Exhibit 1.1
2,200,000 SHARES
MEDI-JECT CORPORATION
Common Stock
UNDERWRITING AGREEMENT
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_____________, 1996
Rodman & Renshaw, Inc.
R. J. Steichen & Company
c/o Rodman & Renshaw, Inc.
225 Liberty Street
2 World Financial Center
30th Floor
New York, New York 10281
On behalf of the Several
Underwriters named in
Schedule I attached hereto.
Ladies and Gentlemen:
Medi-Ject Corporation, a Minnesota corporation (the "Company"), proposes to
sell to you (the "Representatives") and the other underwriters named in Schedule
I attached hereto (the "Underwriters"), for whom you are acting as the
Representatives, an aggregate of 2,200,000 shares (the "Firm Shares") of the
Company's Common Stock, $.01 par value (the "Common Stock"). In addition, the
Company proposes to grant to the Underwriters an option to purchase up to an
additional 330,000 shares (the "Option Shares"), of Common Stock for the purpose
of covering over-allotments in connection with the sale of the Firm Shares. The
Firm Shares and the Option Shares are together called the "Shares."
1. Sale and Purchase of the Shares. On the basis of the representations,
warranties and agreements contained in, and subject to the terms and conditions
of, this Agreement:
(a) The Company agrees to issue and sell the Shares to the several
Underwriters and each of the Underwriters agrees, severally and not
jointly, to purchase at the purchase price per share of Common Stock of
$_____ (the "Initial Price"), the aggregate number of Firm Shares set forth
opposite such Underwriter's name in Schedule I attached hereto. The
Underwriters agree to offer the Firm Shares to the public as set forth in
the Prospectus.
(b) The Company grants to the several Underwriters an option to
purchase all or any part of the Option Shares at the Initial Price. The
number of Option Shares to be purchased by each Underwriter shall be the
same percentage (adjusted by the Representatives to eliminate fractions) of
the total number of Option Shares to be purchased by the Underwriter as
such Underwriter is purchasing of the Firm Shares. Such option may be
exercised only to cover over-allotments in the sales of the Firm Shares by
the Underwriters and may be exercised in whole or in part, but only once,
at any time within 30 days after the date of this Agreement, upon written
notice, or verbal or telephonic notice confirmed by written notice, by the
Representatives to the Company no later than 12:00 noon, New York City
time, on the business day before the Firm Shares Closing Date or at least
two business days before any Option Shares Closing Date (as defined below),
as the case may be, setting forth the number of Option Shares to be
purchased and the time and date (if other than the Firm Shares Closing
Date) of such purchase.
(c) On the Firm Shares Closing Date (as defined below), the Company
shall issue and sell to the Representatives, individually and not as
Representatives of the Underwriters, for an aggregate purchase price of
$.001 per warrant, warrants representing the right of the Representatives
to purchase a number of Shares of Common Stock (the "Warrant Shares") equal
to 10.0% of the Firm Shares (which warrants shall be evidenced in the form
set forth as an exhibit to the Registration Statement) (the
"Representatives' Warrants"). The Representatives' Warrants shall be
allocated between each of the Representatives as the Company shall be
advised in writing.
2. Delivery and Payment. Delivery by the Company of the Firm Shares to
the Representatives for the respective accounts of the Underwriters, and payment
of the purchase price by certified or official bank check or checks payable in
New York Clearing House (next day) funds to the Company, shall take place at the
offices of Rodman & Renshaw, Inc., at 225 Liberty Street, 2 World Financial
Center, 30th Floor, New York, New York 10281, at 10:00 a.m., New York City time,
on the third business day following the date on which the public offering of the
Shares commences (unless such date is postponed in accordance with the
provisions of Section 10(b) hereof), or at such time and place on such other
date, not later than 10 business days after the date of this Agreement, as shall
be agreed upon by the Company and the Representatives (such time and date of
delivery and payment are called the "Firm Shares Closing Date"). The public
offering of the Shares shall be deemed to have commenced at the time which is
the earlier of (a) the time, after the Registration Statement (as defined in
Section 4 below) becomes effective, of the release by you for publication of the
first newspaper advertisement which is subsequently published relating to the
Shares or (b) the time, after the Registration Statement becomes effective, when
the Shares are first released by you for offering by the Underwriters or dealers
by letter or telegram.
In the event the option with respect to the Option Shares is exercised,
delivery by the Company of the Option Shares to the Representatives for the
respective accounts of the Underwriters and payment of the purchase price by
certified or official bank check or checks payable in New York Clearing House
(next day) funds to the Company shall take place at the offices of Rodman &
Renshaw, Inc. specified above at the time and on the date (which may be the same
date as, but in no event shall be earlier than, the Firm Shares Closing Date)
specified in the notice referred to in Section 1(b) (such time and date of
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delivery and payment is called the "Option Shares Closing Date"). The Firm
Shares Closing Date and the Option Shares Closing Dates are called,
individually, a "Closing Date" and, together, the "Closing Dates."
Certificates evidencing the Shares shall be registered in such names and
shall be in such denominations as the Representatives shall request at least two
full business days before the Firm Shares Closing Date or the Option Shares
Closing Date, as the case may be, and shall be made available to the
Representatives for checking and packaging, at such place as is designated by
the Representatives, on the full business day before the Firm Shares Closing
Date or the Option Shares Closing Date, as the case may be.
3. Public Offering. The Company understands that the Underwriters
propose to make a public offering of the Shares, as set forth in and pursuant to
the Prospectus (as defined in Section 4 below), as soon after the effective date
of the Registration Statement and the date of this Agreement as the
Representatives deem advisable. The Company hereby confirms that the
Underwriters and dealers have been authorized to distribute or cause to be
distributed each preliminary prospectus and are authorized to distribute the
Prospectus (as from time to time amended or supplemented).
4. Representations and Warranties of the Company.
The Company represents and warrants to, and agrees with, the several
Underwriters that:
(i) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement, and may have
filed one or more amendments thereto, on Form S-1 (Registration No.
333-06661), including in such registration statement and each such
amendment a related preliminary prospectus (a "Preliminary
Prospectus"), for the registration of the Shares and the Option
Shares, in conformity with the requirements of the Securities Act of
1933, as amended (the "Act"). The Company may also file a related
registration statement with the Commission pursuant to Rule 462(b)
under the Act for the purpose of registering certain additional
Shares, which registration shall be effective upon filing with the
Commission. As used in this Agreement, the term "Original
Registration Statement" means such registration statement, as amended,
on file with the Commission at the time such registration statement
becomes effective (including the prospectus, financial statements,
exhibits, and all other documents filed as a part thereof or
incorporated by reference directly or indirectly therein), provided
that such registration statement, at the time it becomes effective,
may omit such information as is permitted to be omitted from the
registration statement when it becomes effective pursuant to Rule 430A
of the General Rules and Regulations promulgated under the Act (the
"Regulations"), which information ("Rule 430A Information") shall be
deemed to be included in such Registration Statement when a final
prospectus is filed with the Commission in accordance with Rules 430A
and 424(b)(1) or (4) of the Regulations; the term "Rule 462(b)
Registration Statement" means any registration statement filed with
the Commission pursuant to Rule 462(b) under the Act
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(including the Original Registration Statement and any Preliminary
Prospectus or Prospectus incorporated therein at the time the Original
Registration Statement becomes effective); the term "Registration
Statement" includes both the Original Registration Statement and any
Rule 462(b) Registration Statement; the term "Preliminary Prospectus"
means each prospectus included in the Registration Statement, or any
amendments thereto, before it becomes effective under the Act, the
form of prospectus omitting Rule 430A Information included in the
Registration Statement when it becomes effective, if applicable (the
"Rule 430A Prospectus"), and any prospectus filed by the Company with
your consent pursuant to Rule 424(a) of the Regulations; and the term
"Prospectus" means the final prospectus included as part of the
Registration Statement, except that if the prospectus relating to the
securities covered by the Registration Statement in the form first
filed on behalf of the Company with the Commission pursuant to Rule
424(b) of the Regulations shall differ from such final prospectus, the
term "Prospectus" shall mean the prospectus as filed pursuant to Rule
424(b) from and after the date on which it shall have first been used.
