Exhibit 1.1
VASCULAR SOLUTIONS, INC.
_______ Shares Common Stock/1/
Underwriting Agreement
______________, 1999
William Blair & Company, L.L.C.
Dain Rauscher Wessels, a division of
Dain Rauscher Incorporated
Stephens Inc.
As Representatives of the Several
Underwriters Named in Schedule A
c/o William Blair & Company, L.L.C.
222 West Adams Street
Chicago, Illinois 60606
Ladies and Gentlemen:
1. Introductory. Vascular Solutions, Inc. ("Company") a Minnesota
corporation, has an authorized capital stock consisting of 20,000,000 shares, of
which 2,000,000 have been designated as Series A Preferred Stock, $.01 par
value, and are outstanding as of ___________, 1999, 1,777,777 have been
designated as Series B Preferred Stock, $.01 par value, and are outstanding as
of ____________, 1999, and ___________ shares of Common Stock, $.01 par value,
("Common Stock"), are outstanding as of ______________, 1999. The Company
proposes to issue and sell ________ shares of its authorized but unissued Common
Stock ("Firm Shares") to the several underwriters named in Schedule A
("Underwriters") pursuant to the terms of this Agreement as it may be
supplemented by the Pricing Agreement hereinafter defined, who are acting
severally and not jointly. In addition, the Company proposes to grant to the
Underwriters an option to purchase up to __________ additional shares of Common
Stock ("Option Shares") as provided in Section 3 hereof. The Firm Shares and,
to the extent such option is exercised, the Option Shares, are hereinafter
collectively referred to as the "Shares."
You have advised the Company that the Underwriters propose to make a public
offering of their respective portions of the Shares as soon as you deem
advisable after the registration statement hereinafter referred to becomes
effective, if it has not yet become effective, and the Pricing Agreement
hereinafter defined has been executed and delivered.
Prior to the purchase and public offering of the Shares by the several
Underwriters, the Company and the Representatives, acting on behalf of the
several Underwriters, shall enter into
___________________
/1/ Plus an option to acquire up to _____ additional shares to cover
overallotments.
an agreement substantially in the form of Exhibit A hereto (the "Pricing
Agreement"). The Pricing Agreement may take the form of an exchange of any
standard form of written communication between the Company and the
Representatives and shall specify such applicable information as is indicated in
Exhibit A hereto. The offering of the Shares will be governed by this Agreement,
as supplemented by the Pricing Agreement. From and after the date of the
execution and delivery of the Pricing Agreement, this Agreement shall be deemed
to incorporate the Pricing Agreement.
The Company hereby confirms its agreement with the Underwriters as follows:
2. Representations and Warranties of the Company. The Company represents
and warrants to the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-_____) and a
related preliminary prospectus with respect to the Shares have been
prepared and filed with the Securities and Exchange Commission
("Commission") by the Company in conformity with the requirements of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "1933 Act;" all references herein
to specific rules are rules promulgated under the 1933 Act); and the
Company has so prepared and has filed such amendments thereto, if any, and
such amended preliminary prospectuses as may have been required to the date
hereof. If the Company has elected not to rely upon Rule 430A, 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, 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. There have been or will promptly be
delivered to you three signed copies of such registration statement and
amendments, three copies of each exhibit filed therewith, and conformed
copies of such registration statement and amendments (but without exhibits)
and of the related preliminary prospectus or prospectuses and final forms
of prospectus for each of the Underwriters.
Such registration statement (as amended, if applicable) at the time it
becomes effective and the prospectus constituting a part thereof (including
the information, if any, deemed to be part thereof pursuant to Rule 430A(b)
and/or Rule 434), as from time to time amended or supplemented, are
hereinafter referred to as the "Registration Statement," and the
"Prospectus," respectively, except that if any revised prospectus shall be
provided to the Underwriters by the Company for use in connection with the
offering of the Shares which differs from the Prospectus on file with the
Commission at the time the Registration Statement became or becomes
effective (whether or not such revised prospectus is required to be filed
by the Company pursuant to Rule 424(b)), the term Prospectus shall refer to
such revised prospectus from and after the time it was provided to the
Underwriters for such use. If the Company elects to rely on Rule 434, all
references to "Prospectus" shall be deemed to include, without limitation,
the form of prospectus and the term sheet, taken together, provided to the
Underwriters by the Company in accordance with Rule 434
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("Rule 434 Prospectus"). Any registration statement (including any
amendment or supplement thereto or information which is deemed part
thereof) filed by the Company under Rule 462(b) ("Rule 462(b) Registration
Statement") shall be deemed to be part of the "Registration Statement" as
defined herein, and any prospectus (including any amendment or supplement
thereto or information which is deemed part thereof) included in such
registration statement shall be deemed to be part of the "Prospectus", as
defined herein, as appropriate. The Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder are
hereinafter collectively referred to as the "Exchange Act."
(b) The Commission has not issued any order preventing or suspending
the use of any preliminary prospectus, and each preliminary prospectus has
conformed in all material respects with the requirements of the 1933 Act
and, as of its date, has not included any untrue statement of a material
fact or omitted to state a material fact necessary to make the statements
therein not misleading; and when the Registration Statement became or
becomes effective, and at all times subsequent thereto, up to the First
Closing Date or the Second Closing Date hereinafter defined, as the case
may be, the Registration Statement, including the information deemed to be
part of the Registration Statement at the time of effectiveness pursuant to
Rule 430A(b), if applicable, and the Prospectus and any amendments or
supplements thereto, contained or will contain all statements that are
required to be stated therein in accordance with the 1933 Act and in all
material respects conformed or will in all material respects conform to the
requirements of the 1933 Act, and neither the Registration Statement nor
the Prospectus, nor any amendment or supplement thereto, included or will
include any untrue statement of a material fact or omitted or will omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that the Company
makes no representation or warranty as to information contained in or
omitted from any preliminary prospectus, the Registration Statement, the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of any Underwriter through the Representatives specifically for use
in the preparation thereof.
(c) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Minnesota,
with corporate power and authority to own its properties and conduct its
business as described in the Prospectus; the Company is duly qualified to
do business as a foreign corporation under the corporation law of, and is
in good standing as such in, each jurisdiction in which it owns or leases
substantial property, has an office, or in which substantial business is
conducted and such qualification is required except in any such case where
the failure to so qualify or be in good standing would not have a material
adverse effect upon the Company; and no proceeding of which the Company has
knowledge has been instituted in any such jurisdiction, revoking, limiting
or curtailing, or seeking to revoke, limit or curtail, such power and
authority or qualification. The Company has no subsidiaries.
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(d) The issued and outstanding shares of capital stock of the Company
as set forth in the Prospectus have been duly authorized and validly
issued, are fully paid and nonassessable, and conform to the description
thereof contained in the Prospectus.
(e) The Shares have been duly authorized and when issued, delivered
and paid for pursuant to this Agreement, will be validly issued, fully paid
and nonassessable, and will conform to the description thereof contained in
the Prospectus.
(f) There is no contract or other document of a character required
pursuant to the 1933 Act and the related published rules and regulations
with respect to Form S-1 to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit thereto, which is not described or
filed as required; and the statements in the Prospectus under the headings
"Business - Clinical Results and Regulatory Status," "Business - Sales,
Marketing and Distribution," "Business - Manufacturing," "Business -
Regulatory Requirements," "Business - Patents and Intellectual Property,"
and "Business - Facilities" fairly summarize the matters therein described.
