] Shares1 UROPLASTY, INC. Common Stock UNDERWRITING AGREEMENT
[ ] Shares1
[ ], 2007
XXXXX-XXXXXX CAPITAL GROUP LLC
NOBLE INTERNATIONAL INVESTMENTS, INC.
As Representatives of the several
Underwriters named in Schedule I hereto
c/o Xxxxx-Xxxxxx Capital Group LLC
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
NOBLE INTERNATIONAL INVESTMENTS, INC.
As Representatives of the several
Underwriters named in Schedule I hereto
c/o Xxxxx-Xxxxxx Capital Group LLC
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Uroplasty, Inc., a Minnesota corporation (the “Company”) severally propose to sell to the
several Underwriters named in Schedule I hereto (the “Underwriters”) [ ] shares
(the “Firm Shares”) of Common Stock, $0.01 par value per share (the “Common Stock”), of the
Company. The Firm Shares consist of [ ] authorized but unissued shares of Common
Stock to be issued and sold by the Company. The Company has also granted to the several
Underwriters an option to purchase up to [ ] additional shares of Common Stock on the
terms and for the purposes set forth in Section 3 hereof (the “Option Shares”). The Firm Shares
and any Option Shares purchased pursuant to this Underwriting Agreement are herein collectively
called the “Securities.”
The Company hereby confirms its agreement with respect to the sale of the Securities to the
several Underwriters, for whom you are acting as representatives (the “Representatives”).
1. Registration Statement and Prospectus. A registration statement on Form SB-2 (File No.
333-146787) with respect to the Securities, including a preliminary form of prospectus, has been
prepared by the Company in conformity with the requirements of the Securities Act of 1933, as
amended (the “Securities Act”), and the rules and regulations (“Rules and Regulations”) of the
Securities and Exchange Commission (the “Commission”) thereunder and has been filed with, and
declared effective by, the Commission; one or more amendments to such registration statement have
also been so prepared and have been, or will be, so filed; and, if the Company has elected to rely
upon Rule 462(b) of the Rules and Regulations to increase the size of the offering registered under
the Securities Act, the Company will prepare and file with the Commission a registration statement
with respect to such increase pursuant to Rule 462(b) (the “462(b) Registration Statement”).
Copies of such registration statement(s) and amendments and each related preliminary prospectus
have been delivered to you.
If the Company has elected not to rely upon Rule 430A of the Rules and Regulations, the
Company has prepared and will promptly file an amendment to the registration statement and an
amended prospectus. If the Company has elected to rely upon Rule 430A of the Rules and
Regulations, it will prepare and file a prospectus pursuant to Rule 424(b) that discloses the
information previously omitted from the prospectus in reliance upon Rule 430A. Each part of such
registration statement as amended at the time it is or was declared effective by the Commission,
including the exhibits and schedules thereto, and, in the event of any amendment thereto after the
effective date, each part of such registration statement as so amended (but only
| 1 | Plus an option to purchase up to [ ] additional shares to cover over-allotments. |
from and after the effectiveness of such amendment), including a Rule 462(b) Registration
Statement, and information (if any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A(b) of the Rules and Regulations, is hereinafter called the
“Registration Statement.” The prospectus included in the Registration Statement at the time it is
or was declared effective by the Commission is hereinafter called the “Prospectus,” except that if
any prospectus filed by the Company with the Commission pursuant to Rule 424(b) of the Rules and
Regulations or any other such prospectus provided to the Underwriters by the Company for use in
connection with the offering of the Securities (whether or not required to be filed by the Company
with the Commission pursuant to Rule 424(b) of the Rules and Regulations, but not including a “free
writing prospectus” as defined in Rule 405 of the Rules and Regulations) differs from the
prospectus on file at the time the Registration Statement is or was declared effective by the
Commission, the term “Prospectus” shall refer to such differing prospectus from and after the time
such prospectus is filed with the Commission or transmitted to the Commission for filing pursuant
to such Rule 424(b) or from and after the time of its first use within the meaning of the Rules and
Regulations. The term “Preliminary Prospectus” as used herein means any preliminary prospectus
included in the Registration Statement prior to the time it becomes or became effective under the
Securities Act and any prospectus subject to completion as described in Rule 430A of the Rules and
Regulations. All references in this Agreement to the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement to any of the foregoing, shall be deemed
to include the copy filed with the Commission pursuant to its Electronic Data Gathering, analysis
and Retrieval System (“XXXXX”). All references in this Agreement to financial statements and
schedules and other information which is “described,” “contained,” “included” or “stated” in the
Registration Statement, the 462(b) Registration Statement, any Preliminary Prospectus or the
Prospectus (or other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is deemed by the Rules and
Regulations to be a part of or included in the Registration Statement, the 462(b) Registration
Statement, any Preliminary Prospectus or the Prospectus, as the case may be.
2. Representations and Warranties of the Company. The Company represents and warrants to, and
agrees with, the several Underwriters as follows:
(a) 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 or the time of first use
within the meaning of the Rules and Regulations, complied in all material respects with the
requirements of the Securities Act and the Rules and Regulations 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 the light of the circumstances under which they were
made, not misleading; except that the foregoing shall not apply to statements in or omissions from
any Preliminary Prospectus in reliance upon, and in conformity with, written information furnished
to the Company by you, or by any Underwriter through you, specifically for use in the preparation
thereof.
(b) The Registration Statement and any Rule 462(b) Registration Statement were initially
declared effective by the Commission under the Securities Act on [_________], 2007. The
Company has complied to the Commission’s satisfaction with all requests of the Commission for
additional or supplemental information. No stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration Statement is in effect and no proceedings
for such purpose have been instituted or are pending or, to the best knowledge of the Company, are
contemplated or threatened by the Commission.
(c) Each part of the Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto, at the time such part became effective, at all other subsequent
times until the expiration of the Prospectus Delivery Period (as defined below), and at the First
Closing Date and Second Closing Date (as hereinafter defined), and the Prospectus (or any amendment
or supplement to the Prospectus), at the time of filing or the time of first use within the meaning
of the Rules and Regulations, at all subsequent times until expiration of the Prospectus Delivery
Period, and at the First Closing Date and Second Closing Date complied and will comply in all
material respects with the applicable requirements and
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provisions of the Securities Act and the Rules and Regulations and did not and will not
contain any untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading. The Prospectus, as
amended or supplemented, as of its date, or the time of first use within the meaning of the Rules
and Regulations, at all subsequent times until the expiration of the Prospectus Delivery Period,
and at the First Closing Date and Second Closing Date, did not and will not contain any untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading.
The representations and warranties set forth in the two immediately preceding sentences do not
apply to statements in or omissions from the Registration Statement, any Rule 462(b) Registration
Statement, or any post-effective amendment thereto, or the Prospectus, or any amendments or
supplements thereto, made in reliance upon and in conformity with written information relating to
an Underwriter furnished to the Company by you or by any Underwriter through you, specifically for
use in the preparation thereof.
(d) Neither (i) the Issuer General Free Writing Prospectus(es) issued at or prior to the Time
of Sale and set forth on Schedule II, the information set forth on Schedule III, and the Statutory
Prospectus, all considered together (collectively, the “Time of Sale Disclosure Package”), nor (ii)
any individual Issuer Limited-Use Free Writing Prospectus, when considered together with the Time
of Sale Disclosure Package, includes or included as of the Time of Sale any untrue statement of a
material fact or omits or omitted as of the Time of Sale to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under which they were made,
not misleading. The preceding sentence does not apply to statements in or omissions from any
Statutory Prospectus or any Issuer Free Writing Prospectus based upon and in conformity with
written information furnished to the Company by you or by any Underwriter through you specifically
for use therein. As used in this paragraph and elsewhere in this Agreement:
(A) “Time of Sale” means [___]:00 **[a/p]m (Eastern time) on the date of this
Agreement
(B) “Statutory Prospectus” as of any time means the Preliminary Prospectus that
is included in the Registration Statement immediately prior to that time. For
purposes of this definition, information contained in a form of prospectus that is
deemed retroactively to be a part of the Registration Statement pursuant to Rule
430A of the Rules and Regulations 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) under the Securities Act.
(C) “Issuer Free Writing Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433 under the Securities Act, relating to the
Securities that (i) is required to be filed with the Commission by the Company, or
(ii) 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, or is a “bona fide electronic road show,” as defined in
Rule 433 of the Rules and Regulations, 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.
(D) “Issuer General 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 II to this Agreement.
(E) “Issuer Limited-Use Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is not an Issuer General Free Writing Prospectus.
(e) (i) Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the Prospectus Delivery Period or until any earlier date that the Company notified or
notifies the Representatives as described in Section 4(a)(iii)(B), did not, does not and will not
include any information
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that conflicted, conflicts or will conflict with the information contained in the Registration
Statement, any Statutory Prospectus or the Prospectus. The foregoing sentence does not apply to
statements in or omissions from any Issuer Free Writing Prospectus based upon and in conformity
with written information furnished to the Company by you or by any Underwriter through you
specifically for use therein.
