4,000,000 Shares UROPLASTY, INC. Common Stock UNDERWRITING AGREEMENT
Exhibit 1.1
EXECUTION COPY
4,000,000 Shares
UROPLASTY, INC.
Common Stock
July 22, 2010
▇▇▇▇▇▇▇▇▇▇▇ & CO. INC.
As Representative of the Several Underwriters
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
As Representative of the Several Underwriters
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Uroplasty, Inc., a Minnesota corporation (the “Company”), proposes, subject to the
terms and conditions contained herein, to sell to you and the other underwriters named on
Schedule I to this Agreement (the “Underwriters”), for whom ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc.
is acting as representative (the “Representative”), an aggregate of
4,000,000 shares (the
“Firm Shares”) of the Company’s common stock, $0.01 par value per share (the “Common
Stock”). The respective amounts of the Firm Shares to be purchased by each of the several
Underwriters are set forth opposite their names on Schedule I hereto. In addition, the
Company proposes to grant to the Underwriters an option to purchase up to an additional
600,000
shares (the “Option Shares”) of Common Stock from the Company for the purpose of covering
over-allotments in connection with the sale of the Firm Shares. The Firm Shares and the Option
Shares are collectively called the “Shares.”
The Company has prepared and filed with the Securities and Exchange Commission (the
“Commission”) a registration statement on Form S-3 (No. 333-167274) under the Securities
Act of 1933, as amended (the “Securities Act”) and the published rules and regulations of
the Commission thereunder (the “Rules”), including a related prospectus dated June 24, 2010
(the “Base Prospectus”) relating to Common Stock and warrants to purchase Common Stock of
the Company that may be sold from time to time by the Company in accordance with Rule 415 of the
Securities Act, and such amendments thereof as may have been required to the date of this
Agreement. Copies of such registration statement (including all amendments thereof and all
documents deemed incorporated by reference therein) and of the related Base Prospectus have
heretofore been delivered by the Company or are otherwise available to you.
The term “Registration Statement” as used in this Agreement means the registration
statement referred to in the preceding paragraph, including all exhibits, financial schedules and
all documents and information deemed to be part of the Registration Statement by incorporation
by reference or otherwise, as amended from time to time, including the information (if any)
contained in the form of final prospectus filed with the Commission pursuant to Rule 424(b) of the
Rules and deemed to be part thereof at the time of effectiveness pursuant to Rule 430B of the
Rules.
If the Company has filed an abbreviated registration statement to register additional Shares
pursuant to Rule 462(b) under the Rules (the “462(b) Registration Statement”), then any
reference herein to the Registration Statement shall also be deemed to include such 462(b)
Registration Statement. The term “Preliminary Prospectus” means the Base Prospectus and
any preliminary prospectus supplement used or filed with the Commission pursuant to Rule 424 of the
Rules, in the form provided to the Underwriters by the Company for use in connection with the
offering of the Shares. The term “Prospectus” means the Base Prospectus, any Preliminary
Prospectus and any amendments or further supplements to such prospectus, and including, without
limitation, the final prospectus supplement, filed pursuant to and within the limits described in
Rule 424(b) with the Commission in connection with the proposed sale of the Shares contemplated by
this Agreement through the date of such final prospectus supplement. The term “Effective
Date” shall mean each date that the Registration Statement and any post-effective amendment or
amendments thereto became or become effective. Unless otherwise stated herein, any reference herein
to the Registration Statement, any Preliminary Prospectus, the Statutory Prospectus (as hereinafter
defined) and the Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein, including pursuant to Item 12 of Form S-3 under the Securities Act, which were
filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) on or
before the date hereof or are so filed hereafter. Any reference herein to the terms “amend,”
“amendment” or “supplement” with respect to the Registration Statement, any Preliminary Prospectus,
the Statutory Prospectus or the Prospectus shall be deemed to refer to and include any such
document filed or to be filed under the Exchange Act after the date of the Registration Statement,
any such Preliminary Prospectus, the Statutory Prospectus or Prospectus, as the case may be, and
deemed to be incorporated therein by reference.
The Company understands that the Underwriters propose to make a public offering of the Shares,
as set forth in and pursuant to the Statutory Prospectus (as hereinafter defined) and the
Prospectus, as soon after the Effective Date and the date of this Agreement as the Representative
deems advisable. The Company hereby confirms that the Underwriters and dealers have been
authorized to distribute or cause to be distributed each Preliminary Prospectus, and each Issuer
Free Writing Prospectus (as hereinafter defined) and are authorized to distribute the Prospectus
(as from time to time amended or supplemented if the Company furnishes amendments or supplements
thereto to the Underwriters).
1. Sale, Purchase, Delivery and Payment for the Shares. On the basis of the
representations, warranties and agreements contained in, and subject to the terms and conditions
of, this Agreement:
(a) The Company agrees to issue and sell to the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at a purchase price of
$3.29 per
share (the “Initial Price”), the number of Firm Shares set forth opposite the
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name of such Underwriter under the column “Number of Firm Shares to be Purchased” on Schedule
I to this Agreement, subject to adjustment in accordance with Section 8 hereof.
(b) The Company hereby grants to the several Underwriters an option to purchase, severally and
not jointly, all or any part of the Option Shares at the Initial Price. The number of Option
Shares to be purchased by each Underwriter shall be the same percentage (adjusted by the
Representative to eliminate fractions) of the total number of Option Shares to be purchased by the
Underwriters as such Underwriter is purchasing of the Firm Shares. Such option may be exercised
only to cover over-allotments in the sales of the Firm Shares by the Underwriters and may be
exercised, in whole or in part at any time on or before 12:00 noon, New York City time, on the
business day before the Firm Shares Closing Date (as defined below), and from time to time
thereafter within 30 days after the date of this Agreement, in each case upon written, facsimile or
telegraphic notice, or verbal or telephonic notice confirmed by written, facsimile or telegraphic
notice, by the Representative to the Company no later than 12:00 noon, New York City time, on the
business day before the Firm Shares Closing Date or at least two business days before the Option
Shares Closing Date (as defined below), as the case may be, setting forth the number of Option
Shares to be purchased and the time and date (if other than the Firm Shares Closing Date) of such
purchase.
(c) Payment of the purchase price for, and delivery of certificates for, the Firm Shares shall
be made at the offices of ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at
10:00 a.m., New York City time, on the third business day following the date of this Agreement or
at such time on such other date, not later than ten (10) business days after the date of this
Agreement, as shall be agreed upon by the Company and the Representative (such time and date of
delivery and payment are called the “Firm Shares Closing Date”). In addition, in the event
that any or all of the Option Shares are purchased by the Underwriters, payment of the purchase
price, and delivery of the certificates, for such Option Shares shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the Representative and
the Company, on each date of delivery as specified in the notice from the Representative to the
Company (such time and date of delivery and payment are called the “Option Shares Closing
Date”). The Firm Shares Closing Date and any Option Shares Closing Date are called,
individually, a “Closing Date” and, together, the “Closing Dates.”
(d) Payment shall be made to the Company by wire transfer of immediately available funds
payable in New York Clearing House (same day) funds drawn to the order of the Company, against
delivery of the respective certificates to the Representative for the respective accounts of the
Underwriters of certificates for the Shares to be purchased by them.
(e) Certificates evidencing the Shares shall be registered in such names and shall be in such
denominations as the Representative shall request at least two full business days before the Firm
Shares Closing Date or, in the case of Option Shares, on the day of notice of exercise of the
option as described in Section 1(b) and shall be delivered by or on behalf of the Company
to the Representative through the facilities of the Depository Trust Company (“DTC”) for
the account of such Underwriters.
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2. Representations and Warranties of the Company. The Company represents and warrants
to each Underwriter as of the date hereof, as of the Firm Shares Closing Date and as of each Option
Shares Closing Date (if any), as follows:
(a) The Company meets the requirements for use of Form S-3 under the Securities Act including
the transaction requirements set forth in General Instruction I.B.1 of such Form. The Company
filed with the Commission the Registration Statement on such Form, including a Base Prospectus, for
registration under the Securities Act of the offering and sale of the Shares, and the Company has
prepared and used a Preliminary Prospectus in connection with the offer and sale of the Shares.
When the Registration Statement or any amendment thereof or supplement thereto was or is declared
effective, it (i) complied or will comply, in all material respects, with the requirements of the
Securities Act and the Rules and the Exchange Act and the rules and regulations of the Commission
thereunder and (ii) did not or will not, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to make the statements
therein not misleading. When any Preliminary Prospectus or Prospectus was first filed with the
Commission (whether filed as part of the Registration Statement or any amendment thereto or
pursuant to Rule 424 of the Rules) and when any amendment thereof or supplement thereto was first
filed with the Commission, such Preliminary Prospectus or Prospectus as amended or supplemented
complied in all material respects with the applicable provisions of the Securities Act and the
Rules and did not or will not, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the statements therein
not misleading. If applicable, each Preliminary Prospectus and the Prospectus delivered to the
Underwriters for use in connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T. Notwithstanding the foregoing, none of the representations and
warranties in this Section 2(a) shall apply to statements in, or omissions from, the
Registration Statement, any Preliminary Prospectus or the Prospectus made in reliance upon, and in
conformity with, information herein or otherwise furnished in writing by the Representative on
behalf of the several Underwriters specifically for use in the Registration Statement, any
Preliminary Prospectus or the Prospectus. With respect to the preceding sentence, the Company
acknowledges that the only information furnished in writing by the Representative for use in the
Registration Statement, any Preliminary Prospectus or the Prospectus is the statements contained in
the fourth, eleventh, twelfth and fourteenth paragraphs under the caption “Underwriting” in the
Prospectus (collectively, the “Underwriting Information”).
(b) As of the Applicable Time (as hereinafter defined), neither (i) any Issuer General Use
Free Writing Prospectus(es) issued at or prior to the Applicable Time and set forth on Schedule III
hereto, the information set forth on Schedule II hereto, the Statutory Prospectus at the
Applicable Time and any information or documents deemed to be incorporated by reference into to the
foregoing, all considered together (collectively, the “General Disclosure Package”), nor
(ii) any individual Issuer Limited-Use Free Writing Prospectus, when considered together with the
General Disclosure Package, included any untrue statement of a material fact or omitted to state
any 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,
however, that this representation and warranty shall not apply to
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statements in or omissions in the General Disclosure Package made in reliance upon and in
conformity with the Underwriting Information.
