Exhibit 10.1

2,400,000 Shares

AngioDynamics, Inc.

Common Stock

($0.01 Par Value)

UNDERWRITING AGREEMENT

May 23, 2006

RBC Capital Markets Corporation

Canaccord Adams Inc.

First Albany Capital Inc.

KeyBanc Capital Markets

As the Representatives of the several

    underwriters named in Schedule I hereto

c/o RBC Capital Markets Corporation

1 Liberty Plaza

New York, NY 10006-1404

Ladies and Gentlemen:

AngioDynamics, Inc., a Delaware corporation (the “Issuer”), proposes to sell to
the several underwriters (the “Underwriters”) named in Schedule I hereto for
whom you are acting as representatives (the “Representatives”) an aggregate of
2,400,000 shares of the Issuer’s common stock, $0.01 par value (the “Firm
Shares”). The respective amounts of the Firm Shares to be so purchased by the
several Underwriters are set forth opposite their names in Schedule I hereto. In
addition, the Issuer proposes to sell at the Underwriters’ option an aggregate
of up to 360,000 additional shares of the Issuer’s common stock (the “Option
Shares”) to cover over-allotments as set forth below.

As the Representatives, you have advised the Issuer (a) that you are authorized
to enter into this agreement (this “Agreement”) on behalf of the several
Underwriters, and (b) that the several Underwriters are willing, acting
severally and not jointly, to purchase the numbers of Firm Shares set forth
opposite their respective names in Schedule I, plus their pro rata portion of
the Option Shares if you elect to exercise the over-allotment option in whole or
in part for the accounts of the several Underwriters. The Firm Shares and the
Option Shares (to the extent the aforementioned option is exercised) are herein
collectively called the “Shares.”

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The Issuer has prepared and filed a registration statement on Form S-3 (File
No. 333-133748), including a prospectus, with respect to the Shares pursuant to
the Securities Act of 1933, as amended, and the rules and regulations of the
United States Securities and Exchange Commission (the “Commission”) thereunder
(collectively, the “1933 Act”). The Registration Statement as amended at the
time it becomes effective, including all information deemed to be a part of the
registration statement as of the time of effectiveness pursuant to Rule 430A
under the 1933 Act, is hereinafter referred to as the “Registration Statement”;
each prospectus included in such registration statement (and any amendments
thereto) before it became effective under the 1933 Act and any prospectus filed
with the Commission pursuant to Rule 424(a) of the 1933 Act is hereinafter
referred to as the “Preliminary Prospectus”; the Preliminary Prospectus relating
to the Shares that was included in the Registration Statement immediately prior
to the Applicable Time (as defined below) is hereinafter referred to as the
“Pricing Prospectus”; the final prospectus in the form first used (or made
available upon request of purchasers pursuant to Rule 173 under the 1933 Act) to
confirm sales of Shares is hereinafter referred to as the “Prospectus”; and any
issuer free writing prospectus as defined in Rule 433 under the 1933 Act
relating to the Shares is hereinafter referred to as the “Issuer Free Writing
Prospectus.” If the Issuer has filed an abbreviated registration statement to
register additional Shares pursuant to Rule 462(b) under the 1933 Act (the “Rule
462 Registration Statement”), then any reference herein to the term
“Registration Statement” shall be deemed to include such Rule 462 Registration
Statement.

For purposes of this Agreement, the “Applicable Time”1 is 07:00 am (Eastern
time) on May 24, 2006. For purposes of this Agreement, the term “Disclosure
Package” shall mean the Pricing Prospectus as supplemented by the Issuer Free
Writing Prospectuses, the pricing information and other documents identified on
Schedule II(a) hereto. Any reference in this Agreement to any Preliminary
Prospectus, the Pricing Prospectus or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the 1933 Act; any reference to any “amendment” or “supplement”
to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the “1934 Act”), and incorporated therein; and any reference to
any amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Section 13(a) or
15(d) of the 1934 Act after the effective date of the Registration Statement.

 

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1 Applicable Time is the time, shortly after the Shares are priced, when the
first sales are confirmed (whether orally or in writing).

 

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In consideration of the mutual agreements contained herein and of the interests
of the parties in the transactions contemplated hereby, the parties hereto agree
as follows:

1. Representations and Warranties of the Issuer.

The Issuer represents and warrants to each of the Underwriters as follows:

(a) The Registration Statement has been filed with the Commission and has been
declared effective by the Commission. No stop order suspending the effectiveness
of the Registration Statement is in effect, and no proceedings for such purpose
are pending before or, to the knowledge of the Issuer, threatened by the
Commission. The Registration Statement and the Prospectus comply and, as amended
or supplemented, if applicable, will comply in all material respects with the
requirements of the 1933 Act. Copies of such Registration Statement and each of
the amendments thereto have been delivered by the Issuer to you.

(b) (i) As of the effective date of the Registration Statement, the date hereof,
the Closing Date (as defined below) and each Option Closing Date (as defined
below), if any, the Registration Statement does not and will not, and any
further amendments to the Registration Statement will not, when they become
effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and (ii) as of its date and the date hereof, the
Prospectus does not, and as amended or supplemented on the Closing Date and each
Option Closing Date, if any, will not, contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties set forth in this
paragraph do not apply to statements or omissions in the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Issuer by any Underwriter
through RBC Capital Markets Corporation expressly for use therein, such
information being listed in Section 13 below.

(c) No order preventing or suspending the use of any Preliminary Prospectus or
any Issuer Free Writing Prospectus has been issued by the Commission and each
Preliminary Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the 1933 Act, and the Pricing Prospectus did not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with written
information furnished to the Issuer by an Underwriter through RBC Capital
Markets Corporation expressly for use therein, such information being listed in
Section 13 below.

(d) The Disclosure Package as of the Applicable Time, did not 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; and each Issuer Free Writing Prospectus listed on
Schedule II(a) or Schedule II(b) hereto does not conflict with the information
contained in the Registration Statement, the Pricing Prospectus or the
Prospectus, and each Issuer Free Writing Prospectus listed in Schedule II(b)
hereto, as supplemented by and taken together with the Disclosure Package as of
the Applicable Time, did not 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;

 

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provided, however, that this representation and warranty shall not apply to any
statements or omissions made in an Issuer Free Writing Prospectus in reliance
upon and in conformity with written information furnished to the Issuer by an
Underwriter through RBC Capital Markets Corporation expressly for use therein,
such information being listed in Section 13 below.

(e) The Issuer filed the Registration Statement with the Commission before using
any Issuer Free Writing Prospectus and each Issuer Free Writing Prospectus was
preceded or accompanied by the most recent Preliminary Prospectus satisfying the
requirements of Section 10 under the Securities Act. No statements of material
fact included in the Prospectus has been omitted from the Disclosure Package and
no statement of a material fact included in the Disclosure Package that is
required to be included in the Prospectus has been omitted therefrom. Each Free
Writing Prospectus and Issuer Free Writing Prospectus that the Issuer has filed,
or is required to file, pursuant to Rule 433(d) under the 1933 Act or that was
prepared by or on behalf of or used or referred to by the Issuer complies or
will comply in all material respects with the requirements of the 1933 Act.
Except for each Free Writing Prospectus and Issuer Free Writing Prospectus, if
any, identified on Schedule II(a) and (b) hereto, and electronic road shows, if
any, furnished to you before first use, the Issuer has not prepared, used or
referred to, and will not without your prior consent, prepare, use or refer to,
any Free Writing Prospectus or Issuer Free Writing Prospectus.

(f) The documents incorporated by reference in the Pricing Prospectus and the
Prospectus, when they were filed with the Commission, conformed in all material
respects to the requirements of the 1933 Act or the 1934 Act, as applicable, and
none of such documents, when read together with the other information in the
Pricing Prospectus or the 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; and any further documents so filed
and incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the
requirements of the 1933 Act or the 1934 Act, as applicable, and will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with written
information furnished to the Issuer by an Underwriter through RBC Capital
Markets Corporation expressly for use therein, such information being listed in
Section 13 below.

(g) This Agreement has been duly authorized, executed and delivered by the
Issuer, and constitutes a valid, legal, and binding obligation of the Issuer,
enforceable in accordance with its terms, except as rights to indemnity and
contribution hereunder may be limited by federal or state securities laws and
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors generally, and
subject to general principles of equity. The Issuer has full corporate power to
enter into this Agreement and to authorize, issue and sell the Shares as
contemplated by this Agreement.

 

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(h) The Issuer has been duly organized and is validly existing as a corporation
in good standing under the laws of the State of Delaware, with corporate power
to own or lease its properties and conduct its business as described in the
Pricing Prospectus and the Prospectus. Leocor, Inc., the Issuer’s only
subsidiary (the “Subsidiary”), has been duly organized and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation. The Issuer is duly qualified to transact business and is in good
standing as a foreign corporation in Florida and New York. The outstanding
shares of capital stock of the Subsidiary have been duly authorized and validly
issued, are fully paid and non-assessable and are wholly owned by the Issuer
free and clear of all liens, encumbrances and equities and claims; and no
options, warrants or other rights to purchase, agreements or other obligations
to issue or other rights to convert any obligations into shares of capital stock
or ownership interests in the Subsidiary are outstanding.

(i) The outstanding shares of common stock of the Issuer (“Common Shares”) have
been duly authorized and validly issued and are fully paid and non-assessable;
the Shares have been duly authorized and when issued and paid for as
contemplated herein will be validly issued, fully paid and non-assessable, and
no preemptive rights, rights of first refusal, rights of co-sale or similar
rights in favor of stockholders of the Issuer exist with respect to any of the
Shares or the issue and sale thereof. Neither the filing of the Registration
Statement nor the offering or sale of the Shares as contemplated by this
Agreement gives rise to any rights, other than those which have been described
in the Registration Statement and waived or satisfied, for or relating to the
registration of any Common Shares.

(j) The information set forth under the caption “Capitalization” in the
Disclosure Package and the Prospectus is true and correct. All of the Shares
conform to the description thereof contained in the Disclosure Package and the
Prospectus. The form of certificates for the Shares conforms to the corporate
law of the jurisdiction of the Issuer’s incorporation. No shares of capital
stock of the Issuer other than Common Stock are issued and outstanding and no
holder of any shares of capital stock, securities convertible into or
exchangeable or exercisable for capital stock or options, warrants or other
rights to purchase capital stock or any other securities of the Issuer has any
existing right to acquire any shares of capital stock other than Common Stock of
the Issuer.