(ii) When the Registration Statement becomes effective, and
at all times subsequent thereto to and including the Closing Dates,
and during such longer period as the Prospectus may be required to be
delivered in connection with sales by the Underwriters or a dealer,
and during such longer period until any post-effective amendment
thereto shall become effective, the Registration Statement (and any
post-effective amendment thereto) and the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any
amendment or supplement to the Registration Statement or the
Prospectus) will contain all statements which are required to be
stated therein in accordance with the Act and the Regulations, will
comply with the Act and the Regulations, and will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, and no event will have occurred which should
have been set forth in an amendment or supplement to the Registration
Statement or the Prospectus which has not then been set forth in such
an amendment or supplement; if a Rule 430A Prospectus is included in
the Registration Statement at the time it becomes effective, the
Prospectus filed pursuant to Rules 430A and 424(b)(1) or (4) will
contain all Rule 430A Information; and each Preliminary Prospectus, as
of the date filed with the Commission, did not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading; except that no representation or warranty is
made in this Section 4(a)(ii) with respect to statement or omissions
made in reliance upon and in conformity with written information
furnished to the Company as stated in Section 7(a) with respect to any
Underwriter by or on behalf of such Underwriter through the
Representatives expressly for inclusion in any Preliminary Prospectus,
the Registration
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Statement, or the Prospectus, or any amendment or supplement thereto.
(iii) If the Company has elected to rely on Rule 462(b),
then (i) the Company has filed a Rule 462(b) Registration Statement in
compliance with and that is effective upon filing pursuant to Rule
462(b) and has received confirmation of its receipt and (ii) the
Company has given irrevocable instructions for transmission of the
applicable filing fee in connection with the filing of the Rule 462(b)
Registration Statement, in compliance with Rule 111 promulgated under
the Act or the Commission has received payment of such filing fee.
(iv) Neither the Commission nor the "blue sky" or securities
authority of any jurisdiction has issued an order (a "Stop Order")
suspending the effectiveness of the Registration Statement, preventing
or suspending the use of any Preliminary Prospectus, the Prospectus,
the Registration Statement, or any amendment or supplement thereto,
refusing to permit the effectiveness of the Registration Statement, or
suspending the registration or qualification of the Firm Shares or the
Option Shares nor has any of such authorities instituted or threatened
to institute any proceedings with respect to a Stop Order.
(v) Any contract, agreement, instrument, lease, or license
required to be described in the Registration Statement or the
Prospectus has been properly described therein. Any contract
agreement, instrument, lease, or license required to be filed as an
exhibit to the Registration Statement has been filed with the
Commission as an exhibit to or has been incorporated as an exhibit by
reference into the Registration Statement.
(vi) The Company has no subsidiary or subsidiaries and does
not control, directly or indirectly, any corporation, partnership,
joint venture, association or other business organization. The
Company is a corporation duly organized, validly existing, and in good
standing under the laws of the jurisdiction of incorporation, with
full corporate power and authority, and all necessary consents,
authorizations, approvals, orders, licenses, certificates, and permits
of and from, and declarations and filings with, all federal, state,
local, foreign and other governmental authorities and all courts and
other tribunals, to own, lease, license, and use its properties and
assets and to carry on its business as now being conducted and in the
manner described in the Prospectus. The Company is duly qualified to
do business and is in good standing in each jurisdiction in which its
ownership, leasing, licensing, or character, location or use of
property and assets or the conduct of its business makes such
qualification necessary.
(vii) The authorized capital stock of the Company consists
of _______________ shares of Common Stock, of which _____________
shares are outstanding; and _____________ shares of preferred stock,
$.01 par value, of the Company of which _____ shares are outstanding.
Each outstanding share of Common Stock has
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been duly and validly authorized and issued, fully paid, and non-
assessable, without any personal liability attaching to the ownership
thereof and has not been issued and is not owned or held in violation
of any preemptive rights of shareholders. There is no commitment,
plan, preemptive right or arrangement to issue, and no outstanding
option, warrant, or other right calling for the issuance of, shares of
capital stock of the Company or any security or other instrument which
by its terms is convertible into, exercisable for, or exchangeable for
capital stock of the Company, except as may be properly described in
the Prospectus. There is outstanding no security or other instrument
which by its terms is convertible into or exchangeable for capital
stock of the Company or of any Subsidiary, except as may be properly
described in the Prospectus.
(viii) The consolidated financial statements of the Company
included in the Registration Statement and the Prospectus fairly
present, with respect to the Company, the financial position, the
results of operations, and the other information purported to be shown
therein at the respective dates and for the respective periods to
which they apply. Such financial statements have been prepared in
accordance with generally accepted accounting principles (except to
the extent that certain footnote disclosures regarding any stub period
may have been omitted in accordance with the applicable rules of the
Commission under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") consistently applied throughout the periods involved,
are correct and complete, and are in accordance with the books and
records of the Company. The accountants whose report on the audited
financial statements is filed with the Commission as a part of the
Registration Statement are, and for the periods covered by their
report(s) included in the Registration Statement and the Prospectus
were, independent certified public accountants with respect to the
Company within the meaning of the Act and the Regulations. No other
financial statements are required by Form S-1 or otherwise to be
included in the Registration Statement or the Prospectus. There has
at no time been a material adverse change in the financial condition,
results of operations, business, properties, assets, liabilities, or
future prospects of the Company from the latest information set forth
in the Registration Statement or the Prospectus, except as may be
properly described in the Prospectus.
(ix) There is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or
investigation before any court or before any public body or board
pending, threatened, or in prospect (or, to the best knowledge of the
Company, any basis therefor) with respect to the Company, or any of
its operations, business, properties, or assets, except as may be
properly described in the Prospectus or such as individually or in the
aggregate do not now have and will not in the future have a material
adverse effect upon the operations, business, properties, assets or
financial condition of the Company. The Company is not involved in
any labor dispute, nor is such dispute threatened, which dispute would
have a material adverse effect upon
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the operations, business, properties, assets or financial condition of
the Company. The Company is not in violation of, or in default with
respect to, any law, rule, regulation, order, judgment, or decree
which would have a material adverse effect upon the operations,
business, properties, assets or financial conditions of the Company;
nor is the Company required to take any corrective action in order to
avoid any such violation or default.
(x) The Company has good title to all properties and assets
which the Prospectus indicates are owned by it, and has valid and
enforceable leasehold interests in each item of leased real property
and personal property, free and clear of all liens, security
interests, pledges, charges, encumbrances, and mortgages (except as
may be properly described or as may not be required to be disclosed in
the Prospectus). No real property owned, leased, licensed or used by
the Company lies in an area which is, or to the best knowledge of the
Company is expected to be, subject to zoning, use or building code
restrictions which would prohibit, and no state of facts relating to
the actions or inaction of another person or entity or such person's
or entity's ownership, leasing, licensing or use of any real or
personal property exists or is expected to exist which would prevent,
the continued effective ownership, leasing, licensing or use of such
real property in the business of the Company as presently conducted or
as the Prospectus indicates it contemplates conducting (except as may
be properly described in the Prospectus).
(xi) Neither the Company nor, to the best knowledge of the
Company, any other party is now or is expected by the Company to be in
violation or breach of, or in default with respect to, complying with
any term, obligation or provision of any contract, agreement,
instrument, lease, license, indenture, mortgage, deed of trust, note,
arrangement or understanding which is material to the Company or by
which any of its properties or business may be bound or affected, and
no event has occurred which with notice or lapse of time or both would
constitute such a default (subject to the best knowledge of the
Company with respect to third-party events constituting a default with
the lapse of time or in which any required notice to the Company has
not been given), and each such contract, agreement, instrument, lease,
license, indenture, mortgage, deed of trust, note, arrangement or
understanding is in full force and is the legal, valid and binding
obligation of the parties thereto and is enforceable as to them
(subject to the best knowledge of the Company with respect to third
parties) in accordance with its terms except as such enforceability
may be limited by bankruptcy, insolvency, reorganization and other
laws affecting creditors' rights generally, and by general limitations
in the availability of equitable remedies. The Company enjoys
peaceful and undisturbed possession under all leases and licenses
under which it is operating. The Company is not a party to or bound
by any contract, agreement, instrument, lease, license, indenture,
mortgage, deed of trust, note, arrangement or understanding, or
subject to any charter or other restriction, which has had or is
expected to have a material adverse effect on
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the financial condition, results of operations, business, properties,
assets, liabilities or future prospects of the Company. The Company
is not in violation or breach of, or in default with respect to, any
term of its articles of incorporation (or other charter document) or
by-laws or of any franchise, license, permit, judgment, decree, order,
statute, rule or regulation which default or violation with respect to
any franchise, license, permit judgment, decree, order, statute, rule
or regulation would have a material adverse effect on the operations,
business, properties, assets or financial condition of the Company.