(ii) (A) 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) under the Securities Act) of the Securities and (B) at the date hereof, the
Company was not and is not an “ineligible issuer,” as defined in Rule 405 under the
Securities Act, including the Company or any 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 (without taking account
of any determination by the Commission pursuant to Rule 405 that it is not necessary that
the Company be considered an ineligible issuer), nor an “excluded issuer” as defined in Rule
164 under the Securities Act.
(iii) Each Issuer Free Writing Prospectus satisfied, as of its issue date and at all
subsequent times through the Prospectus Delivery Period, all other conditions to use thereof
as set forth in Rules 164 and 433 under the Securities Act.
(f) The financial statements of the Company, together with the related notes, set forth in the
Registration Statement, the Time of Sale Disclosure Package and the Prospectus comply in all
material respects with the requirements of the Securities Act and fairly present the financial
condition of the Company as of the dates indicated and the results of operations and changes in
cash flows for the periods therein specified; such financial statements have been prepared in
conformity with generally accepted accounting principles in the U.S. consistently applied
throughout the periods involved; and the supporting schedules included in the Registration
Statement present fairly the information required to be stated therein. No other financial
statements or schedules are required to be included in the Registration Statement, the Time of Sale
Disclosure Package or the Prospectus. To the Company’s knowledge, McGladrey & Xxxxxx, LLP, which
has expressed its opinion with respect to the financial statements and schedules filed as a part of
the Registration Statement and included in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus, is a registered public accounting firm within the meaning of the
Xxxxxxxx-Xxxxx Act of 2002 (the “Xxxxxxxx-Xxxxx Act”), and in the performance of its work for the
Company has not been in violation of the auditor independence requirements of the Xxxxxxxx-Xxxxx
Act.
(g) Each of the Company and its subsidiaries has been duly organized and is validly existing
as a corporation in good standing under the laws of its jurisdiction of incorporation. Each of the
Company and its subsidiaries has full corporate power and authority to own its properties and
conduct its business as currently being carried on and as described in the Registration Statement,
the Time of Sale Disclosure Package and the Prospectus, and is duly qualified to do business as a
foreign corporation in good standing in each jurisdiction in which it owns or leases real property
or in which the conduct of its business makes such qualification necessary and in which the failure
to so qualify would have a material adverse effect upon the business, prospects, management,
properties, operations, condition (financial or otherwise) or results of operations of the Company
and its subsidiaries, taken as a whole (“Material Adverse Effect”).
(h) Except as contemplated in the Time of Sale Disclosure Package and in the Prospectus,
subsequent to the respective dates as of which information is given in the Time of Sale Disclosure
Package, neither the Company nor any of its subsidiaries has incurred any material liabilities or
obligations, direct or contingent, or entered into any material transactions, or declared or paid
any dividends or made any distribution of any kind with respect to its capital stock; and there has
not been any change in the capital stock (other than a change in the number of outstanding shares
of Common Stock due to the issuance of shares upon the exercise of outstanding options or
warrants), or any material change in the short-term or long-term debt, or any issuance of options,
warrants, convertible securities or other rights to purchase the capital stock, of the Company or
any of its subsidiaries, or any material adverse change in the condition
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(financial or otherwise), business, prospects, management, properties, operations or results
of operations of the Company and its subsidiaries, taken as a whole (“Material Adverse Change”) or
any development involving a prospective Material Adverse Change.
(i) Except as set forth in the Time of Sale Disclosure Package and in the Prospectus, there is
not pending or, to the knowledge of the Company, threatened or contemplated, any action, suit or
proceeding to which the Company or any of its subsidiaries is a party or of which any property or
assets of the Company is the subject before or by any court or governmental agency, authority or
body, or any arbitrator, which, individually or in the aggregate, might result in any Material
Adverse Change.
(j) There are no statutes, regulations, contracts or documents to which the Company is subject
or by which the Company is bound that are required to be described in the Registration Statement,
in the Time of Sale Disclosure Package and in the Prospectus or be filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and Regulations that have not been so
described or filed.
(k) This Agreement has been duly authorized, executed and delivered by the Company, and
constitutes a valid, legal and binding obligation of the Company, enforceable in accordance with
its terms, except as rights to indemnity hereunder may be limited by federal or state securities
laws and except as such enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the rights of creditors generally and subject to general principles of
equity. The execution, delivery and performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, (i) any statute, any agreement or instrument to which
the Company is a party or by which it is bound or to which any of its property is subject, (ii) the
Company’s articles of incorporation or by-laws, or (iii) any order, rule, regulation or decree of
any court or governmental agency or body having jurisdiction over the Company or any of its
properties, except, in the case of (i) and (iii), as would not be reasonably expected to have a
Material Adverse Effect; no consent, approval, authorization or order of, or filing with, any court
or governmental agency or body is required for the execution, delivery and performance of this
Agreement or for the consummation of the transactions contemplated hereby, including the issuance
or sale of the Securities by the Company, except such as may be required under the Securities Act
and such consents, approvals or authorizations as may be required under the rules and regulations
of the Financial Industry Regulatory Authority, Inc. (“FINRA”) in connection with the purchase and
distribution of the Securities by the Underwriters; and the Company has full power and authority to
enter into this Agreement and to authorize, issue and sell the Securities as contemplated by this
Agreement.
(l) All of the issued and outstanding shares of capital stock of the Company, including the
outstanding shares of Common Stock, are duly authorized and validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other rights to subscribe for or
purchase securities that have not been waived in writing (a copy of which has been delivered to
counsel to the Representatives), and the holders thereof are not subject to personal liability by
reason of being such holders; the Securities which may be sold hereunder by the Company have been
duly authorized and, 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 the holders
thereof will not be subject to personal liability by reason of being such holders; and the capital
stock of the Company, including the Common Stock, conforms to the description thereof in the
Registration Statement, in the Time of Sale Disclosure Package and in the Prospectus. Except as
otherwise stated in the Registration Statement, in the Time of Sale Disclosure Package and in the
Prospectus, 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 Common Stock pursuant to the Company’s
articles of incorporation, by-laws 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 sale of the Securities as contemplated by this Agreement gives rise to any rights for
or relating to the registration of any shares of Common Stock or other securities of the Company.
All of the issued and outstanding shares of capital stock
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of each of the Company’s subsidiaries have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise described in the Registration Statement, in
the Time of Sale Disclosure Package and in the Prospectus and except for any directors’ qualifying
shares, the Company owns of record and beneficially, free and clear of any security interests,
claims, liens, proxies, equities or other encumbrances, all of the issued and outstanding shares of
such stock. Except as described in the Registration Statement, in the Time of Sale Disclosure
Package and in the Prospectus, there are no options, warrants, agreements, contracts or other
rights in existence to purchase or acquire from the Company or any subsidiary of the Company any
shares of the capital stock of the Company or any subsidiary of the Company. The Company has an
authorized and outstanding capitalization as set forth in the Registration Statement, in the Time
of Sale Disclosure Package and in the Prospectus.
(m) The Company and each of its subsidiaries holds, and is operating in compliance in all
material respects with, all franchises, grants, authorizations, licenses, permits, easements,
consents, certificates and orders of any governmental or self-regulatory body required for the
conduct of its business and all such franchises, grants, authorizations, licenses, permits,
easements, consents, certifications and orders are valid and in full force and effect, except where
the failure to hold or comply could not be reasonably expected to have a Material Adverse Effect;
and neither the Company nor any of its subsidiaries has received notice of any revocation or
modification of any such franchise, grant, authorization, license, permit, easement, consent,
certification or order or has reason to believe that any such franchise, grant, authorization,
license, permit, easement, consent, certification or order will not be renewed in the ordinary
course; and the Company and each of its subsidiaries is in compliance in all material respects with
all applicable federal, state, local and foreign laws, regulations, orders and decrees.
(n) The Company and its subsidiaries have good and marketable title to all property (whether
real or personal) described in the Registration Statement, in the Time of Sale Disclosure Package
and in the Prospectus as being owned by them, in each case free and clear of all liens, claims,
security interests, other encumbrances or defects except such as are described in the Registration
Statement, in the Time of Sale Disclosure Package and in the Prospectus. The property held under
lease by the Company and its subsidiaries is held by them under valid, subsisting and enforceable
leases with only such exceptions with respect to any particular lease as do not interfere in any
material respect with the conduct of the business of the Company or its subsidiaries.