(k) The consolidated financial statements of the Issuer and the Subsidiary,
together with related notes and schedules as set forth or incorporated by
reference in the Disclosure Package and the Prospectus, present fairly the
financial position and the results of operations and cash flows of the Issuer
and the Subsidiary, at the indicated dates and for the indicated periods. Such
financial statements and related schedules have been prepared in accordance with
U.S. generally accepted principles of accounting, consistently applied
throughout the periods involved, except as disclosed therein, and all
adjustments, which include only normal recurring adjustments, necessary for a
fair presentation of results for such periods have been made. The summary
financial

 

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and statistical data included or incorporated by reference in the Disclosure
Package and the Prospectus presents fairly the information shown therein and
such data has been compiled on a basis consistent with the financial statements
presented therein and the books and records of the Issuer. No “non-GAAP
financial measures” (as defined in Regulation G under the 1933 Act) are
disclosed in the Registration Statement or the Prospectus except for disclosure
that complies with the requirements of Item 10 of Regulation S-K and Regulation
G promulgated by the Commission.

(l) The Issuer is in material compliance with all applicable provisions of the
Sarbanes-Oxley Act of 2002 and all rules and regulations promulgated thereunder
(the “Sarbanes-Oxley Act”) that are in effect.

(m) The Issuer is in material compliance with all applicable corporate
governance requirements set forth in the Nasdaq Marketplace Rules that are in
effect.

(n) The Issuer maintains a system of internal control over financial reporting
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management’s general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of financial
statements of the Issuer in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to the
Issuer’s assets is permitted only in accordance with management’s general or
specific authorization; and (iv) the recorded accountability for assets of the
Issuer is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.

(o) The Issuer has established and maintains disclosure controls and procedures
(as such term is defined in Rules 13a-15(e) and 15d-15(e) of the 1934 Act),
which are (i) designed to provide reasonable assurance that material information
relating to the Issuer required to be disclosed by the Issuer in the reports
that it files or submits under the 1934 Act is recorded, processed, summarized
and reported in the time periods specified in the Commission’s rules and forms;
and (ii) effective in all material respects to perform the functions for which
they are established.

(p) Pricewaterhouse Coopers LLP, who have audited certain financial statements
of the Issuer and delivered their report with respect to the audited financial
statements included in the Registration Statement and the Prospectus and Grant
Thornton LLP, who have audited certain financial statements of the Issuer and
delivered their report with respect to the audited financial statements and
schedules included in the Registration Statement and the Prospectus, are each
independent registered public accountants with respect to the Issuer within the
meaning of the 1933 Act (including without limitation the Sarbanes-Oxley Act).

(q) Since the date of the latest audited financial statements included or
incorporated by reference in the Disclosure Package and the Prospectus, the
Issuer has not been advised of (i) any significant deficiencies in the design or
operation of its internal control over financial reporting that could adversely
affect the ability of the Issuer to record, process, summarize and report
financial data, (ii) any material

 

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weaknesses in its internal control over financial reporting or (iii) any fraud,
whether or not material, that involves management or other employees who have a
significant role in the internal control over financial reporting of the Issuer.

(r) Other than as set forth in the Disclosure Package and the Prospectus, there
is no action, suit, claim or proceeding pending or, to the knowledge of the
Issuer, threatened against the Issuer or the Subsidiary before any court or
administrative agency or otherwise which, if determined adversely to the Issuer
or the Subsidiary, could reasonably be expected to have a material adverse
effect on the results of operations, condition (financial or otherwise),
business, or prospects of the Issuer, whether or not arising from transactions
in the ordinary course of business (a “Material Adverse Effect”) or prevent the
consummation of the transactions contemplated hereby.

(s) No labor problem or dispute with the employees of the Issuer exists or, to
the Issuer’s knowledge, is threatened or imminent, and the Issuer is not aware
of any existing labor disturbance by the employees of any of its principal
suppliers, contractors or customers, that could have a Material Adverse Effect.

(t) The Issuer and the Subsidiary have good and marketable title to all of the
real property, and have title to all of the personal assets, reflected in the
financial statements (or as described in the Disclosure Package and the
Prospectus) hereinabove described, subject to no lien, mortgage, pledge, charge
or encumbrance of any kind except those reflected in such financial statements
(or as described in the Disclosure Package and the Prospectus) or which are not
material in amount. The Issuer occupies its leased property under a valid and
binding lease conforming in all material respects to the description thereof set
forth in the Disclosure Package and the Prospectus. The Issuer has not received
any written notice of any claim adverse to its ownership of any property of any
claim against the continued possession of any owned or leased property.

(u) The Issuer and the Subsidiary have filed (or duly requested extension of
filing for) all Federal, state, local and foreign tax returns which have been
required to be filed and have paid all taxes indicated by said returns and all
assessments received by them or any of them to the extent that such taxes have
become due and are not being contested in good faith and for which an adequate
reserve for accrual has been established in accordance with U.S. generally
accepted accounting principles. All tax liabilities have been adequately
provided for in the financial statements of the Issuer, and the Issuer does not
know of any actual or proposed additional material tax assessments.

(v) Since the respective dates as of which information is given in the
Disclosure Package and the Prospectus, there has not been any material adverse
change or any development involving a prospective change which has had or is
reasonably likely to have a Material Adverse Effect, whether or not occurring in
the ordinary course of business, and there has not been any material transaction
entered into or any material transaction that is probable of being entered into
by the Issuer or the Subsidiary, other than transactions in the ordinary course
of business and changes and transactions described in or contemplated by the
Disclosure Package and the Prospectus. The Issuer and the Subsidiary have no
material contingent obligations that are not disclosed in the Issuer’s financial
statements in the Disclosure Package and the Prospectus.

 

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(w) Neither the Issuer nor the Subsidiary is, or with the giving of notice or
lapse of time or both, will be, in breach of its certificate of incorporation
(“Charter”) or by-laws (“By-Laws”) or in breach of or in default under any
agreement, lease, contract, indenture or other instrument or obligation to which
it is a party or by which it, or any of its properties, is bound and which
breach or default has had or is reasonably likely to have a Material Adverse
Effect. The execution and delivery of this Agreement and the consummation of the
transactions herein contemplated and the fulfillment of the terms hereof will
not result in a breach of any of the terms or provisions of, or constitute a
default under, any contract, indenture, mortgage, deed of trust or other
agreement or instrument to which the Issuer or the Subsidiary is a party (except
to the extent that any such conflict, breach or default has been waived), or
violate the Charter or By-Laws of the Issuer or any order, rule or regulation
applicable to the Issuer or the Subsidiary of any court or of any regulatory
body or administrative agency or other governmental body having jurisdiction
over the Issuer or the Subsidiary.

(x) No approval, consent, order or authorization by or filing with any
regulatory, administrative or other governmental body is required in connection
with the execution and delivery by the Issuer of this Agreement and the
consummation by the Issuer of the transactions herein contemplated (except such
additional steps as may be required under the 1933 Act, by the National
Association of Securities Dealers, Inc. (the “NASD”) or under state securities
or blue sky laws).

(y) The Issuer has made all filings, applications and submissions required by,
and possess all material licenses, marketing authorizations, certifications,
permits, franchises, approvals, clearances and other regulatory authorizations
(including without limitation, ISO9001/EN46001 certifications and the CE mark by
the European Union under the Medical Devices Directive) (“Permits”) from
governmental authorities (including, without limitation, the FDA, and any
foreign, federal, state or local governmental or regulatory authority performing
functions similar to those performed by the FDA) as are necessary to conduct its
businesses as currently conducted and to own, lease and operate its properties
and market its products in the manner described in the Pricing Prospectus and
the Prospectus except where the failure to file, apply, submit and possess would
not have a Material Adverse Effect. There is no claim, proceeding or
controversy, pending or, to the knowledge of the Issuer, threatened, involving
the status of or sanctions under any of the Permits. The Issuer is the sole and
exclusive holder of rights under all Permits. The Issuer has fulfilled and
performed all of its material obligations with respect to the Permits, and no
event has occurred which allows, or after notice or lapse of time would allow,
the revocation, termination, modification or other impairment of the rights of
the Issuer under such Permit. None of the Permits contains any restriction that
is materially burdensome on the Issuer.

(z) Neither the Issuer, nor any of its officers, directors or affiliates, has
taken or may take, directly or indirectly, any action designed to stabilize or
manipulate the price of any security of the Issuer or which has caused or
resulted in, or which might reasonably be expected to cause or result in, the
stabilization or manipulation of the price of any security of the Issuer.

 

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(aa) The Issuer is not, and as of the Closing Date (and, if any Option Shares
are purchased, at the Option Closing Date) and after giving effect to the offer
and sale of the Shares and the application of the net proceeds therefrom as
described in the Prospectus, will not be, required to register as an “investment
company” as such term is defined under the Investment Company Act of 1940, and
the rules and regulations of the Commission thereunder (the “1940 Act”).

(bb) The Issuer and the Subsidiary carry, or are covered by, insurance in such
amounts and covering such risks as is adequate for the conduct of their
respective businesses and the value of their respective properties and as is
customary for companies engaged in similar industries. All policies of insurance
insuring the Issuer or the Subsidiary or any of their respective businesses,
assets, employees, officers and directors are in full force and effect, and the
Issuer and the Subsidiary are in compliance with the terms of such policies in
all material respects.

(cc) The Issuer is in compliance in all material respects with all presently
applicable provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations thereunder
(“ERISA”); no “reportable event” (as defined in ERISA) has occurred with respect
to any “pension plan” (as defined in ERISA) for which the Issuer would have any
liability; the Issuer has not incurred liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, any “pension plan” or
(ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the “Code”);
and each “pension plan” for which the Issuer would have any liability that is
intended to be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by failure to
act, which would cause the loss of such qualification.

(dd) Other than as contemplated by this Agreement, the Issuer has not incurred
any liability for any finder’s or broker’s fee, or agent’s commission in
connection with the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby.

(ee) Other than the Subsidiary and the shares of preferred stock and common
stock of Surgica, Inc. owned by the Issuer, the Issuer does not own, directly or
indirectly, any shares of capital stock and does not have any other equity or
ownership or proprietary interest in any corporation, partnership, association,
trust, limited liability company, joint venture or other entity.

(ff) The Issuer has not sent or received any notice indicating the termination
of or intention to terminate any of the contracts or agreements referred to or
described in the Disclosure Package and the Prospectus and no such termination
has been threatened by the Issuer, or any other party to any such contract or
agreement.

 

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(gg) Neither the Issuer nor the Subsidiary is in violation of any statute, any
rule, regulation, decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous chemicals, toxic substances or radioactive and biological materials or
relating to the protection or restoration of the environment or human exposure
to hazardous chemicals, toxic substances or radioactive and biological materials
(collectively, “Environmental Laws”) except for any violation that would not
have a Material Adverse Effect. Neither the Issuer nor the Subsidiary owns or
operates any real property contaminated with any substance that is subject to
any Environmental Laws, is liable for any off-site disposal or contamination
pursuant to any Environmental Laws, or is subject to any claim relating to any
Environmental Laws, which violation, contamination, liability or claim would
individually or in the aggregate have a Material Adverse Effect; and the Issuer
is not aware of any pending investigation that might reasonably be expected to
lead to such a claim.

