2,500,000 SHARES
ADVANCED UROSCIENCE, INC.
COMMON STOCK
NO PAR VALUE
UNDERWRITING AGREEMENT
_____________, 1997
Xxxx Xxxxxxxx Incorporated
Xxxxx, Xxxxxxxx & Xxxx, Inc.
As Representatives of the several Underwriters
x/x Xxxx Xxxxxxxx Xxxxxxxxxxxx
Xxxx Xxxxxxxx Xxxxx
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Advanced UroScience, Inc., a Minnesota corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and
sell to the several Underwriters named in Schedule A hereto (the
"Underwriters"), for which you are acting as representatives (the
"Representatives"), an aggregate of 2,500,000 shares (the "Firm Shares") of
Common Stock, no par value, of the Company (the "Common Stock"), and up to an
additional 375,000 shares of Common Stock at the election of the Underwriters
(the "Option Shares"). The Firm Shares and the Option Shares are herein
collectively called the "Shares."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (File No. 333-_________)
and a related preliminary prospectus for the registration of the Shares under
the Securities Act of 1933, as amended (the "Act"). The registration
statement, as amended at the time it was declared effective, including the
information (if any) deemed to be part thereof pursuant to Rule 430A under
the Act is herein referred to as the "Registration Statement." The form of
prospectus first filed by the Company with the Commission pursuant to Rules
424(b) and 430A under the Act is referred to herein as the "Prospectus."
Each preliminary prospectus included in the Registration Statement prior to
the time it becomes effective or filed with the Commission pursuant to Rule
424(a) under the Act is referred to herein as a "Preliminary Prospectus."
Copies of the Registration Statement, including all exhibits and schedules
thereto, any amendments thereto and all Preliminary Prospectuses have been
delivered to you.
The Company hereby confirms its agreements with respect to the purchase of
the Shares by the Underwriters as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company represents and warrants to, and agrees with, each
of the Underwriters that:
(i) The Registration Statement has been declared
effective under the Act, and no post-effective amendment to the
Registration Statement has been filed as of the date of this
Agreement. No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been instituted or threatened by the Commission.
(ii) No order preventing or suspending the use of
any Preliminary Prospectus has been issued by the Commission, and
each Preliminary Prospectus, at the time of filing thereof,
conformed in all material respects to the requirements of the Act
and the rules and regulations of the Commission promulgated
thereunder, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no representation or warranty as to
information contained in or omitted in reliance upon, and in
conformity with, written information furnished to the Company by or
on behalf of any Underwriter through the Representatives expressly
for use in the preparation thereof.
(iii) The Registration Statement conforms, and the
Prospectus and any amendments or supplements thereto will conform,
in all material respects to the requirements of the Act and the
rules and regulations thereunder. Neither the Registration
Statement nor any amendment thereto, and neither the Prospectus nor
any supplement thereto, contains or will contain, as the case may
be, any untrue statement of a material fact or omits or will omit
to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no representation or warranty as to
information contained in or omitted from the Registration Statement
or the Prospectus, or any such amendment or supplement, in reliance
upon, and in conformity with, written information furnished to the
Company by or on behalf of any Underwriter through the
Representatives, expressly for use in the preparation thereof.
(iv) The Company is a "small business issuer" as such term is
defined in Rule 405 and Item 10 of Regulation S-B under the Act, and
is qualified to register the Shares on Form SB-2.
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(v) The Company has been duly organized, is validly existing
as a corporation in good standing under the laws of the State of
Minnesota, has the corporate power and authority to own or lease
its properties and conduct its business as described in the
Prospectus, and is duly qualified to transact business in all
jurisdictions in which the conduct of its business or its
ownership or leasing of property requires such qualification and
the failure so to qualify would have a material adverse effect on
the business or condition, financial or otherwise, of the Company.
The Company's Articles of Incorporation, as restated on __________,
as corrected on ___________, 1997, were duly adopted by the
Company's shareholders on _________, 1997.
(vi) The Company does not own any stock or other equity
interest in any corporation, partnership, joint venture,
unincorporated association or other entity.
(vii) The outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable. All offers and sales by the Company of outstanding
shares of capital stock and other securities of the Company, prior
to the date hereof, were made in compliance with the Act and all
applicable state securities or blue sky laws. The Shares to be
issued and sold by the Company to the Underwriters pursuant to this
Agreement have been duly authorized and, when issued and paid for
as contemplated herein, will be validly issued, fully paid and
nonassessable. There are no preemptive rights or other rights to
subscribe for or to purchase, or any restriction upon the voting or
transfer of, any shares of capital stock of the Company pursuant to
the Company's Articles of Incorporation, Bylaws or any agreement or
other instrument to which the Company is a party or by which the
Company is bound. Neither the filing of the Registration Statement
nor the offering or the sale of the Shares as contemplated by this
Agreement gives rise to any rights for, or relating to, the
registration of any shares of capital stock or other securities of
the Company, except such rights which have been validly waived or
satisfied. Except as described in the Prospectus, there are no
outstanding options, warrants, agreements, contracts or other
rights to purchase or acquire from the Company any shares of its
capital stock. The Company has the authorized and outstanding
capital stock as set forth under the heading "Capitalization" in
the Prospectus. The outstanding capital stock of the Company,
including the Shares, conforms, and the Shares to be issued by the
Company to the Underwriters will conform, to the description
thereof contained in the Prospectus.
(viii) The financial statements, together with the related
notes and schedules as set forth in the Registration Statement and
Prospectus, present fairly the financial position, results of
operations and changes in financial position of the Company on the
basis stated in the Registration Statement at the indicated dates
and for the indicated periods. Such financial statements have been
prepared in accordance with generally accepted accounting
principles consistently applied
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throughout the periods involved, and all adjustments necessary for
a fair presentation of results for such periods have been made,
except as otherwise stated therein. The summary and selected
financial and statistical data included in the Registration
Statement present fairly the information shown therein on the basis
stated in the Registration Statement and have been compiled on a
basis consistent with the financial statements presented therein.
(ix) There is no action or proceeding pending or, to the
knowledge of the Company, threatened or contemplated against the
Company before any court or administrative or regulatory agency
which, if determined adversely to the Company, would, individually
or in the aggregate, result in a material adverse change in the
business or condition (financial or otherwise), results of
operations, stockholders' equity or prospects of the Company,
except as set forth in the Registration Statement.