(o) The Company and each of its subsidiaries owns, possesses, or can acquire on reasonable
terms, all Intellectual Property (as defined below) necessary for the conduct of the Company’s and
its subsidiaries’ business as now conducted or as described in the Registration Statement, the Time
of Sale, Disclosure Package and the Prospectus to be conducted, except as such failure to own,
possess, or acquire such rights would not result in a Material Adverse Effect. Furthermore, (i) to
the knowledge of the Company, there is no infringement, misappropriation or violation by third
parties of any such Intellectual Property, except as such infringement, misappropriation or
violation would not result in a Material Adverse Effect; (ii) there is no pending or, to the
knowledge of the Company, threatened, action, suit, proceeding or claim by others challenging the
Company’s or any of its subsidiaries’ rights in or to any such Intellectual Property, and the
Company is unaware of any facts which would form a reasonable basis for any such claim; (iii) the
Intellectual Property owned by the Company and its subsidiaries, and to the knowledge of the
Company, the Intellectual Property licensed to the Company and its subsidiaries, has not been
adjudged invalid or unenforceable, in whole or in part, and there is no pending or, to the
knowledge of the Company, threatened action, suite proceeding or claim by others challenging the
validity or scope of any such Intellectual Property, and the Company is unaware of any facts which
would form a reasonable basis for any such claim; (iv) there is no pending or, to the knowledge of
the Company, threatened action, suit, proceeding or claim by others that the Company or any of its
subsidiaries infringes, misappropriates or otherwise violates any Intellectual Property or other
proprietary rights of others, neither the Company or any of its subsidiaries has received any
written notice of such claim and the Company is unaware of any other fact which would form a
reasonable basis for any such claim; and (v) to the Company’s knowledge, no employee of the Company
or any of its
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subsidiaries is in or has ever been in violation of any term of any employment contract,
patent disclosure agreement, invention assignment agreement, non-competition agreement,
non-solicitation agreement, nondisclosure agreement or any restrictive covenant to or with a former
employer where the basis of such violation relates to such employee’s employment with the Company
nor any of its subsidiaries or actions undertaken by the employee while employed with the Company
or any of its subsidiaries, except as such violation would not result in a Material Adverse Effect.
“Intellectual Property” shall mean all patents, patent applications, trade and service marks,
trade and service xxxx registrations, trade names, copyrights, licenses, inventions, trade secrets,
domain names, technology, know-how and other intellectual property utilized or intended to be
utilized in the Company’s business.
(p) Neither the Company nor any of its subsidiaries is (i) in violation of its respective
charter or by-laws or (ii) in breach of or otherwise in default, and no event has occurred which,
with notice or lapse of time or both, would constitute such a default in the performance of any
material obligation, agreement or condition contained in any bond, debenture, note, indenture, loan
agreement or any other material contract, lease or other instrument to which it is subject or by
which any of them may be bound, or to which any of the material property or assets of the Company
or any of its subsidiaries is subject.
(q) The Company and its subsidiaries have timely filed all federal, state, local and foreign
income and franchise tax returns required to be filed and are not in default in the payment of any
taxes which were payable pursuant to said returns or any assessments with respect thereto, other
than any which the Company or any of its subsidiaries is contesting in good faith. There is no
pending dispute with any taxing authority relating to any of such returns, and the Company has no
knowledge of any proposed liability for any tax to be imposed upon the properties or assets of the
Company for which there is not an adequate reserve reflected in the Company’s financial statements
included in the Registration Statement.
(r) The Company has not distributed and will not distribute any prospectus or other offering
material in connection with the offering and sale of the Securities other than any Preliminary
Prospectus, the Time of Sale Disclosure Package or the Prospectus or other materials permitted by
the Securities Act to be distributed by the Company; provided, however, that, except as set forth
on Schedule II, the Company has not made and will not make any offer relating to the Securities
that would constitute a “free writing prospectus” as defined in Rule 405 under the Securities Act,
except in accordance with the provisions of Section 4(q) of this Agreement.
(s) The Common Stock is registered pursuant to Section 12(b) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”) and is included or approved for inclusion on the American
Stock Exchange and 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 delisting the Common
Stock from the American Stock Exchange nor has the Company received any notification that the
Commission or American Stock Exchange is contemplating terminating such registration or listing.
The Company has complied in all material respects with the applicable requirements of the American
Stock Exchange for maintenance of inclusion of the Common Stock thereon. The Company has filed an
application to include the Securities on the American Stock Exchange.
(t) Other than the subsidiaries of the Company listed in Exhibit 21 to the Company’s Annual
Report on Form 10-KSB for the fiscal year ended March 31, 2007, the Company, directly or
indirectly, owns no capital stock or other equity or ownership or proprietary interest in any
corporation, partnership, association, trust or other entity.
(u) The Company maintains a system of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with management’s general or
specific authorization; (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in accordance with management’s
general or specific authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and
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appropriate action is taken with respect to any differences. Except as described in the Registration
Statement, in the Time of Sale Disclosure Package and in the Prospectus, there has been (i) no
material weakness in the Company’s internal control over financial reporting (whether or not
remediated) and (ii) no change in the Company’s internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, the Company’s internal control
over financial reporting.
(v) Other than as contemplated by this Agreement, 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.
(w) The Company carries, or is covered by, insurance in such amounts and covering such risks
as is adequate for the conduct of its business and the value of its properties and as is customary
for companies engaged in similar businesses in similar industries; all policies of insurance and
any fidelity or surety bonds insuring the Company or any of its subsidiaries or its business,
assets, employees, officers and directors are in full force and effect; the Company and its
subsidiaries are in compliance with the terms of such policies and instruments in all material
respects; there are no claims by the Company or any of its subsidiaries under any such policy or
instrument as to which any insurance company is denying liability or defending under a reservation
of rights clause; neither the Company nor any of its subsidiaries has been refused any insurance
coverage sought or applied for; and neither the Company nor any of its subsidiaries has reason to
believe that it will not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect. Without limitation to the
foregoing, the Company and its subsidiaries carry comprehensive general liability insurance and
such other insurance as is customarily carried by lessees of properties similar to those leased by
the Company and its subsidiaries (in the markets in which the Company’s and its subsidiaries’
leased properties are located).
(x) The Company is not and, after giving effect to the offering and sale of the Securities and
the application of the proceeds thereof, will not be an “investment company,” as such term is
defined in the Investment Company Act of 1940, as amended.
(y) The Company is in compliance in all material respects with all applicable provisions of
the Xxxxxxxx-Xxxxx Act and the rules and regulations of the Commission thereunder.
(z) The Company has established and maintains disclosure controls and procedures (as defined
in Rules 13a-14 and 15d-14 under the Exchange Act) and such controls and procedures are effective
in ensuring that material information relating to the Company, including its subsidiaries, is made
known to the principal executive officer and the principal financial officer. The Company has
utilized such controls and procedures in preparing and evaluating the disclosures in the
Registration Statement, in the Time of Sale Disclosure Package and in the Prospectus.
(aa) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any
director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is aware
of or has taken any action directly or indirectly, that would result in a violation by such persons
of the FCPA (as defined below), including, without limitation, making use of the mails or any means
or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to
pay or authorization of the payment of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any “Foreign official” (as such term is defined
in the FCPA) or any foreign political party or official thereof or any candidate for foreign
political office, in contravention of the FCPA and the Company and its subsidiaries have conducted
their businesses in compliance with the FCPA and have instituted and maintain policies and
procedures designed to ensure, and which are reasonably expected to continue to ensure, continued
compliance therewith. “FCPA” means the Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder.
-8-
(bb) The operations of the Company and its subsidiaries have complied in all material respects
with applicable financial recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions,
the rules and regulations thereunder and any related or similar rules, regulations or guidelines,
issued, administered or enforced by any governmental agency (collectively, the “Money Laundering
Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any of its subsidiaries with respect to the
Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
(cc) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any
director, officer 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. Department of the
Treasury.
(dd) To the Company’s knowledge, except as disclosed to counsel to the Representatives, no
transaction has occurred between or among the Company and its subsidiaries, on the one hand, and
any of the Company’s officers, directors or 5% stockholders or any affiliate or affiliates of any
such officer, director or 5% stockholders that is required to be described that is not so described
in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus. The Company
has not, directly or indirectly, extended or maintained credit, or arranged for the extension of
credit, or renewed an extension of credit, in the form of a personal loan to or for any of its
directors or executive officers in violation of applicable laws, including Section 402 of the
Xxxxxxxx-Xxxxx Act.
(ee) The Company and each of its subsidiaries (i) is in compliance with any and all applicable
federal, state, local and foreign laws, rules, regulations, decisions and orders relating to the
protection of human health and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants (collectively, “Environmental Laws”); (ii) has received and is in
compliance with all permits, licenses or other approvals required of it under applicable
Environmental Laws to conduct its business; and (iii) has not received notice of any actual or
potential liability for the investigation or remediation of any disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants, except in any such case for any such
failure to comply, or failure to receive required permits, licenses or approvals, or liability as
would not, individually or in the aggregate, result in a Material Adverse Effect.