(hh) No payments or inducements have been made or given, directly or indirectly,
to any federal or local official or candidate for, any federal or state office
in the United States or foreign offices by the Issuer or the Subsidiary, or, to
the knowledge of the Issuer, by any of their officers, directors, employees or
agents or by any other person in connection with any opportunity, contract,
permit, certificate, consent, order, approval, waiver or other authorization
relating to the business of the Issuer or the Subsidiary, except for such
payments or inducements as were lawful under applicable laws, rules and
regulations. Neither the Issuer nor the Subsidiary, nor, to the knowledge of the
Issuer, any director, officer, agent, employee or other person associated with
or acting on behalf of the Issuer or the Subsidiary, (i) has used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; (ii) made any direct or indirect
unlawful payment to any government official or employee from corporate funds;
(iii) violated or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977; or (iv) made any bribe, unlawful rebate, payoff,
influence payment, kickback or other unlawful payment in connection with the
business of the Issuer or the Subsidiary.

(ii) Each of the Issuer and the Subsidiary owns, licenses, or otherwise has
rights in all United States and foreign patents, trademarks, service marks,
tradenames, copyrights, trade secrets and other proprietary rights necessary for
the conduct of its respective business as currently carried on and as proposed
to be carried on as described in the Disclosure Package and the Prospectus
(collectively and together with any applications or registrations for the
foregoing, the “Intellectual Property”), except where the failure to own,
license or otherwise have rights to the Intellectual Property would not have a
Material Adverse Effect. Except as specifically described in the Disclosure
Package and the Prospectus (i) to the Issuer’s knowledge, no third parties have
obtained rights to any such Intellectual Property from the Issuer, other than
licenses granted in the ordinary course and those that would not have a Material
Adverse Effect; (ii) to the Issuer’s knowledge, there is no infringement,
misappropriation or other violation by third parties of any such Intellectual
Property; (iii) there is no pending or, to the Issuer’s knowledge, threatened in
writing, action, suit, proceeding or claim by others challenging the Issuer’s or
the Subsidiary’s rights in or to any such Intellectual Property, and the

 

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Issuer is unaware of any facts which would form a reasonable basis for any such
claim; (iv) there is no pending or, to the Issuer’s knowledge, threatened in
writing, action, suit, proceeding or claim by others challenging the validity,
enforceability, or scope of any such Intellectual Property, and the Issuer is
unaware of any facts which would form a reasonable basis for any such claim;
(v) except as described in the Disclosure Package and the Prospectus, there is
no pending or, to the Issuer’s knowledge, threatened in writing, action, suit,
proceeding or claim by others that the Issuer the Subsidiary, or any of the
Issuer’s or its Subsidiary’s products, product candidates, or services
infringes, misappropriates, or otherwise violates, or would infringe upon,
misappropriate or otherwise violate the development or commercialization of a
third party’s products, product candidates, or services described in the
Disclosure Package and the Prospectus, any patent, trademark, copyright, trade
secret or other proprietary right of others, and the Issuer has not received any
notice and are otherwise unaware of any facts which would form a reasonable
basis for any such claim; (vi) to the Issuer’s knowledge, there is no patent or
patent application that contains claims that can reasonably be deemed to cover
or may cover any Intellectual Property described in the Disclosure Package and
the Prospectus as being owned by or licensed to the Issuer or the Subsidiary or
that is necessary for the conduct of the Issuer’s business as currently or
contemplated to be conducted or that interferes with the issued or pending
claims of any such Intellectual Property; (vii) there is no prior art or public
or commercial activity of which the Issuer is aware that may render any patent
held by the Issuer or the Subsidiary invalid or any patent application held by
the Issuer or the Subsidiary unpatentable which has not been disclosed to the
U.S. Patent and Trademark Office and any other patent office in which any
Intellectual Property is pending for such patent or patent application; and
(viii) to the Issuer’s knowledge, neither the Issuer nor the Subsidiary has
committed any act or omitted to undertake any act the effect of such commission
or omission would render the Intellectual Property invalid or unenforceable in
whole or in part. To the Issuer’s knowledge, none of the technology employed by
the Issuer has been obtained or is being used by the Issuer in violation of the
rights of any person or third party.

(jj) The conduct of business by the Issuer and the Subsidiary complies, and at
all times has substantially complied, in all material respects with federal,
state, local and foreign laws, statutes, ordinances, rules, regulations,
decrees, orders, Permits and other similar items (“Laws”) applicable to its
business, including, without limitation, (a) the Federal Food, Drug, and
Cosmetic Act and similar federal, state, local and foreign laws applicable to
the evaluation, testing, manufacturing, distribution, advertising and marketing
of each of the Issuer’s products, in whatever stage of development or
commercialization, and (b) the Federal Anti-Kickback Statute and any similar
health care fraud and abuse laws. Neither the Issuer nor the Subsidiary has
received any notification asserting, or has knowledge of, any present or past
failure to comply with or violation of any such Laws.

(kk) Except to the extent disclosed in the Disclosure Package and the Prospectus
the clinical, pre-clinical and other studies, tests and research conducted by or
on behalf of or sponsored by the Issuer or the Subsidiary are, and at all times
have been, conducted in accordance with the Federal Food, Drug, and Cosmetic Act
and the regulations promulgated thereunder, as well as other applicable federal,
state, local and

 

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foreign Laws, and consistent with current clinical and scientific research
standards and procedures, except where the failure to be so conducted would not
have a Material Adverse Effect. The descriptions of the results of such studies,
tests and research are accurate and complete in all material respects and fairly
present the data derived from such studies, tests and research, and the Issuer
has no knowledge of any other studies, tests or research the results of which
are inconsistent with or otherwise call into question the results described or
referred to in the Pricing Prospectus and the Prospectus. Except to the extent
disclosed in the Pricing Prospectus and the Prospectus, the Issuer has not
notified the FDA of any adverse reactions with respect to any clinical or
pre-clinical studies, tests or research that are described in the Pricing
Prospectus and the Prospectus or the results of which are referred to in the
Pricing Prospectus and the Prospectus, and the Issuer has not received any
notices or other correspondence from the FDA or any other foreign, federal,
state or local governmental or regulatory authority with respect to any clinical
or pre-clinical studies, tests or research that are described in the Disclosure
Package and the Prospectus or the results of which are referred to in the
Disclosure Package and the Prospectus which require the termination, suspension,
delay or modification of such studies, tests or research, otherwise require the
Issuer to engage in any remedial activities with respect to such studies, test
or research, or threaten to impose or actually impose any fines or other
disciplinary actions.

(ll) Except to the extent disclosed in the Disclosure Package and the Prospectus
and as would not have a Material Adverse Effect, the Issuer has not received any
Form 483s or other Notices of Adverse Findings or Warning Letters from the FDA
or similar forms, notices or letters from any other regulatory agency in which
the agency asserts that the operations or facilities of the Issuer or in which
the Issuer’s products are manufactured may not be in compliance with applicable
laws. The Issuer has not received any written or oral notice that the FDA or any
other regulatory agency has commenced, or threatened to initiate, any action to
withdraw its approval, request a recall or halt distribution of any of the
Issuer’s products, or commenced or threatened to initiate any action to seize,
or enjoin the production of, any of the Issuer’s products.

(mm) The Issuer has established and administers a compliance program (including
a written compliance policy) applicable to the Issuer, to assist the Issuer and
the directors, officers and employees of the Issuer in complying with applicable
regulatory guidelines (including, without limitation, those administered by the
FDA and any foreign, federal, state or local governmental or regulatory
authority performing functions similar to those performed by the FDA) and to
provide compliance policies governing applicable areas for medical device
companies (including, without limitation, pre-clinical and clinical testing,
product design and development, product testing, product manufacturing, product
labeling, product storage, premarket clearance and approval, advertising and
promotion, product sales and distribution, medical device reporting regulations,
and record keeping).

(nn) The Issuer has not failed to file with the applicable regulatory
authorities (including, without limitation, the FDA or any foreign, federal,
state or local governmental or regulatory authority performing functions similar
to those performed by

 

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the FDA) any filing, declaration, listing, registration, report or submission
required by law, except as would not have a Material Adverse Effect; all such
filings, declarations, listing, registrations, reports or submission were in
compliance with applicable laws when filed and no deficiencies have been
asserted by any applicable regulatory authority (including, without limitation,
the FDA or any foreign, federal, state or local governmental or regulatory
performing functions similar to those performed by the FDA) with respect to any
such filings, declarations, listings, registrations, reports or submissions,
except as would not have a Material Adverse Effect.

(oo) The information contained in the Prospectus and the Disclosure Package
regarding the Issuer’s expectations, plans and intentions, and any other
information that constitutes “forward-looking” information within the meaning of
the 1933 Act and the 1934 Act were made by the Issuer on a reasonable basis and
reflect the Issuer’s good faith belief and/or estimate of the matters described
therein.

(pp) Except as disclosed in the Disclosure Package and the Prospectus, there are
no relationships, direct or indirect, or related-party transactions involving
the Issuer, the Subsidiary or any other person that are required to be so
described in the Disclosure Package and the Prospectus. The Issuer is not,
directly or indirectly, extending or maintaining credit, arranging for the
extension of credit or renewing an extension of credit, in the form of a
personal loan to or for any director or executive officer (or equivalent
thereof) of the Issuer. There are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or guarantees
of indebtedness by the Issuer to or for the benefit of any of the officers or
directors of the Issuer or any of the members of any of them, except as
disclosed in the Disclosure Package and the Prospectus.

(qq) Neither the Issuer nor the Subsidiary nor any officer, employee or agent of
the Issuer or the Subsidiary has made an untrue statement of a material fact or
fraudulent statement to the FDA or any other governmental entity, failed to
disclose a material fact required to be disclosed to the FDA or any other
governmental entity, or committed an act, made a statement, or failed to make a
statement that, at the time such disclosure was made, in each case, relating to
Issuer’s business, could reasonably be expected to provide a basis for the FDA
or any other governmental entity to invoke any policies respecting Fraud, Untrue
Statements of Material Facts, Bribery, and Illegal Gratuities, including but not
limited to the FDA policy set forth in 56 Fed. Reg. 46191 (September 10, 1991)
or any similar policy. Neither the Issuer nor the Subsidiary has been convicted
of any crime or engaged in any conduct for which debarment is mandated by 21
U.S.C. § 335a(a) or any similar Law for which debarment is authorized by 21
U.S.C. § 335a(b) or any similar Law.