(x) The Company has good and marketable title to all
properties and assets reflected as owned in the financial
statements hereinabove described (or as described as owned in the
Prospectus), in each case free and clear of all liens, encumbrances
and defects, except such as are described in the Prospectus or do
not substantially affect the value of such properties and assets
and do not materially interfere with the use made and proposed to
be made of such properties and assets by the Company; and any real
property and buildings held under lease by the Company are held
under valid, subsisting and enforceable leases with such exceptions
as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company.
(xi) Since the respective dates as of which information is
given in the Registration Statement, as it may be amended or
supplemented, (A) there has not been any material adverse change,
or any development involving a prospective material adverse change,
in or affecting the condition, financial or otherwise, of the
Company or the business affairs, management, financial position,
shareholders' equity or results of operations of the Company,
whether or not occurring in the ordinary course of business, (B)
there has not been any transaction not in the ordinary course of
business entered into by the Company which is material to the
Company, other than transactions described or contemplated in the
Registration Statement, (C) the Company has not incurred any
material liabilities or obligations, which are not in the ordinary
course of business or which could result in a material reduction in
the future earnings of the Company, (D) the Company has not
sustained any material loss or interference with its business or
properties from fire, flood, windstorm, accident or other calamity,
whether or not covered by insurance, (E) there has not been any
change in the capital stock of the Company (other than upon the
exercise of options and warrants described in the Registration
Statement or in connection with a strategic alliance as
specifically described in the Registration Statement), or any
material increase in the short-term or long-term debt (including
capitalized lease
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obligations) of the Company, (F) there has not been any declaration
or payment of any dividends or any distributions of any kind with
respect to the capital stock of the Company, other than any
dividends or distributions described or contemplated in the
Registration Statement, or (G) there has not been any issuance of
warrants, options, convertible securities or other rights to
purchase or acquire capital stock of the Company.
(xii) The Company is not in violation of, or in default under,
its Articles of Incorporation or Bylaws, or any statute, or any
rule, regulation, order, judgment, decree or authorization of any
court or governmental or administrative agency or body having
jurisdiction over the Company or any of its properties, or any
indenture, mortgage, deed of trust, loan agreement, lease,
franchise, license or other agreement or instrument to which the
Company is a party or by which it is bound or to which any property
or assets of the Company is subject, which violation or default
would have a material adverse effect on the business, condition
(financial or otherwise), results of operations, stockholders'
equity or prospects of the Company.
(xiii) The issuance and sale of the Shares by the Company and
the compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions contemplated
herein will not violate any provision of the Articles of
Incorporation or Bylaws of the Company or any statute or any order,
judgment, decree, rule, regulation or authorization of any court or
governmental or administrative agency or body having jurisdiction
over the Company or any of its properties, and will not conflict
with, result in a breach or violation of, or constitute, either by
itself or upon notice or passage of time or both, a default under
any indenture, mortgage, deed of trust, loan agreement, lease,
franchise, license or other agreement or instrument to which the
Company is a party or by which the Company is bound or to which any
property or assets of the Company is subject. No approval,
consent, order, authorization, designation, declaration or filing
by or with any court or governmental agency or body is required for
the execution and delivery by the Company of this Agreement and the
consummation of the transactions herein contemplated, except as may
be required under the Act or any state securities or blue sky laws.
(xiv) The Company holds and is operating in compliance with
all licenses, approvals, certificates and permits from governmental
and regulatory authorities, foreign and domestic, which are
necessary to the conduct of its business as described in the
Prospectus. The Company has not received notice of or has
knowledge of any basis for any proceeding or action relating
specifically to the Company for the revocation or suspension of any
such consent, authorization, approval, order, license, certificate,
permit or any other action or proposed action by any regulatory
authority having jurisdiction over the Company that would have
material adverse effect on the Company.
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(xv) The Company has the power and authority to enter into
this Agreement and to authorize, issue and sell the Shares it will
sell hereunder as contemplated hereby. This Agreement has been
duly and validly authorized, executed and delivered by the Company.
(xvi) McGladrey & Xxxxxx, LLP, which has certified certain of
the financial statements filed with the Commission as part of the
Registration Statement, are independent public accountants as
required by the Act and the rules and regulations thereunder.
(xvii) The Company has not taken and will not take, directly
or indirectly, any action designed to, or which has constituted, or
which might reasonably be expected to cause or result in,
stabilization or manipulation of the price of the Common Stock.
(xviii) The Company's registration statement pursuant to
Section 12(g) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), has been declared effective by the
Commission, and the Shares have been approved for designation upon
notice of issuance on the Nasdaq National Market under the symbol
"AURO."
(xix) The Company has obtained and delivered to the
Representatives written agreements, in form and substance
satisfactory to the Representatives, of each of its directors,
executive officers and five percent or greater shareholders that no
offer, sale, assignment, transfer, encumbrance, contract to sell,
grant of an option to purchase or other disposition of any Common
Stock or other capital stock of the Company will be made for a
period of 180 days after the date of the Prospectus, directly or
indirectly, by such holder otherwise than hereunder or with the
prior written consent of the Representatives.
(xx) The Company has not distributed and will not distribute
any prospectus or other offering material in connection with the
offering and sale of the Shares other than any Preliminary
Prospectus or the Prospectus or other materials permitted by the
Act to be distributed by the Company.
(xxi) The Company is in compliance with all provisions of
Florida Statutes Section 517.075 (Chapter 92-198, laws of Florida).
The Company does not do any business, directly or indirectly, with
the government of Cuba or with any person or entity located in Cuba.
(xxii) The Company has filed all federal, state, local and
foreign tax returns or reports required to be filed, and has paid
in full all taxes indicated by said returns or reports and all
assessments received by it to the extent that such taxes have
become due and payable, except where the Company is contesting in
good faith such taxes and assessments.