(g) The making and performance by the Company of this Agreement and
the Pricing Agreement have been duly authorized by all necessary corporate
action and will not violate any provision of the Company's charter or
bylaws and will not result in the breach, or be in contravention, of any
provision of any agreement, franchise, license, indenture, mortgage, deed
of trust, or other instrument to which the Company is a party or by which
the Company, or its property may be bound or affected, or any order, rule
or regulation applicable to the Company of any court or regulatory body,
administrative agency or other governmental body having jurisdiction over
the Company or any of its property, or any order of any court or
governmental agency or authority entered in any proceeding to which the
Company was or is now a party or by which it is bound. No consent,
approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required for the
execution and delivery of this Agreement or the Pricing Agreement or the
consummation of the transactions contemplated herein or therein, except for
compliance with the 1933 Act and blue sky laws applicable to the public
offering of the Shares by the several Underwriters and clearance of such
offering with the National Association of Securities Dealers, Inc.
("NASD"). This Agreement has been duly executed and delivered by the
Company.
(h) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that: (A) transactions are
executed in accordance with management's general or specific authorization;
(B) transactions are recorded as necessary in order to permit preparation
of financial statements in accordance with generally accepted accounting
principles and to maintain accountability for assets; (C) access to assets
is permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
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(i) The accountants who have expressed their opinions with respect to
the financial statements and schedules included in the Registration
Statement are independent accountants as required by the 1933 Act.
(j) The financial statements and schedules of the Company included in
the Registration Statement present fairly the financial position of the
Company as of the respective dates of such financial statements, and the
results of operations and cash flows of the Company for the respective
periods covered thereby, all in conformity with generally accepted
accounting principles consistently applied throughout the periods involved,
except as disclosed in the Prospectus; and the supporting schedules
included in the Registration Statement present fairly the information
required to be stated therein. The financial information set forth in the
Prospectus under "Selected Financial Data" presents fairly on the basis
stated in the Prospectus, the information set forth therein.
(k) The Company is not in violation of its charter or in default
under any consent decree, or in default with respect to any material
provision of any lease, loan agreement, franchise, license, permit or other
contractual obligation to which it is a party; and there does not exist any
state of facts which constitutes an event of default as defined in such
documents or which, with notice or lapse of time or both, would constitute
such an event of default, in each case, except for defaults which neither
singly nor in the aggregate are material to the Company.
(l) There are no material legal or governmental proceedings pending,
or to the Company's knowledge, threatened to which the Company is or may be
a party or of which material property owned or leased by the Company is or
may be the subject, or related to environmental or discrimination matters
which are not disclosed in the Prospectus, or which question the validity
of this Agreement or the Pricing Agreement or any action taken or to be
taken pursuant hereto or thereto.
(m) There are no holders of securities of the Company having rights
to registration thereof or preemptive rights to purchase Common Stock
except as disclosed in the Prospectus. Holders of registration rights have
waived such rights with respect to the offering being made by the
Prospectus.
(n) The Company has good and marketable title to all the properties
and assets reflected as owned in the financial statements hereinabove
described (or elsewhere in the Prospectus), and such properties and assets
are not subject to any lien, mortgage, pledge, charge or encumbrance of any
kind except those, if any, reflected in such financial statements (or
elsewhere in the Prospectus) or which are not material to the Company. The
Company holds all of its material leased properties under valid and binding
leases.
(o) The Company has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause
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or result, under the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares.
(p) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as
contemplated by the Prospectus, the Company has not incurred any material
liabilities or obligations, direct or contingent, nor entered into any
material transactions not in the ordinary course of business and there has
not been any material adverse change in its condition (financial or
otherwise) or results of operations nor any material change in its capital
stock, short-term debt or long-term debt.
(q) The Company agrees not to sell, contract to sell or otherwise
dispose of any Common Stock or securities convertible into Common Stock
(except Common Stock issued pursuant to currently outstanding options,
warrants or convertible securities) for a period of 180 days after this
Agreement becomes effective without the prior written consent of the
Representatives. The Company has obtained similar agreements from each of
its officers and directors and shareholders listed on Schedule B.
(r) There is no material document of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement which is not described or filed as
required.
(s) The Company owns, possesses, licenses or, to its knowledge,
otherwise has sufficient rights to use, all patents, patent applications,
trade and service marks, trade and service mark registrations, trade names,
copyrights, licenses, inventions, trade secrets, technology, know-how and
other intellectual property which it deems necessary for the conduct of the
Company's business as currently conducted or as described in the Prospectus
(collectively, the "Intellectual Property"). (a) There are no rights of
third parties to any such Intellectual Property; (b) there is no
infringement by third parties of any such Intellectual Property; (c) there
is no pending or, to the Company's knowledge, threatened action, suit,
proceeding or claim by others challenging the Company's rights in or to, or
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 except where the Company has requested and obtained a non-
infringement opinion from its intellectual property counsel; (d) there is
no pending or, to the Company's knowledge, threatened action, suit,
proceeding or claim by others alleging that the Company infringes or
otherwise violates any patent, trademark, copyright, trade secret or other
proprietary rights of others, and the Company is unaware of any other fact
which would form a reasonable basis for any such claim except where the
Company has requested and obtained a non-infringement opinion from its
intellectual property counsel; and (e) the Company has requested and
arranged for Lyon & Lyon LLP, its special intellectual property counsel,
to render an opinion letter as to certain intellectual property matters in
the form set forth in Section 6(f)(iii) hereto.
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(t) To the best of the Company's knowledge, the issued patents owned
by, or licensed to, the Company and described in the Registration Statement
and Prospectus are valid and enforceable patents. Except as described in
the Registration Statement and Prospectus and in the agreements referred to
therein, no other entity or individual has any right or claim in any of
such issued patents. The patent applications owned by, or licensed to, the
Company and described in the Registration Statement and Prospectus have
been properly prepared and filed and are being diligently pursued on behalf
of the Company, and each of such patent applications is owned or controlled
by the Company, and no other entity or individual has any right or claim in
any of the patent applications or any patent to be issued therefrom, except
as described in the Registration Statement and Prospectus and in the
agreements referred to therein. To the best of the Company's knowledge,
each patent application owned by or licensed to the Company and described
in the Registration Statement and Prospectus discloses patentable subject
matter.
(u) The human clinical trials conducted by the Company or in which
the Company has participated that are described in the Registration
Statement and Prospectus or the results of which are referred to in the
Registration Statement and Prospectus, and, to the best of the Company's
knowledge, such studies and tests conducted on behalf of the Company, were
and, if still pending, are being conducted in accordance with experimental
protocols, procedures and controls pursuant to accepted professional
scientific standards for the clinical study of new medical devices; the
descriptions of the results of such studies, tests and trials contained in
the Registration Statement and Prospectus are accurate and complete in all
material respects, and the Company has no knowledge of any other trials,
studies or tests, the results of which reasonably call into question the
results described or referred to in the Registration Statement and
Prospectus; and the Company has not received any notices or correspondence
from the Food and Drug Administration ("FDA") or any other governmental
agency requiring the termination, suspension or modification of any
clinical trials conducted by, or on behalf of, the Company or in which the
Company has participated that are described in the Registration Statement
and Prospectus or the results of which are referred to in the Registration
Statement and Prospectus.