(rr) There are no transactions, arrangements and other relationships between
and/or among the Issuer, any of its affiliates (as such term is defined in Rule
405 under the 1933 Act) and any unconsolidated entity, including, but not
limited to, any structural finance, special purpose or limited purpose entity
(each, an “Off Balance Sheet Transaction”) that could reasonably be expected to
affect materially the Issuer’s liquidity or the availability of or requirements
for its capital resources, including those Off Balance

 

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Sheet Transactions described in the Commission’s Statement about Management’s
Discussion and Analysis of Financial Condition and Results of Operations
(Release Nos. 33-8056; 34-45321; FR-61), required to be described in the
Disclosure Package and the Prospectus which have not been described as required.

(ss) Each officer and director of the Issuer has executed a letter that contains
“lock-up” provisions (the “Lock-Up Agreements”) with transfer restrictions
substantially similar to those set forth in the letters attached as Exhibit A.

(tt) Since the date as of which information is given in the Prospectus
(exclusive of any amendment or supplement thereto after the date hereof), and
except as may otherwise be disclosed in the Prospectus, the Issuer has not
(i) issued or granted any securities (other than shares issued pursuant to
employee benefit plans, stock option plans or other employee compensation plans
or pursuant to the exercise of outstanding options, rights or warrants or
options granted pursuant to stock option plans), (ii) incurred any material
liability or obligation, direct or contingent, other than liabilities and
obligations which were incurred in the ordinary course of business,
(iii) entered into any material transaction not in the ordinary course of
business or (iv) declared or paid any dividend on its capital stock.

(uu) None of the proceeds of the sale of the Shares will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin security as
defined in Regulation U of the Board of Governors of the Federal Reserve System
(the “Federal Reserve Board”), for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any margin
security or for any other purpose which might cause any sale of the Shares to be
considered a “purpose credit” within the meanings of Regulation T, U or X of the
Federal Reserve Board.

(vv) The Issuer is not an ineligible issuer (as defined in Rule 405 under the
1933 Act) at the times specified in such Rule in connection with the offering of
the Shares.

2. Purchase, Sale and Delivery of the Firm Shares.

(a) On the basis of the representations, warranties and covenants herein
contained, and subject to the conditions herein set forth, the Issuer agrees to
sell to the Underwriters and each Underwriter agrees, severally and not jointly,
to purchase, at a price of $22.63 per share, the number of Firm Shares set forth
opposite the name of each Underwriter in Schedule I hereof, subject to
adjustments in accordance with Section 10 hereof.

(b) Payment for the Firm Shares to be sold hereunder is to be made by wire
transfer of Federal (same day) funds to an account designated by the Company
against delivery of certificates therefore to the Representatives for the
several accounts of the Underwriters. Such delivery is to be made through the
facilities of the Depository Trust Issuer, New York, New York at 10:00 a.m., New
York time, on the third business

 

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day after the date of this Agreement or at such other time and date not later
than five business days thereafter as you and the Issuer shall agree upon, such
time and date being herein referred to as the “Closing Date.” As used herein,
“business day” means a day on which the New York Stock Exchange is open for
trading and on which banks in New York are open for business and are not
permitted by law or executive order to be closed.

(c) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Issuer
hereby grants an option to the several Underwriters to purchase the Option
Shares at the price per share as set forth in the first paragraph of this
Section. The option granted hereby may be exercised in whole or in part by
giving written notice (i) at any time before the Closing Date and (ii) only once
thereafter within 30 days after the date of this Agreement, by you, as the
Representatives of the several Underwriters, to the Issuer, setting forth the
number of Option Shares as to which the several Underwriters are exercising the
option, the names and denominations in which the Option Shares are to be
registered and the time and date at which such certificates are to be delivered.
The time and date at which certificates for Option Shares are to be delivered
shall be determined by the Representatives but shall not be earlier than three
nor later than 10 full business days after the exercise of such option, nor in
any event prior to the Closing Date (such time and date being herein referred to
as the “Option Closing Date”). If the date of exercise of the option is three or
more days before the Closing Date, the notice of exercise shall set the Closing
Date as the Option Closing Date. The number of Option Shares to be purchased by
each Underwriter shall be in the same proportion to the total number of Option
Shares being purchased as the number of Firm Shares being purchased by such
Underwriter bears to the total number of Firm Shares, adjusted by you in such
manner as to avoid fractional shares. The option with respect to the Option
Shares granted hereunder may be exercised only to cover over-allotments in the
sale of the Firm Shares by the Underwriters. You, as the Representatives of the
several Underwriters, may cancel such option at any time prior to its expiration
by giving written notice of such cancellation to the Issuer. To the extent, if
any, that the option is exercised, payment for the Option Shares shall be made
on the Option Closing Date by wire transfer of Federal (same day) funds drawn to
the order of the Issuer against delivery of certificates therefore through the
facilities of the Depository Trust Company, New York, New York.

3. Offering by the Underwriters.

It is understood that the several Underwriters are to make a public offering of
the Firm Shares as soon as the Representatives deem it advisable to do so. The
Firm Shares are to be initially offered to the public at the initial public
offering price set forth in the Prospectus. The Representatives may from time to
time thereafter change the public offering price and other selling terms. To the
extent, if at all, that any Option Shares are purchased pursuant to Section 2
hereof, the Underwriters will offer them to the public on the foregoing terms.

It is further understood that you will act as the Representatives for the
Underwriters in the offering and sale of the Shares in accordance with a Master
Agreement Among Underwriters entered into by you and the several other
Underwriters.

 

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4. Covenants of the Issuer.

The Issuer covenants and agrees with the several Underwriters that:

(a) The Issuer will (i) prepare and timely file with the Commission, under Rule
424(b) of the 1933 Act, a Prospectus in a form approved by the Representatives
containing information previously omitted at the time of effectiveness of the
Registration Statement in reliance on Rule 430A of the 1933 Act; (ii) file any
Issuer Free Writing Prospectus to the extent required by Rule 433 under the 1933
Act; (iii) not file any amendment to the Registration Statement or supplement to
the Prospectus or the Disclosure Package of which the Representatives shall not
previously have been advised and furnished with a copy or to which the
Representatives shall have reasonably objected in writing or which is not in
compliance with the 1933 Act;(iv) not prepare, use, authorize, approve, refer to
or file any Issuer Free Writing Prospectus, amendment or supplement, whether
before or after the time that the Registration Statement becomes effective, of
which the Representatives shall not previously have been advised and furnished
with a copy or to which the Representatives and counsel for the Underwriters
shall have reasonably objected in writing;(v) file on a timely basis all reports
and any definitive proxy or information statements required to be filed by the
Issuer with the Commission subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus (or in lieu thereof, the notice referred to
in Rule 173(a) under the 1933 Act) is required in connection with the offering
or sale of the Shares; and (vi) furnish copies of the Disclosure Package and the
Prospectus and any supplements and amendments thereto in such quantities as the
Representatives may reasonably request.

(b) The Issuer has not distributed and without the prior consent of the
Representatives, it will not distribute any prospectus or other offering
material (including, without limitation, any offer relating to the Shares that
would constitute a free writing prospectus and content on the Issuer’s website
that may be deemed to be a prospectus or other offering material) in connection
with the offering and sale of the Shares, other than the materials referred to
in Section 1(d). Any such Issuer Free Writing prospectus the use of which has
been consented to by the Issuer and the Representatives is listed on Schedule
II(a) or Schedule II(b) hereto. The Issuer has complied and will comply with the
requirements of Rule 433 under the 1933 Act applicable to any Issuer Free
Writing Prospectus, including timely filing with the Commission or retention
where required and legending. The Issuer agrees that if at any time following
issuance of an Issuer Free Writing Prospectus any event occurred or occurs as a
result of which such Issuer Free Writing Prospectus would conflict with the
information in the Registration Statement, the Preliminary Prospectus or the
Prospectus or would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
light of the circumstances then prevailing, not misleading, the Issuer will give
prompt notice thereof to the Representatives and, if requested by the
Representatives, will prepare and furnish without charge to each Underwriter an
Issuer Free Writing Prospectus or other document which will correct such
conflict, statement or omission.

 

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(c) The Issuer will not take, directly or indirectly, any action designed to
cause or result in, or that has constituted or might reasonably be expected to
constitute, the stabilization or manipulation of the price of any securities of
the Issuer.

(d) The Issuer will advise the Representatives promptly (i) when the
Registration Statement or any post-effective amendment thereto shall have become
effective; (ii) when any amendment to the Registration Statement has been filed
or becomes effective; (iii) when any supplement to the Prospectus or any Issuer
Free Writing Prospectus or any amendment to the Prospectus has been filed;(iv)
of the receipt of any comments from the Commission; (v) of any request of the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for any additional information; (vi) of the
issuance by the Commission of any order suspending the effectiveness of the
Registration Statement or preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or of the institution or threatening of any
proceedings for that purpose; and (vii) of the receipt by the Issuer of any
notice with respect to any suspension of the qualification of the Shares for
offer and sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; and the Issuer will use reasonable best efforts to
prevent the issuance of any such order suspending the effectiveness of the
Registration Statement, preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending any such qualification of the Shares
and, if any such order is issued, will obtain as soon as reasonably possible the
withdrawal thereof. As used herein, “Prospectus Delivery Period” means such
period of time after the date of the first bona fide public offering of the
Shares as in the opinion of counsel for the Underwriters a prospectus relating
to the Shares is required by law to be delivered (or required to be delivered
but for Rule 172 under the 1933 Act) in connection with the sales of the Shares
by any Underwriter or dealer. The Issuer will use its best efforts to prevent
the issuance of any stop order preventing or suspending the use of the
Prospectus and to obtain as soon as possible the lifting thereof, if issued.

(e) The Issuer will cooperate with the Representatives in endeavoring to qualify
the Shares for sale under (or obtain exemptions from the application of) the
securities laws of such jurisdictions as the Representatives may reasonably have
designated in writing and will make such applications, file such documents, and
furnish such information as may be reasonably required for that purpose,
provided the Issuer shall not be required to qualify as a foreign corporation or
to file a general consent to service of process in any jurisdiction where it is
not now so qualified or required to file such a consent. The Issuer will, from
time to time, prepare and file such statements, reports, and other documents, as
are or may be required to continue such qualifications in effect for so long a
period as the Representatives may reasonably request for distribution of the
Shares. The Issuer will advise the Representatives promptly of the suspension of
the qualification or registration of (or any such exemption relating to) the
Common Shares for offering, sale or trading in any jurisdiction or any
initiation or threat of any proceeding for any such purpose, and in the event of
the issuance of any order suspending such qualification, registration or
exemption, the Issuer shall use its best efforts to obtain the withdrawal
thereof at the earliest possible moment.