Each Issuer General Use Free Writing Prospectus (as hereinafter defined), (i) is identified in
Schedule III hereto and (ii) complied when issued, and complies, in all material respects
with the requirements of the Securities Act and the Rules.
As used in this Section and elsewhere in this Agreement:
“Applicable
Time” means 9:15 am (Eastern time) on the date of this Agreement.
“Statutory Prospectus” as of any time means the Preliminary Prospectus relating to the
Shares that is included in the Registration Statement immediately prior to the Applicable Time,
including the Base Prospectus and any document incorporated by reference therein and any prospectus
supplement deemed to be a part thereof. For purposes of this definition, information that is
contained in a form of prospectus that is deemed retroactively to be a part of the Registration
Statement pursuant to Rule 430B shall be considered to be included in the Statutory Prospectus as
of the actual time that form of prospectus is filed with the Commission pursuant to Rule 424(b).
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as
defined in Rule 433 under the Securities Act, relating to the Shares that (A) is required to be
filed with the Commission by the Company, or (B) is exempt from filing pursuant to
Rule 433(d)(5)(i) under the Securities Act because it contains a description of the Securities or
of the offering that does not reflect the final terms, in each case in the form filed or required
to be filed with the Commission or, if not required to be filed, in the form retained in the
Company’s records pursuant to Rule 433(g) under the Securities Act.
“Issuer General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is intended for general distribution to prospective investors, as evidenced by its being
specified in Schedule III hereto.
“Issuer Limited-Use Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is not an Issuer General Free Writing Prospectus.
(c) The Registration Statement is effective under the Securities Act and no stop order
preventing or suspending the effectiveness of the Registration Statement or suspending or
preventing the use of any Preliminary Prospectus, the Prospectus or any “free writing prospectus”,
as defined in Rule 405 under the Rules, has been issued by the Commission and to the knowledge of
the Company no proceedings for that purpose have been instituted or are threatened under the
Securities Act. Any required filing of any Preliminary Prospectus and/or the Prospectus and any
supplement thereto pursuant to Rule 424(b) of the Rules has been or will be made in the manner and
within the time period required by such Rule 424(b). Any material required to be filed by the
Company pursuant to Rule 433(d) or Rule 163(b)(2) of the Rules has been or will be made in the
manner and within the time period required by such Rules.
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(d) The documents incorporated by reference in the Registration Statement, any Preliminary
Prospectus and the Prospectus, at the time they became effective or were filed with the Commission,
as the case may be, complied in all material respects with the requirements of the Securities Act
or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder, and
none of such documents contained an untrue statement of a material fact or omitted 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, and any further
documents so filed and incorporated by reference in the Registration Statement, any Preliminary
Prospectus and the Prospectus, 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 the rules and regulations of the Commission
thereunder and 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 statements therein, in light of the
circumstances under which they are made, not misleading.
(e) Each Issuer Free Writing Prospectus, if any, as of its issue date and at all subsequent
times through the completion of the public offer and sale of the Shares or until any earlier date
that the Company notified or notifies the Representative as described in the next sentence, did
not, does not and will not include any information that conflicted, conflicts or will conflict with
the information contained in the Registration Statement, including any document incorporated by
reference therein and any prospectus supplement deemed to be a part thereof that has not been
superseded or modified, the Statutory Prospectus or the Prospectus.
If at any time following issuance of an Issuer Free Writing Prospectus through the completion
of the public offer and sale of the Shares there occurred or occurs an event or development as a
result of which such Issuer Free Writing Prospectus conflicted or would conflict with the
information contained in the Registration Statement, the Statutory Prospectus or the Prospectus or
included or would include an untrue statement of a material fact or omitted or would 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 prevailing at the subsequent time, not misleading, the Company
has promptly notified or will promptly notify the Representative and has promptly amended or will
promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate
or correct such conflict, untrue statement or omission.
(f) The financial statements of the Company (including all notes and schedules thereto)
included in the Registration Statement, the General Disclosure Package and the Prospectus present
fairly in all material respects the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the statement of operations, stockholders’ equity and cash
flows of the Company and its consolidated subsidiaries for the periods specified; and such
financial statements and related schedules and notes thereto, and the unaudited financial
information filed with the Commission as part of the Registration Statement, have been prepared in
conformity with generally accepted accounting principles, consistently applied throughout the
periods involved except as may be otherwise specified therein or to the extent unaudited financial
statements exclude footnotes or may be condensed or summary statements, and it being understood
that the unaudited financial statements are subject to normal year-end adjustments.
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(g) To the Company’s knowledge, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP (the “Auditor”) which has certified
certain financial statements and related schedules included or incorporated by reference in the
Registration Statement, is and, during the periods covered by its reports, was, an independent
public accounting firm as required by the Securities Act and the Rules.
(h) The Company and each of its subsidiaries that is a “significant subsidiary” within the
meaning of Rule 1-02(w) of Regulation S-X (each, a “subsidiary”), has been duly
incorporated or organized and is validly existing and in good standing (or the foreign equivalent
thereof) under the laws of its respective jurisdictions of incorporation or organization and each
such entity has all requisite power and authority to carry on its business as is currently being
conducted and as described in the General Disclosure Package and the Prospectus, and to own, lease
and operate its properties. All of the issued shares of capital stock of, or other ownership
interests in, each subsidiary have been duly and validly authorized and issued and are fully paid
and non-assessable and are owned, directly or indirectly, by the Company, free and clear of any
lien, charge, mortgage, pledge, security interest, claim, limitation on voting rights, equity,
trust or other encumbrance, preferential arrangement, defect or restriction of any kind whatsoever.
The Company and each of its subsidiaries is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which the nature of the business conducted by it
or location of the assets or properties owned, leased or licensed by it requires such
qualification, except for such jurisdictions where the failure to so qualify individually or in the
aggregate would not have a material adverse effect on the assets, properties, financial condition
or results of operations, business affairs or business prospects (as such business prospects are
contemplated in the Registration Statement, the General Disclosure Package and the Prospectus) of
the Company and its subsidiaries considered as a whole (a “Material Adverse Effect”); and
to the Company’s knowledge, no proceeding has been instituted in any such jurisdiction revoking,
limiting or curtailing, or seeking to revoke, limit or curtail, such power and authority or
qualification.
(i) The Registration Statement initially became effective within three years of the date
hereof.
(j) The Company and each of its subsidiaries has all necessary authorizations, approvals,
consents, orders, licenses, certificates and permits of and from all governmental or regulatory
bodies or entities (collectively, the “Permits”), to own, lease and license its assets and
properties and conduct its business as is currently being conducted and as proposed to be conducted
and described in the General Disclosure Package and the Prospectus, all of which are valid and in
full force and effect, except where the lack of such Permits, individually or in the aggregate,
would not have a Material Adverse Effect. The Company and each of its subsidiaries has fulfilled
and performed in all material respects all of its obligations with respect to such Permits and has
not received any written notice of proceedings relating to the revocation or modification of any
Permits, except where such violation would not, or such proceedings, if determined adversely to the
Company or any of its subsidiaries would not, individually or in the aggregate have a Material
Adverse Effect. Except as may be required under the Securities Act and state and foreign Blue Sky
laws and except as may be required by the Financial Industry Regulatory Authority, Inc.
(“FINRA”) and the NASDAQ Capital Market in connection with the offer and sale of the
Shares, no other Permits are required to enter into, deliver and perform this Agreement and to
issue and sell the Shares.
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(k) (i) At the earliest time after the filing of the Registration Statement that the Company
or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the
Rules) of the Shares and (ii) at the date hereof, the Company was not and is not an “ineligible
issuer,” as defined in Rule 405 of the Rules, including (but not limited to) the Company or any
other subsidiary in the preceding three years not having been convicted of a felony or misdemeanor
or having been made the subject of a judicial or administrative decree or order as described in
Rule 405 of the Rules.
(l) To the Company’s knowledge, except as disclosed in the General Disclosure Package and the
Prospectus and except as would not have a Material Adverse Effect, (i) the Company and each of its
Subsidiaries owns or has adequate licenses or other rights to use all trademarks, trade names,
domain names, patents, patent rights, mask works, copyrights, technology, know-how (including trade
secrets and other unpatented or unpatentable proprietary or confidential information, systems or
procedures), service marks, trade dress rights, and other intellectual property (collectively,
“Intellectual Property”) sufficient in all material respects to conduct its business as now
conducted, (ii) to the Company’s knowledge, the business of the Company and its Subsidiaries as
currently conducted does not infringe the Intellectual Property rights of others, (iii) there are
no pending or threatened actions, suits or proceedings against the Company or any of its
subsidiaries that allege that the Company or any of its subsidiaries is infringing any third-party
Intellectual Property rights, and (iv) in the three-year period prior to the date hereof, the
Company and its Subsidiaries have not received any written notice from any third party claiming
that the Company or any of its subsidiaries is infringing any third-party patent or challenging the
validity, scope or enforceability of any Intellectual Property owned by or licensed to the Company
or any of its Subsidiaries.
(m) Except as disclosed in the General Disclosure Package and the Prospectus, the Company and
each of its subsidiaries has good and marketable title to all real or personal property owned by it
that is material to the business of the Company and its subsidiaries taken as a whole, in each case
free and clear of all liens, encumbrances, claims, security interests and defects, except such as
would not result in a Material Adverse Effect. All property held under lease by the Company and
its subsidiaries that is material to the business of the Company and its subsidiaries taken as a
whole is held by the Company or one of its subsidiaries under a valid and enforceable lease, free
and clear of all liens, encumbrances, claims, security interests and defects, except such as would
not result in a Material Adverse Effect.