6
(xxiii) The Company owns or possesses all patents, patent
applications, trademarks, service marks, tradenames, trademark
registrations, service xxxx registrations, copyrights, licenses,
inventions, trade secrets and other similar rights necessary for
the conduct of its business as described in the Prospectus. No
name which the Company uses, product of the Company described in
the Prospectus and no other aspect of the business of the Company
involves or gives rise to any infringement of or conflict with, or
license or similar fees for, any patents, patent applications,
trademarks, service marks, tradenames, trademark registrations,
service xxxx registrations, copyrights, licenses, inventions, trade
secrets or other similar rights of others. Except as set forth in
the Prospectus, the Company has not received any notice or claim of
conflict with the asserted rights of others with respect any of the
foregoing.
(xxiv) The Company is not, and upon completion of the sale of
Shares contemplated hereby will not be, required to register as an
"investment company" under the Investment Company Act of 1940, as
amended.
(xxv) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with management's general
or specific authorization; (B) transactions are recorded as
necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (C) access to records is
permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is
compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(xxvi) Other than as contemplated by this Agreement and that
certain letter of intent dated September 18, 1997 between the
Company and Xxxx Xxxxxxxx Incorporated, the Company has not
incurred any liability for any finder's or broker's fee or agent's
commission in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated
hereby.
(xxvii) There has been no unlawful storage, treatment or
disposal of waste by the Company (or any of its
predecessors-in-interest) at any of the facilities owned or leased
thereby, except for such violations which would not have a material
adverse effect on the condition, financial or otherwise, or the
earnings, affairs or business prospects of the Company; there has
been no material spill, discharge, leak, emission, ejection,
escape, dumping or release of any kind onto the properties owned or
leased by the Company, or into the environment surrounding those
properties, of any toxic or hazardous substances, as defined under
any federal, state or local regulations, laws or statutes, except
for those releases permissible under such regulations, laws or
statutes or otherwise allowable under applicable permits and except
for such releases which would not
7
have a material adverse effect on the condition, financial or
otherwise, or the earnings, affairs or business prospects of the
Company.
(xxviii) No material labor dispute with the employees of the
Company exists or is imminent.
(xxix) Each employee benefit plan (as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) ("Employee Benefit Plan"), and each bonus, retirement,
pension, profit sharing, stock bonus, thrift, stock option, stock
purchase, incentive, severance, deferred or other compensation or
welfare benefit plan, program, agreement or arrangement of, or
applicable to employees or former employees of, the Company or with
respect to which the Company could have any liability ("Benefit
Plans"), was or has been established, maintained and operated in
all material respects in compliance with all applicable federal,
state, and local statutes, orders, governmental rules and
regulations, including, but not limited to, ERISA and the Internal
Revenue Code of 1986, as amended (the "Code"). No Benefit Plan is
or was subject to Title IV of ERISA or Section 302 of ERISA or
Section 412 of the Code. The Company does not, either directly or
indirectly as a member of a controlled group within the meaning of
Sections 414(b), (c), (m) and (o) of the Code ("Controlled Group"),
have any material liability that remains unsatisfied or arising
under Section 502 of ERISA, Subchapter D of Chapter 1 of Subtitle A
of the Code or under Chapter 43 of Subtitle D of the Code. No
action, suit, grievance, arbitration or other matter of litigation
or claim with respect to any Benefit Plan (other than routine
claims for benefits made in the ordinary course of plan
administration for which plan administrative procedures have not
been exhausted) is pending or, to the Company's knowledge,
threatened or imminent against or with respect to any Benefit Plan,
any member of a Controlled Group that includes the Company, or any
fiduciary within the meaning of Section 3(21) of ERISA with respect
to a Benefit Plan which, if determined adversely to the Company,
would have a material adverse effect on the Company. Neither the
Company nor any member of a Controlled Group that includes the
Company, has any knowledge of any facts that could give rise to any
action, suit, grievance, arbitration or any other manner of
litigation or claim with respect to any Benefit Plan.
(xxx) The Company maintains insurance, including without
limitation, product liability insurance, of the types and in the
amounts generally deemed adequate in its business and consistent
with insurance coverage maintained by similar companies and
businesses, and as required by the rules and regulations of all
governmental agencies having jurisdiction over the Company, all of
which insurance is in full force and effect.
(xxxi) Since August 19, 1996, the Company has not received any
communication, oral or written, from, or on behalf of, Uroplasty
Incorporated
8
("Uroplasty") with respect to any alleged infringement by the
Company of any rights or alleged rights of Uroplasty under any
patents, patent applications or any alleged trade secrets of
Uroplasty, nor with respect to any alleged breach by the Company or
any of its officers, directors or employees of any agreements or
alleged agreements or arrangements relating to confidentiality,
non-disclosure or non-competition.
(xxxii) All transactions between the Company and its officers,
directors and holders of more than five percent of any class of its
voting securities required to be disclosed pursuant to Item 404 of
Regulation S-B under the Act have been accurately disclosed in the
Prospectus.
(b) Any certificate signed by any officer of the Company and
delivered to the Representatives or counsel to the Underwriters shall be
deemed to be a representation and warranty of the Company to each
Underwriter as to the matters covered thereby.
2. PURCHASE, SALE AND DELIVERY OF SHARES.
(a) On the basis of the representations, warranties and
covenants contained herein, and subject to the terms and conditions
herein set forth, the Company agrees to sell to each Underwriter and
each Underwriter agrees, severally and not jointly, to purchase from the
Company, at a price of $________ per share, the number of Firm Shares
set forth opposite the name of each Underwriter in Schedule A hereto,
subject to adjustments in accordance with Section 8 hereof.
In addition, on the basis of the representations, warranties
and covenants herein contained and subject to the terms and conditions
herein set forth, the Company hereby grants to the several Underwriters
an option to purchase, at their election, up to 375,000 Option Shares at
the same price per share as set forth for the Firm Shares in the
paragraph above, for the sole purpose of covering overallotments in the
sale of the Firm Shares. The option granted hereby may be exercised in
whole or in part, but only once, and at any time upon written notice
given within 30 days after the date of this Agreement, by you, as
Representatives of the several Underwriters, to the Company setting
forth the number of Option Shares as to which the several Underwriters
are exercising the option and the time and date at which certificates
are to be delivered. If any Option Shares are purchased, each
Underwriter agrees, severally and not jointly, to purchase that portion
of the number of Option Shares as to which such election shall have been
exercised (subject to adjustment to eliminate fractional shares)
determined by multiplying such number of Option Shares by a fraction the
numerator of which is the maximum number of Option Shares which such
Underwriter is entitled to purchase as set forth opposite the name of
such Underwriter in Schedule A hereto and the denominator of which is
the maximum number of Option Shares which all of the Underwriters are
entitled to purchase hereunder. The time and date at which certificates
for Option Shares are to be delivered shall be determined by the
Representatives but shall not be earlier than two or later than ten full
business days after the exercise of such option, and shall not in any
event be prior
9
to the Closing Date. If the date of exercise of the option is three or
more full days before the Closing Date, the notice of exercise shall set
the Closing Date as the Option Closing Date.