 

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(f) The Issuer will deliver to, or upon the order of, the Representatives, from
time to time, as many copies of any Preliminary Prospectus as the
Representatives may reasonably request. The Issuer will deliver to, or upon the
order of, the Representatives during the Prospectus Delivery Period as many
copies of the Prospectus in final form, or as thereafter amended or
supplemented, and each Issuer Free Writing Prospectus as the Representatives may
reasonably request. The Issuer will deliver to the Representatives at or before
the Closing Date, four signed copies of the Registration Statement and all
amendments thereto including all exhibits filed therewith, and will deliver to
the Representatives such number of copies of the Registration Statement
(including such number of copies of the exhibits filed therewith that may
reasonably be requested) and of all amendments thereto, as the Representatives
may reasonably request.

(g) The Issuer will comply with the 1933 Act, and the 1934 Act, and the rules
and regulations of the Commission thereunder, so as to permit the completion of
the distribution of the Shares as contemplated in this Agreement and the
Prospectus. If during the Prospectus Delivery Period (i) any event shall occur
or condition shall exist 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 required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances existing when the
Prospectus is delivered to a purchaser, not misleading or (ii) it is necessary
to amend or supplement the Prospectus to comply with law, the Issuer will
promptly notify the Underwriters thereof and forthwith prepare and, subject to
paragraph (a) above, file with the Commission and furnish to the Underwriters
and to such dealers as the Representatives may designate, such amendments or
supplements to the Prospectus as may be necessary so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus will comply with law. If at any time prior
to the Closing Date (i) any event shall occur or condition shall exist as a
result of which the Disclosure Package as then amended or supplemented would
include any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances then existing, not misleading or (ii) it is necessary to amend or
supplement the Disclosure Package to comply with law, the Issuer will
immediately notify the Underwriters thereof and forthwith prepare and, subject
to paragraph (a) above, file with the Commission (to the extent required) and
furnish to the Underwriters and to such dealers as the Representatives may
designate, such amendments or supplements to the Disclosure Package as may be
necessary so that the statements in the Disclosure Package as so amended or
supplemented will not, in the light of the circumstances then existing, be
misleading.

(h) The Issuer will make generally available to its security holders, as soon as
it is practicable to do so, but in any event not later than 15 months after the
effective date of the Registration Statement, an earning statement (which need
not be audited) in reasonable detail, covering a period of at least 12
consecutive months beginning after the effective date of the Registration
Statement, which earning statement shall satisfy the requirements of
Section 11(a) of the 1933 Act and Rule 158 of the rules and regulations
promulgated thereunder.

 

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(i) No offering, sale, short sale or other disposition of any shares of Common
Shares of the Issuer or other securities convertible into or exchangeable or
exercisable for shares of Common Shares or derivative of Common Shares (or
agreement for such) will be made for a period of 90 days after the date of this
Agreement, directly or indirectly, by the Issuer otherwise than hereunder or
with the prior written consent of RBC Capital Markets Corporation; provided,
that this provision will not restrict the Issuer from awarding shares of Common
Stock, or options or other awards to purchase shares of its common stock
pursuant to its employee benefit plans as described in the Prospectus or prevent
the issuance by the Issuer of shares of its common stock upon exercise of any
such options or other awards. Notwithstanding the foregoing, if (1) during the
last 17 days of the 90-day restricted period, the Issuer issues an earnings
release or material news or a material event relating to the Issuer occurs; or
(2) prior to the expiration of the 90-day restricted period, the Issuer
announces that it will release earnings results during the 16-day period
beginning on the last day of the 90-day period, the restrictions imposed by this
Agreement shall continue to apply until the expiration of the 18-day period
beginning on the issuance of the earnings release or the occurrence of the
material news or material event.

(j) The Issuer will direct the Issuer’s transfer agent with respect to the
transfer restrictions upon any such securities of the Issuer that are bound by
such Lockup Agreements for the duration of the period contemplated in such
agreements.

(k) The Issuer shall apply the net proceeds of its sale of the Shares as
described under the heading “Use of Proceeds” in the Prospectus.

(l) The Issuer shall not invest, or otherwise use the proceeds received by the
Issuer from its sale of the Shares in such a manner as would require the Issuer
or the Subsidiary to register as an investment company under the 1940 Act.

(m) The Issuer will maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Issuer, a registrar for the Common Shares.

(n) The Issuer will, pursuant to reasonable procedures developed in good faith,
retain copies of each Issuer Free Writing Prospectus that is not filed with the
Commission in accordance with Rule 433 under the Securities Act.

5. Costs and 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
Issuer agrees to pay (i) all costs, expenses and fees incident to the
performance of the obligations of the Issuer under this Agreement, including,
without limiting the generality of the foregoing, all fees and expenses of legal
counsel for the Issuer and of the Issuer’s independent accountants, all costs
and expenses incurred in connection with the preparation, printing, filing and
distribution of the Registration Statement, any Preliminary Prospectus, any

 

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Issuer Free Writing Prospectus, any Disclosure Package, and the Prospectus
(including all exhibits, amendments and supplements thereto), except that the
Issuer shall not be responsible for any printing or distribution costs incurred
more than nine months after the effective date of the Registration Statement;
(ii) the filing fees of the Commission and all costs, fees and expenses
(including legal fees 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 applicable state and foreign
securities laws and blue sky laws, including the preparation of a blue sky
memorandum relating to the Shares and clearance of such offering with the
National Association of Securities Dealers, Inc. (the “NASD”) of the terms of
the sale of the Shares; (iii) all fees and expenses of the Issuer’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, (iv) all fees and expenses in connection with qualification and
inclusion of the Shares other than outstanding shares of Common Stock on the
Nasdaq National Market, and (v) the cost of printing or producing any agreement
among underwriters, this Agreement, closing documents (including compilations
thereof) and any other documents in connection with the offering, purchase, sale
and delivery of the Shares. Any transfer taxes imposed on the sale of the Shares
to the several Underwriters will be paid by the Issuer.

The Issuer shall not, however, be required to pay for any of the Underwriters
expenses, including fees and expenses of legal counsel (other than those related
to qualification under NASD regulations and State securities or blue sky laws)
except that, if this Agreement shall not be consummated because the conditions
in Section 6 hereof are not satisfied, or because this Agreement is terminated
by the Representatives pursuant to Section 11 hereof, or by reason of any
failure, refusal or inability on the part of the Issuer to perform any
undertaking or satisfy any condition of this Agreement or to comply with any of
the terms hereof on its part to be performed, unless such failure to satisfy
said condition or to comply with said terms be due to the default or omission of
any Underwriter, then the Issuer shall reimburse the several Underwriters for
reasonable out-of-pocket expenses, including all fees and disbursements of
counsel, reasonably incurred in connection with investigating, marketing and
proposing to market the Shares or in contemplation of performing their
obligations hereunder; but the Issuer shall not in any event be liable to any of
the several Underwriters for damages on account of loss of anticipated profits
from the sale by the Issuer of the Shares.

6. Conditions of Obligations of the Underwriters.

The several obligations of the Underwriters to purchase the Firm Shares on the
Closing Date and the Option Shares, if any, on the Option Closing Date are
subject to the accuracy, as of the Closing Date and the Option Closing Date, if
any, of the representations and warranties of the Issuer contained herein, and
to the performance by the Issuer of its covenants and obligations hereunder and
to each of the following additional conditions:

(a) The Registration Statement and all post-effective amendments thereto shall
have become effective and any and all filings required by Rule 424 and Rule 430A

 

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of the 1933 Act shall have been made, and any request of the Commission for
additional information (to be included in the Registration Statement or
otherwise) shall have been disclosed to the Representatives and complied with to
their reasonable satisfaction. All material required to be filed by the Issuer
pursuant to Rule 433(d) under the 1933 Act shall have been filed with the
Commission within the applicable time period prescribed for such filing by Rule
433 under the 1933 Act. If the Issuer has elected to rely upon Rule 462(b) under
the 1933 Act, the Rule 462(b) Registration Statement shall have become effective
by 10:00 P.M., Washington, D.C. time, on the date of this Agreement. No stop
order suspending the effectiveness of the Registration Statement, as amended
from time to time, shall have been issued and no proceedings for that purpose
shall have been taken or, to the knowledge of the Issuer, shall be contemplated
by the Commission; no stop order suspending or preventing the use of the
Prospectus or any Issuer Free Writing Prospectus shall have been initiated or,
to the knowledge of the Issuer, shall be contemplated by the Commission; all
requests for additional information on the part of the Commission shall have
been complied with to your reasonable satisfaction; and no injunction,
restraining order, or order of any nature by a Federal or state court of
competent jurisdiction shall have been issued as of the Closing Date which would
prevent the issuance of the Shares. The NASD shall have raised no objection to
the fairness and reasonableness of the underwriting terms and agreements.

(b) The Representatives shall have received on the Closing Date and the Option
Closing Date, if any, the opinion of Davies Ward Phillips & Vineberg LLP counsel
for the Issuer, dated the Closing Date or the Option Closing Date, if any,
addressed to the Underwriters to the effect that:

(i) The Issuer is validly existing as a corporation in good standing under the
laws of the State of Delaware with corporate power to own or lease its
properties and conduct its business as described in the Registration Statement
and the Issuer is duly qualified to transact business as a foreign corporation
in Florida and New York.

(ii) The Issuer had, as of February 25, 2006, authorized and outstanding capital
stock as set forth under the “Actual” column under the caption “Capitalization”
in the Prospectus; the outstanding shares of the Issuer’s Common Shares, have
been duly authorized and validly issued and are fully paid and non-assessable;
all of the Shares conform, in all material respects as to legal matters, to the
description thereof contained in the Prospectus; the Shares, including the
Option Shares, if any, to be sold by the Issuer pursuant to this Agreement have
been duly authorized and will be validly issued, fully paid and non-assessable
when issued and paid for as contemplated by this Agreement; and no preemptive
rights of shareholders exist with respect to any of the Shares or the issue or
sale thereof under the Issuer’s Charter or Bylaws.

(iii) Based solely on a telephone conversation with the Staff of the Commission,
the Registration Statement has become effective under the 1933 Act and, to the
knowledge of such counsel, no stop order proceedings with respect thereto have
been instituted or are pending or threatened under the 1933 Act.

 

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(iv) The statements under the caption “Description of Capital Stock,” in the
Prospectus, insofar as such statements constitute a summary of documents
referred to therein or matters of law, fairly summarize in all material respects
such documents and matters of law.

(v) Such counsel knows of no material legal or governmental proceedings pending
or threatened in writing against the Issuer except as set forth in the
Prospectus.