(xii) The Company has filed all federal, state, local and
foreign tax returns which are required to be filed through the date
hereof, or has received extensions thereof, and has paid all taxes
shown on such returns and all assessments received by it to the extent
that the same are material and have become due.
(xiii) All patents, patent applications, trademarks,
trademark applications, trade names, service marks, copyrights,
copyright applications, franchises, and other intangible properties
and assets listed in the Registration Statement under "Business-
Patents" (all of the foregoing being collectively herein called
"Intangibles") that the Company owns, possesses or has pending, or
under which it is licensed, are in good standing and, to the best
knowledge of the Company, uncontested. There is no right under any
Intangible necessary to the business of the Company as presently
conducted or that the Prospectus indicates the Company has that the
Company does not have (except as may be so described in the
Prospectus). The Company has not infringed, is not infringing, and
has not received any notice of infringement with respect to asserted
Intangibles of others. To the best knowledge of the Company, there is
no infringement by others of Intangibles of the Company. To the best
knowledge of the Company, there is no Intangible of others which is
expected to have a material adverse effect on the financial condition,
results of operations, business, properties, assets, liabilities or
future prospects of the Company.
(xiv) Neither the Company nor, to the best knowledge of the
Company, any director, officer, agent, employee or other person
associated with or acting on behalf of the Company has, directly or
indirectly: used any corporate funds for unlawful contributions,
gifts, entertainment, or other unlawful expenses relating to political
activity; made any unlawful payment to foreign or domestic government
officials or employees or to foreign or domestic political parties or
campaigns from corporate funds; violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended; or made any bribe, rebate,
payoff, influence payment, kickback, or other unlawful payment. No
transaction has occurred between or among the Company and any of its
officers or directors or any affiliates or affiliates of any such
officer or director, except as described in the Prospectus or as may
be omitted from the Prospectus in accordance with the Regulations.
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(xv) The Company has all requisite power and authority to
execute, deliver and perform each of this Agreement and the
Representatives' Warrants (collectively, the "Company Documents").
All necessary corporate proceedings of the Company have been duly
taken to authorize the execution, delivery and performance of each of
the Company Documents. This Agreement has been duly authorized,
executed, and delivered by the Company, is the legal, valid and
binding obligation of the Company, and is enforceable as to the
Company in accordance with its terms and each of the other Company
Documents have been duly authorized and when executed and delivered by
the Company will be the legal, valid and binding obligation of the
Company enforceable as to the Company in accordance with its terms
(subject to applicable bankruptcy, insolvency, and other laws
affecting the enforceability of creditors' rights generally and to
general limitations on the availability of equitable remedies). No
consent, authorization, approval, order, license, certificate or
permit of or from, or declaration or filing with, any federal, state,
local or other governmental authority or any court or other tribunal
is required by the Company for the execution, delivery or performance
by the Company of the Company Documents (except filings under the Act
which have been or will be made before the applicable Closing Date and
such consents consisting only of consents under "blue sky" or
securities laws which have been obtained at or prior to the date of
this Agreement or others as have been made or obtained). No consent
of any party to any contract, agreement, instrument, lease, license,
indenture, mortgage, deed of trust, note, arrangement or understanding
to which the Company is a party, or to which any of its respective
properties or assets are subject, is required for the execution,
delivery or performance of the Company Documents, except as have been
obtained, and the execution, delivery and performance of the Company
Documents, will not violate, result in a breach of, conflict with,
accelerate the due date of any payments under, or (with or without the
giving of notice or the passage of time or both) entitle any party to
terminate or call a default under any such contract, agreement,
instrument, lease, license, indenture, mortgage, deed of trust, note,
arrangement, or understanding, or violate or result in a breach of any
term of the certificate of incorporation (or other charter document)
or by-laws of the Company, or violate, result in a breach of, or
conflict with any law, rule, regulation, order, judgment or decree
binding on the Company or to which any of its operations, business,
properties or assets are subject.
(xvi) The Firm Shares and the Option Shares are duly and
validly authorized. The Firm Shares and the Option Shares, when
delivered in accordance with this Agreement will be duly and validly
issued, fully paid, and non-assessable, without any personal liability
attaching to the ownership thereof, and will not be issued in
violation of any preemptive rights of shareholders, optionholders,
warrantholders and any other persons and the Underwriters will receive
good title to the Firm Shares and the Option Shares purchased by them,
respectively, free and clear of all liens, security interests,
pledges, charges, encumbrances, shareholders' agreements and voting
trusts.
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(xvii) The Warrant Shares are validly authorized and
reserved for issuance and, when issued and delivered upon exercise of
the Representatives' Warrants, will be validly issued, fully paid and
non-assessable, without any personal liability attaching to the
ownership thereof, and will not be issued in violation of any
preemptive rights of shareholders, optionholders, warrantholders and
any other persons and the holders of the Representatives' Warrants
will receive good title to the securities purchased by them,
respectively, free and clear of all liens, security interests,
pledges, charges, encumbrances, shareholders' agreements and voting
trusts.
(xviii) The Firm Shares, the Option Shares, the
Representatives' Warrants, all of the classes of the Common Stock and
the Preferred Stock conform to all statements relating thereto
contained in the Registration Statement or the Prospectus.
(xix) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
and except as may otherwise be properly described therein, there has
not been any material adverse change in the assets or properties,
business or results of operations or financial condition of the
Company, whether or not arising from transactions in the ordinary
course of business; the Company has not sustained any material loss or
interference with its business or properties from fire, explosion,
earthquake, flood or other calamity, whether or not covered by
insurance; since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, except as reflected in the
Prospectus, the Company has not undertaken any liability or
obligation, direct or contingent, except for liabilities or
obligations undertaken in the ordinary course of business and except
in connection with the issuance and sale of the Shares; and, except as
reflected in the Prospectus, the Company has not (A) issued any
securities or incurred any liability or obligation, primary or
contingent, for borrowed money, (B) entered into any transaction not
in the ordinary course of business, or (C) declared or paid any
dividend or made any distribution on any of its capital stock or
redeemed, purchased or otherwise acquired or agreed to redeem,
purchase or otherwise acquire any shares of its capital stock.
(xx) Neither the Company nor, to the best knowledge of the
Company, any of its officers, directors or affiliates (as defined in
the Regulations), has taken or will take, directly or indirectly,
prior to the termination of the underwriting syndicate contemplated by
this Agreement, any action designed to stabilize or manipulate the
price of any security of the Company, or which has caused or resulted
in, or which might in the future reasonably be expected to cause or
result in, stabilization or manipulation of the price of any security
of the Company, to facilitate the sale or resale of any of the Firm
Shares or the Option Shares.
(xxi) The Company has obtained from each of its executive
officers and directors, his or her enforceable written
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agreement, in form and substance satisfactory to counsel for the
Underwriters, that for a period of 180 days from the date on which the
public offering of the Shares commences he or she will not, without
the prior written consent of Rodman & Renshaw, Inc. ("Rodman"), on
behalf of the Underwriters, offer, pledge, sell, contract to sell,
grant any option for the sale of, or otherwise dispose of, directly or
indirectly, any shares of Common Stock or other securities of the
Company (or any security or other instrument which by its terms is
convertible into, exercisable for, or exchangeable for shares of
Common Stock or other securities of the Company, including, without
limitation, any shares of Common Stock issuable under any employee
stock options), beneficially owned by him or her.