(b) Certificates in definitive form for the Shares to be purchased
by each Underwriter hereunder, and in such denominations and registered
in such names as Xxxx Xxxxxxxx Incorporated may request upon at least
forty-eight hours' prior notice to the Company, shall be delivered by or
on behalf of the Company to you for the account of such Underwriter at
such time and place as shall hereafter be designated by the
Representatives, against payment by such Underwriter or on its behalf of
the purchase price therefor by certified or official bank check or
checks, payable to the order of the Company in next day funds, or by
wire transfer. The time and date of such delivery and payment shall be,
with respect to the Firm Shares, 8:30 a.m. Minneapolis time, at the
offices of Xxxxxxxxxx & Xxxxx, P.A., on ____________, 1997, or such
other time and date as you and the Company may agree upon in writing,
such time and date being herein referred to as the "Closing Date," and,
with respect to the Option Shares, at the time and on the date specified
by you in the written notice given by you of the Underwriters' election
to purchase the Option Shares, or such other time and date as you and
the Company may agree upon in writing, such time and date being referred
to herein as the "Option Closing Date." Such certificates will be made
available for checking and packaging at least twenty-four hours prior to
the Closing Date or the Option Closing Date, as the case may be, at a
location as may be designated by you.
3. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to make a public offering of the Firm Shares as soon as
the Representatives deem it advisable to do so. The Firm Shares are to be
initially offered to the public at the initial public offering price set
forth in the Prospectus. The Representatives may from time to time
thereafter change the public offering price and other selling terms. To the
extent, if at all, that any Option Shares are purchased pursuant to Section 2
hereof, the Underwriters will offer such Option Shares to the public on the
foregoing terms.
4. COVENANTS OF THE COMPANY. The Company covenants and agrees with
the several Underwriters that:
(a) The Company will prepare and timely file with the Commission
under Rule 424(b) under the Act a Prospectus containing information
previously omitted at the time of effectiveness of the Registration
Statement in reliance on Rule 430A under the Act, and will not file any
amendment to the Registration Statement or supplement to the Prospectus
of which the Representatives shall not previously have been advised and
furnished with a copy and as to which the Representatives shall have
objected in writing promptly after reasonable notice thereof or which is
not in compliance with the Act or the rules and regulations thereunder.
(b) The Company will advise the Representatives promptly of any
request of the Commission for amendment of the Registration Statement or
for any supplement to
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the Prospectus or for any additional information, or of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or the use of the Prospectus, of the suspension
of the qualification of the Shares for offering or sale in any
jurisdiction, or of the institution or threatening of any proceedings
for that purpose, and the Company will use its best efforts to prevent
the issuance of any such stop order preventing or suspending the use of
the Prospectus or suspending such qualification and to obtain as soon as
possible the lifting thereof, if issued.
(c) The Company will endeavor to qualify the Shares for sale under
the securities laws of such jurisdictions as the Representatives may
reasonably have designated in writing and will, or will cause counsel
to, make such applications, file such documents, and furnish such
information as may be reasonably requested by the Representatives,
provided that the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction where it is not now so qualified or required to file such a
consent. The Company will, from time to time, prepare and file such
statements, reports and other documents as are or may be required to
continue such qualifications in effect for so long a period as the
Representatives may reasonably request for distribution of the Shares.
(d) The Company will furnish the Underwriters with as many
copies of any Preliminary Prospectus as the Representatives may
reasonably request and, during the period when delivery of a prospectus
is required under the Act, the Company will furnish the Underwriters
with as many copies of the Prospectus in final form, or as thereafter
amended or supplemented, as the Representatives may, from time to time,
reasonably request. The Company will deliver to the Representatives, at
or before the Closing Date, two (2) signed copies of the Registration
Statement and all amendments thereto including all exhibits filed
therewith, and will deliver to the Representatives such number of copies
of the Registration Statement, without exhibits, and of all amendments
thereto, as the Representatives may reasonably request.
(e) If, during the period in which a prospectus is required by law
to be delivered by an Underwriter or dealer, any event shall occur as a
result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in
light of the circumstances existing at the time the Prospectus is
delivered to a purchaser, not misleading, or if for any other reason it
shall be necessary at any time to amend or supplement the Prospectus to
comply with any law, the Company promptly will prepare and file with the
Commission an appropriate amendment to the Registration Statement or
supplement to the Prospectus so that the Prospectus as so amended or
supplemented will not include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein in light of the circumstances existing when it is so
delivered, not misleading, or so that the Prospectus will comply with
law. In case any Underwriter is required to deliver a prospectus in
connection with sales of any Shares at any time nine months or more
after the effective date of the Registration Statement, upon the request
of the Representatives but at the expense of such
11
Underwriter, the Company will prepare and deliver to such Underwriter as
many copies as the Representatives may request of an amended or
supplemented Prospectus complying with Section 10(a)(3) of the Act.
(f) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any event not
later than 18 months after the effective date of the Registration
Statement, an earnings statement (which need not be audited) in
reasonable detail, covering a period of at least 12 consecutive months
beginning after the effective date of the Registration Statement, which
earnings statement shall satisfy the requirements of Section 11(a) of
the Act and Rule 158 thereunder and will advise you in writing when such
statement has been so made available.
(g) The Company will, for such period up to five years from
the Closing Date, deliver to the Representatives copies of its annual
report and copies of all other documents, reports and information
furnished by the Company to its security holders or filed with any
securities exchange pursuant to the requirements of such exchange or
with the Commission pursuant to the Act or the Exchange Act. The
Company will deliver to the Representatives similar reports with respect
to significant subsidiaries, as that term is defined in the rules and
regulations under the Act, which are not consolidated in the Company's
financial statements.
