Company in connection with letters,
filings or other supplemental information provided to FINRA
pursuant to FINRA Conduct Rule 2710 or 2720 is true, complete
and correct.
(aa) Parties to Lock-Up
Agreements. Each of the Company’s directors and executive
officers and each of the other persons and entities listed in
Exhibit C has executed and delivered to Jefferies a lock-up
agreement in the form of Exhibit C hereto. Exhibit B
hereto contains a true, complete and correct list of all directors
and executive officers of the Company. If any additional persons
shall become directors or executive officers of the Company prior
to the end of the Company Lock-up Period (as defined below), the
Company shall cause each such person, prior to or contemporaneously
with their appointment or election as a director or executive
officer of the Company, to execute and deliver to Jefferies an
agreement in the form attached hereto as Exhibit C.
(bb) Statistical and
Market-Related Data. The statistical, demographic and
market-related data included in the Registration Statement and each
Applicable Prospectus are based on or derived from sources that the
Company believes to be reliable and accurate or represent the
Company’s good faith estimates that are made on the basis of
data derived from such sources.
(cc) No Unlawful
Contributions or Other Payments. Neither the Company nor any of its
subsidiaries nor, to the best of the Company’s knowledge, any
employee or agent of the Company or any subsidiary, has made any
contribution or other payment to any official of, or candidate for,
any federal, state or foreign office in violation of any law or of
the character required to be disclosed in the Registration
Statement and each Applicable Prospectus.
(dd) Disclosure
Controls and Procedures; Deficiencies in or Changes to Internal
Control Over Financial Reporting. The Company has established and
maintains disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)), which (i) are
designed to ensure that material information relating to the
Company, including its consolidated subsidiaries, is made known to
the Company’s principal executive officer and its principal
financial officer by others within those entities, particularly
during the periods in which the periodic reports required under the
Exchange Act are being prepared; (ii) have been evaluated by
management of the Company for effectiveness as of December 31,
2007; and (iii) are effective in all material respects to perform
the functions for which they were established. The Company is not
aware of (i) any significant deficiencies or material weaknesses in
the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the
Company’s ability to record, process, summarize and report
financial information or (ii) any fraud, whether or not material,
that involves management or other employees who have a significant
role in the Company’s internal control over financial
reporting. The Company is not aware of any change in its internal
control over financial reporting that has occurred during its most
recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the Company’s
internal control over financial reporting.
(ee) Compliance with
Environmental Laws. Except as described in each Applicable
Prospectus and except as would not, singly or in the aggregate,
result in a Material Adverse Change, (i) neither the Company nor
any of its subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or
10
administrative order, consent, decree or judgment,
relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife,
including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, “
Hazardous Materials ”) or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous
Materials (collectively, “ Environmental Laws ”), (ii) the
Company and its subsidiaries have all permits, authorizations and
approvals required under any applicable Environmental Laws and are
each in compliance with their requirements, (iii) there are no
pending or threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating
to any Environmental Law against the Company or any of its
subsidiaries and (iv) there are no events or circumstances that
might reasonably be expected to form the basis of an order for
clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting
the Company or any of its subsidiaries relating to Hazardous
Materials or any Environmental Laws.
(ff) ERISA Compliance.
The Company and its subsidiaries and any “
employee benefit plan ” (as defined under the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, “
ERISA ”))
established or maintained by the Company, its subsidiaries or their
ERISA Affiliates (as defined below) are in compliance in all
material respects with ERISA. “ ERISA Affiliate ” means, with
respect to the Company or a subsidiary, any member of any group of
organizations described in Sections 414(b),(c),(m) or (o) of
the Internal Revenue Code of 1986, as amended, and the regulations
and published interpretations thereunder (the “
Code ”) of which
the Company or such subsidiary is a member. No “reportable
event” (as defined under ERISA) has occurred or is reasonably
expected to occur with respect to any “employee benefit
plan” established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates. No “employee
benefit plan” established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates, if such
“employee benefit plan” were terminated, would have any
“amount of unfunded benefit liabilities” (as defined
under ERISA). Neither the Company, its subsidiaries nor any of
their ERISA Affiliates has incurred or reasonably expects to incur
any liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any “employee benefit
plan” or (ii) Sections 412, 4971, 4975 or 4980B of
the Code. Each “employee benefit plan” established or
maintained by the Company, its subsidiaries or any of their ERISA
Affiliates that is intended to be qualified under
Section 401(a) of the Code is so qualified and nothing has
occurred, whether by action or failure to act, which would cause
the loss of such qualification.