(v) The Company holds all franchises, licenses, permits, approvals,
certificates and other authorizations from federal, state and other
governmental or regulatory authorities, including, but not limited to the
FDA and any foreign regulatory authorities performing functions similar to
those performed by the FDA, necessary to the ownership, leasing and
operation of its properties or required for the present conduct of its
business, and such franchises, licenses, permits, approvals, certificates
and other governmental authorizations are in full force and effect and the
Company is in compliance therewith in all material respects except where
the failure so to obtain, maintain or comply with would not have a material
adverse effect upon the condition (financial or otherwise) or results of
operations of the Company. All of the descriptions in the Registration
Statement and Prospectus of the legal and governmental proceedings by and
before the FDA or any
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foreign state or local government body exercising comparable authority are
true, complete and accurate in all material respects.
(w) The Company is (A) in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants applicable to its
business as described in the Prospectus ("Environmental Laws"), (B) has
received and is in compliance with all permits, licenses or other approvals
required under applicable Environmental Laws to conduct its business and
(C) 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 as set forth
in or contemplated in the Prospectus (exclusive of any supplement thereto).
The Company has not received notice that it has been named as a
"potentially responsible party" under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
(x) The conduct of the business of the Company is in compliance in
all respects with applicable federal, state, local and foreign laws and
regulations, except where the failure to be in compliance would not have a
material adverse effect upon the condition (financial or otherwise) or
results of operations of the Company.
(y) 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 1933 Act and were duly registered with or the subject
of an available exemption from the registration requirements of the
applicable state securities or blue sky laws.
(z) The Company has filed all necessary federal and state income and
franchise tax returns and has paid all taxes shown as due thereon, and
there is no tax deficiency that has been, or to the knowledge of the
Company might be, asserted against the Company or any of its properties or
assets that would or could be expected to have a material adverse effect
upon the condition (financial or otherwise) or results of operations of the
Company.
(aa) The Company maintains insurance of the types and in the amounts
which it deems adequate for its business, including, but not limited to,
product liability, general liability insurance and insurance governing all
real and personal property owned or leased by the Company against theft,
damage, destruction, acts of vandalism and all other risk customarily
insured against, all of which insurance is in full force and effect.
(bb) The Company has filed a registration statement pursuant to
Section 12(g) of the Exchange Act to register the Common Stock thereunder,
has filed an application to list the Shares on the Nasdaq National Market,
and has received notification that the listing has been approved, subject
to notice of issuance or sale of the Shares, as the case may be.
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(cc) 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, as amended ("Investment
Company Act").
(dd) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter 92-
198, An Act Relating to Disclosure of Doing Business with Cuba, and the
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Company further agrees that if it commences engaging in business with the
government of Cuba or with any person or affiliate located in Cuba after
the date the Registration Statement becomes or has become effective with
the Commission or with the Florida Department of Banking and Finance (the
"Department"), whichever date is later, or if the information reported in
the Prospectus, if any, concerning the Company's business with Cuba or with
any person or affiliate located in Cuba changes in any material way, the
Company will provide the Department notice of such business or change, as
appropriate, in a form acceptable to the Department.
(ee) Neither the Company nor any of the Company's officers, employees,
agents or any other person acting on behalf of, at the direction of, or for
the benefit of the Company has, directly or indirectly, (A) used any
corporate funds for unlawful contributions, gifts, entertainment, or other
unlawful expenses relating to political activity, (B) made any unlawful
contribution to any candidate for foreign or domestic office, or to any
foreign or domestic government officials or employees or other person
charged with similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States or any jurisdiction
thereof or to foreign or domestic political parties or campaigns from
corporate funds, or failed to disclose fully any contribution in violation
of law, (C) violated any provision of the Foreign Corrupt Practices Act of
1977, as amended, or (D) made any other unlawful payment which, if not
given in the past or if not continued in the future would have a material
adverse effect upon the condition (financial or otherwise) or results of
operations of the Company.
(ff) The Company is in compliance with the Commission's revised staff
legal bulletin No. 5 dated January 12, 1998, related to Year 2000
compliance to the extent described in the Prospectus.
3. Purchase, Sale and Delivery of Shares. 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 sell to the
Underwriters named in Schedule A hereto, and the Underwriters agree, severally
and not jointly, to purchase the Firm Shares from the Company at the price per
share set forth in the Pricing Agreement. The obligation of each Underwriter to
the Company shall be to purchase from the Company that number of full shares
which (as nearly as practicable, as determined by you) represents the same
proportion as the number of Shares set forth opposite the name of such
Underwriter in Schedule A hereto bears to the total number of
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Firm Shares to be purchased by all Underwriters under this Agreement. The
initial public offering price and the purchase price shall be set forth in the
Pricing Agreement.
At 9:00 A.M., Chicago Time, on the fourth business day, if permitted under
Rule 15c6-1 under the Exchange Act, (or the third business day if required under
Rule 15c6-1 under the Exchange Act or unless postponed in accordance with the
provisions of Section 11 of this Agreement) following the date the Registration
Statement becomes effective (or, if the Company has elected to rely upon Rule
430A, the fourth business day, if permitted under Rule 15c6-1 under the Exchange
Act (or the third business day if required under Rule 15c6-1 under the Exchange
Act), after execution of the Pricing Agreement), or such other time not later
than ten business days after such date as shall be agreed upon by the
Representatives and the Company, the Company will deliver to you at the offices
of counsel for the Underwriters or through the facilities of The Depository
Trust Company for the accounts of the several Underwriters, certificates
representing the Firm Shares to be sold by it against payment of the purchase
price therefor by delivery of federal or other immediately available funds, by
wire transfer or otherwise, to the Company. Such time of delivery and payment
is herein referred to as the "First Closing Date." The certificates for the Firm
Shares so to be delivered will be in such denominations and registered in such
names as you request by notice to the Company prior to 10:00 A.M., Chicago Time,
on the second full business day preceding the First Closing Date, and will be
made available at the Company's expense for checking and packaging by the
Representatives at 10:00 A.M., Chicago Time, on the business day preceding the
First Closing Date. Payment for the Firm Shares so to be delivered shall be
made at the time and in the manner described above at the offices of counsel for
the Underwriters.
In addition, on the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company hereby grants an option to the several Underwriters to purchase,
severally and not jointly, the Option Shares, at the same purchase price per
share to be paid for the Firm Shares, for use solely in covering any
overallotments 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 date of the initial
public offering upon notice by you to the Company setting forth the aggregate
number of Option Shares as to which the Underwriters are exercising the option,
the names and denominations in which the certificates for such shares are to be
registered and the time and place at which such certificates will be delivered.
Such time of delivery (which may not be earlier than the First Closing Date),
being herein referred to as the "Second Closing Date," shall be determined by
you, but if at any time other than the First Closing Date, shall not be earlier
than three nor later than 10 full business days after delivery of such notice of
exercise. The number of Option Shares to be purchased by each Underwriter shall
be determined by multiplying the number of Option Shares to be sold by a
fraction, the numerator of which is the number of Firm Shares to be purchased by
such Underwriter as set forth opposite its name in Schedule A and the
denominator of which is the total number of Firm Shares (subject to such
adjustments to eliminate any fractional share purchases as you in your absolute
discretion may make). Certificates for the Option Shares will be made available
at the Company's expense
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for checking and packaging at 10:00 A.M., Chicago Time, on the first full
business day preceding the Second Closing Date. The manner of payment for and
delivery of the Option Shares shall be the same as for the Firm Shares as
specified in the preceding paragraph.