(ff) The Company and each of its subsidiaries (i) is in compliance, in all material respects,
with any and all applicable foreign, federal, state and local laws, rules, regulations, treaties,
statutes and codes promulgated by any and all governmental authorities (including pursuant to the
Occupational Health and Safety Act) relating to the protection of human health and safety in the
workplace (“Occupational Laws”); (ii) has received all material permits, licenses or other
approvals required of it under applicable Occupational Laws to conduct its business as currently
conducted; and (iii) is in compliance, in all material respects, with all terms and conditions of
such permit, license or approval. No action, proceeding, revocation proceeding, writ, injunction
or claim is pending or, to the Company’s knowledge, threatened against the Company or any of its
subsidiaries relating to Occupational Laws, and the Company does not have knowledge of any facts,
circumstances or developments relating to its operations that could reasonably be expected to form
the basis for or give rise to such actions, suits, investigations or proceedings.
(gg) Each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), that is maintained, administered or contributed
to by the Company or any of its affiliates for employees or former employees of the Company and its
affiliates has been maintained in compliance with its terms and the requirements of any applicable
statutes, orders, rules and regulations, including but not limited to, ERISA and the Internal
Revenue Code of 1986, as amended (the “Code”). No prohibited transaction, within the meaning of
Section 406 of
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ERISA or Section 4975 of the Code, has occurred with respect to any such plan, excluding
transactions effected pursuant to a statutory or administrative exemption; and for each such plan
that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no
“Accumulated funding deficiency,” as defined in Section 412 of the Code, has been incurred, whether
or not waived, and the fair market value of the assets of each such plan (excluding for these
purposes accrued but unpaid contributions) exceeds the present value of all benefits accrued under
such plan determined using reasonable actuarial assumptions.
(hh) Except with notice to the Representatives and compliance with applicable laws, none of
the Directed Stock (as defined below) distributed in connection with the Directed Stock Program (as
defined below) will be offered or sold outside of the United States.
3. Purchase, Sale and Delivery of Securities.
(a) On the basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to issue and sell the Firm
Shares to the several Underwriters, and each Underwriter agrees, severally and not jointly, to
purchase from the Company the number of Firm Shares set forth opposite the name of such Underwriter
in Schedule I hereto. The purchase price for each Firm Share shall be $[ ] per
share. The obligation of each Underwriter to the Company shall be to purchase from the Company
that number of Firm Shares (to be adjusted by the Representatives to avoid fractional shares) which
represents the same proportion of the number of Firm Shares to be sold by the Company pursuant to
this Agreement as the number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto represents to the total number of Firm Shares to be purchased by all Underwriters
pursuant to this Agreement. In making this Agreement, each Underwriter is contracting severally
and not jointly; except as provided in paragraph (c) of this Section 3 and in Section 8 hereof, the
agreement of each Underwriter is to purchase only the respective number of Firm Shares specified in
Schedule I.
It is understood that [___]shares of the Firm Shares (“Directed Stock”) will initially be
reserved by the Underwriters for offer and sale to officers and directors of the Company (“Directed
Stock Participants”) upon the terms and conditions set forth in the Prospectus and in accordance
with the rules and regulations of FINRA (“Directed Stock Program”). Under no circumstance will the
Representatives or any Underwriter be liable to the Company or to any Directed Stock Participant
for any action taken or omitted to be taken in good faith in connection with such Directed Stock
Program. To the extent that any shares of Directed Stock are not affirmatively reconfirmed for
purchase by any Directed Stock Participant on or immediately after the date of this Agreement, such
Directed Stock may be offered to the public as part of the public offering contemplated hereby.
The Company agrees to pay all fees and disbursements incurred by the Underwriters in connection
with the Directed Stock Program, including counsel fees and any stamp duties or other taxes
incurred by the Underwriters in connection with the Directed Stock Program.
The Firm Shares will be delivered by the Company to you for the accounts of the several
Underwriters against payment of the purchase price therefor by wire transfer of same day funds
payable to the order of the Company at the offices of Xxxxx-Xxxxxx Capital Group LLC, 000 Xxxxx
Xxxxx Xxxxxx, Xxxxx 000 Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be mutually
acceptable, at 9:00 a.m. Central time on the third (or if the Securities are priced, as
contemplated by Rule 15c6-1(c) under the Exchange Act, after 4:30 p.m. Eastern time, the fourth)
full business day following the date hereof, or at such other time and date as you and the Company
determine pursuant to Rule 15c6-1(a) under the Exchange Act, such time and date of delivery being
herein referred to as the “First Closing Date.” If the Representatives so elect, delivery of the
Firm Shares may be made by credit through full fast transfer to the accounts at The Depository
Trust Company designated by the Representatives. Certificates representing the Firm Shares, in
definitive form and in such denominations and registered in such names as you may request upon at
least two business days’ prior notice to the Company, will be made available for checking and
packaging not later than 10:30 a.m.,
-10-
Central time, on the business day next preceding the First Closing Date at the offices of
Xxxxx-Xxxxxx Capital Group LLC, 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000 Xxxxxxxxxxx, Xxxxxxxxx, or such
other location as may be mutually acceptable.
(b) On the basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company, with respect to the Option
Shares, hereby grants to the several Underwriters an option to purchase all or any portion of the
Option Shares at the same purchase price as the Firm Shares, for use solely in covering any
over-allotments made by the Underwriters in the sale and distribution of the Firm Shares. The
option granted hereunder may be exercised in whole or in part at any time (but not more than once)
within 30 days after the effective date of this Agreement upon notice (confirmed in writing) by the
Representatives to the Company setting forth the aggregate number of Option Shares as to which the
several Underwriters are exercising the option, the names and denominations in which the
certificates for the Option Shares are to be registered and the date and time, as determined by
you, when the Option Shares are to be delivered, such time and date being herein referred to as the
“Second Closing” and “Second Closing Date,” respectively; provided, however, that the Second
Closing Date shall not be earlier than the First Closing Date nor earlier than the second business
day after the date on which the option shall have been exercised. The number of Option Shares to
be purchased by each Underwriter shall be the same percentage of the total number of Option Shares
to be purchased by the several Underwriters as the number of Firm Shares to be purchased by such
Underwriter is of the total number of Firm Shares to be purchased by the several Underwriters, as
adjusted by the Representatives in such manner as the Representatives deem advisable to avoid
fractional shares. No Option Shares shall be sold and delivered unless the Firm Shares previously
have been, or simultaneously are, sold and delivered.
The Option Shares will be delivered by the Company to you for the accounts of the several
Underwriters against payment of the purchase price therefor by wire transfer of same day funds
payable to the order of the Company at the offices of Xxxxx-Xxxxxx Capital Group LLC, 000 Xxxxx
Xxxxx Xxxxxx, Xxxxx 000 Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be mutually
acceptable at 9:00 a.m., Central time, on the Second Closing Date. If the Representatives so
elect, delivery of the Option Shares may be made by credit through full fast transfer to the
accounts at The Depository Trust Company designated by the Representatives. Certificates
representing the Option Shares in definitive form and in such denominations and registered in such
names as you have set forth in your notice of option exercise, will be made available for checking
and packaging not later than 10:30 a.m., Central time, on the business day next preceding the
Second Closing Date at the office of Xxxxx-Xxxxxx Capital Group LLC, 000 Xxxxx Xxxxx Xxxxxx, Xxxxx
000 Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be mutually acceptable.
(c) It is understood that you, individually and not as Representatives of the several
Underwriters, may (but shall not be obligated to) make payment to the Company on behalf of any
Underwriter for the Securities to be purchased by such Underwriter. Any such payment by you shall
not relieve any such Underwriter of any of its obligations hereunder. Nothing herein contained
shall constitute any of the Underwriters an unincorporated association or partner with the Company.
4. Covenants. The Company covenants and agrees with the several Underwriters as follows:
(a) During the period beginning on the date hereof and ending on the later of the Second
Closing Date or such date, as in the opinion of counsel for the Underwriters, the Prospectus is no
longer required by law to be delivered assuming the absence of Rule 172 under the Securities Act,
in connection with sales by an underwriter or dealer (the “Prospectus Delivery Period”), prior to
amending or supplementing the Registration Statement (including any Rule 462(b) Registration
Statement), the Time of Sale Disclosure Package or the Prospectus, the Company shall furnish to the
Representatives for review a copy of each such proposed amendment or supplement, and the Company
shall not file any such proposed amendment or supplement to which the Representatives or counsel to
the Underwriters reasonably object. Subject to this Section 4(a), immediately following execution
of this Agreement, the Company will prepare
-11-
the Prospectus containing the information omitted pursuant to Rule 430A and other selling
terms of the Securities, the plan of distribution thereof and such other information as may be
required by the Securities Act or the Rules and Regulations or as the Representatives and the
Company may deem appropriate, and if requested by the Representatives, an Issuer Free Writing
Prospectus containing the selling terms of the Securities and such other information as the Company
and the Representatives may deem appropriate, and will file or transmit for filing with the
Commission, in accordance with Rule 424(b) or Rule 433, as the case may be, copies of the
Prospectus and each Issuer Free Writing Prospectus.