(h) No offering, sale or other disposition of any Common
Stock or other capital stock of the Company, or warrants, options,
convertible securities or other rights to acquire such Common Stock or
other capital stock (other than pursuant to employee stock option plans,
outstanding options or on the conversion of convertible securities
outstanding on the date of this Agreement or in connection with a
strategic relationship specifically described in the Registration
Statement) will be made for a period of 180 days after the date of this
Agreement, directly or indirectly, by the Company otherwise than
hereunder or with the prior written consent of the Representatives.
(i) The Company will apply the net proceeds from the sale of
the Shares to be sold by it hereunder substantially in accordance with
the purposes set forth under "Use of Proceeds" in the Prospectus.
(j) The Company will use its best efforts to maintain the
designation of the Common Stock on the Nasdaq National Market.
5. COSTS AND EXPENSES. The Company will pay (directly or by
reimbursement) all costs, expenses and fees incident to the performance of
the obligations of the Company under this Agreement, including, without
limiting the generality of the foregoing, the following: accounting fees of
the Company; the fees and disbursements of counsel for the Company; the cost
of preparing, printing and filing of the Registration Statement, Preliminary
Prospectuses and the Prospectus and any amendments and supplements thereto
and the printing, mailing and delivery to the Underwriters and dealers of
copies thereof and of this Agreement, any Selected Dealers Agreement, the
Underwriters' Selling Memorandum, any Blue Sky Memorandum and any supplements
or amendments thereto (excluding, except as provided below, fees and expenses
12
of counsel to the Underwriters); the filing fees of the Commission; the
filing fees and expenses (including legal fees and disbursements of counsel
for the Underwriters) incident to securing any required review by the NASD of
the terms of the sale of the Shares (including any fees, expenses, legal fees
or disbursements incident to qualification of Xxxx Xxxxxxxx Incorporated as a
"Qualified Independent Underwriter" with respect to the sale of Shares);
listing fees, if any, transfer taxes and the expenses, including the fees and
disbursements of counsel for the Underwriters incurred in connection with the
qualification of the Shares under state securities or Blue Sky laws; the fees
and expenses incurred in connection with the designation of the Shares on the
Nasdaq National Market; the costs of preparing stock certificates; the costs
and fees of any registrar or transfer agent and all other costs and expenses
incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section 5. In addition, the
Company will pay all travel and lodging expenses incurred by management of
the Company in connection with any informational "road show" meetings held in
connection with the offering and will also pay for the preparation of all
materials used in connection with such meetings. The Company shall not,
however, be required to pay for any of the Underwriters' expenses (other than
those related to qualification of the Shares under state securities or Blue
Sky laws and those incident to securing any required review by the NASD of
the terms of the sale of the shares) except that, if this Agreement shall not
be consummated because the conditions in Section 6 hereof are not satisfied,
or because this Agreement is terminated by the Representatives pursuant to
Section 10(b) hereof, or by reason of any failure, refusal or inability on
the part of the Company to perform any undertaking or satisfy any condition
of this Agreement or to comply with any of the terms hereof on its part to be
performed, unless such failure to satisfy said condition or to comply with
said terms shall be due to the default or omission of any Underwriter, then
the Company shall promptly upon request by the Representatives reimburse the
several Underwriters for all out-of-pocket accountable expenses, including
fees and disbursements of counsel, incurred in connection with investigating,
marketing and proposing to market the Shares or in contemplation of
performing their obligations hereunder; but the Company shall not in any
event be liable to any of the several Underwriters for damages on account of
loss of anticipated profits from the sale by them of the Shares.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS. The several
obligations of the Underwriters to purchase the Firm Shares on the Closing
Date and the Option Shares, if any, on the Option Closing Date, are subject
to the condition that all representations and warranties of the Company
contained herein are true and correct, at and as of the Closing Date or the
Option Closing Date, as the case may be, the condition that the Company shall
have performed all of its covenants and obligations hereunder and to the
following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 4(a) hereof; no stop order suspending the effectiveness of
the Registration Statement, as amended from time to time, or any part
thereof shall have been issued and no proceedings for that purpose shall
have been initiated or threatened by the Commission; and all requests
for additional information on the part of the Commission shall have been
complied with to the reasonable satisfaction of the Representatives.
13
(b) The Representatives shall have received on the Closing Date or
the Option Closing Date, as the case may be, the opinion of Xxxxxxxxxx &
Xxxxx, P.A., counsel for the Company, dated the Closing Date or the
Option Closing Date, as the case may be, addressed to the Underwriters,
to the effect that:
(i) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the
State of Minnesota, with corporate power and authority to own or
lease its properties and conduct its business as described in the
Prospectus. The Company's Articles of Incorporation, as restated
on ____________, as corrected on ___________, 1997, were duly
adopted by the Company's shareholders on ____________, 1997, and
are in full force and effect under, and have been filed in
accordance with all applicable requirements of, Minnesota corporate
law.
(ii) To the knowledge of such counsel, the Company does not
own any stock or other equity interest in any corporation,
partnership, joint venture, unincorporated association or other
entity.
(iii) The Company has authorized and outstanding capital stock
as described in the Prospectus. The outstanding shares of the
Company's capital stock have been duly authorized and validly
issued and are fully paid and nonassessable. The form of
certificate for the Shares is in due and proper form and complies
with all applicable statutory requirements. The Shares to be
issued and sold by the Company pursuant to this Agreement have been
duly authorized and, when issued and paid for as contemplated
herein, will be validly issued, fully paid and nonassessable. No
preemptive or, to the knowledge of such counsel, other similar
subscription rights of shareholders of the Company, or of holders
of warrants, options, convertible securities or other rights to
acquire shares of capital stock of the Company, exist with respect
to any of the Shares or the issue and sale thereof. To the
knowledge of such counsel, no rights to register outstanding shares
of the Company's capital stock, or shares issuable upon the
exercise of outstanding warrants, options, convertible securities
or other rights to acquire shares of such capital stock, exist
which have not been validly exercised or waived with respect to the
Registration Statement. The capital stock of the Company,
including the Shares, conforms in all material respects to the
description thereof contained in the Prospectus.
(iv) The Registration Statement has become effective under
the Act and, to the knowledge of such counsel, no stop order
proceedings with respect thereto have been instituted or are
pending or threatened by the Commission.