(vi) The execution and delivery of this Agreement by the Issuer do not, and the
performance by the Issuer of its obligations hereunder will not, violate the
Charter or By-Laws of the Issuer or result in a breach of any of the terms or
provisions of, or constitute a default under any document filed as an exhibit to
the documents incorporated by reference in the Registration Statement, except
for any breach or default that has been waived.

(vii) This Agreement has been duly authorized, executed and delivered by the
Issuer, and is a legal, valid and binding agreement of the Issuer, except as
rights to indemnity and contribution hereunder may be limited by federal or
state securities laws and except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting the rights of
creditors generally, and subject to general principles of equity.

(viii) No approval, consent, order or authorization by or filing with any
regulatory, administrative or other governmental body is required in connection
with the execution and delivery of this Agreement and the performance by the
Issuer of its obligations hereunder which has not been obtained or made (other
than as may be required under the 1933 Act, by the NASD or under state
securities and blue sky laws as to which such counsel need express no opinion).

(ix) The Issuer is not and, after giving effect to the offering and sale of the
Shares and the application of the net proceeds therefrom as described in the
Prospectus will not be, required to register as an investment company under the
1940 Act.

In rendering such opinion, Davies Ward Phillips & Vineberg LLP may rely as to
matters governed by the laws of states other than New York, the General
Corporation Law of the State of Delaware or Federal laws, on local counsel in
such jurisdictions provided that in each case Davies Ward Phillips & Vineberg
LLP shall state that they believe that they and the Underwriters are justified
in relying on such other counsel. In addition to the matters set forth above,
such opinion shall also include a statement to the effect that nothing has come
to the attention of such counsel which leads them to believe that (i) the
Registration Statement, at the time it became effective under the 1933 Act (but
after giving effect to any modifications incorporated therein pursuant to Rule
430A under the 1933 Act) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; (ii) that the Disclosure Package, as
of the Applicable Time, contained any untrue statement of a material fact or
omitted to state any material fact necessary in order

 

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to make the statements therein, in light of the circumstances under which they
were made, not misleading (except that such counsel need express no view as to
financial statements, financial schedules and other financial data); and
(iii) the Prospectus, or any supplement thereto, on the date it was filed
pursuant to the 1933 Act and as of the Closing Date or the Option Closing Date,
if any, contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements, in the light of the
circumstances under which they are made, not misleading (except that such
counsel need express no view as to financial statements, financial schedules and
other financial data). Such opinion shall also include a statement to the effect
that the Registration Statement, the Prospectus and each amendment or supplement
thereto comply as to form in all material respects with the requirements of the
1933 Act and the applicable rules and regulations thereunder (except that such
counsel need express no view as to financial statements, financial schedules and
other financial data). With respect to such statements, Davies Ward Phillips &
Vineberg LLP may state that their belief is based upon the procedures set forth
therein, but is without independent check and verification. As to opinion
numbers (vii) Davies Ward Phillips & Vineberg LLP may assume that the
Registration Statement, on the date it became effective, did not contain any
untrue statement of a material fact required to be stated therein or necessary
to make the statements therein not misleading and that neither the Prospectus
nor the Disclosure Package, or any amendment or supplement thereto, as of its
date and as of the date hereof, contained any untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

(c) The Representatives shall have received on the Closing Date and the Option
Closing Date, if any, opinions of Reed Smith LLP, special counsel for the Issuer
with respect to patent and proprietary rights, dated the Closing Date and the
Option Closing Date, if any, addressed to the Underwriters (and stating that it
may be relied upon by Dorsey & Whitney LLP, counsel for the Underwriters) to the
effect that:

(i) To such counsel’s knowledge, except as described in the Prospectus, (A) the
Issuer and the Subsidiary have valid license rights or clear title to the
Intellectual Property referenced in the Prospectus, and there are no rights of
third parties to any such Intellectual Property, except where the failure to
have such valid license rights or clear title to the Intellectual Property would
not have a Material Adverse Effect; (B) no third parties have obtained rights to
any Intellectual Property from the Issuer, other than licenses granted in the
ordinary course and rights that would not have a Material Adverse Effect;
(C) there is no infringement, misappropriation, or other violation by third
parties of any of the Intellectual Property of the Issuer or the Subsidiary that
would have a Material Adverse Effect; (D) there is no infringement,
misappropriation, or other violation by the Issuer or the Subsidiary of any
Intellectual Property of others; (E) there is no pending or threatened action,
suit, proceeding or claim by governmental authorities or others that the Issuer
or the Subsidiary infringe or otherwise violate any Intellectual Property of
others that would have a Material Adverse Effect; (F) there is no pending or
threatened action, suit, proceeding or claim by governmental authorities or
others challenging the rights of the Issuer or the Subsidiary in or to, or
challenging the scope of, any Intellectual Property of the Issuer or the
Subsidiary

 

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referenced in the Prospectus; and (G) there is no patent or patent application
owned by third parties that contains valid claims that cover or may cover any
Intellectual Property described in the Prospectus as being owned by or licensed
to the Issuer or the Subsidiary.

(ii) In such counsel’s opinion, the patent applications of the Issuer and the
Subsidiary presently on file disclose patentable subject matter, and such
counsel is not aware of any inventorship challenges, any interference which has
been declared or provoked, prior art or public or commercial activity, or any
other material fact with respect to the patent applications of the Issuer and
the Subsidiary presently on file that (A) would preclude the issuance of patents
with respect to such applications or (B) would lead such counsel to conclude
that such patents, when issued, would not be valid and enforceable.

(iii) Except as set forth in the Registration Statement, Prospectus, in such
counsel’s opinion, there is no fact which would serve as an Intellectual
Property bar to any of the businesses known to such counsel which are conducted
by the Issuer and the Subsidiary as described in the Prospectus.

(iv) Such counsel has reviewed the Risk Factors and Business portions of the
Registration Statement and the Prospectus referencing certain Issuer patent
rights, (collectively, the “Patent Sections”) (attached hereto as Exhibit B).
Such counsel has no reason to believe that the information in the Patent
Sections contains any untrue statement or material fact or omits to state a
material fact necessary to make the statements therein not misleading and
insofar as the attached Patent Sections constitute statements or summaries of
matters of law, the Patent Sections are, to such counsel’s knowledge, in all
material respects, accurate and complete statements or summaries, as the case
may be, of the matters referred to therein.

(d) The Representatives shall have received on the Closing Date and the Option
Closing Date, if any, an opinion letter and negative assurance letter of Hogan &
Hartson LLP, special counsel for the Issuer with respect to U.S. Food and Drug
Administration (“FDA”) regulatory matters, dated the Closing Date or the Option
Closing Date, if any addressed to the Underwriters to the effect that:

(i) counsel serves in the limited role of regulatory counsel to the Issuer in
the FDA area only. In such capacity, counsel has reviewed certain information
under the captions “Risk Factors — If we cannot obtain and maintain clearance or
approval from governmental agencies, we will not be able to sell our products,”
“Risk Factors — Modifications to our current products may require new marketing
clearances or approvals or require us to cease marketing or recall the modified
products until such clearances or approvals are obtained,” “Risk Factors — If we
or some of our suppliers fail to comply with the FDA’s Quality System Regulation
and other applicable postmarket regulatory requirements, our manufacturing
operations could be disrupted, our product sales and profitability could suffer,
and we may be subject to a wide variety of enforcement actions by the FDA,” and
“Business—Government Regulation — United States FDA Regulation,” in the Issuer’s
Prospectus dated May 23, 2006 (the “Prospectus”), forming a part of the Issuer’s
Registration Statement on Form S-3, as amended (Registration No. 333-133748).

 

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(ii) counsel is of the opinion that the statements in the Prospectus under the
captions “Risk Factors – If we cannot obtain and maintain clearance or approval
from governmental agencies, we will not be able to sell our products,” “Risk
Factors – Modifications to our current products may require new marketing
clearances or approvals or require us to cease marketing or recall the modified
products until such clearances or approvals are obtained,” “Risk Factors – If we
or some of our suppliers fail to comply with the FDA’s Quality System Regulation
and other applicable postmarket regulatory requirements, our manufacturing
operations could be disrupted, our product sales and profitability could suffer,
and we may be subject to a wide variety of enforcement actions by the FDA,” and
“Business – Government Regulation – United States FDA Regulation,” insofar as
such statements purport to summarize applicable provisions of the Federal Food,
Drug, and Cosmetic Act and the regulations promulgated thereunder, are accurate
summaries in all material respects of the provisions purported to be summarized
under such captions in the Prospectus.

(iii) During the course of counsel’s professional engagement, counsel reviewed
the information under the captions “Risk Factors – If we cannot obtain and
maintain clearance or approval from governmental agencies, we will not be able
to sell our products, “Risk Factors – Modifications to our current products may
require new marketing clearances or approvals or require us to cease marketing
or recall the marketed products until such clearances or approvals are
obtained,” “Risk Factors – If we or some of our suppliers fail to comply with
the FDA’s Quality System Regulation and other applicable postmarket regulatory
requirements, our manufacturing operations could be disrupted, our product sales
and profitability could suffer, and we may be subject to a wide variety of
enforcements actions by the FDA,” and “Business – Government Regulation – United
States FDA Regulation,” in the Prospectus and participated in conferences with
officers and other representatives of the Issuer at which FDA regulatory matters
were discussed. While the purpose of counsel’s professional engagement was not
to establish or confirm factual matters set forth in the Prospectus, and counsel
has not undertaken any obligation to verify independently any of those factual
matters, and does not assume any responsibility for, the accuracy, completeness,
or fairness of the statements under the above-referenced captions in the
Prospectus, counsel may state on the basis of the information gained by counsel
in the course of these discussions and activities as special FDA regulatory
counsel to the Issuer in connection with review of the statements contained in
such captioned sections that no facts have come to counsel’s attention that
cause counsel to believe that the statements in the Prospectus under the such
captions, insofar as such statements relate to FDA regulatory matters, at the
time the Registration Statement became effective, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or as of the
date hereof, contains an untrue statement of a material fact or omits 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.

 

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(e) The Representatives shall have received from Dorsey & Whitney LLP, counsel
for the Underwriters, an opinion dated the Closing Date and the Option Closing
Date, if any, with respect to the formation of the Issuer, the validity of the
Shares and other related matters as the Representatives reasonably may request,
and such counsel shall have received such papers and information as they request
to enable them to pass upon such matters.

(f) The Representatives shall have received at or prior to the Closing Date from
Dorsey & Whitney LLP a memorandum or summary, in form and substance satisfactory
to the Representatives, with respect to the qualification for offering and sale
by the Underwriters of the Shares under the State securities or blue sky laws of
such jurisdictions as the Representatives may reasonably have designated to the
Issuer.