(b) After the date of this Agreement, the Company shall promptly advise the Representatives in
writing (i) of the receipt of any comments of, or requests for additional or supplemental
information from, the Commission, (ii) of the time and date of any filing of any post-effective
amendment to the Registration Statement or any amendment or supplement to any Preliminary
Prospectus, the Time of Sale Disclosure Package or the Prospectus, (iii) of the time and date that
any post-effective amendment to the Registration Statement becomes effective, (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of the Registration Statement or
any post-effective amendment thereto or of any order preventing or suspending its use or the use of
any Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus or any Issuer Free
Writing Prospectus, or (v) of any proceedings to remove, suspend or terminate from listing or
quotation the Common Stock from any securities exchange upon which it is listed for trading or
included or designated for quotation, or of the threatening or initiation of any proceedings for
any of such purposes. If the Commission shall enter any such stop order at any time, the Company
will use its best efforts to obtain the lifting of such order at the earliest possible moment.
Additionally, the Company agrees that it shall comply with the provisions of Rules 424(b) and 430A,
as applicable, under the Securities Act and will use its reasonable efforts to confirm that any
filings made by the Company under Rule 424(b), Rule 433 or Rule 462 were received in a timely
manner by the Commission (without reliance on Rule 424(b)(8) or Rule 164(b)).
(c) During the Prospectus Delivery Period, the Company will comply as far as it is able with
all requirements imposed upon it by the Securities Act, as now and hereafter amended, and by the
Rules and Regulations, as from time to time in force, and by the Exchange Act so far as necessary
to permit the continuance of sales of or dealings in the Securities as contemplated by the
provisions hereof, the Time of Sale Disclosure Package and the Prospectus. If during such period
any event occurs as a result of which the Prospectus (or if the Prospectus is not yet available to
prospective purchasers, the Time of Sale Disclosure Package) would include an untrue statement of a
material fact or omit to state a material fact necessary to make the statements therein, in the
light of the circumstances then existing, not misleading, or if during such period it is necessary
or appropriate in the opinion of the Company or its counsel or the Representatives or counsel to
the Underwriters to amend the Registration Statement or supplement the Prospectus (or, if the
Prospectus is not yet available to prospective purchasers, the Time of Sale Disclosure Package) to
comply with the Securities Act, the Company will promptly notify you and will amend the
Registration Statement or supplement the Prospectus (or, if the Prospectus is not yet available to
prospective purchasers, the Time of Sale Disclosure Package) at the expense of the Company so as to
correct such statement or omission or effect such compliance.
(d) If at any time following issuance of an Issuer Free Writing Prospectus 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 necessary in order to make the statements therein,
in the light of the circumstances prevailing at that subsequent time, not misleading, the Company
has promptly notified or promptly will notify the Representatives 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.
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(e) The Company shall take or cause to be taken all necessary action to qualify the Securities
for sale under the securities laws of such jurisdictions as you reasonably designate or as is
necessary to effect the distribution of the Directed Stock and to continue such qualifications in
effect so long as required for the distribution of the Securities, except that the Company shall
not be required in connection therewith to qualify as a foreign corporation or to execute a general
consent to service of process in any state.
(f) The Company will furnish to the Underwriters and counsel for the Underwriters copies of
the Registration Statement (which will include three complete manually signed copies of the
Registration Statement and all consents and exhibits filed therewith), each Preliminary Prospectus,
the Time of Sale Disclosure Package, the Prospectus, any Issuer Free Writing Prospectus, and all
amendments and supplements to such documents, in each case as soon as available and in such
quantities as you may from time to time reasonably request.
(g) The Company will make generally available to its security holders as soon as practicable
an earnings statement (which need not be audited) covering a 12-month period that shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 of the Rules and Regulations.
(h) The Company, whether or not the transactions contemplated hereunder are consummated or
this Agreement is terminated, will pay or cause to be paid (i) all expenses (including transfer
taxes allocated to the respective transferees) incurred in connection with the delivery to the
Underwriters of the Securities, (ii) all expenses and fees (including, without limitation, fees and
expenses of the Company’s accountants and counsel but, except as otherwise provided below, not
including fees of the Underwriters’ counsel) in connection with the preparation, printing, filing,
delivery, and shipping of the Registration Statement (including the financial statements therein
and all amendments, schedules, and exhibits thereto), the Securities, each Preliminary Prospectus,
the Time of Sale Disclosure Package, the Prospectus, any Issuer Free Writing Prospectus and any
amendment thereof or supplement thereto, and the printing, delivery, and shipping of this Agreement
and other underwriting documents, including Blue Sky Memoranda (covering the states and other
applicable jurisdictions), (iii) all filing fees incurred in connection with the qualification of
the Securities for offering and sale by the Underwriters or by dealers under the securities or blue
sky laws of the states and other jurisdictions which you shall designate, (iv) the fees and
expenses of any transfer agent or registrar, (v) the filing fees and fees and disbursements of
Underwriters’ counsel incident to any required review and approval by FINRA of the terms of the
sale of the Securities, (vi) listing fees, if any, (vii) the cost and expenses of the Company
relating to investor presentations or any “road show” undertaken in connection with marketing of
the Securities, (viii) the fees and disbursements of Faegre & Xxxxxx LLP, legal counsel to the
Representatives, in an amount not to exceed $75,000 (when aggregated with any other expenses of the
Underwriters paid for or reimbursed by the Company under (v)) and (ix) all other costs and expenses
incident to the performance of its obligations hereunder that are not otherwise specifically
provided for herein. If this Agreement is terminated by the Representatives pursuant to Section 9
hereof or if the sale of the Securities provided for herein is not consummated by reason of any
failure, refusal or inability on the part of the Company to perform any agreement on its part to be
performed, or because any other condition of the Underwriters’ obligations hereunder required to be
fulfilled by the Company is not fulfilled, the Company will reimburse the several Underwriters for
all out-of-pocket disbursements, subject to the $75,000 limit
referenced above in Section 4(h)(viii), (including but not limited to fees and disbursements of counsel,
printing expenses, travel expenses, postage, facsimile and telephone charges) incurred by the
Underwriters in connection with their investigation, preparing to market and marketing the
Securities or in contemplation of performing their obligations hereunder.
(i) The Company will apply the net proceeds from the sale of the Securities to be sold by it
hereunder for the purposes set forth in the Time of Sale Disclosure Package and in the Prospectus.
(j) The Company will not, without the prior written consent of Xxxxx-Xxxxxx Capital Group,
from the date of execution of this Agreement and continuing to and including the date 90 days after
the date of the Prospectus (the “Lock-Up Period”) offer for sale; sell, contract to sell, pledge,
or grant any option for the sale of, enter into any transaction which is designed to, or might
reasonably be expected to,
-13-
result in the disposition (whether by actual disposition or effective economic disposition due
to cash settlement or otherwise) by the Company or any affiliate, or otherwise issue or dispose of,
directly or indirectly (or publicly disclose the intention to make any such offer, sale, pledge,
grant, issuance or other disposition), any Common Stock or any securities convertible into or
exchangeable for, or any options or rights to purchase or acquire, Common Stock, except (i) to the
Underwriters pursuant to this Agreement, (ii) to the holders of options or warrants described in
the Registration Statement pursuant to the exercise thereof on their respective terms as currently
in effect or (iii) options to purchase up to 100,000 shares of common stock pursuant to the
Company’s existing stock option plans, which have been approved by the Company’s shareholders. The
Company agrees not to accelerate the vesting of any option or warrant or the lapse of any
repurchase right prior to the expiration of the Lock-Up Period. If (1) during the period that
begins on the date that is 17 calendar days before the last day of the Lock-Up Period and ends on
the last day of the Lock-Up Period, (a) the Company issues an earnings release, (b) the Company
publicly announces material news or (c) a material event relating to the Company occurs; or (2)
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 Lock-Up Period, then the
restrictions in this Agreement, unless otherwise waived by Xxxxx-Xxxxxx Capital Group in writing,
shall continue to apply until the expiration of the date that is 18 calendar days after the date on
which (a) the Company issues the earnings release, (b) the Company publicly announces material news
or (c) a material event relating to the Company occurs. The Company will provide the
Representatives, any co-managers and each shareholder subject to the Lock-Up Agreement (as defined
below) with prior notice of any such announcement that gives rise to the extension of the Lock-Up
Period.