(v) The Registration Statement, the Prospectus and each
amendment or supplement thereto comply as to form in all material
respects with the requirements of the Act and the rules and
regulations thereunder (except that such counsel need express no
opinion as to the financial statements and related
14
schedules included therein). The Company is a "small business
issuer" as such term is defined in Rule 405 and Item 10 of
Regulation S-B under the Act.
(vi) The statements (A) in the Prospectus under the captions
"Risk Factors -- Extensive Governmental Regulation; Uncertainty of
Obtaining Regulatory Approval," "-- Uncertainty Relating to
Third-Party Reimbursement," "-- Possible Adverse Market Effect of
Shares Eligible for Future Sale," " -- Adverse Effect of
Anti-Takeover Provisions; Undesignated Stock," "Business -- Status
of Clinical Trials," " -- Manufacturing," "-- Government
Regulations," "-- Third Party Reimbursement," "Description of
Capital Stock" and "Shares Eligible for Future Sale" and (B) in the
Registration Statement in Item 24, insofar as such statements
constitute a summary of matters of law, are accurate summaries and
fairly present the information called for with respect to such
matters.
(vii) Such counsel does not know of any contracts, agreements,
documents or instruments required to be filed as exhibits to the
Registration Statement, incorporated by reference into the
Prospectus, or described in the Registration Statement or the
Prospectus which are not so filed, incorporated by reference or
described as required; and insofar as any statements in the
Registration Statement or the Prospectus constitute summaries of
any contract, agreement, document or instrument to which the
Company is a party, such statements are accurate summaries and
fairly present the information called for with respect to such
matters.
(viii) Such counsel knows of no legal or governmental
proceeding, pending or threatened, before any court or
administrative body or regulatory agency, to which the Company is a
party or to which any of the properties of the Company is subject
that are required to be described in the Registration Statement or
Prospectus and are not so described, or statutes or regulations
that are required to be described in the Registration Statement or
the Prospectus that are not so described.
(ix) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated do not and
will not conflict with or result in a violation of, or default
under, the charter or bylaws of the Company, or under any statute,
permit, judgment, decree, order, rule or regulation known to such
counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its properties, or under
any lease, contract, indenture, mortgage, loan agreement or other
agreement or other instrument or obligation known to such counsel
to which the Company is a party or by which the Company is bound or
to which any property or assets of the Company is subject, except
such agreements, instruments or obligations with respect to which
valid consents or waivers have been obtained by the Company.
15
(x) The Company has the corporate power and authority to
enter into this Agreement and to authorize, issue and sell the
Shares as contemplated hereby. This Agreement has been duly and
validly authorized, executed and delivered by the Company.
(xi) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or
other governmental body is necessary in connection with the
execution and delivery of this Agreement and the consummation of
the transactions herein contemplated (other than as may be required
by state securities and blue sky laws, as to which such counsel
need express no opinion) except such as have been obtained or made,
specifying the same.
(xii) The Company is not, and immediately upon completion of
the sale of Shares contemplated hereby will not be, required to
register as an "investment company" under the Investment Company
Act of 1940, as amended.
(xiii) Such counsel has no reason to believe that, as of its
effective date, the Registration Statement or any further amendment
thereto made by the Company prior to the Closing Date or the Option
Closing Date, as the case may be, (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that, as of its date, the Prospectus or any further
amendment or supplement thereto made by the Company prior to the
Closing Date or the Option Closing Date, as the case may be, (other
than the financial statements and related schedules therein, as to
which such counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading or that, as
of the Closing Date or the Option Closing Date, as the case may be,
either the Registration Statement or the Prospectus or any further
amendment or supplement thereto made by the Company prior to the
Closing Date or the Option Closing Date, as the case may be, (other
than the financial statements and related schedules therein, as to
which such counsel need express no opinion) contains an untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; and they do
not know of any amendment to the Registration Statement required to
be filed.
(c) The Representatives shall have received from Xxxxxxxx Rooney &
Xxxxxxxxx P.A., patent counsel to the Company, an opinion dated the
Closing Date or the Option Closing Date, as the case may be, addressed
to the Underwriters, in the form requested by the Representatives.
16
(d) The Representatives shall have received from Xxxxxxxxxxx Xxxxx
& Xxxxxxxx, counsel for the Underwriters, an opinion dated the Closing
Date or the Option Closing Date, as the case may be, with respect to the
incorporation of the Company, the validity of the Shares, the
Registration Statement, the Prospectus, and other related matters as the
Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters.
(e) The Representatives shall have received on each of the date
hereof, the Closing Date and the Option Closing Date, as the case may
be, a signed letter, dated as of the date hereof, the Closing Date or
the Option Closing Date, as the case may be, in form and substance
satisfactory to the Representatives, from McGladrey & Xxxxxx LLP, to the
effect that they are independent public accountants with respect to the
Company within the meaning of the Act and the related rules and
regulations and 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) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date or the Option Closing Date, as the case may
be, there shall not have been any change or any development involving a
prospective change, in or affecting the general affairs, management,
financial position, shareholders' equity or results of operations of the
Company, otherwise than as set forth or contemplated in the Prospectus,
the effect of which, in your judgment, is material and adverse to the
Company and makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares being delivered at the
Closing Date or the Option Closing Date, as the case may be, on the
terms and in the manner contemplated in the Prospectus.
(g) The Representatives shall have received on the Closing Date or
the Option Closing Date, as the case may be, a certificate or
certificates of the chief executive officer and the chief financial
officer of the Company to the effect that, as of the Closing Date or the
Option Closing Date, as the case may be, each of them severally
represents as follows:
(i) The Prospectus was filed with the Commission pursuant to
Rule 424(b) within the applicable period prescribed for such filing
by the rules and regulations under the Act and in accordance with
Section 4 of this Agreement; no stop order suspending the
effectiveness of the Registration Statement has been issued, and no
proceedings for such purpose have been initiated or are, to his
knowledge, threatened by the Commission.
(ii) The representations and warranties of the Company set
forth in Section 1 of this Agreement are true and correct at and as
of the Closing Date or the Option Closing Date, as the case may be,
and the Company has performed all
17
of its obligations under this Agreement to be performed at or
prior to the Closing Date or the Option Closing Date, as the
case may be.
(h) The Company shall have furnished to the Representatives such
further certificates and documents as the Representatives may reasonably
have requested.