(g) You shall have received, on each of the dates hereof, the Closing Date and
the Option Closing Date, if any, a letter dated the date hereof, the Closing
Date or the Option Closing Date, if any, in form and substance satisfactory to
you, of Grant Thornton LLP confirming that they are independent public
accountants within the meaning of the 1933 Act and stating that in their opinion
the financial statements and schedules examined by them and included in the
Registration Statement and the Prospectus comply in form in all material
respects with the applicable accounting requirements of the 1933 Act; and
containing such other statements and information as is ordinarily included in
accountants’ “comfort letters” to Underwriters with respect to the financial
statements and certain financial and statistical information contained in the
Registration Statement and the Prospectus delivered according to Statement of
Auditing Standards No. 72 (or any successor bulletin); provided, however, that
the letter delivered on the Closing Date shall use a “cut-off date” of
February 26, 2005.

(h) You shall have received, on each of the dates hereof, the Closing Date and
the Option Closing Date, if any, a letter dated the date hereof, the Closing
Date or the Option Closing Date, if any, in form and substance satisfactory to
you, of PricewaterhouseCoopers LLP confirming that they are independent public
accountants within the meaning of the 1933 Act and stating that in their opinion
the financial statements and schedules examined by them and included in the
Registration Statement and the Prospectus comply in form in all material
respects with the applicable accounting requirements of the 1933 Act; and
containing such other statements and information as is ordinarily included in
accountants’ “comfort letters” to Underwriters with respect to the financial
statements and certain financial and statistical information contained in the
Registration Statement and the Prospectus delivered according to Statement of
Auditing Standards No. 72 (or any successor bulletin); provided, however, that
the letter delivered on the Closing Date shall use a reasonable “cut-off date.”

(i) The Representatives shall have received on the Closing Date and the Option
Closing Date, if any, a certificate or certificates of the Issuer’s Chief
Executive Officer and Chief Financial Officer to the effect that, as of the
Closing Date or the Option Closing Date, if any, each of them severally
represents as follows:

(i) The Registration Statement has become effective under the 1933 Act and no
stop order suspending the effectiveness of the Registration Statement has been
issued, and no proceedings for such purpose have been taken or are, to his
knowledge, contemplated by the Commission;

 

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(ii) The representations and warranties of the Issuer contained in Section 1
hereof are true and correct as of the Closing Date or the Option Closing Date,
if any;

(iii) They have carefully examined the Registration Statement, the Disclosure
Package and the Prospectus and, in their opinion, as of the effective date of
the Registration Statement, the Registration Statement, the Disclosure Package
and Prospectus did not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading in
light of the circumstance under which they were made, and since the effective
date of the Registration Statement, no event has occurred which should have been
set forth in a supplement to or an amendment of the Prospectus or any Issuer
Free Writing Prospectus which has not been so set forth in such supplement or
amendment; and

(iv) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any material
adverse change or any development involving a prospective change, which has had
or is reasonably likely to have a Material Adverse Effect, whether or not
arising in the ordinary course of business.

(j) The Issuer shall have furnished to the Representatives such further
certificates and documents confirming the representations and warranties,
covenants and conditions contained herein and related matters as the
Representatives may reasonably have requested.

(k) Executed copies of the Lockup Agreements described in Section 4(j) have been
delivered to the Representatives.

The opinions and certificates mentioned in this Agreement shall be deemed to be
in compliance with the provisions hereof only if they are in all material
respects satisfactory to the Representatives and to Dorsey & Whitney LLP,
counsel for the Underwriters.

If any of the conditions hereinabove provided for in this Section shall not have
been fulfilled when and as required by this Agreement to be fulfilled, the
obligations of the Underwriters hereunder may be terminated by the
Representatives by notifying the Issuer of such termination in writing on or
prior to the Closing Date or the Option Closing Date, if any.

In such event, the Issuer and the Underwriters shall not be under any obligation
to each other (except to the extent provided in Sections 5 and 16 hereof).

 

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7. Conditions of the Obligations of the Issuer.

The obligations of the Issuer to sell and deliver the portion of the Shares
required to be delivered as and when specified in this Agreement are subject to
the conditions that at the Closing Date or the Option Closing Date, if any, no
stop order suspending the effectiveness of the Registration Statement shall have
been issued and in effect or proceedings therefore initiated or threatened.

8. Indemnification.

(a) The Issuer agrees:

(i) to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of the 1933 Act, against any losses,
claims, damages or liabilities to which such Underwriter or any such controlling
person may become subject under the 1933 Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, or any
amendment thereto, or are caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any
supplement thereto, any Issuer Free Writing Prospectus or any “issuer
information” filed or required to be filed pursuant to Rule 433(d) under the
1933 Act, or caused by any omission or alleged omission to state a material fact
therein necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that this indemnity obligation shall not apply 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 made in the Registration
Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus,
or any amendment or supplement thereto, any Issuer Free Writing Prospectus or
any issuer information made in reliance upon and in conformity with any written
information furnished to the Issuer by any Underwriter through RBC Capital
Markets Corporation expressly for use therein, such information being listed in
Section 13 below; provided, further that the foregoing indemnity agreement with
respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter if (I) a loss, claim, liability, expense or damage results solely
from an untrue statement of a material fact contained in, or the omission of a
material fact from, such Preliminary Prospectus, which untrue statement or
omission was completely corrected in the Prospectus (as then amended or
supplemented) and (II) the Issuer sustains the burden of proving that the
Underwriters sold Shares to the person alleging such loss, claim, liability,
expense or damage without sending or giving, at or prior to the written
confirmation of such sale, a copy of the Prospectus (as then amended or
supplemented) and (III) the Issuer had previously furnished copies thereof to
the Underwriters within a reasonable amount of time prior to

 

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such sale or such confirmation and (IV) the Underwriters failed to deliver the
corrected Prospectus, if required by law to have so delivered it and if
delivered would have been a complete defense against the person asserting such
loss, claim, liability, expense or damage.

(b) to reimburse each Underwriter and each such controlling person upon demand
for any legal or other out-of-pocket expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage or liability, action or proceeding or in
responding to a subpoena or governmental inquiry related to the offering of the
Shares, whether or not such Underwriter or controlling person is a party to any
action or proceeding. In the event that it is finally judicially determined that
the Underwriters were not entitled to receive payments for legal and other
expenses pursuant to this subparagraph, the Underwriters will promptly return
all sums that had been advanced pursuant hereto.

(c) Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Issuer, its directors, its officers who signed the Registration
Statement and each person, if any, who controls the Issuer within the meaning of
the 1933 Act against any losses, claims, damages or liabilities to which the
Issuer or any such director, officer or controlling person may become subject
under the 1933 Act or otherwise (including, without limitation, the legal fees
and other expenses incurred in connection with any suit, action or proceeding or
any claim asserted) insofar as such losses, claims, damages or liabilities that
arise out of, or are based upon, any untrue statement or omission or alleged
untrue statement or omission of a material fact contained in the Registration
Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus,
or any amendment or supplement thereto, or any Issuer Free Writing Prospectus
made in reliance upon and in conformity with any written information furnished
to the Issuer by any Underwriter through RBC Capital Markets Corporation
expressly for use therein, such information being listed in Section 13 below.

(d) In case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to this Section, such person (the “indemnified party”) shall promptly
notify the person against whom such indemnity may be sought (the “Indemnifying
Party”) in writing. No indemnification provided for in Section 8(a) or (b) shall
be available to any party who shall fail to give notice as provided in this
Subsection 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 failure to give such notice shall
not relieve the indemnifying party or parties from any liability which it or
they may have to the indemnified party for contribution or otherwise than on
account of the provisions of Section 8(a) or (b). In case any such proceeding
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably acceptable to such indemnified party and shall
pay as incurred the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the

 

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right to retain its own counsel at its own expense. Notwithstanding the
foregoing, the indemnifying party shall pay as incurred (or within 30 days of
presentation) the fees and expenses of the counsel retained by the indemnified
party in the event (i) the indemnifying party and the indemnified party shall
have mutually agreed to the retention of such counsel, (ii) the named parties to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
interests between them or (iii) the indemnifying party shall have failed to
assume the defense and employ counsel reasonably acceptable to the indemnified
party within a reasonable period of time after notice of commencement of the
action.

(e) It is understood that the indemnifying party shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees and expenses of more than one separate firm for all such
indemnified parties. Such firm shall be designated in writing by you in the case
of parties indemnified pursuant to Section 8(a) and by the Issuer in the case of
parties indemnified pursuant to Section 8(b). The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent but if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or judgment. In
addition, the indemnifying party will not, without the prior written consent of
the indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding of which
indemnification may be sought hereunder (whether or not any indemnified party is
an actual or potential party to such claim, action or proceeding) unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action or
proceeding.

(f) If the indemnification provided for in this Section is unavailable to or
insufficient to hold harmless an indemnified party under Section 8(a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Issuer and on the one hand and the
Underwriters on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law then each indemnifying party shall contribute to such amount paid
or payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Issuer on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, (or actions or proceedings in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Issuer on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Issuer bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the

 

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Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Issuer on the one hand or the Underwriters on the other and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.

(g) The Issuer and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 8(g) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Subsection. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to above in
this Section 8(g) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 8(g), (i) no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to the Shares
purchased by such Underwriter and (ii) 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 in this Section 8(g) and (h) to
contribute are several in proportion to their respective underwriting
obligations and not joint.

(h) In any proceeding relating to the Registration Statement, any Preliminary
Prospectus, the Preliminary Prospectus, the Pricing Prospectus or the
Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing
Prospectus, each party against whom contribution may be sought under this
Section hereby consents to the jurisdiction of any court having jurisdiction
over any other contributing party, agrees that process issuing from such court
may be served upon him or it by any other contributing party and consents to the
service of such process and agrees that any other contributing party may join
him or it as an additional defendant in any such proceeding in which such other
contributing party is a party.

(i) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. A successor
to any Underwriter, or to the Issuer or its respective directors or officers, or
any person controlling the Issuer, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this Section.