(n) Since the date of the latest balance sheet of the Company included or incorporated by
reference in the Registration Statement, General Disclosure Package and Prospectus and except as
set forth or contemplated in the Registration Statement, General Disclosure Package and Prospectus,
(i) there has not occurred any event which would reasonably be expected to have a Material Adverse
Effect; (ii) neither the Company nor any of its subsidiaries has sustained any loss or interference
with its assets, businesses or properties (whether owned or leased) from fire, explosion,
earthquake, flood or other calamity, whether or not covered by insurance, or from any labor dispute
or any court or legislative or other governmental action, order or decree, which would reasonably
be expected to have a Material Adverse Effect; and (iii) neither the Company nor its subsidiaries
has (A) issued any securities (other than issuances of Common Stock pursuant to the exercise of
stock options granted under the Company’s existing equity incentive plans or pursuant to the
exercise of outstanding
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warrants to purchase Common Stock) or incurred any liability or obligation, direct or contingent,
for borrowed money, except such liabilities or obligations incurred in the ordinary course of
business, (B) entered into any material transaction not in the ordinary course of business or (C)
declared or paid any dividend or made any distribution on any shares of its stock or redeemed,
purchased or otherwise acquired or agreed to redeem, purchase or otherwise acquire any shares of
its capital stock (other than ordinary course distributions to the Company from its subsidiaries).
(o) There is no document, contract or other agreement required to be described in the
Registration Statement, the General Disclosure Package or the Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as required by the Securities
Act or Rules. Each description of a contract, document or other agreement in the Registration
Statement, the General Disclosure Package or the Prospectus accurately reflects in all material
respects the terms of the underlying contract, document or other agreement. Each contract,
document or other agreement described in the Registration Statement, the General Disclosure Package
or the Prospectus or listed in the Exhibits to the Registration Statement or incorporated by
reference is in full force and effect and is valid and enforceable by and against the Company or
its subsidiary, as the case may be, in accordance with its terms, except as rights to indemnity in
certain circumstances may be unenforceable as against public policy and except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors’ rights generally and by general equitable
principles. Neither the Company nor any of its subsidiaries, if a subsidiary is a party, nor to
the Company’s knowledge, any other party is in default in the observance or performance of any term
or obligation to be performed by it under any such agreement, and no event has occurred which with
notice or lapse of time or both would constitute such a default, in any such case which default or
event, individually or in the aggregate, would have a Material Adverse Effect. Neither the Company
nor any of its subsidiaries, if a subsidiary is a party, is in default in the observance or
performance of any term or obligation to be performed by it under any such agreement, and no event
has occurred which with notice or lapse of time or both would constitute such a default, in any
such case which default or event, individually or in the aggregate, would have a Material Adverse
Effect.
(p) The statistical and market related data included in the Registration Statement, the
General Disclosure Package or the Prospectus are based on or derived from sources that the Company
believes to be reliable and accurate.
(q) Neither the Company nor any subsidiary is (i) in violation of its certificate or articles
of incorporation, by-laws, certificate of formation, limited liability company agreement,
partnership agreement or other organizational documents, (ii) in default under, and no event has
occurred which, with notice or lapse of time, or both, would constitute a default under, or result
in the creation or imposition of any lien, charge, mortgage, pledge, security interest, claim or
encumbrance of any kind upon, any property or assets of the Company or any subsidiary pursuant to,
any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it
is a party or by which it is bound or to which any of its properties or assets is subject or (iii)
in violation of any statute, law, rule, regulation, ordinance, directive, judgment, decree or order
of any judicial, regulatory or other legal or governmental agency or body, foreign or domestic,
except (in the case of clauses (ii) and (iii) above) for
9
violations or defaults that would not (individually or in the aggregate) reasonably be
expected to have a Material Adverse Effect.
(r) This Agreement has been duly authorized, executed and delivered by the Company.
(s) Neither the execution, delivery and performance of this Agreement by the Company nor the
consummation of any of the transactions contemplated hereby (including, without limitation, the
issuance and sale by the Company of the Shares) will give rise to a right to terminate or
accelerate the due date of any payment due under, or conflict with or result in the breach of any
term or provision of, or constitute a default (or an event which with notice or lapse of time or
both would constitute a default) under, or require any consent or waiver under, or result in the
execution or imposition of any lien, charge or encumbrance upon any properties or assets of the
Company or its subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company or any of its subsidiaries is a party or by
which either the Company or its subsidiaries or any of their properties or businesses is bound, or
any franchise, license, permit, judgment, decree, order, statute, rule or regulation applicable to
the Company or any of its subsidiaries or violate any provision of the charter or by-laws of the
Company or any of its subsidiaries, except for such consents or waivers which have already been
obtained and are in full force and effect and except for any breach, violation, default, lien,
charge or encumbrance that would not, individually or in the aggregate, result in a Material
Adverse Effect.
(t) The Company has authorized and outstanding capital stock as set forth under the caption
“Capitalization” in the Statutory Prospectus and the Prospectus. All of the issued and outstanding
shares of Common Stock have been duly and validly issued and are fully paid and nonassessable.
Except as otherwise disclosed in the Registration Statement, the General Disclosure Package and the
Prospectus, there are no statutory preemptive or other similar rights to subscribe for or to
purchase or acquire any shares of Common Stock of the Company or any of its subsidiaries or any
such rights pursuant to its articles of incorporation or by-laws or any agreement or instrument to
or by which the Company or any of its subsidiaries is a party or bound. The Shares, when issued,
delivered and paid for in accordance with the terms of this Agreement, will have been validly
issued and will be fully paid and nonassessable and none of them will be issued in violation of any
preemptive or other similar right. Except as disclosed in the Registration Statement, the General
Disclosure Package and the Prospectus, there is no outstanding option, warrant or other right
calling for the issuance of, and there is no commitment, plan or arrangement to issue, any share of
stock of the Company or any of its subsidiaries or any security convertible into, or exercisable or
exchangeable for, such stock. The exercise price of each outstanding option to acquire Common Stock
(each, a “Company Stock Option”) is no less than the fair market value of a share of Common
Stock as determined on the date of grant of such Company Stock Option. All grants of outstanding
Company Stock Options were properly approved by the Board of Directors of the Company in material
compliance with all applicable laws and the terms of the plans under which such Company Stock
Options were granted, and no such grants involved any “back dating”, “forward dating,” “spring
loading” or similar practices with respect to the effective date of grant. The Common Stock
conforms in all material respects to the description thereof in the Registration Statement, the
General Disclosure Package and the Prospectus. All outstanding shares of capital stock of each of
the Company’s
10
subsidiaries have been duly authorized and validly issued, and are fully paid and
nonassessable and are owned directly by the Company or by another wholly-owned subsidiary of the
Company free and clear of any security interests, liens, encumbrances, equities or claims, other
than those described in the Registration Statement, the General Disclosure Package and the
Prospectus.
(u) No holder of any security of the Company has any right, which has not been waived, to have
any security owned by such holder included in the Registration Statement or to demand registration
of any security owned by such holder for a period of 180 days after the date of this Agreement.
Each director and executive officer of the Company listed on Schedule IV hereto has
delivered to the Representative an executed lock-up agreement in the form attached to this
Agreement as Exhibit A hereto (“Lock-Up Agreement”).
(v) Neither the Company nor any subsidiary is a party to any governmental proceeding nor, to
the knowledge of the Company, is any property or asset of the Company or any subsidiary subject to
any governmental proceeding, including any proceeding before the United States Food and Drug
Administration of the U.S. Department of Health and Human Services (“FDA”) or comparable
federal, state, local or foreign governmental bodies (it being understood that the interaction
between the Company and the FDA and such comparable governmental bodies relating to the clinical
development and product approval process shall not be deemed proceedings for purposes of this
representation), which is required to be described in the Registration Statement, the General
Disclosure Package or the Prospectus or a document incorporated by reference therein and is not
described therein, or which, singularly or in the aggregate, if determined adversely to the Company
or any subsidiary, would reasonably be expected to have a Material Adverse Effect; and to the
Company’s knowledge, no such proceedings are threatened or contemplated by governmental authorities
or threatened by others. The Company and each subsidiary is in compliance with all applicable
federal, state, local and foreign laws, regulations, orders and decrees governing its business as
prescribed by the FDA, or any other federal, state or foreign agencies or bodies engaged in the
regulation of pharmaceuticals or biohazardous substances or materials, except where noncompliance
would not, singularly or in the aggregate, have a Material Adverse Effect. All preclinical and
clinical studies conducted by or on behalf of the Company and any subsidiary to support approval
for commercialization of the Company’s or any subsidiary’s products have been conducted by the
Company or any subsidiary, as applicable, or to the Company’s knowledge by third parties, in
compliance with all applicable federal, state or foreign laws, rules, orders and regulations,
except for such failure or failures to be in compliance as could not reasonably be expected to
have, singularly or in the aggregate, a Material Adverse Effect.
(w) All necessary corporate action has been duly and validly taken by the Company and to
authorize the execution, delivery and performance of this Agreement and the issuance and sale of
the Shares by the Company.
(x) Neither the Company nor any of its subsidiaries is involved in any labor dispute with its
employees, nor, to the knowledge of the Company, is any such dispute threatened, which dispute
would have a Material Adverse Effect. The Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers or contractors which would have a
Material Adverse Effect. The Company is not aware of any threatened or pending litigation between
the Company or its subsidiaries and any of its executive
11
officers which, if adversely determined, could have a Material Adverse Effect and has no
reason to believe that such officers will not remain in the employment of the Company.
(y) No transaction has occurred between or among the Company and any of its officers or
directors, shareholders or any affiliate or affiliates of any such officer or director or
shareholder that is required to be described in and is not described in the Registration Statement,
the General Disclosure Package and the Prospectus.
(z) The Company has not taken, nor will it take, directly or indirectly, any action designed
to or which might reasonably be expected to cause or result in, or which has constituted or which
might reasonably be expected to constitute, the stabilization or manipulation of the price of the
Common Stock or any security of the Company to facilitate the sale or resale of any of the Shares.