(xxii) The Company is not, and does not intend to conduct
its business in a manner in which it would become, an "investment
company" as defined in Section 3(a) of the Investment Company Act of
1940 (the "Investment Company Act").
(xxiii) All offers and sales of the Company's capital
stock, prior to the date hereof, were at all relevant times exempt
from the registration requirements of the Act, and were the subject of
an available exemption from the registration requirements of all
applicable state securities or blue sky laws.
(xxiv) No person or entity has the right to require
registration of shares of Common Stock or other securities of the
Company because of the filing or effectiveness of the Registration
Statement, except such persons or entities from whom written waivers
of such rights have been received prior to the date hereof.
(xxv) Except as may be set forth in the Prospectus, the
Company has not incurred any liability for a fee, commission or other
compensation on account of the employment of a broker or finder in
connection with the transactions contemplated by this Agreement.
(xxvi) No transaction has occurred between or among the
Company or any of the Subsidiaries and any of their respective
officers or directors or any affiliates of any such officer or
director, that is required to be described in and is not described in
the Registration Statement and the Prospectus.
(xxvii) The Company has, and at each Closing Date will
have, made all filings required to be made by it under the Exchange
Act, and such filings, at the time they were made, complied in all
material respects with the requirements of the Exchange Act, and the
rules and regulations thereunder, and did not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
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(xxviii) The Common Stock, including the Shares, is
authorized for quotation on the Nasdaq National Market upon official
notice of issuance.
(xxix) Neither the Company nor any of its affiliates is
presently doing business with the government of Cuba or with any
person or affiliate of any person located in Cuba. If, at any time
after the date that the Registration Statement is declared effective
with the Commission or with the Florida Department of Banking and
Finance (the "Florida Department"), whichever date is later, and prior
to the end of the period referred to in the first clause of Section
4(ii) hereof, the Company commences engaging in business with the
government of Cuba or with any person or affiliate of any person
located in Cuba, the Company will so inform the Florida Department
within ninety days after such commencement of business in Cuba, and
during the period referred to in Section 4(ii) hereof will inform the
Florida Department within ninety days after any change occurs with
respect to previously reported information.
5. Conditions of the Underwriters' Obligations. The obligations of the
Underwriters under this Agreement are several and not joint. The respective
obligations of the Underwriters to purchase the Shares are subject in the
Representatives' sole discretion, to each of the following terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 6(a)(i) of this Agreement; if the Original
Registration Statement or any amendment thereto filed prior to the Firm
Closing Date has not been declared effective as of the time of execution
hereof, the Original Registration Statement or such amendment and, if the
Company has elected to rely upon Rule 462(b), the Rule 462(b) Registration
Statement shall be effective not later than the earlier of (i) 11:00 a.m.
New York time, on the date on which the amendment to the registration
statement originally filed with respect to the Shares or to the
Registration Statement, as the case may be, containing information
regarding the public offering price of the Shares has been filed with the
Commission, and (ii) the time confirmations are sent or given as specified
by Rule 462(b)(2) or, with respect to the Original Registration Statement,
such later time and date as shall have been consented to by the
Representatives.
(b) No order preventing or suspending the use of any preliminary
prospectus or the Prospectus shall have been or shall be in effect and no
order suspending the effectiveness of the Registration Statement shall be
in effect and no proceedings for such purpose shall be pending before or
threatened by the Commission, and any requests for additional information
on the part of the Commission (to be included in the Registration Statement
or the Prospectus or otherwise) shall have been complied with to the
satisfaction of the Representatives.
(c) The representations and warranties of the Company contained in
this Agreement and in the certificate delivered pursuant to Section 5(d)
shall be true and correct when made and on and as of each Closing Date as
if made on such date and the Company shall have performed all
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covenants and agreements and satisfied all the conditions contained in this
Agreement required to be performed or satisfied by it at or before such
Closing Date.
(d) The Representatives shall have received on each Closing Date, a
certificate, addressed to the Representatives and dated such Closing Date,
executed on behalf of the Company by the chief executive officer and the
chief financial officer of the Company to the effect that the persons
executing such certificate have carefully examined the Registration
Statement, the Prospectus and this Agreement and that the representations
and warranties of the Company in this Agreement are true and correct on and
as of such Closing Date with the same effect as if made on such Closing
Date and the Company has performed all covenants and agreements and
satisfied all conditions contained in this Agreement required to be
performed or satisfied by it at or prior to such Closing Date.
(e) The Representatives shall have received at the time this Agreement
is executed and on each Closing Date a signed letter from KPMG Peat Marwick
LLP addressed to the Representatives and dated, respectively, the date of
this Agreement and each such Closing Date, in form and scope reasonably
satisfactory to the Representatives, with reproduced copies or signed
counterparts thereof for each of the Underwriters confirming that they are
independent accountants within the meaning of the Act and the Regulations,
that the response to Item 10 of the Registration Statement is correct in so
far as it relates to them and stating in effect that:
(i) in its opinion the audited financial statements and
financial statement schedules included or incorporated by reference in
the Registration Statement and the Prospectus and reported on by it
comply as to form in all material respects with the applicable
accounting requirements of the Act, the Exchange Act and the related
published rules and regulations thereunder;
(ii) on the basis of a reading of the amounts included in
the Registration Statement and the Prospectus under the heading
"Selected Financial Data" which would not necessarily reveal matters
of significance with respect to the comments set forth in such letter,
a reading of the minutes of the meetings of the shareholders and
directors of the Company, and inquiries of certain officials of the
Company who have responsibility for financial and accounting matters
of the Company as to transactions and events subsequent to the date of
the latest audited financial statements, except as disclosed in the
Registration Statement and the Prospectus, nothing came to their
attention which caused them to believe that:
(A) the amounts in "Selected Financial Data," and included
or incorporated by reference in the Registration Statement and
the Prospectus do not agree with the corresponding amounts in the
audited financial statements from which such amounts were
derived; or
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(B) with respect to the Company, there were, at a specified
date not more than five business days prior to the date of the
letter, any decreases in net sales, income before income taxes
and net income or any increases in long-term debt of the Company
or any decreases in the capital stock, working capital or the
shareholders' equity in the Company, as compared with the amounts
shown on the Company's audited Balance Sheet for the fiscal year
ended March 31, 1996 included in the Registration Statement or
the audited Statement of Operations, for such year; and
(iii) they have performed certain other procedures as a
result of which they determined that information of an accounting,
financial or statistical nature (which is limited to accounting,
financial or statistical information derived from the general
accounting records of the Company) set forth in the Registration
Statement and the Prospectus and reasonably specified by the
Representatives agrees with the accounting records of the Company.
References to the Registration Statement and the Prospectus in this
paragraph (e) are to such documents as amended and supplemented at the date
of such letter.
(f) The Representatives shall have received on each Closing Date from
Dorsey & Whitney LLP, counsel for the Company, an opinion, addressed to the
Representatives and dated such Closing Date, and in form and scope
satisfactory to counsel for the Underwriters, with reproduced copies or
signed counterparts thereof for each of the Underwriters, to the effect
that:
(i) The Company is a corporation duly incorporated, validly
existing, and in good standing under the laws of the State of
Minnesota and has duly elected directors, held its first meeting of
the board of directors, adopted by-laws, elected officers and received
payment of any statutory minimum amount for capital stock pursuant to
the Minnesota Business Corporation Act. The Company has full
corporate power and authority to own, lease, license and use its
properties and assets and to conduct its business in the manner
described in the Prospectus. To the knowledge of such counsel, the
Company has no subsidiary and does not control, directly or
indirectly, any corporation, partnership, joint venture, association
or other business organization. The Company is duly qualified to do
business and is in good standing, in each state where the failure to
be so qualified could have a material adverse effect on the operating
condition (financial and otherwise) or business of the Company.