(k) The Company has caused to be delivered to you prior to the date of this Agreement a letter
from each of the Company’s directors and officers stating that such person agrees that he or she
will not, without your prior written consent, offer for sale, sell, contract to sell or otherwise
dispose of, as set forth in such letter, any shares of Common Stock or rights to purchase Common
Stock, except to the Underwriters pursuant to this Agreement, for a period of 90 days after
commencement of the public offering of the Securities by the Underwriters plus customary extensions
(the “Lock-Up Agreement”). The Company will enforce the terms of each Lock-Up Agreement and issue
stop-transfer instructions to the transfer agent for the Common Stock with respect to any
transaction or contemplated transaction that would constitute a breach of or default under the
applicable Lock-Up Agreement.
(l) The Company has not taken and will not take, directly or indirectly, any action designed
to or which might reasonably be expected to cause or result in, or which has constituted, the
stabilization or manipulation of the price of any security of the Company to facilitate the sale or
resale of the Securities.
(m) The Company will not incur 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.
(n) The Company represents and agrees that, unless it obtains the prior written consent of
Xxxxx-Xxxxxx Capital Group, and each Underwriter severally represents and agrees that, unless it
obtains the prior written consent of the Company and Xxxxx-Xxxxxx Capital Group., it has not made
and will not make any offer relating to the Securities that would constitute an “issuer free
writing prospectus,” as defined in Rule 433 under the Securities Act, or that would otherwise
constitute a “free writing prospectus,” as defined in Rule 405 under the Securities Act, required
to be filed with the Commission; provided that the prior written consent of the parties hereto
shall be deemed to have been given in respect of the free writing prospectuses included in Schedule
II. Any such free writing prospectus consented to by the Company and Xxxxx-Xxxxxx Capital Group is
hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company represents that it
has treated or agrees that it will treat each Permitted Free Writing Prospectus as an “issuer free
writing prospectus,” as defined in Rule 433, and has complied and will comply with the requirements
of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely Commission filing
where required, legending and record keeping.
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(o) The Company will comply with all applicable securities and other applicable laws, rules
and regulations in each foreign jurisdiction in which Directed Stock is offered in connection with
the Directed Stock Program.
(p) In connection with the Directed Stock Program to ensure that the Directed Stock will be
restricted to the extent required by FINRA or the rules of such authority from sale, transfer,
assignment, pledge or hypothecation for a period of three months following the date of the
effectiveness of the Registration Statement, the Company will direct the transfer agent to place
stop-transfer restrictions upon such securities for such period of time. Should the Company
release, or seek to release, from such restrictions any of the Directed Stock, the Company agrees
to reimburse the Underwriters for any reasonable expense (including, without limitation, legal
expenses) they incur with such release.
5. Conditions of Underwriters’ Obligations. The obligations of the several Underwriters
hereunder are subject to the accuracy, as of the date hereof and at each of the First Closing Date
and the Second Closing Date (as if made at such Closing Date), of and compliance with all
representations, warranties and agreements of the Company contained herein, to the performance by
the Company of its obligations hereunder and to the following additional conditions:
(a) If filing of the Prospectus, or any amendment or supplement thereto, or any Issuer Free
Writing Prospectus, is required under the Securities Act or the Rules and Regulations, the Company
shall have filed the Prospectus (or such amendment or supplement) or such Issuer Free Writing
Prospectus with the Commission in the manner and within the time period so required (without
reliance on Rule 424(b)(8) or Rule 164(b)); the Registration Statement shall remain effective; no
stop order suspending the effectiveness of the Registration Statement or any part thereof, any Rule
462(b) Registration Statement, or any amendment thereof, nor suspending or preventing the use of
the Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus shall
have been issued; no proceedings for the issuance of such an order shall have been initiated or
threatened; any request of the Commission for additional information (to be included in the
Registration Statement, the Time of Sale Disclosure Package, the Prospectus, any Issuer Free
Writing Prospectus or otherwise) shall have been complied with to your satisfaction; and the
Financial Industry Regulatory Authority shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements.
(b) No Underwriter shall have advised the Company that the Registration Statement, the Time of
Sale Disclosure Package or the Prospectus, or any amendment thereof or supplement thereto, or any
Issuer Free Writing Prospectus, contains an untrue statement of fact which, in your opinion, is
material, or omits to state a fact which, in your opinion, is material and is required to be stated
therein or necessary to make the statements therein not misleading.
(c) Except as contemplated in the Time of Sale Disclosure Package and in the Prospectus,
subsequent to the respective dates as of which information is given in the Time of Sale Disclosure
Package, neither the Company nor any of its subsidiaries shall have incurred any material
liabilities or obligations, direct or contingent, or entered into any material transactions, or
declared or paid any dividends or made any distribution of any kind with respect to its capital
stock; and there shall not have been any change in the capital stock (other than a change in the
number of outstanding shares of Common Stock due to the issuance of shares upon the exercise of
outstanding options or warrants), or any material change in the short-term or long-term debt of the
Company, or any issuance of options, warrants, convertible securities or other rights to purchase
the capital stock of the Company or any of its subsidiaries, or any Material Adverse Change or any
development involving a prospective Material Adverse Change (whether or not arising in the ordinary
course of business), or any loss by strike, fire, flood, earthquake, accident or other calamity,
whether or not covered by insurance, incurred by the Company or any subsidiary, the effect of
which, in any such case described above, in your judgment, makes it impractical or inadvisable to
offer or deliver the Securities on the terms and in the manner contemplated in the Time of Sale
Disclosure Package and in the Prospectus.
-15-
(d) On or after the Time of Sale (i) no downgrading shall have occurred in the rating accorded
any of the Company’s securities by any “nationally recognized statistical organization,” as that
term is defined by the Commission for purposes of Rule 436(g)(2) under the Securities Act, and (ii)
no such organization shall have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company’s securities.
(e) On each Closing Date, there shall have been furnished to you, as Representatives of the
several Underwriters, an opinion of Xxxxxxxx & Xxxxxx P.A., counsel for the Company, dated such
Closing Date and addressed to you, in form and substance reasonably satisfactory to counsel for the
Underwriters.
In addition, such counsel shall include a statement to the effect that on the basis of
conferences with officers and other representatives of the Company, representatives of the
Underwriters and representatives of the independent accountants for the Company, examination of
documents referred to in the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus and such other procedures as such counsel deemed appropriate, but without independent
review or verification and without assuming responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus, nothing has come to the attention of such counsel that causes such
counsel to believe that (a) any part of the Registration Statement or any amendment thereof
(including any information omitted from the Registration Statement at the time it became effective
pursuant to Rule 430A of the Rules and Regulations but that is deemed to be part of and included in
the Registration Statement pursuant to Rule 430A) when such part became effective and as of such
Closing Date (including any 462(b) Registration Statement), contained or contains any untrue
statement of a material fact or omitted or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, or (b) that the documents
specified in a schedule to such counsel’s letter, consisting of those included in the Time of Sale
Disclosure Package as of the Time of Sale and as of such Closing Date, included or includes any
untrue statement of material fact or omitted or omits to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were made, not misleading;
or (c) that the Prospectus (as of its issue date and as of such Closing Date) included or includes
any untrue statement of material fact or omitted or omits to state a material fact necessary to
make the statements therein, in light of the circumstances under which they were made, not
misleading; it being understood that such counsel need express no belief as to the financial
statements or other financial data included in any of the documents mentioned in this paragraph.
(f) On each Closing Date, there shall have been furnished to you, as Representatives of the
several Underwriters, such opinion or opinions from Faegre & Xxxxxx LLP, counsel for the several
Underwriters, dated such Closing Date and addressed to you, with respect to such matters as you
reasonably may request, and such counsel shall have received such papers and information as they
request to enable them to pass upon such matters.
(g) On each Closing Date you, as Representatives of the several Underwriters, shall have
received a letter of McGladrey & Xxxxxx, LLP, dated such Closing Date and addressed to you,
confirming that they are independent public accountants within the meaning of the Securities Act
and are in compliance with the applicable requirements relating to the qualifications of
accountants under Rule 2-01 of Regulation S-X of the Commission, and stating, as of the date of
such letter (or, with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Time of Sale Disclosure Package,
as of a date not prior to the date hereof or more than five days prior to the date of such letter),
the conclusions and findings of said firm with respect to the financial information and other
matters covered by its letter delivered to you concurrently with the execution of this Agreement,
and the effect of the letter so to be delivered on such Closing Date shall be to confirm the
conclusions and findings set forth in such prior letter.