(gg) Brokers. Except
for the underwriting discounts and commissions payable to the
Underwriter as described in the Time of Sale Prospectus and the
Prospectus, there is no broker, finder or other party that is
entitled to receive from the Company any brokerage or
finder’s fee or other fee or commission as a result of any
transactions contemplated by this Agreement.
(hh) No Outstanding
Loans or Other Extensions of Credit. Since the adoption of Section
13(k) of the Exchange Act, neither the Company nor any of its
subsidiaries has extended or maintained credit, arranged for the
extension of credit, or renewed any extension of credit, in the
form of a personal loan, to or for any director or
11
executive officer (or equivalent thereof) of the
Company and/or such subsidiary except for such extensions of credit
as are expressly permitted by Section 13(k) of the Exchange
Act.
(ii) Compliance with
Laws . The
Company has not been advised, and has no reason to believe, that it
and each of its subsidiaries are not conducting business in
compliance with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting business, except where
failure to be so in compliance would not result in a Material
Adverse Change.
(jj) Dividend
Restrictions. Except as provided under the credit facility of the
Company with JPMorgan Chase Bank, N.A., as amended as of November
30, 2007, no subsidiary of the Company is prohibited or restricted,
directly or indirectly, from paying dividends to the Company, or
from making any other distribution with respect to such
subsidiary’s equity securities or from repaying to the
Company or any other subsidiary of the Company any amounts that may
from time to time become due under any loans or advances to such
subsidiary from the Company or from transferring any property or
assets to the Company or to any other subsidiary.
(kk) Money Laundering
Laws. To the knowledge of the Company, 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 applicable jurisdictions, the rules and regulations thereunder
and any related or similar applicable 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.
Any certificate signed by any officer of the Company
or any of its subsidiaries and delivered to the Underwriter or to
counsel for the Underwriter shall be deemed a representation and
warranty by the Company to the Underwriter as to the matters
covered thereby.
The Company acknowledges that the Underwriter and,
for purposes of the opinions to be delivered pursuant to Section 6
hereof, counsel to the Company and counsel to the Underwriter, will
rely upon the accuracy and truthfulness of the foregoing
representations and hereby consents to such reliance.
Section 2. Purchase, Sale and Delivery of the
Offered Shares .
(a) The Firm Shares.
Upon the terms herein set forth, the Company agrees to issue and
sell to the Underwriter the Firm Shares. On the basis of the
representations, warranties and agreements herein contained, and
upon the terms but subject to the conditions herein set forth, the
Underwriter agrees to purchase from the Company the Firm Shares.
The purchase price per Firm Share to be paid by the Underwriter to
the Company shall be $16.8182 per share.
(b) The First Closing
Date. Delivery of certificates for the Firm Shares to be purchased
by the Underwriter and payment therefor shall be made at the
offices of
12
Proskauer Rose LLP, 1585 Broadway, New York, New
York 10036 (or such other place as may be agreed to by the
Company and the Underwriter) at 9:00 a.m. New York time, on April
16, 2008, or such other time and date not later than 1:30 p.m.
New York time, on April 18, 2008 as the Underwriter shall designate
by notice to the Company (the time and date of such closing are
called the “ First Closing
Date ”). The Company hereby
acknowledges that circumstances under which the Underwriter may
provide notice to postpone the First Closing Date as originally
scheduled include, but are in no way limited to, any determination
by the Company or the Underwriter to recirculate to the public
copies of an amended or supplemented Prospectus or a delay as
contemplated by the provisions of Section 11.