The opinions and certificates mentioned in this Agreement shall be
deemed to be in compliance with the provisions hereof only if they are in all
material respects reasonably satisfactory to the Representatives and to
Xxxxxxxxxxx Xxxxx & Xxxxxxxx, counsel for the Underwriters.
If any of the conditions hereinabove provided for in this Section 6
shall not have been fulfilled when and as required by this Agreement to be
fulfilled, the obligations of the Underwriters hereunder may be terminated by
the Representatives by notifying the Company of such termination in writing
or by telegram at or prior to the Closing Date or the Option Closing Date, as
the case may be. In such event, the Company and the Underwriters shall not
be under any obligation to each other (except to the extent provided in
Sections 5 and 7 hereof).
7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, each officer and director thereof, and each person, if any,
who controls any Underwriter within the meaning of the Act, against any
losses, claims, damages or liabilities to which such Underwriter or such
persons may became subject under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of or are based upon (i) any untrue statement
or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus or the Prospectus,
including any amendments or supplements thereto, (ii) 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
light of the circumstances under which they were made, or (iii) any act
or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the Common
Stock or the offering contemplated hereby, and which is included as part
of or referred to in any losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arising out of or based upon
matters covered by clause (i) or (ii) above, and will reimburse each
Underwriter and each such controlling person for any legal or other
expenses reasonably incurred by such Underwriter or such controlling
person in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement, or omission or alleged omission,
made in the Registration Statement, any Preliminary Prospectus or the
Prospectus, including any amendments or supplements thereto, in reliance
upon and in conformity with written information furnished to the Company
by any Underwriter through the Representatives specifically for use
therein; and provided, further, that the Company shall not be liable in
the case of any matter
18
covered by clause (iii) above to the extent that it is determined in a
final judgment by a court of competent jurisdiction that such losses,
claims, damages or liabilities resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter
through its gross negligence or willful misconduct.
(b) Each Underwriter agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed the
Registration Statement and each person, if any, who controls the Company
within the meaning of the Act, against any losses, claims, damages or
liabilities to which the Company or any such director, officer or
controlling person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or arise out of or
are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances
under which they were made, and will reimburse any legal or other
expenses reasonably incurred by the Company or any such director,
officer or controlling person in connection with investigating or
defending any such action or claim as such expenses are incurred;
provided, however, that each Underwriter will be liable in each case to
the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission has been made
in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through the Representatives specifically for use therein.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity or contribution may be sought pursuant to this Section
7, such person (the "indemnified party") shall promptly notify the
person against whom such indemnity may be sought (the "indemnifying
party") in writing. No indemnification provided for in Section 7(a) or
(b) or contribution provided for in Section 7(d) shall be available with
respect to a proceeding to any party who shall fail to give notice of
such proceeding as provided in this Section 7(c) if the party to whom
notice was not given was unaware of the proceeding to which such notice
would have related and was prejudiced by the failure to give such
notice, but the failure to give such notice shall not relieve the
indemnifying party or parties from any liability which it or they may
have to the indemnified party otherwise than on account of the
provisions of Section 7(a), (b) or (c). In case any such 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 therein 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 shall pay as incurred the
fees and disbursements of such counsel related to such proceeding. In
any such proceeding, any indemnified party shall have the right to
retain its own counsel at its own expense. Notwithstanding the
foregoing, the
19
indemnifying party shall pay promptly as incurred the reasonable fees
and expenses of the counsel retained by the indemnified party in the
event (i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel or (ii) the named
parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and the
indemnified party shall have reasonably concluded that there may be a
conflict between the positions of the indemnifying party and the
indemnified party in conducting the defense of any such action or that
there may be legal defenses available to it or other indemnified parties
which are different from or additional to those available to the
indemnifying party. It is understood that the indemnifying party shall
not, in connection with any proceeding or related proceedings in the
same jurisdiction, be liable for the fees and expenses of more than one
separate firm at any time for all such indemnified parties. Such firm
shall be designated in writing by the Representatives and shall be
reasonably satisfactory to the Company in the case of parties
indemnified pursuant to Section 7(a) and shall be designated in writing
by the Company and shall be reasonably satisfactory to the
Representatives in the case of parties indemnified pursuant to Section
7(b). The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent but if settled with
such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
Section 7(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions or proceedings in respect
thereof) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on
the other from the offering of the Shares. If, however, the allocation
provided by the immediately preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as
is appropriate to reflect not only such relative benefits but also the
relative fault of the Company on the one hand and the Underwriters on
the other in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bears to the total
underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover page of the Prospectus.
The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the
Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or
20
omission. The Company and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section 7(d) 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 in this Section 7(d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or
liabilities (or actions or proceedings in respect thereto) referred to
above in this Section 7(d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7(d), no Underwriter
shall be required to contribute any amount in excess of the underwriting
discounts and commissions applicable to the Shares purchased by such
Underwriter; and no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this Section 7(d)
to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 7 shall
be in addition to any liability which the Company may otherwise have,
and the obligations of the Underwriters under this Section 7 shall be in
addition to any liability which the Underwriters may otherwise have.