-16-
(h) On each Closing Date, there shall have been furnished to you, as Representatives of the
Underwriters, a certificate, dated such Closing Date and addressed to you, signed by the chief
executive officer and by the chief financial officer of the Company, to the effect that:
(i) The representations and warranties of the Company in this Agreement are true and
correct, in all material respects, as if made at and as of such Closing Date, and the
Company has complied, in all material respects, with all the agreements and satisfied, in
all material respects, all the conditions on its part to be performed or satisfied at or
prior to such Closing Date;
(ii) No stop order or other order suspending the effectiveness of the Registration
Statement or any part thereof or any amendment thereof or the qualification of the
Securities for offering or sale, nor suspending or preventing the use of the Time of Sale
Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, has been issued,
and no proceeding for that purpose has been instituted or, to the best of their knowledge,
is contemplated by the Commission or any state or regulatory body; and
(iii) The signers of said certificate have carefully examined the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus, and any amendments
thereof or supplements thereto, and
(A) each part of the Registration Statement and the Prospectus, and any
amendments thereof or supplements thereto contain, and contained, when such part of
the Registration Statement (or such amendment) became effective, all statements and
information required to be included therein, each part of the Registration
Statement, or any amendment thereof, does not contain, and did not contain, when
such part of the Registration Statement (or such amendment) became effective, any
untrue statement of a material fact or omit to state, and did not omit to state when
such part of the Registration Statement (or such amendment) became effective, any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and the Prospectus, as amended or supplemented, does not
include and did not include as of its date, or the time of first use within the
meaning of the Rules and Regulations, any untrue statement of a material fact or
omit to state and did not omit to state as of its date, or the time of first use
within the meaning of the Rules and Regulations, a material fact necessary to make
the statements therein, in light of the circumstances under which they were made,
(B) neither (1) the Time of Sale Disclosure Package nor (2) any individual
Issuer Limited-Use Free Writing Prospectus, when considered together with the Time
of Sale Disclosure Package, includes, nor included as of the Time of Sale, any
untrue statement of a material fact or omits, or omitted as of the Time of Sale, to
state any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(C) since the Time of Sale, there has occurred no event required to be set
forth in an amended or supplemented prospectus which has not been so set forth,
(D) subsequent to the respective dates as of which information is given in the
Time of Sale Disclosure Package, neither the Company nor any of its subsidiaries has
incurred any material liabilities or obligations, direct or contingent, or entered
into any material transactions, not in the ordinary course of business, or declared
or paid any dividends or made any distribution of any kind with respect to its
capital stock, and except as disclosed in the Time of Sale Disclosure Package and in
the Prospectus, there has not been any change in the capital stock (other than a
change in the number of outstanding shares of Common Stock due to the issuance of shares upon the exercise of outstanding options or warrants), or any material change
in the short-term or long-term
-17-
debt, or any issuance of options, warrants, convertible securities or other rights
to purchase the capital stock, of the Company, or any of its subsidiaries, or any
Material Adverse Change or any development involving a prospective Material Adverse
Change (whether or not arising in the ordinary course of business), or any loss by
strike, fire, flood, earthquake, accident or other calamity, whether or not covered
by insurance, incurred by the Company or any subsidiary, and
(E) except as stated in the Time of Sale Disclosure Package and in the
Prospectus, there is not pending, or, to the knowledge of the Company, threatened or
contemplated, any action, suit or proceeding to which the Company or any of its
subsidiaries is a party before or by any court or governmental agency, authority or
body, or any arbitrator, which might result in any Material Adverse Change.
(i) FINRA shall have raised no objection to the fairness and reasonableness of the
underwriting terms and arrangements.
(j) The Company shall have furnished to you and counsel for the Underwriters such additional
documents, certificates and evidence as you or they may have reasonably requested.
(k) The Securities shall be approved for listing on American Stock Exchange.
All such opinions, certificates, letters and other documents will be in compliance with the
provisions hereof only if they are satisfactory in form and substance to you and counsel for the
Underwriters. The Company will furnish you with such conformed copies of such opinions,
certificates, letters and other documents as you shall reasonably request.
6. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter may become subject,
under the Securities Act or otherwise (including in settlement of any litigation if such settlement
is effected with the written consent of the Company), insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i) an untrue statement
or alleged untrue statement of a material fact contained in the Registration Statement, including
the information deemed to be a part of the Registration Statement at the time of effectiveness and
at any subsequent time pursuant to Rules 430A and 430C of the Rules and Regulations, if applicable,
any Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus, or any amendment
or supplement thereto, or any Issuer Free Writing Prospectus 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, and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by it in connection with investigating or defending
against such loss, claim, damage, liability or action; or (ii) in whole or in part upon any
inaccuracy in the representations and warranties of the Company contained herein; or (iii) in whole
or in part upon any failure of the Company to perform its obligations hereunder or under law;
provided, however, that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action 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, the Time of Sale Disclosure Package, the Prospectus, or any such amendment
or supplement or any Issuer Free Writing Prospectus, in reliance upon and in conformity with
written information furnished to the Company by you, or by any Underwriter through you,
specifically for use in the preparation thereof.
In addition to its other obligations under this Section 6(a), the Company agrees that, as an
interim measure during the pendency of any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any alleged statement or
omission, described in this Section 6(a), it will reimburse each Underwriter on a monthly basis for
all reasonable legal fees or other expenses incurred in connection with investigating or defending
any such claim, action, investigation, inquiry
-18-
or other proceeding, notwithstanding the absence of a judicial determination as to the propriety
and enforceability of the Company’s obligation to reimburse the Underwriters for such expenses and
the possibility that such payments might later be held to have been improper by a court of
competent jurisdiction. To the extent that any such interim reimbursement payment is so held to
have been improper, the Underwriter that received such payment shall promptly return it to the
party or parties that made such payment, together with interest, compounded daily, determined on
the basis of the prime rate (or other commercial lending rate for borrowers of the highest credit
standing) announced from time to time by U.S. Bank, N.A. (the “Prime Rate”). Any such interim
reimbursement payments which are not made to an Underwriter within 30 days of a request for
reimbursement shall bear interest at the Prime Rate from the date of such request. This indemnity
agreement shall be in addition to any liabilities which the Company may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company against any losses, claims,
damages or liabilities to which the Company may become subject, under the Securities Act or
otherwise (including in settlement of any litigation, if such settlement is effected with the
written consent of such Underwriter), 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 the Registration Statement, any Preliminary Prospectus,
the Time of Sale Disclosure Package, the Prospectus, or any amendment or supplement thereto or any
Issuer Free Writing Prospectus, 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 the Registration
Statement, any Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus, or any
amendment or supplement thereto, or any Issuer Free Writing Prospectus in reliance upon and in
conformity with written information furnished to the Company by you, or by such Underwriter through
you, specifically for use in the preparation thereof, and will reimburse the Company for any legal
or other expenses reasonably incurred by the Company in connection with investigating or defending
against any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice
of the commencement of any action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the indemnifying party shall not
relieve the indemnifying party from any liability that it may have to any indemnified party except
to the extent such indemnifying party has been materially prejudiced by such failure. In case any
such action 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 satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of the indemnifying party’s election so to
assume the defense thereof, the indemnifying party shall not be liable to such indemnified party
under such subsection for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof other than reasonable costs of investigation;
provided, however, that if, in the sole judgment of the Representatives, it is advisable for the
Underwriters to be represented as a group by separate counsel, the Representatives shall have the
right to employ a single counsel to represent the Representatives and all Underwriters who may be
subject to liability arising from any claim in respect of which indemnity may be sought by the
Underwriters under subsection (a) of this Section 6, in which event the reasonable fees and
expenses of such separate counsel shall be borne by the indemnifying party or parties and
reimbursed to the Underwriters as incurred (in accordance with the provisions of the second
paragraph in subsection (a) above).
The indemnifying party under this Section 6 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
against any
-19-
loss, claim, damage, liability or expense by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of counsel as
contemplated by this Section 6, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such settlement is entered
into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement, compromise or consent to the entry
of judgment in any pending or threatened action, suit or proceeding in respect of which any
indemnified party is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or consent (a) includes an
unconditional release of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding and (b) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 6 is unavailable or insufficient to
hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (i) 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 Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above 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 that resulted in such losses, claims, damages or liabilities, 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 bear 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 or the Underwriters and the parties’ relevant intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contributions pursuant to this
subsection (d) were to be 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 in the first sentence of this subsection (d). The amount
paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to
in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating or defending against
any action or claim which is the subject of this subsection (d). Notwithstanding the provisions of
this subsection (d), no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages that such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. 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. The Underwriters’ obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 6 shall be in addition to any liability
which the Company may otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the Securities Act; and the
obligations of the Underwriters under this Section 6 shall be in addition to any liability that the
respective
-20-
Underwriters may otherwise have and shall extend, upon the same terms and conditions, to 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), to each officer of the
Company who has signed the Registration Statement and to each person, if any, who controls the
Company within the meaning of the Securities Act.
(f) The Underwriters severally confirm and the Company acknowledges that the statements with
respect to the public offering of the Securities by the Underwriters set forth in the [second,
eleventh, twelfth and thirteenth] paragraphs under the heading “Underwriting” in the Time of Sale
Disclosure Package and in the Prospectus are correct and constitute the only information concerning
such Underwriters furnished in writing to the Company by or on behalf of the Underwriters
specifically for inclusion in the Registration Statement, any Preliminary Prospectus, the Time of
Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus.