(ii) The Company has authorized, issued and outstanding
capital stock as set forth under the caption "Capitalization" in the
Prospectus. The certificates evidencing the Shares are in due and
proper legal form under the Minnesota Business Corporation Act. Each
outstanding share of Common Stock has been duly authorized and validly
issued and is fully paid and
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non-assessable, without any personal liability attaching solely to the
ownership thereof, and, to the knowledge of such counsel, has not been
issued and is not owned or held in violation of any preemptive right
of shareholders. To the knowledge of such counsel, there is no
commitment, plan, or arrangement to issue, and no outstanding option,
warrant, or other right calling for the issuance of, any share of
capital stock of the Company or any security or other instrument which
by its terms is convertible into, exercisable for, or exchangeable for
capital stock of the Company, except as may be described in the
Prospectus. To the knowledge of such counsel, there is outstanding no
security or other instrument which by its terms is convertible into,
exercisable for or exchangeable for capital stock of the Company,
except as may be described in the Prospectus.
(iii) To the knowledge of such counsel, there is no
litigation, arbitration, claim, governmental or other proceeding
(formal or informal), or investigation before any court or before any
public body or board pending, threatened, or in prospect with respect
to the Company, or any of its respective operations, businesses,
properties, assets, or financial condition which is required to be
described in the Prospectus that is not described as required under
the Act or the Exchange Act.
(iv) The issuance and sale of the Shares and
Representatives' Warrants as described in the Prospectus, will not
violate or conflict with, or constitute a breach or default with
respect to, the articles of incorporation or bylaws of the Company, or
any contract, agreement, instrument, lease, license, indenture,
mortgage, deed of trust, note, arrangement or understanding known to
such counsel to which the Company is a party.
(v) The Company has all requisite corporate power to
execute, deliver and perform the Company Agreements and to issue and
sell the Shares and to issue the Representatives' Warrants. All
necessary corporate proceedings of the Company have been taken to
authorize the execution, delivery and performance by the Company of
the Company Documents. Each of the Company Documents has been duly
authorized by all requisite corporate action, executed and delivered
by the Company, is the legal, valid and binding obligation of the
Company and (subject to applicable bankruptcy, insolvency, and other
laws affecting the enforceability of creditors' rights generally and
general limitations on the availability of equitable remedies) is
enforceable as to the Company in accordance with its terms. No
consent, authorization, approval, order, license, certificate or
permit of or from, or declaration or filing with, any federal state,
local or other governmental authority or any court or other tribunal
is required by the Company, for the execution and delivery by the
Company of the Company Documents and the issuance and sale of the
Shares and Representatives' Warrants as contemplated by the
Registration Statement (except filings under the Act and the Exchange
Act which have been made prior to the Closing Date and consents
consisting only of approvals and consents under "blue sky" or
securities
-15-
laws). To the knowledge of such counsel, no consent of any party to
any contract, agreement, instrument, lease, license, indenture,
mortgage, deed of trust, note, arrangement or understanding to which
the Company is a party, or to which any of its respective properties
or assets are subject, is required for the execution, delivery or
performance of the Company Documents (except as have been obtained);
and the execution, delivery and performance of the Company Documents
will not violate, result in a breach of, conflict with, or (with or
without the giving of notice or the passage of time or both) entitle
any party to terminate or call a default under any such contract,
agreement, instrument, lease, license, indenture, mortgage, deed of
trust, note, arrangement or understanding, in each case known to such
counsel, or violate or result in a breach of any term of the
certificate of incorporation (or other charter document) or by-laws of
the Company, or violate, result in a breach of, or conflict with any
law, rule or regulation of the United States, the State of Minnesota
or any government authority or regulatory body thereof or any, order,
judgment, or decree known to such counsel and binding on the Company
or to which any of its respective operations, businesses, properties
or assets are subject.
(vi) The Firm Shares and the Option Shares are duly and
validly authorized. Such opinion delivered at each of the Closing
Dates shall state that each Share to be delivered on that date is duly
and validly issued, fully paid, and non-assessable, with no personal
liability attaching solely to the ownership thereof, and is not
issued, to the knowledge of such counsel, in violation of any
preemptive rights of shareholders, and the Underwriters have received
good title to the Shares purchased by them from the Company for the
consideration contemplated herein and in good faith and without notice
of any adverse claim within the meaning of the Uniform Commercial
Code, free and clear of any liens, security interests, pledges,
charges, encumbrances, shareholders' agreements, voting trusts and
other claims. The Common Stock, the Firm Shares and the Option Shares
conform substantially and in all material respects to the description
thereof contained in the Registration Statement or the Prospectus.
(vii) The Warrant Shares have been duly and validly
reserved for issuance and, upon issuance, delivery and payment
therefore, as described in the Representatives' Warrants, will be
validly issued, fully paid and non-assessable, without any personal
liability attaching solely to the ownership thereof, and will not be
issued, to the knowledge of such counsel, in violation of any
preemptive rights of shareholders, optionholders, warrantholders and
any other persons. The Representatives' Warrants have been duly and
validly issued, fully paid, and non-assessable, with no personal
liability attaching solely to the ownership thereof, and will not have
been issued, to the knowledge of such counsel, in violation of any
preemptive rights of stockholders, optionholders, warrantholders and
any other persons, and the holders of the Representatives' Warrants
will receive good title to the securities purchased by them from the
Company, for the consideration
-16-
contemplated herein and in good faith and without notice of any
adverse claim within the meaning of the Uniform Commercial Code, free
and clear of any liens, security interests, pledges, charges,
encumbrances, stockholders' agreements, voting trusts and other
claims. The Warrant Shares and the Representatives' Warrants conform
substantially and in all material respects to the description thereof
contained in the Registration Statement or the Prospectus.
(viii) Any contract, agreement, instrument, lease or
license known to such counsel and required to be described in the
Registration Statement or the Prospectus has been properly described
therein. Any contract, agreement, instrument, lease or license known
to such counsel and required to be filed as an exhibit to the
Registration Statement has been filed with the Commission as an
exhibit to or has been incorporated as an exhibit by reference into
the Registration Statement.
(ix) Insofar as statements in the Prospectus purport to
summarize provisions of the Company's agreements and licenses with
pharmaceutical and medical device companies, the Minnesota Business
Corporation Act, the Company's lease for its facilities in
Minneapolis, Minnesota, the Company' employee agreements, the
Company's stock option plans, the Company's loan agreements, the
Company's preferred, common and warrant purchase agreements and the
Act and Exchange Act, such statements have been prepared or reviewed
by such counsel and to the knowledge of such counsel, accurately
reflect the provisions purported to be summarized and are correct in
all material respects.
(x) The Company is not an "investment company" as defined in
Section 3(a) of the Investment Company Act and, if the Company
conducts its business as set forth in the Prospectus, will not become
an "investment company" and will not be required to be registered
under the Investment Company Act.
(xi) To the knowledge of such counsel, no person or entity
has the right to require registration of shares of Common Stock or
other securities of the Company because of the filing or effectiveness
of the Registration Statement except such persons or entities from
whom written waivers of such rights have been received prior to the
Closing Date.
(xii) The Registration Statement has become effective under
the Act. No Stop Order has been issued and no proceedings for that
purpose have been instituted or, to the knowledge of such counsel, are
threatened, pending or contemplated.
(xiii) The Registration Statement, any Rule 430A
Prospectus, and the Prospectus, and any amendment or supplement
thereto (other than financial statements and other financial data and
schedules which are or should be contained in any thereof, as to which
such counsel need express no opinion), comply as to form
-17-
in all material respects with the requirements of the Act and the
Regulations.
In addition, such counsel shall state that such counsel has
participated in the preparation of the Registration Statement and the Prospectus
and in conferences with officers and other representatives of the Company,
representatives of the Representatives and representatives of the independent
accountants of the Company, at which conferences the contents of the
Registration Statement and the Prospectus and related matters were discussed
and, although such counsel has not independently verified and is not passing
upon and does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and the
Prospectus (except as specified in the foregoing opinion), on the basis of the
foregoing and relying as to materiality upon the representations of executive
officers of the Company after conferring with such executive officers, no facts
have come to the attention of such counsel which lead such counsel to believe
that the Registration Statement, except for the financial statements and other
financial and statistical data included therein as to which counsel need express
no statement, at the time it became effective contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or that the
Prospectus, or any Rule 430A Prospectus, except for the financial statements and
other financial and statistical data included therein as to which counsel need
express no statement, as amended or supplemented on the date thereof contained
any untrue statement of a material fact or omitted 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.