You have advised the Company that each Underwriter has authorized you to
accept delivery of its Shares, to make payment and to receipt therefor. You,
individually and not as the Representatives of the Underwriters, may make
payment for any Shares to be purchased by any Underwriter whose funds shall not
have been received by you by the First Closing Date or the Second Closing Date,
as the case may be, for the account of such Underwriter, but any such payment
shall not relieve such Underwriter from any obligation hereunder.
4. Covenants of the Company. The Company covenants and agrees that:
(a) The Company will advise you promptly of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of the institution of any proceedings for that
purpose, or of any notification of the suspension of qualification of the
Shares for sale in any jurisdiction or the initiation or threatening of any
proceedings for that purpose, and will also advise you promptly of any
request of the Commission for amendment or supplement of the Registration
Statement, of any preliminary prospectus or of the Prospectus, or for
additional information.
(b) The Company will give you notice of its intention to file or
prepare any amendment to the Registration Statement (including any post-
effective amendment) or any Rule 462(b) Registration Statement or any
amendment or supplement to the Prospectus (including any revised prospectus
which the Company proposes for use by the Underwriters in connection with
the offering of the Shares which differs from the prospectus on file with
the Commission at the time the Registration Statement became or becomes
effective, whether or not such revised prospectus is required to be filed
pursuant to Rule 424(b) and any term sheet as contemplated by Rule 434) and
will furnish you with copies of any such amendment or supplement a
reasonable amount of time prior to such proposed filing or use, as the case
may be, and will not file any such amendment or supplement or use any such
prospectus to which you or counsel for the Underwriters shall reasonably
object.
(c) If the Company elects to rely on Rule 434, the Company will
prepare a term sheet that complies with the requirements of Rule 434. If
the Company elects not to rely on Rule 434, the Company will provide the
Underwriters with copies of the form of prospectus, in such numbers as the
Underwriters may reasonably request, and file with the Commission such
prospectus in accordance with Rule 424(b) by the close of business in New
York City on the second business day immediately succeeding the date of the
Pricing Agreement. If the Company elects to rely on Rule 434, the Company
will provide the Underwriters with copies of the form of Rule 434
Prospectus, in such numbers as the
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Underwriters may reasonably request, by the close of business in New York
on the business day immediately succeeding the date of the Pricing
Agreement.
(d) If at any time when a prospectus relating to the Shares is
required to be delivered under the 1933 Act any event occurs as a result of
which the Prospectus, including any amendments or supplements, would
include an 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, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the
Prospectus, including any amendments or supplements thereto and including
any revised prospectus which the Company proposes for use by the
Underwriters in connection with the offering of the Shares which differs
from the prospectus on file with the Commission at the time of
effectiveness of the Registration Statement, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) to comply with
the 1933 Act, the Company promptly will advise you thereof and will
promptly prepare and file with the Commission an amendment or supplement
which will correct such statement or omission or an amendment which will
effect such compliance; and, in case any Underwriter is required to deliver
a prospectus nine months or more after the effective date of the
Registration Statement, the Company upon request, but at the expense of
such Underwriter, will prepare promptly such prospectus or prospectuses as
may be necessary to permit compliance with the requirements of Section
10(a)(3) of the 1933 Act.
(e) The Company will not, prior to the earlier of the Second Closing
Date or termination or expiration of the related option, incur any
liability or obligation, direct or contingent, or enter into any material
transaction, other than in the ordinary course of business, except as
contemplated by the Prospectus.
(f) The Company will not acquire any of its capital stock prior to the
earlier of the Second Closing Date or termination or expiration of the
related option nor will the Company declare or pay any dividend or make any
other distribution upon the Common Stock payable to stockholders of record
on a date prior to the earlier of the Second Closing Date or termination or
expiration of the related option, except in either case as contemplated by
the Prospectus.
(g) Not later than ____________, 2000 the Company will make generally
available to its security holders an earnings statement (which need not be
audited) covering a period of at least 12 months beginning after the
effective date of the Registration Statement, which will satisfy the
provisions of the last paragraph of Section 11(a) of the 1933 Act.
(h) During such period as a prospectus is required by law to be
delivered in connection with offers and sales of the Shares by an
underwriter or dealer, the Company will furnish to you at its expense,
subject to the provisions of subsection (d) of this Section
12
4, copies of the Registration Statement, the Prospectus, each preliminary
prospectus and all amendments and supplements to any such documents in each
case as soon as available and in such quantities as you may reasonably
request, for the purposes contemplated by the 1933 Act.
(i) The Company will cooperate with the Underwriters in qualifying or
registering the Shares for sale under the blue sky laws of such
jurisdictions as you designate, and will continue such qualifications in
effect so long as reasonably required for the distribution of the Shares.
The Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any such jurisdiction where
it is not currently qualified or where it would be subject to taxation as a
foreign corporation.
(j) During the period of five years hereafter, the Company will
furnish you and each of the other Underwriters with a copy (i) as soon as
practicable after the filing thereof, of each report filed by the Company
with the Commission, any securities exchange or the NASD; (ii) as soon as
practicable after the release thereof, of each press release in respect of
the Company; and (iii) as soon as available, of each report of the Company
mailed to stockholders.
(k) The Company will use the net proceeds received by it from the sale
of the Shares being sold by it in the manner specified in the Prospectus.
(l) If, at the time of effectiveness of the Registration Statement,
any information shall have been omitted therefrom in reliance upon Rule
430A and/or Rule 434, then immediately following the execution of the
Pricing Agreement, the Company will prepare, and file or transmit for
filing with the Commission in accordance with such Rule 430A, Rule 424(b)
and/or Rule 434, copies of an amended Prospectus, or, if required by such
Rule 430A and/or Rule 434, a post-effective amendment to the Registration
Statement (including an amended Prospectus), containing all information so
omitted. If required, the Company will prepare and file, or transmit for
filing, a Rule 462(b) Registration Statement not later than the date of the
execution of the Pricing Agreement. If a Rule 462(b) Registration
Statement is filed, the Company shall make payment of, or arrange for
payment of, the additional registration fee owing to the Commission
required by Rule 111.
(m) The Company will comply with all registration, filing and
reporting requirements of the Exchange Act and the Nasdaq National Market
and shall report the use of proceeds of the offering pursuant to Item 701
of Regulation S-K as required by Rule 463 and will furnish you copies of
any such reports as soon as practicable after the filing thereof.
5. Payment of Expenses. Whether or not the transactions contemplated
hereunder are consummated or this Agreement becomes effective as to all of its
provisions or is terminated, the
13
Company agrees to pay (i) all costs, fees and expenses (other than legal fees
and disbursements of counsel for the Underwriters and the expenses incurred by
the Underwriters) incurred in connection with the performance of the Company's
obligations hereunder, including without limiting the generality of the
foregoing, all fees and expenses of legal counsel for the Company and of the
Company's independent accountants, all costs and expenses incurred in connection
with the preparation, printing, filing and distribution of the Registration
Statement, each preliminary prospectus and the Prospectus (including all
exhibits and financial statements) and all amendments and supplements provided
for herein, this Agreement, the Pricing Agreement and the Blue Sky Memorandum,
(ii) all costs, fees and expenses (including legal fees not to exceed $5,000 and
disbursements of counsel for the Underwriters) incurred by the Underwriters in
connection with qualifying or registering all or any part of the Shares for
offer and sale under blue sky laws, including the preparation of a blue sky
memorandum relating to the Shares and clearance of such offering with the NASD;
and (iii) all fees and expenses of the Company's transfer agent, printing of the
certificates for the Shares and all transfer taxes, if any, with respect to the
sale and delivery of the Shares to the several Underwriters.
6. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Firm Shares on the First
Closing Date and the Option Shares on the Second Closing Date shall be subject
to the accuracy of the representations and warranties on the part of the Company
herein set forth as of the date hereof and as of the First Closing Date or the
Second Closing Date, as the case may be, to the accuracy of the statements of
officers of the Company made pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder, and to the following
additional conditions:
(a) The Registration Statement shall have become effective either
prior to the execution of this Agreement or not later than 1:00 P.M.,
Chicago Time, on the first full business day after the date of this
Agreement, or such later time as shall have been consented to by you but in
no event later than 1:00 P.M., Chicago Time, on the third full business day
following the date hereof; and prior to the First Closing Date or the
Second Closing Date, as the case may be, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or shall be pending
or, to the knowledge of the Company or you, shall be contemplated by the
Commission. If the Company has elected to rely upon Rule 430A and/or Rule
434, the information concerning the initial public offering price of the
Shares and price-related information shall have been transmitted to the
Commission for filing pursuant to Rule 424(b) within the prescribed period
and the Company will provide evidence satisfactory to the Representatives
of such timely filing (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with
the requirements of Rules 430A and 424(b)). If a Rule 462(b) Registration
Statement is required, such Registration Statement shall have been
transmitted to the Commission for filing and become effective within the
prescribed time period and, prior to the First Closing Date, the Company
shall have provided evidence of such filing and effectiveness in accordance
with Rule 462(b).
14
(b) The Shares shall have been qualified for sale under the blue sky
laws of such states as shall have been specified by the Representatives.
(c) The legality and sufficiency of the authorization, issuance and
sale or transfer and sale of the Shares hereunder, the validity and form of
the certificates representing the Shares, the execution and delivery of
this Agreement and the Pricing Agreement, and all corporate proceedings and
other legal matters incident thereto, and the form of the Registration
Statement and the Prospectus (except financial statements) shall have been
approved by counsel for the Underwriters exercising reasonable judgment.
(d) You shall not have advised the Company that the Registration
Statement or the Prospectus or any amendment or supplement thereto,
contains an untrue statement of fact, which, in the opinion of counsel for
the Underwriters, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein
or necessary to make the statements therein not misleading.
(e) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred any change, or any development involving a
prospective change, in or affecting particularly the business or property
of the Company, whether or not arising in the ordinary course of business,
which, in the judgment of the Representatives, makes it impractical or
inadvisable to proceed with the public offering or purchase of the Shares
as contemplated hereby.
(f) There shall have been furnished to you, as Representatives of the
Underwriters, on the First Closing Date or the Second Closing Date, as the
case may be, except as otherwise expressly provided below:
(i) An opinion of Dorsey & Whitney LLP, counsel for the Company
addressed to the Underwriters and dated the First Closing Date or the
Second Closing Date, as the case may be, to the effect that:
(1) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Minnesota with corporate power and authority to own its properties
and conduct its business as described in the Prospectus; and the
Company has been duly qualified to do business as a foreign
corporation under the corporation law of, and is in good standing as
such in, every jurisdiction where the ownership or leasing of
property, or the conduct of its business requires such qualification
except where the failure so to qualify would not have a material
adverse effect upon the condition (financial or otherwise) or results
of operations of the Company;
(2) the authorized capital stock of the Company, of which
there is outstanding the amount set forth in the Registration
Statement and Prospectus
15
(except for subsequent issuances, if any, pursuant to stock options or
other rights referred to in the Prospectus), conforms as to legal
matters in all material respects to the description thereof in the
Registration Statement and Prospectus;
(3) the issued and outstanding capital stock of the Company
has been duly authorized and validly issued and is fully paid and
nonassessable;
(4) the certificates for the Shares to be delivered
hereunder are in due and proper form, and when duly countersigned by
the Company's transfer agent and delivered to you or upon your order
against payment of the agreed consideration therefor in accordance
with the provisions of this Agreement and the Pricing Agreement, the
Shares represented thereby will be duly authorized and validly issued,
fully paid and nonassessable;
(5) the holders of the Company's outstanding Common Stock
are not entitled to any preemptive rights or other rights to
subscribe for Common Stock arising by operation of law, under the
Certificate of Incorporation or Bylaws or under any agreement. Except
as included in the Registration Statement and Prospectus, no options,
warrants or other rights to purchase, agreements or other obligations
to issue, or rights to convert any obligations into or exchange any
securities for, shares of capital stock of or ownership interests in
the Company are outstanding.
(6) the Registration Statement has become effective under
the 1933 Act, and, to the best knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted
or are pending or contemplated under the 1933 Act, and the
Registration Statement (including the information deemed to be part of
the Registration Statement at the time of effectiveness pursuant to
Rule 430A(b) and/or Rule 434, if applicable), the Prospectus and each
amendment or supplement thereto (except for the financial statements
and other statistical or financial data included therein as to which
such counsel need express no opinion) comply as to form in all
material respects with the requirements of the 1933 Act; such counsel
have no reason to believe that either the Registration Statement
(including the information deemed to be part of the Registration
Statement at the time of effectiveness pursuant to Rule 430A(b) and/or
Rule 434, if applicable) or the Prospectus, or the Registration
Statement or the Prospectus as amended or supplemented (except as
aforesaid), as of their respective effective or issue dates, 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 as amended or
supplemented, if applicable, as of the First Closing Date or the
Second Closing Date, as the case may be, contained any untrue
statement of a material fact or omitted to state any material fact
16
necessary to make the statements therein not misleading in light of
the circumstances under which they were made; the statements in the
Registration Statement and the Prospectus summarizing statutes, rules
and regulations are accurate and fairly and correctly present the
information required to be presented by the 1933 Act or the rules and
regulations thereunder, in all material respects and such counsel does
not know of any statutes, rules or regulations required to be
described or referred to in the Registration Statement or the
Prospectus that are not described or referred to therein as required;
and such counsel does not know of any legal or governmental
proceedings pending or threatened required to be described in the
Prospectus which are not described as required, nor of any contracts
or documents of a character required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not described or filed, as required;
(7) the statements under the captions "Business - Clinical
Results and Regulatory Status," "Business - Sales, Marketing and
Distribution," "Business - Manufacturing," "Business - Regulatory
Requirements," "Business - Patents and Intellectual Property,"
"Business - Facilities," "Management -- Indemnification Matters and
Limitation of Liability," "Management -- Employment Agreements,"
"Management - Benefit Plans," "Certain Transactions," "Description of
Capital Stock" and "Shares Eligible for Future Sale" in the Prospectus
and Items 14 and 15 of Part II of the Registration Statement, insofar
as such statements constitute a summary of documents referred to
therein or matters of law, are accurate summaries and fairly and
correctly present, in all material respects, the information called
for with respect to such documents and matters;
(8) this Agreement and the Pricing Agreement and the
performance of the Company's obligations hereunder have been duly
authorized by all necessary corporate action and this Agreement and
the Pricing Agreement have been duly executed and delivered by and on
behalf of the Company, and are legal, valid and binding agreements of
the Company, except as enforceability of the same may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights and by the exercise of judicial
discretion in accordance with general principles applicable to
equitable and similar remedies and except as to those provisions
relating to indemnities for liabilities arising under the 1933 Act as
to which no opinion need be expressed; and no approval, authorization
or consent of any public board, agency, or instrumentality of the
United States or of any state or other jurisdiction is necessary in
connection with the issue or sale of the Shares pursuant to this
Agreement (other than under the 1933 Act, applicable blue sky laws and
the rules of the NASD) or the consummation by the Company of any other
transactions contemplated hereby;
17
(9) the execution and performance of this Agreement will
not contravene any of the provisions of, or result in a default under,
any agreement, franchise, license, indenture, mortgage, deed of trust,
or other instrument known to such counsel, of the Company or by which
its property is bound and which contravention or default would be
material to the Company; or violate any of the provisions of the
charter or bylaws of the Company or, so far as is known to such
counsel, violate any statute, order, rule or regulation of any
regulatory or governmental body having jurisdiction over the Company;
(10) such counsel does not know of any contracts or
documents required to be filed as exhibits to the Registration
Statement or described in the Registration Statement or the Prospectus
which are not so filed, or described as required, and such contracts
and documents as are described in the Registration Statement or the
Prospectus are accurately described in all material respects.