8. DEFAULT BY UNDERWRITERS. If on the Closing Date or the Option
Closing Date, as the case may be, any Underwriter shall fail to purchase and
pay for the portion of the Shares which such Underwriter has agreed to
purchase and pay for on such date (otherwise than by reason of any default on
the part of the Company), you, as Representatives of the Underwriters, shall
use your best efforts to procure within 36 hours thereafter one or more of
the other Underwriters, or any others, to purchase from the Company such
amounts as may be agreed upon, and upon the terms set forth herein, of the
Firm Shares or Option Shares, as the case may be, which the defaulting
Underwriter or Underwriters failed to purchase. If during such 36 hours you,
as Representatives, shall not have procured such other Underwriters, or any
others, to purchase the Firm Shares or Option Shares, as the case may be,
agreed to be purchased by the defaulting Underwriter or Underwriters, then
(a) if the aggregate number of Shares with respect to which such default
shall occur does not exceed 10% of the Firm Shares or Option Shares, as the
case may be, covered hereby, the other Underwriters shall be obligated,
severally, in proportion to the respective numbers of Firm Shares or Option
Shares, as the case may be, which they are obligated to purchase hereunder,
to purchase the Firm Shares or Option Shares, as the case may be, which such
defaulting Underwriter or Underwriters failed to purchase, or (b) if the
aggregate number of shares of Firm Shares or Option Shares, as the case may
be, with respect to which such default shall occur exceeds 10% of the Firm
Shares or Option Shares, as the case may be, covered hereby, this Agreement
will terminate without liability on the part of the non-defaulting
Underwriters or of the Company except for expenses to be borne by the Company
and the Underwriters as provided in Section 5 hereof and the indemnity and
contribution agreements in Section 7 hereof. In the
21
event of a default by any Underwriter or Underwriters, as set forth in this
Section 8, the Closing Date or Option Closing Date, as the case may be, may
be postponed for such period, not exceeding seven days, as you, as
Representatives, may determine in order that the required changes in the
Registration Statement or in the Prospectus or in any other documents or
arrangements may be effected. The term "Underwriter" includes any person
substituted for a defaulting Underwriter. Any action taken under this
Section 8 shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
9. NOTICES. All communications hereunder shall be in writing and,
except as otherwise provided herein, will be mailed, delivered or telegraphed
and confirmed as follows: (i) if to the Underwriters, to Xxxx Xxxxxxxx
Incorporated, Xxxx Xxxxxxxx Plaza, 00 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, XX
00000-0000, Attention: Xxxxx Xxxxxx, with copies to Xxxxxxxxxxx Xxxxx &
Xxxxxxxx, 00 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxxxx, XX 00000-0000, Attention:
Xxxxx X. Xxxxxxxxx, Esq.; and (ii) if to the Company, to Advanced UroScience,
Inc., 0000 Xxxxxxx Xxxx, Xx. Xxxx, XX 00000, Attention: Xxxx X. Xxxxx, with
copies to Xxxxxxxxxx & Xxxxx, P.A., 1100 International Centre, 000 Xxxxxx
Xxxxxx Xxxxx, Xxxxxxxxxxx, XX 00000-0000, Attention: Xxxxxx West, Esq.
10. TERMINATION. This Agreement may be terminated by you by notice to
the Company as follows:
(a) at any time prior to the earlier of (i) the time the
Shares are released by you for sale by notice to the Underwriters or
(ii) 4:00 p.m., Minneapolis time, on the first business day following
the later of the date on which the Registration Statement becomes
effective or the date of this Agreement;
(b) at any time prior to the Closing Date if any of the
following has occurred: (i) since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
any material adverse change in or affecting the condition, financial or
otherwise, of the Company or the business affairs, management, financial
position, stockholders' equity or results of operations of the Company,
whether or not arising in the ordinary course of business, (ii) any
outbreak or escalation of hostilities or declaration of war or national
emergency after the date hereof or other national or international
calamity or crisis or change in economic or political conditions if the
effect of such outbreak, escalation, declaration, emergency, calamity,
crisis or change on the financial markets of the United States would, in
your judgment, make the offering or delivery of the Shares impracticable
or inadvisable, (iii) suspension of trading in securities on the New
York Stock Exchange or the American Stock Exchange or limitation on
prices (other than limitations on hours or numbers of days of trading)
for securities on either such Exchange, or a halt or suspension of
trading in securities generally which are quoted on Nasdaq National
Market System, or (iv) declaration of a banking moratorium by either
federal or New York State authorities; or
(c) as provided in Sections 6 and 8 of this Agreement.
22
This Agreement also may be terminated by you, by notice to the Company,
as to any obligation of the Underwriters to purchase the Option Shares, upon
the occurrence at any time prior to the Option Closing Date of any of the
events described in subparagraph (b) above or as provided in Sections 5 and 7
of this Agreement.
11. WRITTEN INFORMATION. For all purposes under this Agreement
(including, without limitation, Section 1, Section 2 and Section 7 hereof),
the Company understands and agrees with each of the Underwriters that the
following constitutes the only written information furnished to the Company
by or through the Representatives specifically for use in preparation of the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto: (i) the per share "Price to Public" and per
share "Underwriting Discounts and Commissions" set forth on the cover page of
the Prospectus, (ii) the information relating to stabilization set forth in
the last paragraph on page two of the Preliminary Prospectus and the
Prospectus, and (iii) the information set forth under the caption
"Underwriting" in the Preliminary Prospectus and the Prospectus.
12. SUCCESSORS. This Agreement has been and is made solely for the
benefit of and shall be binding upon the Underwriters, the Company and their
respective successors, executors, administrators, heirs and assigns, and the
officers, directors and controlling persons referred to herein, and no other
person will have any right or obligation hereunder. The term "successors"
shall not include any purchaser of the Shares merely because of such purchase.
13. MISCELLANEOUS. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties
and covenants in this Agreement shall remain in full force and effect
regardless of (a) any termination of this Agreement, (b) any investigation
made by or on behalf of any Underwriter or controlling person thereof, or by
or on behalf of the Company or its directors and officers and (c) delivery of
and payment for the Shares under this Agreement.
Each provision of this Agreement shall be interpreted in such a manner
as to be effective and valid under applicable law, but if any provision of
this Agreement is held to be invalid, illegal or unenforceable under any
applicable law or rule in any jurisdiction, such provision will be
ineffective only to the extent of such invalidity, illegality or
unenforceability in such jurisdiction or any provision hereof in any other
jurisdiction
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Minnesota.
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the
several Underwriters in accordance with its terms.
Very truly yours,
ADVANCED UROSCIENCE, INC.
By:
---------------------------------
Xxxx X. Xxxxx
Its: President and Chief Executive Officer
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
first above written.
XXXX XXXXXXXX INCORPORATED
XXXXX, XXXXXXXX & XXXX, INC.
As Representatives of the several Underwriters
By: Xxxx Xxxxxxxx Incorporated
By:
----------------------------------
Its:
------------------------------
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SCHEDULE A
Schedule of Underwriters
Number of Firm Maximum Number
Underwriter Shares to Be Purchased of Option Shares
----------- ---------------------- ----------------
Xxxx Xxxxxxxx Incorporated . . . . .
Xxxxx, Xxxxxxxx & Xxxx, Inc. . . . .
--------- -------
Total. . . . . . . 2,500,000 375,000
--------- -------
--------- -------
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