In rendering their opinion as aforesaid, counsel may rely upon an
opinion or opinions, each dated the Closing Date, of other counsel retained by
the Company as to laws of any jurisdiction other than the Federal laws of the
United States and the laws of the State of Minnesota, provided that (1) each
such local counsel is reasonably acceptable to the Representatives and (2) such
reliance is expressly authorized by each opinion so relied upon and a copy of
each such opinion is addressed to the Representatives and is in form and
substance reasonably satisfactory to them and their counsel. In addition, such
counsel may rely, as to matters of fact, to the extent such counsel deems
proper, on certificates of responsible officers of the Company, provided that
executed copies of such certificates are provided to the Representatives.
(g) The Representatives shall have received on each Closing Date from
Pennie & Edmonds, patent counsel for the Company, an opinion, addressed to
the Representatives and dated such Closing Date, and in form and scope
satisfactory to counsel for the Underwriters.
(h) The Representatives shall have received on each Closing Date from
Covington & Burling, FDA counsel for the Company, an opinion, addressed to
the Representatives and dated such Closing Date, and in form and scope
satisfactory to counsel for the Underwriters.
(i) All proceedings taken in connection with the sale of the Firm
Shares and the Option Shares as herein contemplated shall be satisfactory
in form and substance to the Representatives and their counsel, and the
Underwriters shall have received from Squadron, Ellenoff, Plesent &
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Sheinfeld, LLP, a favorable opinion, addressed to the Representatives and
dated such Closing Date, with respect to the Shares, the Registration
Statement and the Prospectus, and such other related matters, as the
Representatives may reasonably request, and the Company shall have
furnished to Squadron, Ellenoff, Plesent & Sheinfeld, LLP, such documents
as they may reasonably request for the purpose of enabling them to pass
upon such matters.
(j) On the Firm Shares Closing Date, the Company shall have issued to
the Representatives, the Representatives' Warrants equal to 10% of the Firm
Shares.
6. Covenants of the Company.
(a) The Company covenants and agrees as follows:
(i) The Company shall use its best efforts to cause the
Registration Statement to become effective as promptly as possible.
If the Registration Statement has become or becomes effective with a
form of prospectus omitting Rule 430A information, or filing of the
Prospectus is otherwise required under Rule 424(b), the Company will
file the Prospectus, properly completed, pursuant to Rule 424(b)
within the time period prescribed and will provide evidence
satisfactory to you of such timely filing. The Company shall notify
you immediately, and confirm such notice in writing, (A) when the
Registration Statement and any post-effective amendment thereto become
effective, (B) of the receipt of any comments from the Commission or
the "blue sky" or securities authority of any jurisdiction regarding
the Registration Statement, any post-effective amendment thereto, the
Prospectus, or any amendment or supplement thereto, and (C) of the
receipt of any notification with respect to a Stop Order. The Company
shall not file any amendment of the Registration Statement or
supplement to the Prospectus unless the Company has furnished the
Representatives a copy for its review prior to filing and shall not
file any such proposed amendment or supplement to which the
Representatives reasonably object. The Company shall use its best
efforts to prevent the issuance of any Stop Order and, if issued, to
obtain as soon as possible the withdrawal thereof.
(ii) During the time when a Prospectus relating to the
Shares is required to be delivered hereunder or under the Act or the
Regulations, comply so far as it is able with all requirements imposed
upon it by the Act, as now existing and as hereafter amended, and by
the Regulations, as from time to time in force, so far as necessary to
permit the continuance of sales of or dealings in the Shares in
accordance with the provisions hereof and the Prospectus. If, at any
time when a prospectus relating to the Shares is required to be
delivered under the Act and the Regulations, there shall occur any
event as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein in the light of the circumstances under which they were made
not misleading, or if it
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shall be necessary to amend or supplement the Prospectus to comply
with the Act or the Regulations, the Company promptly shall prepare
and file with the Commission, subject to the third sentence of
paragraph (i) of this Section 6(a), an amendment or supplement which
shall correct such statement or omission or an amendment which shall
effect such compliance.
(iii) The Company shall make generally available to its
security holders and to the Representatives as soon as practicable,
but not later than 45 days after the end of the 12-month period
beginning at the end of the fiscal quarter of the Company during which
the Effective Date (or 90 days if such 12-month period coincides with
the Company's fiscal year), an earnings statement (which need not be
audited) of the Company, covering such 12-month period, which shall
satisfy the provisions of Section 11(a) of the Act or Rule 158 of the
Regulations.
(iv) The Company shall furnish to the Representatives and
counsel for the Underwriters, without charge, signed copies of the
Registration Statement (including all exhibits and amendments thereto)
and to each other Underwriter a copy of the Registration Statement
(without exhibits thereto) and all amendments thereof and, so long as
delivery of a prospectus by an Underwriter or dealer may be required
by the Act or the Regulations, as many copies of any preliminary
prospectus and the Prospectus and any amendments thereof and
supplements thereto as the Representatives may reasonably request.
(v) The Company shall cooperate with the Representatives and
their counsel in endeavoring to qualify the Shares for offer and sale
under the laws of such jurisdictions as the Representatives may
designate and shall maintain such qualifications in effect so long as
required for the distribution of the Shares; provided, however, that
the Company shall not be required in connection therewith, as a
condition thereof, to qualify as a foreign corporation or to execute a
general consent to service of process in any jurisdiction or subject
itself to taxation as doing business in any jurisdiction.
(vi) For a period of five years after the date of this
Agreement, the Company shall supply to the Representatives, and to
each other Underwriter who may so request in writing, copies of such
financial statements and other periodic and special reports as the
Company may from time to time distribute generally to the holders of
any class of its capital stock and to furnish to the Representatives a
copy of each annual or other report it shall be required to file with
the Commission.
(vii) If the Company elects to rely on Rule 462(b), the
Company shall both file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) and pay the applicable fees
in accordance with Rule 111 promulgated under the Act by the earlier
of (i) 10:00 p.m. eastern time on the date of
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this Agreement and (ii) the time confirmations are sent or given, as
specified by Rule 462(b)(2).
(viii) Without the prior written consent of Rodman, on
behalf of the Underwriters, for a period of 180 days from the date on
which a public offering of the Shares commences, the Company shall not
issue, sell or register with the Commission or otherwise dispose of,
directly or indirectly, any securities of the Company (or any
securities convertible into or exercisable or exchangeable for
securities of the Company), except for (A) the issuance of the Shares
pursuant to the Registration Statement (B) the issuance of Common
Stock upon the exercise of currently outstanding options and warrants
or pursuant to outstanding contingent share agreements, (C) the
issuance of options under plans disclosed in the Registration
Statement, (D) the filing of a registration statement on Form S-8 or
other comparable form in respect of the shares underlying the option
plans disclosed in the Registration Statement and (E) the issuance of
Common Stock in connection with acquisitions with consent not to be
unreasonably withheld.
(ix) The Company shall use its reasonable efforts to assure
that the restrictions set forth in the so-called "lock-up" agreements
signed by certain shareholders of the Company are enforced.
(x) Prior to each Closing Date and for a period of 25 days
thereafter, you shall be given reasonable written prior notice of any
press release or other direct or indirect communication and of any
press conference with respect to the Company, the financial
conditions, results of operations, business, properties, assets,
liabilities of the Company, or this offering.
(xi) On or before completion of this offering, the Company
shall make all filings required under applicable securities laws and
by the Nasdaq National Market.
(xii) Until expiration of the Representatives' Warrants,
the Company shall keep reserved sufficient shares of Common Stock for
issuance upon exercise thereof.
(xiii) The Company will make all filings required to be
made under the Exchange Act and such filings shall comply in all
material respects with the Requirements of the Exchange Act and the
rules and regulations thereunder.
(xiv) Prior to each Closing Date and for a period of 25
days thereafter, you shall be given reasonable written prior notice of
any press release or other direct or indirect communication and of any
press conference with respect to the Company, the financial condition,
results of operations, business, properties, assets, liabilities of
the Company, or this offering.