(11) there is no legal action, suit or proceeding pending
or, to such counsel's knowledge, threatened against the Company of a
character required to be disclosed in the Registration Statement or
the Prospectus pursuant to the 1933 Act or the Exchange Act, as
applicable; the Company is not a party or subject to provisions of any
injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other governmental body or agency the effect
of which could be material and adverse to the condition (financial or
otherwise) or results of operations of the Company.
(12) all offers and sales of the Company's capital stock
since February, 1997 were at all relevant times exempt from the
registration requirements of the 1933 Act and were duly registered or
the subject of an available exemption from the registration
requirements of the applicable state securities or blue sky laws;
(13) no holder of any security of the Company has any right
to require registration of shares of Common Stock or any other
security of the Company; and
(14) the Company is not an "investment company" or a person
"controlled by" an "investment company" within the meaning of the
Investment Company Act.
In rendering such opinion, such counsel may state that they are relying
upon the certificate of Norwest Bank Minnesota, N.A., the transfer agent for the
Common Stock, as to the number of shares of Common Stock at any time or times
outstanding, and that insofar as their opinion under clause (5) above relates to
the accuracy and completeness of the Prospectus and Registration Statement, it
is based upon a general review with the Company's representatives and
independent
18
accountants of the information contained therein, without independent
verification by such counsel of the accuracy or completeness of such
information. Such counsel may also rely upon the opinions of other competent
counsel and, as to factual matters, on certificates of officers of the Company
and of state officials, in which case their opinion is to state that they are so
doing and copies of said opinions or certificates are to be attached to the
opinion unless said opinions or certificates (or, in the case of certificates,
the information therein) have been furnished to the Representatives in other
form.
(ii) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, the opinion of Dorsey
& Whitney LLP, special international regulatory counsel for the Company
dated the Closing Date or the Option Closing Date, as the case may be,
addressed to the Underwriters, to the effect that the statements in the
Registration Statement and the Prospectus under the caption
"Business--Regulatory Requirements--International," insofar as such
statements purport to summarize applicable provisions of international
regulatory requirements have been reviewed by such counsel and are accurate
summaries in all material respects of the provisions purported to be
summarized under such captions in the Registration Statement and the
Prospectus. In rendering such opinion, such counsel may state that they
have not independently verified nor do they take any responsibility for nor
are they addressing in any way any advents of fact, any statements
concerning state or foreign law or any legal conclusions or statements of
belief attributable to the Company.
(iii) Representatives shall have received on the Closing Date or
the Option Closing Date, as the case may be, the opinion of Lyon & Lyon
LLP, special patent counsel for the Company, dated the Closing Date or the
Option Closing Date, as the case may be, addressed to the Underwriters to
the effect that:
(1) the statements in the Registration Statement under the
captions "Risk Factors--We May Face Intellectual Property Infringement
Claims" and "Business--Patents and Intellectual Property" and other
statements in the Registration Statement and Prospectus that discuss
patents, patent rights and other proprietary rights, to the extent
that they constitute matters of law, summaries of legal matters,
documents or proceedings, or legal conclusions, are accurate and
complete statements or summaries of the matters therein set forth.
(2) other than as described in the Prospectus and the
Registration Statement, such counsel is not aware of any patent,
patent right or other proprietary right of others which would prevent
the conduct of the business of the Company now being or currently
proposed to be conducted by the Company as described in the
Prospectus; and such counsel is not aware of any rights of third
parties to, or any infringement by third parties of, any of the
Company's patents, patent rights or other proprietary rights.
19
(3) to such counsel's knowledge, there is no pending or
threatened action, suit, proceeding or claim by others, either
domestically or internationally, that the Company is violating any
patents, patent rights, rights thereto or other proprietary rights of
others; or otherwise challenging the validity or scope of any such
patents, patent rights, rights, patent rights and other proprietary
rights thereto of others or other proprietary rights.
In addition, such counsel shall state that, although they have not verified
the accuracy or completeness of the statements contained in the Registration
Statement or the Prospectus, nothing has come to the attention of such counsel
that caused them to believe that, at the time the Registration Statement became
effective the description of the Company's patents, patent rights and other
proprietary rights matters and the statements made under the captions "Risk
Factors--We May Face Intellectual Property Infringement Claims" and
"Business--Patents and Intellectual Property" in the Registration Statement and
Prospectus 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 at the Closing Date or the Option Closing
Date, as the case may be, the description of the patent, patent rights and other
proprietary rights, situation of the Company and the statements made under the
captions "Risk Factors--We May Face Intellectual Property Infringement Claims"
and "Business--Patents and Intellectual Property" in the Registration Statement
and Prospectus 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, in the light of the circumstances under which they were
made, not misleading.
(iv) Such opinion or opinions of Katten Muchin & Zavis, counsel
for the Underwriters, dated the First Closing Date or the Second Closing
Date, as the case may be, with respect to the incorporation of the Company,
the validity of the Shares, the Registration Statement and the Prospectus
and other related matters as you may reasonably require, and the Company
shall have furnished to such counsel such documents and shall have
exhibited to them such papers and records as they request for the purpose
of enabling them to pass upon such matters.
(v) A certificate of the chief executive officer and the
principal financial officer of the Company, dated the First Closing Date or
the Second Closing Date, as the case may be, to the effect that:
(1) the representations and warranties of the Company set
forth in Section 2 of this Agreement are true and correct as of the
date of this Agreement and as of the First Closing Date or the Second
Closing Date, as the case may be, and the Company has complied with
all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such Closing Date; and
20
(2) the Commission has not issued an order preventing or
suspending the use of the Prospectus or any preliminary prospectus
filed as a part of the Registration Statement or any amendment
thereto; no stop order suspending the effectiveness of the
Registration Statement has been issued; and to the best knowledge of
the respective signers, no proceedings for that purpose have been
instituted or are pending or contemplated under the 1933 Act.
The delivery of the certificate provided for in this subparagraph shall be
and constitute a representation and warranty of the Company as to the facts
required in the immediately foregoing clauses (1) and (2) of this subparagraph
to be set forth in said certificate.