(aa) The Company and each of its subsidiaries has filed all Federal, state, local and foreign
tax returns which are required to be filed through the date hereof (except in any case in which the
failure to so file would not have a Material Adverse Effect), which returns were true and correct
in all material respects at the time of filing, or has received timely extensions thereof, and
except as set forth in the General Disclosure Package has paid all taxes shown on such returns and
all assessments received by it to the extent that the same are material and have become due, except
for any such taxes or assessments currently being contested in good faith and as would not,
individually or in the aggregate, have a Material Adverse Effect. There are no tax audits or
investigations pending, which if adversely determined would have a Material Adverse Effect; nor to
the knowledge of the Company are there any material proposed additional tax assessments against the
Company or any of its subsidiaries.
(bb) The Shares have been duly authorized for listing on the NASDAQ Capital Market, subject to
official notice of issuance. The Company has taken no action designed to, or likely to have the
effect of, terminating the registration of the Common Stock under the Exchange Act or listing of
the Common Stock on the NASDAQ Capital Market, nor has the Company received any written
notification that the Commission or the NASDAQ Capital Market is contemplating terminating such
registration or listing.
(cc) The books, records and accounts of the Company and its subsidiaries accurately and fairly
reflect in all material respects the transactions in, and dispositions of, the assets of, and the
results of operations of, the Company and its subsidiaries. The Company maintains a system of
internal accounting and other controls that are designed to provide reasonable assurances that (i)
transactions are executed in accordance with management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles and to maintain 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 the existing assets
at reasonable intervals and appropriate action is taken with respect to any differences.
(dd) The Company has established and maintains disclosure controls and procedures (as such
term is defined in Rule 13a-15 under the Exchange Act), which: (i) are
12
designed to ensure that material information relating to the Company is made known to the
Company’s principal executive officer and its principal financial officer by others within the
Company, particularly during the periods in which the periodic reports required under the Exchange
Act are required to be prepared; (ii) provide for the periodic evaluation of the effectiveness of
such disclosure controls and procedures at the end of the periods in which the periodic reports are
required to be prepared; and (iii) are effective in all material respects to perform the functions
for which they were established.
(ee) Based on the evaluation of its disclosure controls and procedures, the Company is not
aware of (i) any material weaknesses in internal controls; or (ii) any fraud, whether or not
material, that involves management or other employees who have a role in the Company’s internal
controls.
(ff) Except as described in the Registration Statement, the General Disclosure Package and the
Prospectus and as preapproved in accordance with the requirements set forth in Section 10A of the
Exchange Act, the Auditor has not been engaged by the Company to perform any “prohibited
activities” (as defined in Section 10A of the Exchange Act).
(gg) Except as described in the Registration Statement, the General Disclosure Package and the
Prospectus, there are no material off-balance sheet arrangements (as defined in Item 303 of
Regulation S-K) that have or are reasonably likely to have a material current or future effect on
the Company’s financial condition, revenues or expenses, changes in financial condition, results of
operations, liquidity, capital expenditures or capital resources.
(hh) The Company’s board of directors has validly appointed an audit committee whose
composition satisfies the requirements of Rule 5605(c)(2) of the Rules of the NASDAQ Stock Market
(the “Nasdaq Rules”) and the Company’s board of directors and/or the audit committee has
adopted a charter that satisfies the requirements of Rule 5605(c)(1) of the Nasdaq Rules. The
audit committee has reviewed the adequacy of its charter within the past twelve months.
(ii) The Company and, to the Company’s knowledge, its directors and officers, in their
capacities as such, are in compliance in all material respects with all applicable provisions of
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, including, without limitation, Section 402 related to loans and Sections
302 and 906 related to certifications.
(jj) The Company and its subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are customary in the businesses
in which they are engaged; all policies of insurance and fidelity or surety bonds insuring the
Company or any of its subsidiaries or the Company’s or its subsidiaries’ respective businesses,
assets, employees, officers and directors are in full force and effect; the Company and each of its
subsidiaries are in compliance with the terms of such policies and instruments in all material
respects; and neither the Company nor any subsidiary of the Company has any reason to believe that
it will not be able to renew its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to continue its business at a
cost that is not materially greater than the current cost. Neither the
13
Company nor any of its subsidiaries has been denied any insurance coverage which it has sought
or for which it has applied.
(kk) Each approval, consent, order, authorization, designation, declaration or filing of, by
or with any regulatory, administrative or other governmental body necessary in connection with the
execution and delivery by the Company of this Agreement and the consummation of the transactions
herein contemplated required to be obtained or performed by the Company (except such additional
steps as may be required by FINRA or as may be necessary to qualify the Shares for public offering
by the Underwriters under the state securities or Blue Sky laws) has been obtained or made and is
in full force and effect.
(ll) There are no affiliations with FINRA among the Company’s officers, directors or, to the
best of the knowledge of the Company, any five percent or greater stockholder of the Company,
except as set forth in the Registration Statement or otherwise disclosed in writing to the
Representative.
(mm) Except as would not, individually or in the aggregate, have a Material Adverse Effect,
(i) each of the Company and each of its subsidiaries is in compliance with all rules, laws and
regulation relating to the use, treatment, storage and disposal of toxic substances and protection
of health or the environment (“Environmental Law”) which are applicable to its business;
(ii) neither the Company nor its subsidiaries has received any notice from any governmental
authority or third party of an asserted claim under Environmental Laws; (iii) each of the Company
and each of its subsidiaries has received all permits, licenses or other approvals required of it
under applicable Environmental Laws to conduct its business and is in compliance with all terms and
conditions of any such permit, license or approval; (iv) to the Company’s knowledge, no facts
currently exist that will require the Company or any of its subsidiaries to make future material
capital expenditures to comply with Environmental Laws; and (v) to the Company’s knowledge no
property which is or has been owned, leased or occupied by the Company or its subsidiaries has been
designated as a Superfund site pursuant to the Comprehensive Environmental Response, Compensation
of Liability Act of 1980, as amended (42 U.S.C. Section 9601, et. seq.) or otherwise designated as
a contaminated site under applicable state or local law. Neither the Company nor any of its
subsidiaries has been named as a “potentially responsible party” under the CER, CLA 1980.
(nn) [Reserved]
(oo) The Company is not and, after giving effect to the offering and sale of the Shares and
the application of proceeds thereof as described in the Statutory Prospectus and the Prospectus,
will not be an “investment company” within the meaning of the Investment Company Act of 1940, as
amended (the “Investment Company Act”).
(pp) Neither the Company nor, to the Company’s knowledge, any director, officer, agent or
employee of the Company or its subsidiaries, has, directly or indirectly, while acting on behalf of
the Company or its subsidiaries (i) used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity; (ii) made any unlawful
payment to foreign or domestic government officials or employees or to
14
foreign or domestic political parties or campaigns from corporate funds; or (iii) violated any
provision of the Foreign Corrupt Practices Act of 1977, as amended.
(qq) The operations of the Company and its subsidiaries are and have been conducted at all
times in compliance in all material respects with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, and any
other applicable money laundering statutes and applicable rules and regulations thereunder
(collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before
any court or governmental agency, authority or body or any arbitrator involving the Company or any
of it subsidiaries with respect to the Money Laundering Laws is pending, or to the knowledge of the
Company, threatened.
(rr) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any
director, officer, agent or employee of the Company or any of its subsidiaries is currently subject
to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of
the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by OFAC.
(ss) Except as described in the Registration Statement, the General Disclosure Package and the
Prospectus, the Company has not sold or issued any shares of Common Stock during the six-month
period preceding the date of the Prospectus, including any sales pursuant to Rule 144A under, or
Regulations D or S of, the Securities Act, other than shares issued pursuant to employee benefit
plans, qualified stock options plans or other employee compensation plans or pursuant to
outstanding options, rights or warrants.
(tt) The Company has fulfilled its obligations, if any, under the minimum funding standards of
Section 302 of the U.S. Employee Retirement Income Security Act of 1974 (“ERISA”) and the
regulations and published interpretations thereunder with respect to each “plan,” as defined in
Section 3(3) of ERISA, that is subject to Section 302 of ERISA and such regulations and published
interpretations and in which its employees are eligible to participate, and each such plan is in
compliance in all material respects with the presently applicable provisions of ERISA and such
regulations and published interpretations. Except as would not have a Material Adverse Effect, no
“Reportable Event” (as defined in Section 4043 of ERISA) has occurred with respect to any “Pension
Plan” (as defined in Section 3(2) of ERISA) for which the Company could have any liability.
(uu) None of the Company, its directors or its officers has distributed or will distribute
prior to the later of (i) the Firm Shares Closing Date, or the Option Shares Closing Date, and (ii)
completion of the distribution of the Shares, any offering material in connection with the offering
and sale of the Shares other than any Preliminary Prospectus, any Issuer Free Writing Prospectus,
the Prospectus, the Registration Statement and other materials, if any, permitted by the Securities
Act.
15
3. Conditions of the Underwriters’ Obligations. The obligations of the Underwriters
under this Agreement are several and not joint. The respective obligations of the Underwriters to
purchase the Shares are subject to each of the following terms and conditions:
(a) Notification that the Registration Statement has become effective shall have been received
by the Representative and the Prospectus shall have been timely filed with the Commission in
accordance with Section 4(a) of this Agreement and any material required to be filed by the
Company pursuant to Rule 433(d) of the Rules shall have been timely filed with the Commission in
accordance with such Rule.
(b) No order preventing or suspending the use of any Preliminary Prospectus, the Prospectus or
any “free writing prospectus” (as defined in Rule 405 of the Rules), shall have been or shall be in
effect and no order suspending the effectiveness of the Registration Statement shall be in effect
and no proceedings for such purpose shall be pending before or, to the knowledge of the Company,
threatened by the Commission, and any requests for additional information on the part of the
Commission (to be included in the Registration Statement or the Prospectus or otherwise) shall have
been complied with to the satisfaction of the Commission and the Representative. If the Company
has elected to rely upon Rule 430B, Rule 430B information previously omitted from the effective
Registration Statement pursuant to Rule 430B shall have been transmitted to the Commission for
filing pursuant to Rule 424(b) within the prescribed time period and the Company shall have
provided evidence satisfactory to the Underwriters of such timely filing, or a post-effective
amendment providing such information shall have been promptly filed and declared effective in
accordance with the requirements of Rule 430B.