(xv) The Company shall participate in conference calls
designated and arranged by the Representatives on a quarterly basis in
connection with the release of its quarterly earnings for a period of
one year from the Firm Shares Closing Date, subject to any applicable
law.
(b) The Company agrees to pay, or reimburse if paid by the
Representatives, whether or not the transactions contemplated hereby are
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consummated or this Agreement is terminated, all of its costs and expenses
relating to the registration and public offering of the Shares including
those relating to: (i) the preparation, printing, filing and distribution
of the Registration Statement including all exhibits thereto, each
preliminary prospectus, the Prospectus, all amendments and supplements to
the Registration Statement and the Prospectus, and any documents required
to be delivered with any Preliminary Prospectus or the Prospectus, and the
printing, filing and distribution of the Agreement Among Underwriters, this
Agreement and related documents; (ii) the preparation and delivery of
certificates for the Shares to the Underwriters; (iii) the registration or
qualification of the Shares for offer and sale under the securities or Blue
Sky laws of the various jurisdictions referred to in Section 6(a)(v),
including the fees and disbursements of counsel for the Underwriters in
connection with such registration and qualification and the preparation,
printing, distribution and shipment of preliminary and supplementary Blue
Sky memoranda; (iv) the furnishing (including costs of shipping and
mailing) to the Representatives and to the Underwriters of copies of each
preliminary prospectus, the Prospectus and all amendments or supplements to
the Prospectus, and of the several documents required by this Section to be
so furnished, as may be reasonably requested for use in connection with the
offering and sale of the Shares by the Underwriters or by dealers to whom
Shares may be sold; (v) the filing fees of the National Association of
Securities Dealers, Inc. in connection with its review of the terms of the
public offering; (vi) the furnishing (including costs of shipping and
mailing) to the Representatives and to the Underwriters of copies of all
reports and information required by Section 6(a)(vi); (vii) inclusion of
the Shares for quotation on the Nasdaq National Market; and (viii) all
transfer taxes, if any, with respect to the sale and delivery of the Shares
by the Company to the Underwriters. Except as otherwise contemplated by
Section 9 hereof, the Underwriters will pay their own out-of-pocket
expenses, including counsel fees and expenses to the extent not otherwise
covered by clause (iii) above, and their own travel and travel-related
expenses in connection with the offering and distribution of the Shares.
Without limiting the Company's obligations set forth above, it agrees to
pay all of its other costs and expenses incident to the performance of its
obligations under this Agreement and the sale of the Shares by it
hereunder.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act against any and all
losses, claims, damages and liabilities, joint or several (including any
reasonable investigation, legal and other expenses incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding
or any claim asserted), to which they, or any of them, may become subject
under the Act, the Exchange Act or other Federal or state law or
regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in any preliminary
prospectus, the Registration Statement or the Prospectus or any amendment
thereof or supplement thereto, or arise
-22-
out of or are based upon any omission or alleged omission to state therein
such fact required to be stated therein or necessary to make such
statements therein not misleading. Such indemnity shall not inure to the
benefit of any Underwriter (or any person controlling such Underwriter) on
account of any losses, claims, damages or liabilities arising from the sale
of the Shares to any person by such Underwriter if such untrue statement or
omission or alleged untrue statement or omission was made in such
preliminary prospectus, the Registration Statement or the Prospectus, or
such amendment or supplement, in reliance upon and in conformity with
information furnished in writing to the Company by the Representatives on
behalf of any Underwriter specifically for use therein. In no event shall
the indemnification agreement contained in this Section 7(a) inure to the
benefit of any Underwriter on account of any losses, claims, damages,
liabilities or actions arising from the sale of the Shares upon the public
offering to any person by such Underwriter if such losses, claims, damages,
liabilities or actions arise out of, or are based upon, a statement or
omission or alleged omission in a preliminary prospectus and if, in respect
to such statement, omission or alleged omission, the Prospectus differs in
a material respect from such preliminary prospectus, such that the
Prospectus does not contain such untrue statement or such omission or
alleged untrue statement or omission, and a copy of the Prospectus has not
been sent or given to such person at or prior to the confirmation of such
sale to such person. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, each director of the Company, and each officer of the Company
who signs the Registration Statement, to the same extent as the foregoing
indemnity from the Company to each Underwriter, but only insofar as such
losses, claims, damages or liabilities arise out of or are based upon any
untrue statement or omission or alleged untrue statement or omission which
was made in any Preliminary Prospectus, any Rule 430A Prospectus, the
Registration Statement or the Prospectus, or any amendment thereof or
supplement thereto, which were made in reliance upon and in conformity with
information furnished in writing to the Company by the Representatives on
behalf of any Underwriter for specific use therein; provided, however, that
except as otherwise provided in section 9 below the obligation of each
Underwriter to indemnify the Company (including any controlling person,
director or officer thereof) shall be limited to the net proceeds received
or to be received by the Company from such Underwriter. For all purposes
of this Agreement, the public offering price and underwriting discounts and
commissions set forth on the cover of the Prospectus, the stabilization
language in the penultimate paragraph on page 2 of the Prospectus and the
third paragraph under the caption "Underwriting" (except for the
penultimate sentence thereof) constitute the only information furnished in
writing by or on behalf of any Underwriter expressly for inclusion in any
Preliminary Prospectus, any Rule 430A Prospectus, the Registration
Statement or the Prospectus or any amendment or supplement thereto.
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(c) Any party that proposes to assert the right to be indemnified
under this Section will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a
claim is to be made against an indemnifying party or parties under this
Section, notify each such indemnifying party of the commencement of such
action, suit or proceeding, enclosing a copy of all papers served. No
indemnification provided for in Section 7(a) or 7(b) shall be available to
any party who shall fail to give notice as provided in this Section 7(c) if
the party to whom notice was not given was unaware of the proceeding to
which such notice would have related and was materially prejudiced by the
failure to give such notice but the omission so to notify such indemnifying
party of any such action, suit or proceeding shall not relieve it from any
liability that it may have to any indemnified party for contribution or
otherwise than under this Section. In case any such action, suit or
proceeding shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate in, and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and the
approval by the indemnified party of such counsel, the indemnifying party
shall not be liable to such indemnified party for any legal or other
expenses, except as provided below and except for the reasonable costs of
investigation subsequently incurred by such indemnified party in connection
with the defense thereof. The indemnified party shall have the right to
employ its counsel in any such action, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
employment of counsel by such indemnified party has been authorized in
writing by the indemnifying parties, (ii) the indemnified party shall have
reasonably concluded that there may be a conflict of interest between the
indemnifying parties and the indemnified party in the conduct of the
defense of such action (in which case the indemnifying parties shall not
have the right to direct the defense of such action on behalf of the
indemnified party), or (iii) the indemnifying parties shall not have
employed counsel to assume the defense of such action within a reasonable
time after notice of the commencement thereof, in each of which cases the
reasonable fees and expenses of counsel shall be at the expense of the
indemnifying parties. An indemnifying party shall not be liable for any
settlement of any action, suit, proceeding or claim effected without its
written consent.
8. Contribution. In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in Sections 7(a) and
(b) is due in accordance with its terms but for any reason is held to be
unavailable from the Company or the Underwriters, such as the Company and the
Underwriters shall contribute to the aggregate losses, claims, damages and
liabilities (including any investigation, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claims asserted, but after deducting any contribution
received by the Company from persons other than the Underwriters, persons who
control the Company within the meaning of the Act, officers of the Company who
signed the Registration Statement and directors of the Company, who
-24-
may also be liable for contribution) to which the Company and one or more of the
Underwriters may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Shares or, if such allocation is not
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in Section 7
hereof, in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company and on the
one hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Underwriters shall be deemed to be in
the same proportion as (x) the total proceeds from the Offering (net of
underwriting discounts but before deducting expenses) received by the Company
from the sale of the Shares, as set forth in the table on the cover page of the
Prospectus (but not taking into account the use of the proceeds of such sale of
Shares by the Company), bear to (y) the underwriting discount received by the
Underwriters, as set forth in the table on the cover page of the Prospectus.