(g) In connection with the offer and sale of the Directed Stock, the Company agrees, promptly
upon a request in writing, to indemnify and hold harmless the Underwriters from and against any and
all losses, liabilities, claims, damages and expenses incurred by them as a result of the failure
of the Directed Stock Participants to affirmatively reconfirm the Directed Stock for purchase as of
the date of this Agreement or to pay for and accept delivery of the Directed Stock by the end of
the First Closing Date.
7. Representations and Agreements to Survive Delivery. All representations, warranties, and
agreements of the Company herein or in certificates delivered pursuant hereto, including but not
limited to the agreements of the several Underwriters and the Company contained in Section 6
hereof, shall remain operative and in full force and effect regardless of any investigation made by
or on behalf of any Underwriter or any controlling person thereof or the Company or any of its
officers, directors, or controlling persons, and shall survive delivery of, and payment for, the
Securities to and by the Underwriters hereunder.
8. Substitution of Underwriters.
(a) If any Underwriter or Underwriters shall fail to take up and pay for the amount of Firm
Shares agreed by such Underwriter or Underwriters to be purchased hereunder, upon tender of such
Firm Shares in accordance with the terms hereof, and the amount of Firm Shares not purchased does
not aggregate more than 10% of the total amount of Firm Shares set forth in Schedule I hereto, the
remaining Underwriters shall be obligated to take up and pay for (in proportion to their respective
underwriting obligations hereunder as set forth in Schedule I hereto except as may otherwise be
determined by you) the Firm Shares that the withdrawing or defaulting Underwriters agreed but
failed to purchase.
(b) If any Underwriter or Underwriters shall fail to take up and pay for the amount of Firm
Shares agreed by such Underwriter or Underwriters to be purchased hereunder, upon tender of such
Firm Shares in accordance with the terms hereof, and the amount of Firm Shares not purchased
aggregates more than 10% of the total amount of Firm Shares set forth in Schedule I hereto, and
arrangements satisfactory to you for the purchase of such Firm Shares by other persons are not made
within 36 hours thereafter, this Agreement shall terminate. In the event of any such termination
the Company shall not be under any liability to any Underwriter (except to the extent provided in
Section 4(h) and Section 6 hereof) nor shall any Underwriter (other than an Underwriter who shall
have failed, otherwise than for some reason permitted under this Agreement, to purchase the amount
of Firm Shares agreed by such Underwriter to be purchased hereunder) be under any liability to the
Company (except to the extent provided in Section 6 hereof).
If Firm Shares to which a default relates are to be purchased by the non-defaulting
Underwriters or by any other party or parties, the Representatives or the Company shall have the
right to postpone the First Closing Date for not more than seven business days in order that the
necessary changes in the Registration Statement, in the Time of Sale Disclosure Package, in the
Prospectus or in any other
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documents, as well as any other arrangements, may be effected. As used herein, the term
“Underwriter” includes any person substituted for an Underwriter under this Section 8.
9. Termination of this Agreement.
(a) You, as Representatives of the several Underwriters, shall have the right to terminate
this Agreement by giving notice to the Company as hereinafter specified at any time at or prior to
the First Closing Date, and the option referred to in Section 3(b), if exercised, may be cancelled
at any time prior to the Second Closing Date, if (i) the Company has failed, refused or been
unable, at or prior to such Closing Date, to perform any agreement on its part to be performed
hereunder, (ii) any condition of the Underwriters’ obligations in Section 5 is not fulfilled, (iii)
trading in the Company’s Common Stock shall have been suspended by the Commission or the American
Stock Exchange or trading in securities generally on the Nasdaq Global Market, New York Stock
Exchange or the American Stock Exchange shall have been suspended, (iv) minimum or maximum prices
for trading shall have been fixed, or maximum ranges for prices for securities shall have been
required, on the Nasdaq Global Market, New York Stock Exchange or the American Stock Exchange, by
such Exchange or by order of the Commission or any other governmental authority having
jurisdiction, (v) a banking moratorium shall have been declared by federal or state authorities, or
(vi) there shall have occurred any attack on, outbreak or escalation of hostilities or act of
terrorism involving the United States, any declaration by the United States of a national emergency
or war, any change in financial markets, any substantial change or development involving a
prospective substantial change in United States or international political, financial or economic
conditions, or any other calamity or crisis that, in your judgment, is material and adverse and
makes it impractical or inadvisable to proceed with the completion of the sale of and payment for
the Securities. Any such termination shall be without liability of any party to any other party
except that the provisions of Section 4(h) and Section 6 hereof shall at all times be effective and
shall survive such termination.
(b) If you elect to terminate this Agreement as provided in this Section, the Company shall be
notified promptly by you by telephone, confirmed by letter.
10. Default by the Company. If the Company shall fail at the First Closing Date to sell and
deliver the number of Securities which it is obligated to sell hereunder, then this Agreement shall
terminate without any liability on the part of any Underwriter or, except as provided in Section
4(h) hereof, any non-defaulting party.
No action taken pursuant to this Section shall relieve the Company so defaulting from
liability, if any, in respect of such default.
11. Notices. Except as otherwise provided herein, all communications hereunder shall be in
writing and, if to the Underwriters, shall be mailed, delivered or telecopied to the
Representatives c/o Xxxxx-Xxxxxx Capital Group LLC, 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000 Xxxxxxxxxxx,
Xxxxxxxxx 00000, Attention: General Counsel (telecopy no. (000) 000-0000) except that notices given
to an Underwriter pursuant to Section 6 hereof shall be sent to such Underwriter at the address
stated in the Underwriters’ Questionnaire furnished by such Underwriter in connection with this
offering; if to the Company, shall be mailed, delivered or telecopied to it at Uroplasty, Inc. 0000
Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxx 00000, Attention: Chief Executive Officer (telecopy no. (000)
000-0000). Any party to this Agreement may change such address for notices by sending to the
parties to this Agreement written notice of a new address for such purpose.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and assigns and the
controlling persons, officers and directors referred to in Section 6. Nothing in this Agreement is
intended or shall be construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision herein contained.
The term “successors and assigns” as herein used shall not include any purchaser, as such
purchaser, of any of the Securities from any of the several Underwriters.
-22-
13. Absence of Fiduciary Relationship. The Company acknowledges and agrees that: (a) the
Representatives have been retained solely to act as an underwriter in connection with the sale of
the Securities and that no fiduciary, advisory or agency relationship between the Company and the
Representatives has been created in respect of any of the transactions contemplated by this
Agreement, irrespective of whether the Representatives have advised or are advising the Company on
other matters; (b) the price and other terms of the Securities set forth in this Agreement were
established by the Company following discussions and arms-length negotiations with the
Representatives and the Company; (c) it has been advised that the Representatives and their
affiliates are engaged in a broad range of transactions which may involve interests that differ
from those of the Company and that the Representatives have no obligation to disclose such interest
and transactions to the Company by virtue of any fiduciary, advisory or agency relationship; (d) it
has been advised that the Representatives are acting, in respect of the transactions contemplated
by this Agreement, solely for the benefit of the Representatives and the other Underwriters, and
not on behalf of the Company; (e) it waives, to the fullest extent permitted by law, any claims it
may have against the Representatives for breach of fiduciary duty or alleged breach of fiduciary
duty in respect of any of the transactions contemplated by this Agreement and agrees that the
Representatives shall have no liability (whether direct or indirect) to the Company in respect of
such a fiduciary duty claim on behalf of or in right of the Company, including stockholders,
employees or creditors of the Company.
14. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of Minnesota.
15. Counterparts. This Agreement may be executed in one or more counterparts and, if executed
in more than one counterparts, the executed counterpart shall each be deemed to be an original and
all such counterparts shall together constitute one and the same instrument.
[Signature Page Follows]
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Please sign and return to the Company the enclosed duplicates of this letter whereupon
this letter will become a binding agreement between the Company and the several Underwriters in
accordance with its terms.
| Very truly yours, | ||||||
| Uroplasty, Inc. | ||||||
| By | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| Confirmed as of the date first above mentioned, on behalf of themselves and the other several Underwriters named in Schedule I hereto. | ||||||
| Xxxxx-Xxxxxx Capital Group | ||||||
By:
|
||||||
Name:
|
||||||
| Managing Partner | ||||||
| Noble International Investments, Inc. | ||||||
By:
|
||||||
Name:
|
||||||
Its:
|
||||||
SCHEDULE I
| Underwriter | Number of Firm Shares (1) | |||
Xxxxx-Xxxxxx Capital Group LLC |
||||
Noble International Investments, Inc. |
||||
Total |
||||
| (1) | The Underwriters may purchase up to an additional [ ] Option Shares, to the extent the option described in Section 3(b) of the Agreement is exercised, in the proportions and in the manner described in the Agreement. |
SCHEDULE II
Issuer General Free Writing Prospectuses
SCHEDULE III
Pricing Information