(c) The representations and warranties of the Company contained in this Agreement and in the
certificates delivered pursuant to Section 3(d) shall be true and correct when made and on
and as of each Closing Date as if made on such date. The Company shall have performed in all
material respects all covenants and agreements and satisfied in all material respects all the
conditions contained in this Agreement required to be performed or satisfied by it at or before
such Closing Date.
(d) The Representative shall have received on each Closing Date a certificate, addressed to
the Representative and dated such Closing Date, of the chief executive or chief operating officer
and the chief financial officer or chief accounting officer of the Company to the effect that: (i)
the representations, warranties and agreements of the Company in this Agreement were true and
correct when made and are true and correct as of such Closing Date; (ii) the Company has performed
in all material respects all covenants and agreements and satisfied in all material respects all
conditions contained herein required to be performed or satisfied by the Company; (iii) they have
carefully examined the Registration Statement, the Prospectus, the General Disclosure Package, and
any individual Issuer Free Writing Prospectus and, in their opinion (A) as of the Effective Date
the Registration Statement did not include any untrue statement of a material fact and did not omit
to state a material fact required to be stated therein or necessary to make the statements therein
not misleading and the Prospectus, as of its date and the date of such certificate, did not contain
any untrue statement of a material fact and did not omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading and (B) as of
16
the Applicable Time, neither (i) the General Disclosure Package, nor (ii) any individual Issuer
Limited-Use Free Writing Prospectus, when considered together with the General Disclosure Package,
included, any untrue statement of a material fact and did not omit to state a material fact
required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (C) since the Applicable Time no
event has occurred which should have been set forth in a supplement or otherwise required an
amendment to the Registration Statement, the General Disclosure Package or the Prospectus that was
not so set forth; and (iv) no stop order suspending the effectiveness of the Registration Statement
has been issued and, to their knowledge, no proceedings for that purpose have been instituted or
are pending under the Securities Act.
(e) The Representative shall have received: (i) simultaneously with the execution of this
Agreement a signed letter from the Auditor addressed to the Representative and dated the date of
this Agreement, in form and substance reasonably satisfactory to the Representative, containing
statements and information of the type ordinarily included in accountants’ “comfort letters” to
underwriters with respect to the financial statements and certain financial information contained
in the Registration Statement and the General Disclosure Package, and (ii) on each Closing Date, a
signed letter from the Auditor addressed to the Representative and dated the date of such Closing
Date(s), in form and substance reasonably satisfactory to the Representative containing statements
and information of the type ordinarily included in accountants’ “comfort letters” to underwriters
with respect to the financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
(f) The Representative shall have received on each Closing Date from ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP,
counsel for the Company, an opinion and written statement, addressed to the Representative and
dated such Closing Date, in form and substance as is set forth on Exhibit B attached
hereto, which opinion and written statement may be subject to customary assumptions and
qualifications.
(g) [Reserved]
(h) The Representative shall have received on each Closing Date from ▇▇▇▇▇▇▇ Procter LLP,
counsel for the Underwriters, an opinion and written statement, addressed to the Representative and
dated such Closing Date, with respect to the validity of the Shares, the Registration Statement,
the General Disclosure Package, the Prospectus and other related matters as the Representative
reasonably may request, and such counsel shall have received such papers and information as they
request to enable them to pass upon such matters.
(i) [Reserved]
(j) The Representative shall have received copies of the Lock-up Agreements executed by each
person listed on Schedule IV hereto.
(k) The Shares shall have been approved for listing on the NASDAQ Capital Market, subject only
to official notice of issuance.
(l) The Representative shall be reasonably satisfied that since the respective dates as of
which information is given in the Registration Statement, the General Disclosure
17
Package and the Prospectus, (i) there shall not have been any material change in the capital stock
of the Company (other than as a result of the exercise of outstanding stock options) or any
material change in the indebtedness of the Company (other than in the ordinary course of business),
(ii) except as set forth or contemplated by the Registration Statement, the General Disclosure
Package or the Prospectus, no material oral or written agreement or other transaction shall have
been entered into by the Company that is not in the ordinary course of business or that would
reasonably be expected to result in a material reduction in the future earnings of the Company,
(iii) no loss or damage (whether or not insured) to the property of the Company shall have been
sustained that had or would reasonably be expected to have a Material Adverse Effect, (iv) no legal
or governmental action, suit or proceeding affecting the Company or any of its properties that is
material to the Company or that affects or could reasonably be expected to affect the transactions
contemplated by this Agreement shall have been instituted or threatened and (v) there shall not
have been any material adverse change in the assets, properties, financial condition or results of
operations, business affairs or business prospects of the Company or its subsidiaries considered as
a whole that makes it impractical or inadvisable in the Representative’s judgment to proceed with
the purchase or offering of the Shares as contemplated hereby.
(m) As of the Firm Shares Closing Date, FINRA shall not have raised any objection with respect
to the fairness and reasonableness of the underwriting terms and agreements in connection with the
offering of the Shares.
(n) The Representative shall have received on each Closing Date a Secretary’s Certificate of
the Company certifying as to the attached board resolutions, articles of incorporation, bylaws and
as to incumbency.
(o) The Company shall have furnished or caused to be furnished to the Representative such
further certificates or documents as the Representative shall have reasonably requested.
All such opinions, certificates, letters and other documents will be in compliance with the
provisions hereof only if they are reasonably satisfactory in form and substance to the
Representative and counsel for the Representative.
4. Covenants and other Agreements of the Company and the Underwriters.
(a) The Company covenants and agrees as follows:
(i) The Company will use its best efforts to cause the Registration Statement, if not
effective at the time of execution of this Agreement, and any amendments thereto, to become
effective as promptly as possible. The Company shall prepare the Prospectus in a form
approved by the Representative and file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than the Commission’s close of business on the second business day
following the execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by the Rules. The Company will file with the Commission all Issuer Free
Writing Prospectuses in the time and manner required under Rules 433(d) or 163(b)(2), as the
case may be.
18
(ii) The Company shall promptly advise the Representative in writing (A) when any
post-effective amendment to the Registration Statement shall have become effective or any
supplement to the Prospectus shall have been filed, (B) of any request by the Commission for
any amendment of the Registration Statement or the Prospectus or for any additional
information, (C) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or suspending the use
of any preliminary prospectus or any “free writing prospectus”, as defined in Rule 405 of
the Rules, or the institution or threatening of any proceeding for that purpose and (D) of
the receipt by the Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. The Company shall not file any amendment of the
Registration Statement or supplement to the Prospectus or any document incorporated by
reference in the Registration Statement or any Issuer Free Writing Prospectus unless the
Company has furnished the Representative a copy for its review prior to filing and shall not
file any such proposed amendment or supplement to which the Representative reasonably
objects. The Company shall use its best efforts to prevent the issuance of any such stop
order and, if issued, to obtain as soon as possible the withdrawal thereof.
(iii) If, at any time when a prospectus relating to the Shares (or, in lieu thereof,
the notice referred to in Rule 173(a) of the Rules) is required to be delivered under the
Securities Act and the Rules, any event occurs as a result of which the Prospectus as then
amended or supplemented includes any untrue statement of a material fact or omits to state
any material fact necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, or if it shall be necessary to amend or
supplement the Prospectus to comply with the Securities Act or the Rules, the Company
promptly shall prepare and file with the Commission, subject to the second sentence of
paragraph (ii) of this Section 4(a), an amendment or supplement which shall correct
such statement or omission or an amendment which shall effect such compliance.
(iv) If at any time following issuance of an Issuer Free Writing Prospectus there
occurs an event or development as a result of which such Issuer Free Writing Prospectus
conflicts with the information contained in the Registration Statement or includes an untrue
statement of a material fact or omits 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
prevailing at the subsequent time, not misleading, the Company will promptly notify the
Representative and will promptly amend or supplement, at its own expense, such Issuer Free
Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.
(v) The Company shall make generally available to its security holders and to the
Representative as soon as practicable an earnings statement (which need not be audited) of
the Company, which shall satisfy the provisions of Section 11(a) of the Securities Act or
Rule 158 of the Rules.
19
(vi) The Company shall furnish to the Representative and counsel for the Underwriters,
without charge, signed copies of the Registration Statement (including all exhibits thereto
and amendments thereof) and to each other Underwriter a copy of the Registration Statement
(without exhibits thereto) and all amendments thereof and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Securities Act or the Rules,
as many copies of any Preliminary Prospectus, any Issuer Free Writing Prospectus and the
Prospectus and any amendments thereof and supplements thereto as the Representative may
reasonably request. If applicable, the copies of the Registration Statement, Preliminary
Prospectus, any Issuer Free Writing Prospectus and Prospectus and each amendment and
supplement thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
(vii) The Company shall cooperate with the Representative and its counsel in
endeavoring to qualify the Shares for offer and sale in connection with the offering under
the laws of such jurisdictions as the Representative may designate and shall maintain such
qualifications in effect so long as required for the distribution of the Shares; provided,
however, that the Company shall not be required in connection therewith, as a condition
thereof, to qualify as a foreign corporation or to execute a general consent to service of
process in any jurisdiction or subject itself to taxation as doing business in any
jurisdiction.
(viii) The Company, during the period when the Prospectus (or in lieu thereof, the
notice referred to in Rule 173(a) of the Rules) is required to be delivered under the
Securities Act and the Rules or the Exchange Act, will file all reports and other documents
required to be filed with the Commission pursuant to Section 13, 14 or 15 of the Exchange
Act within the time periods required by the Exchange Act and the regulations promulgated
thereunder.