(vi) At the time the Pricing Agreement is executed and also on
the First Closing Date or the Second Closing Date, as the case may be,
there shall be delivered to you a letter addressed to you, as
Representatives of the Underwriters, from Ernst & Young LLP, independent
accountants, the first one to be dated the date of the Pricing Agreement,
the second one to be dated the First Closing Date and the third one (in the
event of a second closing) to be dated the Second Closing Date, to the
effect set forth in Schedule C. There shall not have been any change or
decrease specified in the letters referred to in this subparagraph which
makes it impractical or inadvisable in the judgment of the Representatives
to proceed with the public offering or purchase of the Shares as
contemplated hereby.
(vii) Such further certificates and documents as you may
reasonably request.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to you and
to Katten Muchin & Zavis, counsel for the Underwriters, which approval shall not
be unreasonably withheld. The Company shall furnish you with such manually
signed or conformed copies of such opinions, certificates, letters and documents
as you request.
If any condition to the Underwriters' obligations hereunder to be satisfied
prior to or at the First Closing Date is not so satisfied, this Agreement at
your election will terminate upon notification to the Company without liability
on the part of any Underwriter or the Company, except for the expenses to be
paid or reimbursed by the Company pursuant to Sections 5 and 7 hereof and except
to the extent provided in Section 9 hereof.
7. Reimbursement of Underwriters' Expenses. If the sale to the
Underwriters of the Shares on the First Closing Date is not consummated because
any condition of the Underwriters' obligations hereunder is not satisfied or
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or to comply with any provision hereof, unless such
failure to satisfy such condition or to comply with any provision hereof is due
to the default or omission of any Underwriter, the Company agrees to reimburse
you and the other Underwriters
21
upon demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been reasonably incurred by you and
them in connection with the proposed purchase and the sale of the Shares. Any
such termination shall be without liability of any party to any other party
except that the provisions of this Section 7, Section 5 and Section 9 shall at
all times be effective and shall apply.
8. Effectiveness of Registration Statement. You and the Company will use
your and its best efforts to cause the Registration Statement to become
effective, if it has not yet become effective, and to prevent the issuance of
any stop order suspending the effectiveness of the Registration Statement and,
if such stop order be issued, to obtain as soon as possible the lifting thereof.
9. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Underwriter, its partners, its directors, its officers and each
person, if any, who controls any Underwriter within the meaning of the 1933 Act
or the Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter or such controlling person may become subject
under the 1933 Act, the Exchange Act or other federal or state statutory law or
regulation, at common law 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 any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement,
including the information deemed to be part of the Registration Statement at the
time of effectiveness pursuant to Rule 430A and/or Rule 434, if applicable, any
preliminary prospectus, the Prospectus, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; and will reimburse each Underwriter and each
such controlling person for any legal or other expenses reasonably incurred by
such Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that (i) any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, any preliminary prospectus, the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
the Representatives, specifically for use therein; or (ii) if such statement or
omission was contained or made in any preliminary prospectus and corrected in
the Prospectus and (1) any such loss, claim, damage or liability suffered or
incurred by any Underwriter (or any person who controls any Underwriter)
resulted from an action, claim or suit by any person who purchased Shares which
are the subject thereof from such Underwriter in the offering and (2) such
Underwriter failed to deliver or provide a copy of the Prospectus to such person
at or prior to the confirmation of the sale of such Shares in any case where
such delivery is required by the 1933 Act. In addition to its other obligations
under this Section 9(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,
22
or any alleged statement or omission, described in this Section 9(a), it will
reimburse the Underwriters on a monthly basis for all reasonable legal and other
expenses incurred in connection with investigating or defending any such claim,
action, investigation, inquiry 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. This indemnity agreement will be in addition to
any liability which the Company may otherwise have.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of the 1933 Act or the Exchange Act, against any losses, claims,
damages or liabilities to which the Company, or any such director, officer or
controlling person may become subject under the 1933 Act, the Exchange Act or
other federal or state statutory law or regulation, at common law 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 any untrue or alleged untrue statement of any material fact contained in
the Registration Statement, any preliminary prospectus, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or 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 Prospectus, or any amendment or
supplement thereto in reliance upon and in conformity with any written
information furnished to the Company by such Underwriter through the
Representatives specifically for use in the preparation thereof; and will
reimburse any legal or other expenses reasonably incurred by the Company, or any
such director, officer or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action. In addition to
their other obligations under this Section 9(b), the Underwriters agree 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 9(b),
they will reimburse the Company on a monthly basis for all reasonable legal and
other expenses incurred in connection with investigating or defending any such
claim, action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the Underwriters' obligation to reimburse the Company for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. This indemnity agreement will be in addition
to any liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 9 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section 9, notify the indemnifying party of the commencement thereof; but the
omission to so notify the indemnifying party will not relieve it
23
from any liability which it may have to any indemnified party except to the
extent that the indemnifying party was prejudiced by such failure to notify. In
case any such action is brought against any indemnified party, and it notifies
an indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate in, and, to the extent that it may wish, jointly with
all other indemnifying parties similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided, however,
if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, or the indemnified and indemnifying parties may have
conflicting interests which would make it inappropriate for the same counsel to
represent both of them, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defense and otherwise to
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defense in accordance with the proviso
to the immediately preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by the Representatives in the case of paragraph (a)
representing all indemnified parties not having different or additional defenses
or potential conflicting interests among themselves who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability arising out
of such proceeding.
(d) If the indemnification provided for in this Section 9 is unavailable
to an indemnified party under paragraphs (a) or (b) hereof in respect of any
losses, claims, damages or liabilities referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Underwriters from the offering of the Shares 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 and the Underwriters in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The respective relative benefits received by the
24
Company and the Underwriters shall be deemed to be in the same proportion in the
case of the Company as the total price paid to the Company for the Shares by the
Underwriters (net of underwriting discount but before deducting expenses), and
in the case of the Underwriters as the underwriting discount received by them
bears to the total of such amounts paid to the Company and received by the
Underwriters as underwriting discount in each case as contemplated by 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 or the omission to state a material fact
relates to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, claims, damages and liabilities referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which 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 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section are several in proportion to their respective underwriting commitments
and not joint.
(e) The provisions of this Section shall survive any termination of this
Agreement.
10. Default of Underwriters. It shall be a condition to the agreement and
obligation of the Company to sell and deliver the Shares hereunder, and of each
Underwriter to purchase the Shares hereunder, that, except as hereinafter
provided in this Section 10, each of the Underwriters shall purchase and pay for
all Shares agreed to be purchased by such Underwriter hereunder upon tender to
the Representatives of all such Shares in accordance with the terms hereof. If
any Underwriter or Underwriters default in their obligations to purchase Shares
hereunder on the First Closing Date and the aggregate number of Shares which
such defaulting Underwriter or Underwriters agreed but failed to purchase does
not exceed 10 percent of the total number of Shares which the Underwriters are
obligated to purchase on the First Closing Date, the Representatives may make
arrangements satisfactory to the Company for the purchase of such Shares by
other persons, including any of the Underwriters, but if no such arrangements
are made by such date the nondefaulting Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the Shares which such defaulting Underwriters agreed but failed to purchase on
such date. If any Underwriter or Underwriters so default and the
25
aggregate number of Shares with respect to which such default or defaults occur
is more than the above percentage and arrangements satisfactory to the
Representatives and the Company for the purchase of such Shares by other persons
are not made within 36 hours after such default, this Agreement will terminate
without liability on the part of any nondefaulting Underwriter or the Company,
except for the expenses to be paid by the Company pursuant to Section 5 hereof
and except to the extent provided in Section 9 hereof.