The relative fault of the Company and the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact related to information supplied by the Company, or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
Section 8, (i) in no case shall any Underwriter (except as may be provided in
the Agreement Among Underwriters) be liable or responsible for any amount in
excess of the underwriting discount applicable to the Shares purchased by such
Underwriter hereunder, and (ii) the Company shall be liable and responsible
under this Section 8 for any amount in excess of the underwriting discount;
provided, however (i) that no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act shall have the same rights to contribution as such
Underwriter, and each person, if any, who controls the Company within the
meaning of the Section 15 of the Act or Section 20(a) of the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to clauses (i), (ii) and (iii) in the immediately
preceding sentence of this Section 8. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this Section, notify such party
or parties from whom contribution may be sought, but the omission so to notify
such party or parties from whom contribution may be sought shall not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have hereunder or otherwise than under this Section. No party
shall be liable for
contribution with respect to any action, suit, proceeding or claim settled
without its written consent. The Underwriters' obligations to
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contribute pursuant to this Section 8 are several in proportion to their
respective underwriting commitments and not joint.
9. Termination. This Agreement may be terminated with respect to the
Shares to be purchased on any Closing Date by the Representatives by notifying
the Company at any time prior to the purchase of the Shares:
(a) in the absolute discretion of the Representatives at or before any
Closing Date: (i) if on or prior to such date, any domestic or
international event or act or occurrence has materially disrupted, or in
the opinion of the Representatives will in the future materially disrupt,
the securities markets; (ii) if there has occurred any new outbreak or
material escalation of hostilities or other calamity or crisis the effect
of which on the financial markets of the United States is such as to make
it, in the judgment of the Representatives, inadvisable to proceed with the
Offering; (iii) if there shall be such a material adverse change in general
financial, political or economic conditions or the effect of international
conditions on the financial markets in the United States such as to make
it, in the judgment of the Representatives, inadvisable or impracticable to
market the Shares; (iv) if trading in the Shares has been suspended by the
Commission or trading generally on the New York Stock Exchange, Inc., the
American Stock Exchange, Inc. or the Nasdaq National Market System has been
suspended or limited, or minimum or maximum ranges for prices for
securities shall have been fixed, or maximum ranges for prices for
securities have been required, by said exchanges or by order of the
Commission, the National Association of Securities Dealers, Inc., or any
other governmental or regulatory authority; or (v) if a banking moratorium
has been declared by any state or federal authority, or
(b) at or before any Closing Date, if any of the conditions specified
in Section 5 shall not have been fulfilled when and as required by this
Agreement.
If this Agreement is terminated pursuant to any of its provisions, the
Company shall not be under any liability to any Underwriter, and no Underwriter
shall be under any liability to the Company, except that (y) if this Agreement
is terminated by the Representatives or the Underwriters because of any failure,
refusal or inability on the part of the Company or all of them to comply with
the terms or to fulfill any of the conditions of this Agreement, the Company
will reimburse the Underwriters for all out-of-pocket expenses (including the
fees and disbursements of their counsel) incurred by them in connection with the
proposed purchase and sale of the Shares or in contemplation of performing their
obligations hereunder but not to exceed an aggregate of $25,000 and (z) no
Underwriter who shall have failed or refused to purchase the Shares agreed to be
purchased by it under this Agreement, without some reason sufficient hereunder
to justify cancellation or termination of its obligations under this Agreement,
shall be relieved of liability (without limitation as to amount) to the Company
or to the other Underwriters for all damages occasioned by its failure or
refusal.
10. Substitution of Underwriters. If one or more of the Underwriters
shall fail (other than for a reason sufficient to justify the cancellation or
termination of this Agreement under Section 9) to purchase on any Closing Date
-26-
the Shares agreed to be purchased on such Closing Date by such Underwriter or
Underwriters, the Representatives may find one or more substitute underwriters
to purchase such Shares or make such other arrangements as the Representatives
may deem advisable or one or more of the remaining Underwriters may agree to
purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date:
(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Shares that
all the Underwriters are obligated to purchase on such Closing Date, then
each of the nondefaulting Underwriters shall be obligated to purchase such
Shares on the terms herein set forth in proportion to their respective
obligations hereunder; provided, that in no event shall the maximum number
of Shares that any Underwriter has agreed to purchase pursuant to Section 1
be increased pursuant to this Section 10 by more than one-ninth of such
number of Shares without the written consent of such Underwriter, or
(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that all
the Underwriters are obligated to purchase on such Closing Date, then the
Company shall be entitled to an additional business day within which it
may, but is not obligated to, find one or more substitute underwriters
reasonably satisfactory to the Representatives to purchase such Shares upon
the terms set forth in this Agreement.
In any such case, either the Representatives or the Company shall have the
right to postpone the applicable Closing Date for a period of not more than five
business days in order that necessary changes and arrangements (including any
necessary amendments or supplements to the Registration Statement or Prospectus)
may be effected by the Representatives and the Company. If the number of Shares
to be purchased on such Closing Date by such defaulting Underwriter or
Underwriters shall exceed 10% of the Shares that all the Underwriters are
obligated to purchase on such Closing Date, and none of the nondefaulting
Underwriters or the Company shall make arrangements pursuant to this Section
within the period stated for the purchase of the Shares that the defaulting
Underwriters agreed to purchase, this Agreement shall terminate with respect to
the Shares to be purchased on such Closing Date without liability on the part of
any nondefaulting Underwriter to the Company and without liability on the part
of the Company, except in both cases as provided in Sections 6(b), 7, 8 and 9.
The provisions of this Section shall not in any way affect the liability of any
defaulting Underwriter to the Company or the nondefaulting Underwriters arising
out of such default. A substitute underwriter hereunder shall become an
Underwriter for all purposes of this Agreement.
11. Miscellaneous. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers, and
the Underwriters set forth in or made pursuant to this Agreement shall remain in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or the Company or any of the officers, directors or controlling
persons referred to in Sections 7 and 8 hereof, and shall survive
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delivery of and payment for the Shares. The provisions of Sections 6(b), 7, 8
and 9 shall survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the Underwriters,
the Company and their respective heirs, executors, administrators, personal
representatives, successors and assigns and, to the extent expressed herein, for
the benefit of persons controlling any of the Underwriters, or the Company, and
directors and officers of the Company, and their respective successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement. The term "successors and assigns" shall not include any
purchaser of Shares from any Underwriter merely because of such purchase.
All notices and communications hereunder shall be in writing and delivered
by mail, overnight courier, personal delivery, or by telefax if subsequently
confirmed by letter, (a) if to the Representatives, to Rodman & Renshaw, Inc.,
225 Liberty Street, 2 World Financial Center, 30th Floor, New York, New York
10281, and Attention: John J. Borer III, Managing Director, telecopy: (212) 416-
7439 and (b) if to the Company, to the Company's agent for service as such
agent's address appears on the cover page of the Registration Statement or
telecopy: (612) 553-1610, with a copy to Amy Lange, Esq. as such person's
address appears on the cover page of the Registration Statement. Such notices
and communications shall be deemed received three days following the date of
dispatch if by mail, upon receipt if by overnight courier, upon confirmation if
by telefax or when made if by personal delivery.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to principles of conflict of laws.
This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine or neuter, singular or plural, as the identity of the person
or persons or entity or entities requires.
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All section headings herein are for convenience of reference only and are
not part of this Agreement, and no construction or inference shall be derived
therefrom.
Please confirm that the foregoing correctly sets forth the agreement among
us.
Very truly yours,
MEDI-JECT CORPORATION
By:
---------------------------------------------
Name: Franklin Pass, M.D.
Title: President, Chief Executive Officer and
Chairman of the Board of Directors
Confirmed on behalf of itself
and as a Representative of the several Underwriters
named in Schedule I annexed hereto:
RODMAN & RENSHAW, INC.
By:
---------------------------
Name: John J. Borer III
Title: Managing Director
R. J. STEICHEN & COMPANY
By:
---------------------------
Name:
--------------------
Title: Managing Director
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SCHEDULE I
Number of Firm
Shares to be
Name of Underwriter Purchased
------------------- --------------
Rodman & Renshaw, Inc................................
R. J. Steichen & Company.............................
---------
Total 2,200,000
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