(ix) Without the prior written consent of ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc., for a period of 90
days after the date of this Agreement, the Company shall not issue, sell or register with
the Commission (other than on Form S-8 or on any successor form), or otherwise dispose of,
directly or indirectly, any equity securities of the Company (or any securities convertible
into, exercisable for or exchangeable for equity securities of the Company), except for (A)
the issuance of the Shares pursuant to the Registration Statement, (B) the issuance of
securities pursuant to the Company’s existing equity incentive plan or bonus plan as
described in the Registration Statement and the Prospectus, and (C) the issuance of Common
Stock upon the exercise of options outstanding on the date hereof. Notwithstanding the
foregoing, if (x) during the last 17 days of the 90 day period described in this Section
4(a)(ix) the Company issues an earnings release or material news or a material event
relating to the Company occurs; or (y) prior to the expiration of such 90 day period, the
Company announces that it will release earnings results during the 16 day period beginning
on the last day of the 90 day period; the restrictions imposed during this Section
4(a)(ix) shall continue to apply until the expiration of the 18-day period beginning on
the issuance of the earnings release or the occurrence of the material news or material
event unless ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc. waives, in writing, such extension; provided, however,
that this extension shall not apply
20
if the research published or distributed on the Company is compliant under Rule 139 of
the Securities Act and the Company’s securities are actively traded as defined in Rule
101(c)(1) of Regulation M of the Exchange Act.
(x) On or before completion of this offering, the Company shall make all filings
required under applicable securities laws and by the NASDAQ Capital Market (including any
required registration under the Exchange Act); provided that the Company shall make all
filings required by NASDAQ that may be filed after completion of the offering within the
period provided by NASDAQ.
(xi) Prior to the Closing Date, the Company will issue no press release or other
communications directly or indirectly and hold no press conference with respect to the
Company, the condition, financial or otherwise, or the earnings, business affairs or
business prospects of any of them, or the offering of the Shares without the prior written
consent of the Representative unless in the judgment of the Company and its counsel, and
after notification to the Representative, such press release or communication is required by
law.
(xii) The Company will apply the net proceeds from the offering of the Shares in the
manner set forth under “Use of Proceeds” in the Prospectus.
(b) The Company agrees to pay, or reimburse if paid by the Representative, whether or not the
transactions contemplated hereby are consummated or this Agreement is terminated, all costs and
expenses incident to the public offering of the Shares and the performance of the obligations of
the Company under this Agreement including those relating to: (i) the preparation, printing,
reproduction filing and distribution of the Registration Statement including all exhibits thereto,
each Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus, all amendments and
supplements thereto and any document incorporated by reference therein, and the printing, filing
and distribution of this Agreement; (ii) the preparation and delivery of certificates for the
Shares to the Underwriters; (iii) the registration or qualification of the Shares for offer and
sale under the securities or Blue Sky laws of the various jurisdictions referred to in Section
4(a)(vii), including the reasonable fees and disbursements of counsel for the Underwriters in
connection with such registration and qualification and the preparation, printing, distribution and
shipment of preliminary and supplementary Blue Sky memoranda; (iv) the furnishing (including costs
of shipping and mailing) to the Representative and to the Underwriters of copies of each
Preliminary Prospectus, the Prospectus and all amendments or supplements to the Prospectus, any
Issuer Free Writing Prospectus, and of the several documents required by this Section to be so
furnished, as may be reasonably requested for use in connection with the offering and sale of the
Shares by the Underwriters or by dealers to whom Shares may be sold; (v) the filing fees of FINRA
in connection with its review of the terms of the public offering and reasonable fees and
disbursements of counsel for the Underwriters in connection with such review; (vi) inclusion of the
Shares for listing on the NASDAQ Capital Market; (vii) all transfer taxes, if any, with respect to
the sale and delivery of the Shares by the Company to the Underwriters; and (viii) the reasonable
fees and expenses of outside counsel to the Underwriters; provided, however, that the aggregate
amount of all costs, expenses, fees, disbursements and other charges paid to the Underwriters, or
reimbursed if paid by the Underwriters, pursuant to this Section 4(b) shall not exceed $100,000 if
the public
21
offering and sale of the Shares as contemplated by this Agreement is consummated; and provided,
further, that in the event this Agreement is terminated pursuant to any of its provisions, Section
7(b)(y) hereof shall only require the Company to reimburse the Underwriters for all out-of-pocket
accountable expenses (including the reasonable fees and disbursements of their outside counsel)
actually incurred by them in connection with the proposed purchase and sale of the Shares or in
contemplation of performing their obligations hereunder, the aggregate of which shall not exceed
$75,000.
(c) The Company acknowledges and agrees that each of the Underwriters has acted and is acting
solely in the capacity of a principal in an arm’s length transaction between the Company, on the
one hand, and the Underwriters, on the other hand, with respect to the offering of Shares
contemplated hereby (including in connection with determining the terms of the offering) and not as
a financial advisor, agent or fiduciary to the Company or any other person. Additionally, the
Company acknowledges and agrees that the Underwriters have not and will not advise the Company or
any other person as to any legal, tax, investment, accounting or regulatory matters in any
jurisdiction. The Company has consulted 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
or any other person with respect thereto, whether arising prior to or after the date hereof. Any
review by the Underwriters of the Company, the transactions contemplated hereby or other matters
relating to such transactions have been and will be performed solely for the benefit of the
Underwriters and shall not be on behalf of the Company. The Company agrees that it will not claim
that the Underwriters, or any of them, has rendered advisory services of any nature or respect, or
owes a fiduciary duty to the company or any other person in connection with any such transaction or
the process leading thereto.
(d) If requested by the Representative, the Company will prepare a final term sheet relating
to the Shares, containing only information that describes the final terms of the Shares and
otherwise in a form consented to by the Representative, and will file such final term sheet within
the period required by Rule 433(d)(5)(ii) following the date such final terms have been established
for all classes of the offering of the Shares. Any such final term sheet shall be an Issuer
General Use Free Writing Prospectus for purposes of this Agreement.
(e) The Company represents and agrees that, unless it obtains the prior consent of the
Representative, and each Underwriter represents and agrees that, unless it obtains the prior
consent of the Company and the Representative, it has not made and will not make any offer relating
to the Shares that would constitute an “issuer free writing prospectus,” as defined in Rule 433, or
that would otherwise constitute a “free writing prospectus,” as defined in Rule 405, required to be
filed with the Commission. The Company has complied and will comply with the requirements of Rule
433 under the Securities Act applicable to any Issuer Free Writing Prospectus, including timely
filing with the Commission where required, legending and record keeping.
5. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the
22
Securities Act or Section 20 of the Exchange Act against any and all losses, claims, damages
and liabilities, joint or several (including any reasonable investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding
or any claim asserted), to which they, or any of them, may become subject under the Securities Act,
the Exchange Act or other Federal or state law or regulation, at common law or otherwise, insofar
as such losses, claims, damages or liabilities arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement, the Statutory Prospectus (taken together with the information set forth on
Schedule II hereto), the Prospectus, any Issuer Free Writing Prospectus, any materials or
information provided to investors by, or with the approval of, the Company in connection with the
marketing of the offering of the Shares (“Marketing Materials”), or any
“issuer-information” filed or required to be filed pursuant to Rule 433(d) of the Rules, any
amendment thereof or supplement thereto, or in any Blue Sky application or other information or
other documents executed by the Company filed in any state or other jurisdiction to qualify any or
all of the Shares under the securities laws thereof (any such application, document or information
being hereinafter referred to as a “Blue Sky Application”) or arise out of or are based
upon any omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided, however, that such
indemnity shall not inure to the benefit of any Underwriter (or any person controlling such
Underwriter) on account of any losses, claims, damages or liabilities arising from the sale of the
Shares to any person by such Underwriter if such untrue statement or omission or alleged untrue
statement or omission was made in such Preliminary Prospectus, the Registration Statement, the
Statutory Prospectus (taken together with the information set forth on Schedule II hereto),
the Prospectus, any Issuer Free Writing Prospectus, any Marketing Materials, or any
“issuer-information” filed or required to be filed pursuant to Rule 433(d) of the Rules, any
amendment thereof or supplement thereto, or in any Blue Sky Application in reliance upon and in
conformity with the Underwriting Information. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the
Company and each person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, each director of the Company, and each officer of
the Company who signs the Registration Statement, against any losses, claims, damages or
liabilities (including any reasonable investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim
asserted) to which such party may become subject, under the Securities Act, the Exchange Act or
other Federal or state law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement, the Statutory Prospectus (taken together with the
information set forth on Schedule II hereto) or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus,
the Registration Statement, the Statutory Prospectus (taken together with the information set forth
on Schedule II hereto) or the Prospectus or any such amendment or
23
supplement in reliance upon and in conformity with the Underwriting Information; provided,
however, that the obligation of each Underwriter to indemnify the Company (including any
controlling person, director or officer thereof) shall be limited to the amount of the underwriting
discount and commissions applicable to the Shares to be purchased by such Underwriter hereunder.
(c) Any party that proposes to assert the right to be indemnified under this Section will,
promptly after receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim is to be made against an indemnifying party or parties under this
Section, notify each such indemnifying party of the commencement of such action, suit or
proceeding, enclosing a copy of all papers served. The failure to provide such notice shall not
relieve an indemnifying party for liability under this Section 5 unless such indemnifying party was
prejudiced by the failure to give such notice. In case any such action, suit or proceeding shall
be brought against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate in, and, to the
extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so to assume the
defense thereof and the approval by the indemnified party of such counsel, the indemnifying party
shall not be liable to such indemnified party for any legal or other expenses, except as provided
below and except for the reasonable costs of investigation subsequently incurred by such
indemnified party in connection with the defense thereof. The indemnified party shall have the
right to employ its counsel in any such action, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the employment of counsel by such indemnified
party and the agreement of the indemnifying party to pay the fees and expenses of such counsel have
been authorized in writing by the indemnifying parties, (ii) the indemnified party shall have been
advised by counsel that there may be one or more legal defenses available to it which are different
from or in addition to those available to the indemnifying party (in which case the indemnifying
parties shall not have the right to direct the defense of such action on behalf of the indemnified
party) or (iii) the indemnifying parties shall not have employed counsel to assume the defense of
such action within a reasonable time after notice of the commencement thereof, in each of which
cases the fees and expenses of counsel shall be at the expense of the indemnifying parties. An
indemnifying party shall not be liable for any settlement of any action, suit, and proceeding or
claim effected without its written consent, which consent shall not be unreasonably withheld or
delayed.