In the event that Shares to which a default relates are to be purchased by
the nondefaulting Underwriters or by another 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, Prospectus and any other documents, as
well as any other arrangements, may be effected. As used in this Agreement, the
term "Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability
for its default.
11. Effective Date. This Agreement shall become effective immediately as
to Sections 5, 7, 9 and 12 and as to all other provisions at 10:00 A.M., Chicago
Time, on the day following the date upon which the Pricing Agreement is executed
and delivered, unless such a day is a Saturday, Sunday or holiday (and in that
event this Agreement shall become effective at such hour on the business day
next succeeding such Saturday, Sunday or holiday); but this Agreement shall
nevertheless become effective at such earlier time after the Pricing Agreement
is executed and delivered as you may determine on and by notice to the Company
or by release of any Shares for sale to the public. For the purposes of this
Section, the Shares shall be deemed to have been so released upon the release
for publication of any newspaper advertisement relating to the Shares or upon
the release by you of telegrams (i) advising Underwriters that the Shares are
released for public offering, or (ii) offering the Shares for sale to securities
dealers, whichever may occur first.
12. Termination. Without limiting the right to terminate this Agreement
pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice to you
or by you by notice to the Company at any time prior to the time this
Agreement shall become effective as to all its provisions, and any such
termination shall be without liability on the part of the Company to any
Underwriter (except for the expenses to be paid or reimbursed pursuant to
Section 5 or Section 7 hereof and except to the extent provided in Section
9 hereof) or of any Underwriter to the Company.
(b) This Agreement may also be terminated by you prior to the First
Closing Date, and the option referred to in Section 3, if exercised, may be
cancelled at any time prior to the Second Closing Date, if (i) trading in
securities on the New York Stock Exchange or the Nasdaq National Market
shall have been suspended or minimum prices shall have been established on
such exchange, or (ii) a banking moratorium shall have been declared by
Illinois, New York, or United States authorities, or (iii) there shall have
been
26
any change in financial markets or in political, economic or financial
conditions which, in the opinion of the Representatives, either renders it
impracticable or inadvisable to proceed with the offering and sale of the
Shares on the terms set forth in the Prospectus or materially and adversely
affects the market for the Shares, or (iv) there shall have been an
outbreak of major armed hostilities between the United States and any
foreign power which in the opinion of the Representatives makes it
impractical or inadvisable to offer or sell the Shares. Any termination
pursuant to this paragraph (b) shall be without liability on the part of
any Underwriter to the Company or on the part of the Company to any
Underwriter (except for expenses to be paid or reimbursed pursuant to
Section 5 or Section 7 hereof and except to the extent provided in Section
9 hereof).
13. Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of the
Company, of its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter or the Company or any
of its or their partners, principals, members, officers or directors or any
controlling person, as the case may be, and will survive delivery of and payment
for the Shares sold hereunder.
14. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters will be mailed, delivered or telegraphed and confirmed to
you c/o William Blair & Company, L.L.C., 222 West Adams Street, Chicago,
Illinois 60606, with a copy to Katten Muchin & Zavis, 525 West Monroe Street,
Chicago, Illinois 60661, Attention: David J. Kaufman; and if sent to the Company
will be mailed, delivered or telegraphed and confirmed to the Company at its
corporate headquarters with a copy to Dorsey & Whitney LLP, Pillsbury Center
South, 220 South Sixth Street, Minneapolis, Minnesota 55402, Attention: Timothy
S. Hearn.
15. Successors. This Agreement and the Pricing Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective
successors, personal representatives and assigns, and to the benefit of the
officers and directors and controlling persons referred to in Section 9, and no
other person will have any right or obligation hereunder. The term "successors"
shall not include any purchaser of the Shares as such from any of the
Underwriters merely by reason of such purchase.
16. Representation of Underwriters. You will act as Representatives for
the several Underwriters in connection with this financing, and any action under
or in respect of this Agreement taken by you will be binding upon all the
Underwriters.
17. Partial Unenforceability. If any section, paragraph or provision of
this Agreement is for any reason determined to be invalid or unenforceable, such
determination shall not affect the validity or enforceability of any other
section, paragraph or provision hereof.
27
18. Applicable Law. This Agreement and the Pricing Agreement shall be
governed by and construed in accordance with the laws of the State of Illinois.
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicates hereof, whereupon it will
become a binding agreement among the Company and the several Underwriters
including you, all in accordance with its terms.
Very truly yours,
VASCULAR SOLUTIONS, INC.
By:____________________________________
Howard C. Root
Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the date first
above written.
WILLIAM BLAIR & COMPANY, L.L.C.
DAIN RAUSCHER WESSELS, A DIVISION OF
DAIN RAUSCHER INCORPORATED
STEPHENS INC.
Acting as Representatives of the several
Underwriters named in Schedule A.
By William Blair & Company, L.L.C.
By______________________________________
Principal
28
Schedule A
Number of Firm Shares
Underwriter to be Purchased
- ----------- ---------
William Blair & Company, L.L.C. ..................................
Dain Rauscher Wessels.............................................
Stephens Inc...................................................... -----------------
Total =================
29
Schedule B
List of Shareholders
Lock-Up Agreements are to be delivered by the following persons and
entities who are shareholders of the Company at the time the Underwriting
Agreement becomes effective:
30
Schedule C
Comfort Letter of Ernst & Young LLP
[To Come]
31
Exhibit A
VASCULAR SOLUTIONS, INC.
____________ Shares Common Stock/2/
Pricing Agreement
____________, 1999
William Blair & Company, L.L.C.
Dain Rauscher Wessels, a division
of Dain Rauscher Incorporated
Stephens Inc.
As Representatives of the Several
Underwriters
c/o William Blair & Company, L.L.C.
222 West Adams Street
Chicago, Illinois 60606
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated ____________, 1999
(the "Underwriting Agreement") relating to the sale by the Company and the
purchase by the several Underwriters for whom William Blair & Company, L.L.C.,
Dain Rauscher Wessels, a division of Dain Rauscher Incorporated and Stephens
Inc. are acting as representatives (the "Representatives") of the above Shares.
All terms herein shall have the definitions contained in the Underwriting
Agreement except as otherwise defined herein.
Pursuant to Section 3 of the Underwriting Agreement, the Company agrees
with the Representatives as follows:
1. The initial public offering price per share for the Shares shall be
$__________.
2. The purchase price per share for the Shares to be paid by the several
Underwriters shall be $__________, being an amount equal to the initial public
offering price set forth above less $__________ per share.
- ----------------
/2/ Plus an option to acquire up to ____ additional shares to cover
overallotments.
32
Schedule A is amended as follows:
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicates hereof, whereupon it will
become a binding agreement among the Company and the several Underwriters,
including you, all in accordance with its terms.
Very truly yours,
VASCULAR SOLUTIONS, INC.
By:___________________________________
Howard C. Root
Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the date first
above written.
WILLIAM BLAIR & COMPANY, L.L.C.
DAIN RAUSCHER WESSELS, A DIVISION OF
DAIN RAUSCHER INCORPORATED
STEPHENS INC.
Acting as Representatives of the several
Underwriters named in Schedule A.
By William Blair & Company, L.L.C.
By________________________________
Principal
33