(c) The Optional
Shares; Option Closing Date. In addition, on the basis of the
representations, warranties and agreements herein contained, and
upon the terms but subject to the conditions herein set forth, the
Company hereby grants an option to the Underwriter to purchase up
to an aggregate of 337,500 Optional Shares from the Company at the
purchase price per share to be paid by the Underwriter for the Firm
Shares. The option granted hereunder is for use by the Underwriter
solely in covering any over-allotments in connection with the sale
and distribution of the Firm Shares. The option granted hereunder
may be exercised at any time and from time to time in whole or in
part upon notice by the Underwriter to the Company, which notice
may be given at any time within 30 days from the date of this
Agreement. Such notice shall set forth (i) the aggregate
number of Optional Shares as to which the Underwriter is exercising
the option, (ii) the names and denominations in which the
certificates for the Optional Shares are to be registered and
(iii) the time, date and place at which such certificates will
be delivered (which time and date may be simultaneous with, but not
earlier than, the First Closing Date; and in the event that such
time and date are simultaneous with the First Closing Date, the
term “First Closing Date” shall refer to the time and
date of delivery of certificates for the Firm Shares and such
Optional Shares). Any such time and date of delivery, if subsequent
to the First Closing Date, is called an “
Option Closing Date ” and shall be determined by the Underwriter and shall
not be earlier than three nor later than five full business days
after delivery of such notice of exercise. The Underwriter may
cancel the option at any time prior to its expiration by giving
written notice of such cancellation to the Company.
(d) Public Offering of
the Offered Shares. The Underwriter hereby advises the Company that
the Underwriter intends to offer for sale to the public, initially
on the terms set forth in the Time of Sale Prospectus and the
Prospectus, the Offered Shares as soon after this Agreement has
been executed as the Underwriter, in its sole judgment, has
determined is advisable and practicable.
(e) Payment for the
Offered Shares. Payment for the Offered Shares to be sold by the
Company shall be made at the First Closing Date (and, if
applicable, at each Option Closing Date) by wire transfer of
immediately available funds to the order of the Company.
(f) Delivery of the
Offered Shares. The Company shall deliver, or cause to be
delivered, to the Underwriter for the account of the Underwriter
certificates for the Firm Shares to be sold by it at the First
Closing Date, against the irrevocable release of a wire transfer of
immediately available funds for the amount of the purchase price
therefor. The Company shall also deliver, or cause to be delivered,
to the Underwriter for the account of the Underwriter, certificates
for the Optional Shares the Underwriter has agreed to purchase at
the First Closing Date or the applicable Option Closing Date, as
the case may be, against the irrevocable release of a wire transfer
of immediately available funds for the amount of the
13
purchase price therefor. The certificates for the
Offered Shares shall be in definitive form and registered in such
names and denominations as the Underwriter shall have requested at
least two full business days prior to the First Closing Date (or
the applicable Option Closing Date, as the case may be) and shall
be made available for inspection on the business day preceding the
First Closing Date (or the applicable Option Closing Date, as the
case may be) at a location in New York City as the Underwriter may
designate. Time shall be of the essence, and delivery at the time
and place specified in this Agreement is a further condition to the
obligations of the Underwriter.
Section 3. Additional Covenants of the
Company . The Company further covenants
and agrees with the Underwriter as follows:
(a) Delivery of
Registration Statement, Time of Sale Prospectus and
Prospectus . The
Company shall furnish to you, without charge, as many copies of the
Registration Statement, any amendments thereto and any Rule 462(b)
Registration Statement (including exhibits thereto) as you may
reasonably request and for delivery to each other Underwriter a
conformed copy of the Registration Statement, any amendments
thereto and any Rule 462(b) Registration Statement (without
exhibits thereto) and shall furnish to you in New York City,
without charge, prior to 10:00 a.m. New York City time on the
business day next succeeding the date of this Agreement and during
the period mentioned in Section 3(e) or 3(f) below, as m