6. Contribution. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 5(a) or 5(b) is
due in accordance with its terms but for any reason is unavailable to or insufficient to hold
harmless an indemnified party in respect to any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the aggregate losses,
liabilities, claims, damages and expenses (including any investigation, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting any contribution received by any person
entitled hereunder to contribution from any person who may be liable for contribution) incurred by
such indemnified party, as incurred, in such proportion as is appropriate to reflect the relative
benefits received by
24
the Company on the one hand and the Underwriters on the other hand from the offering of the
Shares pursuant to this Agreement or, if such allocation is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits referred to above but
also the relative fault of the Company on the one hand and the Underwriters on the other hand in
connection with the statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations. The Company and the
Underwriters agree that it would not be just and equitable if contribution pursuant to this
Section 6 were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above. The aggregate amount of losses, liabilities,
claims, damages and expenses incurred by an indemnified party and referred to above shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the
provisions of this Section 6, no Underwriter (except as may be provided in the Agreement
Among Underwriters) shall be required to contribute any amount in excess of the underwriting
discounts and commissions applicable to the Shares purchased by such Underwriter. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 6, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act shall have the same rights to contribution as such Underwriter, and each director of the
Company including any person who, with his or her consent, is named in the Registration Statement
as about to become a director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, shall have the same rights to
contribution as the Company. Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party in respect of which a
claim for contribution may be made against another party or parties under this Section 6,
notify such party or parties from whom contribution may be sought, but the omission so to notify
such party or parties from whom contribution may be sought shall not relieve the party or parties
from whom contribution may be sought from any other obligation it or they may have hereunder or
otherwise than under this Section 6, unless such party or parties were prejudiced by the
failure to give such notice. No party shall be liable for contribution with respect to any action,
suit, proceeding or claim settled without its written consent. The Underwriters’ obligations to
contribute pursuant to this Section 6 are several in proportion to their respective
underwriting commitments and not joint.
7. Termination.
(a) This Agreement may be terminated by the Representative with respect to the Shares to be
purchased on a Closing Date (by notifying the Company at any time at or before a Closing Date) if
in the judgment of the Representative it has become impracticable or inadvisable to proceed with
the offering of the Shares or the delivery of the Shares on the terms and in the manner
contemplated in the Prospectus because: (i) there has occurred any material adverse change in the
securities markets or any event, act or occurrence that has materially
25
disrupted, or in the opinion of the Representative, will in the future materially disrupt, the
securities markets or there shall be such a material adverse change in general financial, political
or economic conditions or the effect of international conditions on the financial markets in the
United States is such as to make it, in the judgment of the Representative, inadvisable or
impracticable to market the Shares or enforce contracts for the sale of the Shares; (ii) there has
occurred any outbreak or material escalation of hostilities or other calamity or crisis the effect
of which on the financial markets of the United States is such as to make it, in the judgment of
the Representative, inadvisable or impracticable to market the Shares or enforce contracts for the
sale of the Shares; (iii) trading in the Shares or any securities of the Company has been suspended
or materially limited by the Commission or trading generally on the New York Stock Exchange, the
NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or the NYSE Amex
has been suspended or materially limited, or minimum or maximum ranges for prices for securities
shall have been fixed, or maximum ranges for prices for securities have been required, by any of
said exchanges or by such system or by order of the Commission, FINRA, or any other governmental or
regulatory authority; (iv) a banking moratorium has been declared by any state or Federal
authority; or (v) in the judgment of the Representative, there has been, since the time of
execution of this Agreement or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the assets, properties, condition, financial or
otherwise, or in the results of operations, business affairs or business prospects of the Company
and its subsidiaries considered as a whole, whether or not arising in the ordinary course of
business.
(b) If this Agreement is terminated pursuant to any of its provisions, the Company shall not
be under any liability to any Underwriter, and no Underwriter shall be under any liability to the
Company, except that (y) if this Agreement is terminated by the Representative or the Underwriters
because of any failure, refusal or inability on the part of the Company to comply with the terms or
to fulfill any of the conditions of this Agreement, the Company will reimburse the Underwriters for
all out-of-pocket expenses (including the reasonable fees and disbursements of their counsel)
incurred by them in connection with the proposed purchase and sale of the Shares or in
contemplation of performing their obligations hereunder and (z) no Underwriter who shall have
failed or refused to purchase the Shares agreed to be purchased by it under this Agreement, without
some reason sufficient hereunder to justify cancellation or termination of its obligations under
this Agreement, shall be relieved of liability to the Company or to the other Underwriters for
damages occasioned by its failure or refusal.
8. Substitution of Underwriters. If any Underwriter shall default in its obligation
to purchase on any Closing Date the Shares agreed to be purchased hereunder on such Closing Date,
the Representative shall have the right, within 36 hours thereafter, to make arrangements for one
or more of the non-defaulting Underwriters, or any other underwriters, to purchase such Shares on
the terms contained herein. If, however, the Representative shall not have completed such
arrangements within such 36-hour period, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties satisfactory to the
Underwriters to purchase such Shares on such terms. If, after giving effect to any arrangements
for the purchase of the Shares of a defaulting Underwriter or Underwriters by the Representative
and the Company as provided above, the aggregate number of Shares which remains unpurchased on such
Closing Date does not exceed one-eleventh of the aggregate number of all the Shares that all the
Underwriters are obligated to purchase on such date, then the
26
Company shall have the right to require each non-defaulting Underwriter to purchase the number
of Shares which such Underwriter agreed to purchase hereunder at such date and, in addition, to
require each non-defaulting Underwriter to purchase its pro rata share (based on the number of
Shares which such Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default. In any such case, either
the Representative or the Company shall have the right to postpone the applicable Closing Date for
a period of not more than seven days in order to effect any necessary changes and arrangements
(including any necessary amendments or supplements to the Registration Statement or Prospectus or
any other documents), and the Company agrees to file promptly any amendments to the Registration
Statement or the Prospectus which in the opinion of the Company and the Underwriters and their
counsel may thereby be made necessary.
If, after giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by the Representative and the Company as provided above, the aggregate
number of such Shares which remains unpurchased exceeds 10% of the aggregate number of all the
Shares to be purchased at such date, then this Agreement, or, with respect to a Closing Date which
occurs after the Firm Shares Closing Date, the obligations of the Underwriters to purchase, and of
the Company to sell, the Option Shares to be purchased and sold on such date, shall terminate,
without liability on the part of any non-defaulting Underwriter to the Company, and without
liability on the part of the Company, except as provided in Sections 4(b), 5,
6 and 7. The provisions of this Section 8 shall not in any way affect the
liability of any defaulting Underwriter to the Company or the nondefaulting Underwriters arising
out of such default. The term “Underwriter” as used in this Agreement shall include any person
substituted under this Section 8 with like effect as if such person had originally been a
party to this Agreement with respect to such Shares.
9. Miscellaneous. The respective agreements, representations, warranties, indemnities
and other statements of the Company and the several Underwriters, as set forth in this Agreement or
made by or on behalf of them pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or the Company or any of their respective officers, directors or controlling
persons referred to in Sections 5 and 6 hereof, and shall survive delivery of and
payment for the Shares. In addition, the provisions of Sections 4(b), 5, 6
and 7 shall survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the Underwriters, the Company and their
respective successors and assigns, and, to the extent expressed herein, for the benefit of persons
controlling any of the Underwriters, or the Company, and directors and officers of the Company, and
their respective successors and assigns, and no other person shall acquire or have any right under
or by virtue of this Agreement. The term “successors and assigns” shall not include any purchaser
of Shares from any Underwriter merely because of such purchase.
All notices and communications hereunder shall be in writing and mailed or delivered or by
telephone or telegraph if subsequently confirmed in writing, (a) if to the Representative, to
▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
27
Attention: Equity Capital Markets, with a copy to ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Attention: R. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ – Investment Banking Counsel, and to ▇▇▇▇▇▇▇
Procter LLP, The New York Times Building, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇; and (b) if to the Company, to Uroplasty, Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Medi ▇▇▇▇▇▇, with a copy to ▇▇▇▇▇▇ & Whitney LLP, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇.
This Agreement shall be governed by and construed in accordance with the laws of the State of
New York.
This Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon the same
instrument.
[Signature Page Follows]
28
Please confirm that the foregoing correctly sets forth the agreement among us.
| Very truly yours, UROPLASTY, INC. |
||||
| By | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| Title: President, and Chief Executive Officer | ||||
Confirmed:
▇▇▇▇▇▇▇▇▇▇▇ & CO. INC.
Acting on behalf of itself and as representative of the
several Underwriters named in Schedule I hereto.
Acting on behalf of itself and as representative of the
several Underwriters named in Schedule I hereto.
| By | /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ | |||
| Title: Managing Director | ||||
SCHEDULE I
Underwriters
| Number of Firm Shares | ||
| Name | to be Purchased | |
▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc.
|
3,200,000 | |
JMP Securities LLC |
800,000 | |
Total |
4,000,000 | |
Sch I - 1
SCHEDULE II
Pricing Information
Purchase Price Per Share: $3.50
Number of Firm Shares Offered: 4,000,000
Underwriting Discount: 6.0%
Firm Shares Closing Date: July 27, 2010
Sch II - 1
SCHEDULE III
Issuer General Use Free Writing Prospectus
Final Term Sheet, dated July 22, 2010
Sch III - 1
SCHEDULE IV
List of Directors and Executive Officers Executing Lock-Up Agreements
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Sch IV - 1
EXHIBIT A
FORM OF LOCK-UP AGREEMENT
July ___, 2010
▇▇▇▇▇▇▇▇▇▇▇ & CO. INC.
As Representative of the Several Underwriters
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
As Representative of the Several Underwriters
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Public Offering of Uroplasty, Inc.
Ladies and Gentlemen:
The undersigned understands that ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc., as representative of the several
Underwriters (as defined below), proposes to enter into an Underwriting Agreement (the
“Underwriting Agreement”) with Uroplasty, Inc., a Minnesota corporation (the “Company”), providing
for the public offering (the “Public Offering”) by the several Underwriters named in Schedule I to
the Underwriting Agreement (the “Underwriters”), of shares (the “Shares”) of the Company’s common
stock, par value $0.01 per share (“Common Stock”).
In consideration of the Underwriters’ agreement to enter into the Underwriting Agreement and
to proceed with the Public Offering of the Shares, and for other good and valuable consideration
receipt of which is hereby acknowledged, the undersigned hereby agrees for the benefit of the
Company, you and the other Underwriters that, without the prior written consent of ▇▇▇▇▇▇▇▇▇▇▇ &
Co. Inc. on behalf of the Underwriters, the undersigned will not, during the period commencing on
the date hereof and ending 90 days after the date of the final prospectus supplement (the “Lock-Up
Period”) relating to the Public Offering (the “Prospectus Supplement”), directly or indirectly (1)
offer, pledge, assign, encumber, announce the intention to sell, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock owned either of record
or beneficially (as defined in the Securities Exchange Act of 1934, as amended) by the undersigned
on the date hereof or hereafter acquired or (2) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of the Common Stock,
whether any such transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise, or publicly announce an intention to
do any of the foregoing. In addition, the undersigned agrees that, without the prior written
consent of ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc. on behalf of the Underwriters, it will not, during the Lock-Up
Period, make any demand for or exercise any right with respect to, the registration of any shares
of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock.
The foregoing shall not apply to (a) Common Stock to be transferred as a gift or gifts (provided
that any donee thereof agrees in writing to be bound by the terms hereof), (b) Common Stock
transferred, either during the undersigned’s lifetime or on death, by will or intestate succession
to the immediate family of
Exh A - 1
the undersigned or to a trust the beneficiaries of which are exclusively the undersigned or any
member or members of his immediate family (provided that any transferee thereof agrees in writing
to be bound by the terms hereof), (c) the acquisition of Common Stock upon (i) exercise of any
stock option outstanding on the date hereof, including any exercise effected by means of net share
settlement (including with respect to the surrender or forfeiture of Common Stock to satisfy tax
withholding obligations or by delivery of Common Stock held by the undersigned), and (ii) the sale
by an officer or director of Common Stock in connection with the exercise of a stock option solely
in quantities adequate to pay the exercise price of, and tax withholding obligations resulting from
the exercise of, that stock option, (d) the sale of the Shares to be sold pursuant to the
Prospectus, (e) the “cashless” exercise of outstanding options to purchase Common Stock in
accordance with their terms, and (f) sales under any 10b-5 plan in existence as of the date hereof
and the establishment of any 10b-5 plan; provided no sales shall be made pursuant to any new 10b-5
plan established during the Lock-Up Period.
Notwithstanding the foregoing, if (x) during the last 17 days of the Lock-Up Period the
Company issues an earnings release or material news or a material event relating to the Company
occurs; or (y) prior to the expiration of the Lock-Up Period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of the 90-day period;
the restrictions imposed in this letter agreement shall continue to apply until the expiration of
the 18-day period beginning on the issuance of the earnings release or the occurrence of the
material news or material event; provided, however, that this sentence shall not apply if the
research published or distributed on the Company is compliant under Rule 139 of the Securities Act
and the Company’s securities are actively traded as defined in Rule 101(c)(1) of Regulation M of
the Exchange Act.
In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the
registration or transfer of the securities described herein, are hereby authorized to decline to
make any transfer of securities if such transfer would constitute a violation or breach of this
letter agreement.
The undersigned hereby represents and warrants that the undersigned has full power and
authority to enter into this letter agreement. All authority herein conferred or agreed to be
conferred and any obligations of the undersigned shall be binding upon the successors, assigns,
heirs or personal representatives of the undersigned.
The undersigned understands that, if the Underwriting Agreement does not become effective, or
if the Underwriting Agreement (other than the provisions thereof which survive termination) shall
terminate or be terminated prior to payment for and delivery of the Shares to be sold thereunder,
the undersigned shall be released from all obligations under this letter agreement.
The undersigned, whether or not participating in the Public Offering, understands that the
Underwriters are entering into the Underwriting Agreement and proceeding with the Public Offering
in reliance upon this letter agreement.
Exh A - 2
Notwithstanding the foregoing, the undersigned shall be released from all obligations under
this Agreement if the Public Offering has not been completed by September 30, 2010 or has otherwise
been terminated by the Company and the Underwriters.
[Signature page follows.]
Exh A - 3
This letter agreement shall be governed by and construed in accordance with the laws of the
State of New York, without regard to the conflict of laws principles thereof.
| Very truly yours, |
||||
| Name: | ||||
| By: | ||||
Exh A - 4
EXHIBIT B
FORM OF COMPANY COUNSEL OPINION
Such opinion of counsel may be subject to customary assumptions and qualifications, and in
rendering such opinion, such counsel may rely, as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and public officials.
| 1. | The Company is a corporation validly existing and in good standing under the laws of the State of Minnesota, with the corporate power and authority to own and lease its properties and assets and to conduct its business as it is described in the Registration Statement, the General Disclosure Package and the Prospectus. The Company is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction listed on Schedule A. |
| 2. | The Company has the corporate power and authority to enter into and perform its obligations under the Underwriting Agreement. |
| 3. | The issuance and sale of the Shares have been duly authorized by all necessary corporate action on the part of the Company, and when issued, delivered and paid for in accordance with the terms of the Underwriting Agreement, the Shares will have been validly issued and will be fully paid and non-assessable. |
| 4. | The issuance of the Shares is not subject to any statutory pre-emptive right or other similar rights of any shareholder of the Company pursuant to any of the agreements listed on Schedule B. |
| 5. | The Common Stock conforms in all material respects as to legal matters to the description thereof contained in the General Disclosure Package and in the Prospectus under the caption “Description of Common Stock.” |
| 6. | The authorized capital stock of the Company is as set forth in the General Disclosure Package and the Prospectus under the caption “Capitalization.” |
| 7. | The Underwriting Agreement has been duly authorized, executed and delivered by the Company and is a valid and binding obligation of the Company enforceable against the Company in accordance with its terms. |
| 8. | The execution and delivery of the Underwriting Agreement by the Company, and the Company’s performance of its obligations under the Underwriting Agreement, will not result in a breach or violation of (a) the articles of incorporation or bylaws of the Company, (b) any agreement or instrument set forth in Schedule B hereto, or (c) any federal or Minnesota state law, rule or regulation that, in our experience, is generally applicable to transactions in the nature of those contemplated by the Underwriting Agreement (except that we give no opinion regarding any federal or state securities or “blue sky” laws except as expressly stated herein). |
Exh B - 1
| 9. | No consent, authorization, approval or order of, or filing with, any federal or state governmental or regulatory commission, board, body, authority or agency is required to be obtained or made by the Company under the laws, rules and regulations of the United States of America and the state of Minnesota for the consummation by the Company of the of the transactions contemplated by the Underwriting Agreement, including the issuance and sale of the Shares by the Company as contemplated by the Underwriting Agreement, except such as have been obtained; provided, however, that we express no opinion as to (a) state securities or “blue sky” laws or foreign securities laws of the various jurisdictions in which the Shares are being offered by the Underwriters thereof, and (b) the approval by the Financial Industry Regulatory Authority of the terms and conditions of the Underwriting Agreement. | |
| 10. | To our knowledge, there are no actions, suits, claims, investigations or proceedings pending or threatened to which the Company is subject, or by which any of its properties are bound, before or by any federal or state governmental or regulatory commission, board, body, authority or agency that are required to be described in the Prospectus and the General Disclosure Package and that are not so described as required. | |
| 11. | The Registration Statement, as of the Effective Date, and the Prospectus, as of its date (other than the financial statements, schedules, notes, other financial and accounting data and statistical data derived therefrom, included or incorporated by reference therein or omitted therefrom and information about the Underwriters as disclosed therein, as to which we express no opinion) comply as to form in all material respects with the requirements of the Securities Act and the rules and regulations of the Commission thereunder. | |
| 12. | The Company is not and, after giving effect to the issuance and sale of the Shares as contemplated by the Underwriting Agreement, will not be, required to register as an “investment company,” as such term is defined in the Investment Company Act of 1940, as amended. | |
| 13. | The Registration Statement has become effective under the Securities Act. We have been orally advised by the Staff of the Commission that no stop order suspending the effectiveness of the Registration Statement has been issued by the Commission and we are unaware that any proceeding for that purpose is pending before or contemplated by the Commission. |
Negative Assurance Statement:
We have participated in conferences with officers and other representatives of the Company,
representatives of the independent registered public accountants for the Company and
representatives of the Underwriters and their counsel at which conferences the contents of the
Registration Statement, the General Disclosure Package, the Prospectus and related matters were
discussed and, although we are not passing upon and do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the Registration Statement, the
General Disclosure Package or the Prospectus (other than as expressly stated above), on the basis
Exh B - 2
of the foregoing, nothing has come to our attention that would lead us to believe that (i) the
Registration Statement, as of its Effective Date, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary in order to make the
statements therein not misleading, (ii) the General Disclosure Package, as of the Applicable Time,
contained an untrue statement of a material fact or omitted 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 or (iii) the Prospectus, as of its date
and at the date hereof, contained or contains an untrue statement of a material fact, or omitted or
omits 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;
it being understood that, in connection with clauses (i), (ii) and (iii), we make no statement as
to the financial statements, schedules, and notes, other financial and accounting data, statistical
data included therein or derived therefrom, information about internal controls over financial
reporting, information about the Underwriters or the method of distribution of the Shares included
in the Registration Statement, the General Disclosure Statement or the Prospectus or with respect
to the validity, enforceability or non-infringement of any patent, copyright or trade ▇▇▇▇ or name.
Exh B - 3
Schedule A
[List of jurisdictions to be added]
Sch A - 1
Schedule B
[List of material agreements to be provided]
Sch B - 1