9. Default by Underwriters.

If on the Closing Date or the Option Closing Date, if any, any Underwriter shall
fail to purchase and pay for the portion of the Shares which such Underwriter
has agreed to purchase and pay for on such date (otherwise than by reason of any
default on the part of the Issuer), you, as the Representatives of the
Underwriters, shall use your reasonable

 

31

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efforts to procure within 36 hours thereafter one or more of the other
Underwriters, or any other underwriters, to purchase from the Issuer such
amounts as may be agreed upon and upon the terms set forth herein, the Firm
Shares or Option Shares, as the case may be, which the defaulting Underwriter or
Underwriters failed to purchase. If during such 36 hours you, as such
Representatives, shall not have procured such other Underwriters, or any others,
to purchase the Firm Shares or Option Shares, as the case may be, agreed to be
purchased by the defaulting Underwriter or Underwriters, then (a) if the
aggregate number of shares with respect to which such default shall occur does
not exceed 10% of the Firm Shares or Option Shares, as the case may be, covered
hereby, the other Underwriters shall be obligated, severally, in proportion to
the respective numbers of Firm Shares or Option Shares, as the case may be,
which they are obligated to purchase hereunder, to purchase the Firm Shares or
Option Shares, as the case may be, which such defaulting Underwriter or
Underwriters failed to purchase, or (b) if the aggregate number of shares of
Firm Shares or Option Shares, as the case may be, with respect to which such
default shall occur exceeds 10% of the Firm Shares or Option Shares, as the case
may be, covered hereby, the Issuer or you as the Representatives of the
Underwriters will have the right, by written notice given within the next
36-hour period to the parties to this Agreement, to terminate this Agreement
without liability on the part of the non-defaulting Underwriters or of the
Issuer except to the extent provided in Section 8 hereof. In the event of a
default by any Underwriter or Underwriters, as set forth in this Section 9, the
Closing Date or Option Closing Date, if any, may be postponed for such period,
not exceeding seven days, as you, as Representatives, may determine in order
that the required changes in the Registration Statement or in the Prospectus or
in any other documents or arrangements may be effected. The term “Underwriter”
includes any person substituted for a defaulting Underwriter. Any action taken
under this Section 9 shall not relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.

10. Notices.

All communications hereunder shall be in writing and, except as otherwise
provided herein, will be mailed, delivered, or faxed and confirmed as follows:

 

if to the Underwriters, to

   RBC Capital Markets Corporation    1 Liberty Plaza    New York, New York
10006-1404    Attention: Joe Morea                    Syndicate Director    Fax:
(212) 428-6260

 

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if to the Issuer, to    AngioDynamics, Inc.    603 Queensbury Avenue   
Queensbury, New York 12804    Attention: Eamonn Hobbs   

                President and Chief Executive

                Officer

   Fax: (518) 798-1360

11. Termination.

(a) This Agreement may be terminated by you by notice to the Issuer at any time
prior to the Closing Date if any of the following has occurred: (i) since the
respective dates as of which information is given in the Registration Statement
and the Prospectus, any material adverse change or any development involving a
prospective material adverse change, which (A) in the absolute discretion of any
group of Underwriters (which may include RBC Capital Markets Corporation) that
has agreed to purchase in the aggregate at least 50% of the Firm Securities, as
long as RBC Capital Markets Corporation does not affirmatively assert that
termination should not occur, or (B) in the absolute discretion of RBC Capital
Markets Corporation (whether or not the condition of clause (A) is satisfied)
has had or is reasonably likely to have a Material Adverse Effect, (ii) any
outbreak or escalation of hostilities or declaration of war or national
emergency or other national or international calamity or crisis or change in
economic or political conditions if the effect of such outbreak, escalation,
declaration, emergency, calamity, crisis or change on the financial markets of
the United States would, in (A) the absolute discretion of any group of
Underwriters (which may include RBC Capital Markets Corporation) that has agreed
to purchase in the aggregate at least 50% of the Firm Securities, as long as RBC
Capital Markets Corporation does not affirmatively assert that termination
should not occur, or (B) in the absolute discretion of RBC Capital Markets
Corporation (whether or not the condition of clause (A) is satisfied), make it
impracticable or inadvisable to market the Shares or to enforce contracts for
the sale of the Shares, or (iii) suspension of trading in securities generally
on the New York Stock Exchange or the American Stock Exchange or limitation on
prices (other than limitations on hours or numbers of days of trading) for
securities on either such Exchange, (iv) the enactment, publication, decree or
other promulgation of any statute, regulation, rule or order of any court or
other governmental authority which in your opinion materially and adversely
affects or may materially and adversely affect the business or operations of the
Issuer, (v) declaration of a banking moratorium by United States or New York
State authorities, (vi) any downgrading, or placement on any watch list for
possible downgrading, in the rating of the Issuer’s debt securities by any
“nationally recognized statistical rating organization” (as defined for purposes
of Rule 436(g) under the 1934 Act); (vii) the suspension of trading of the
Issuer’s Common Shares by the Nasdaq National Market, the Commission, or any
other governmental authority or, (viii) the taking of any action by any
governmental body or agency in respect of its monetary or fiscal affairs which
in your reasonable opinion has a material adverse effect on the securities
markets in the United States; or

(b) as provided in Sections 6 and 9 of this Agreement.

 

33

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12. Successors.

This Agreement has been and is made solely for the benefit of the Issuer and
Underwriters and their respective successors, executors, administrators, heirs
and assigns, and the officers, directors and controlling persons referred to
herein, and no other person will have any right or obligation hereunder. No
purchaser of any of the Shares from any Underwriter shall be deemed a successor
or assign merely because of such purchase.

13. Information Provided by Underwriters.

The Issuer and the Underwriters acknowledge and agree that the only information
furnished or to be furnished by any Underwriter to the Issuer for inclusion in
Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or
the Prospectus, or any amendment or supplement thereto, or any Issuer Free
Writing Prospectus consists of the information contained in the Prospectus in
the first paragraph under the caption “Underwriting - Commissions and Expenses,
“Stabilization, Short Positions and Penalty Bids” and “Passive Market Making.”

14. Research Independence.

In addition, the Issuer acknowledges that the Underwriters’ research analysts
and research departments are required to be independent from their respective
investment banking divisions and are subject to certain regulations and internal
policies, and that such Underwriters’ research analysts may hold and make
statements or investment recommendations and/or publish research reports with
respect to the Issuer and/or the offering that differ from the views of its
investment bankers. The Issuer hereby waives and releases, to the fullest extent
permitted by law, any claims that the Issuer may have against the Underwriters
with respect to any conflict of interest that may arise from the fact that the
views expressed by their independent research analysts and research departments
may be different from or inconsistent with the views or advice communicated to
the Issuer by such Underwriters’ investment banking divisions. The Issuer
acknowledges that each of the Underwriters is a full service securities firm and
as such from time to time, subject to applicable securities laws, may effect
transactions for its own account or the account of its customers and hold long
or short position in debt or equity securities of the companies which may be the
subject to the transactions contemplated by this Agreement.

15. No Fiduciary Duty.

Notwithstanding any preexisting relationship, advisory or otherwise, between the
parties or any oral representations or assurances previously or subsequently
made by the underwriters, the Issuer acknowledges and agrees that:

(a) nothing herein shall create a fiduciary or agency relationship between the
Issuer and the Underwriters;

(b) the Underwriters are not acting as advisors, expert or otherwise, to the
Issuer in connection with this offering, sale of the Shares or any other
services the Underwriters may be deemed to be providing hereunder, including,
without limitation, with respect to the public offering price of the Shares;

 

34

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(c) the relationship between the Issuer and the Underwriters is entirely and
solely commercial, based on arms-length negotiations;

(d) any duties and obligations that the Underwriters may have to the Issuer
shall be limited to those duties and obligations specifically stated herein; and

(e) notwithstanding anything in this Underwriting Agreement to the contrary, the
Issuer acknowledges that the Underwriters may have financial interests in the
success of the Offering that are not limited to the difference between the price
to the public and the purchase price paid to the Issuer by the Underwriters for
the shares and the Underwriters have no obligation to disclose, or account to
the Issuer for, any of such additional financial interests.

The Issuer hereby waives and releases, to the fullest extent permitted by law,
any claims that the Issuer may have against the Underwriters with respect to any
breach or alleged breach of fiduciary duty.

16. Miscellaneous.

The reimbursement, indemnification and contribution agreements contained in this
Agreement and the representations, warranties and covenants in this Agreement
shall remain in full force and effect regardless of (a) any termination of this
Agreement, (b) any investigation made by or on behalf of any Underwriter or
controlling person thereof, or by or on behalf of the Issuer, or its directors
or officers or any person controlling the Issuer and (c) delivery of and payment
for the Shares under this Agreement.

This Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

This Agreement shall be governed by, and construed in accordance with, the laws
of the State of New York.

This Agreement constitutes the entire agreement of the parties to this Agreement
and supersedes all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter
hereof.

This Agreement may only be amended or modified in writing, signed by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.

 

35

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If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Issuer and the several
Underwriters in accordance with its terms.

 

Very truly yours,

ANGIODYNAMICS, INC.

By

 

/s/    Eamonn P. Hobbs

Name:

  Eamonn P. Hobbs

Title:

  Chief Executive Officer

The foregoing Underwriting Agreement is hereby confirmed

and accepted as of the date first above written.

RBC CAPITAL MARKETS CORPORATION

CANACCORD ADAMS INC.

FIRST ALBANY CAPITAL INC.

KEYBANC CAPITAL MARKETS

As the Representatives of the several

Underwriters listed on Schedule I

By: RBC Capital Markets Corporation

 

By:

 

/s/    Joseph L. Morea

Name:

 

Joseph L. Morea

Title:

 

Managing Director

 

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SCHEDULE I

SCHEDULE OF UNDERWRITERS

 

Underwriter

   Number of Firm Shares
to be Purchased

RBC Capital Markets Corporation

   1,200,000

Canaccord Adams Inc.

   672,000

First Albany Capital Inc.

   408,000

KeyBanc Capital Markets

   120,000     

Total

   2,400,000     

 

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SCHEDULE II(a)

Materials Other than the Pricing Prospectus that Comprise the Disclosure
Package:

Number of Firm Shares: 2,400,000

Number of Option Shares: 360,000

Public Offering Price Per Share: $24.07

 

38

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SCHEDULE II(b)

Issuer Free Writing Prospectuses Not Included in the Disclosure Package

N/A

 

39

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EXHIBIT A

FORM OF LOCK-UP AGREEMENT

May 1, 2006

RBC Capital Markets Corporation

One Liberty Plaza

165 Broadway

New York, NY 10006

 

  Re: AngioDynamics, Inc. (the “Company”)

Ladies and Gentlemen:

The undersigned is an owner of record or beneficially, or a pledgee of, certain
shares of common stock of the Company (“Common Stock”) or securities convertible
into or exchangeable or exercisable for Common Stock. The Company proposes to
carry out a public offering of Common Stock (the “Offering”) for which you will
act as representatives (the “Representatives”) of the several underwriters (the
“Underwriters”). The undersigned recognizes that the Offering will be of benefit
to the undersigned and will benefit the Company by, among other things, raising
additional capital for its operations. The undersigned acknowledges that you
will be relying upon the representations and agreements of the undersigned
contained in this letter in carrying out the Offering and in entering into
underwriting arrangements with the Company with respect to the Offering (the
“Underwriting Agreement”).

In consideration of the foregoing, the undersigned hereby agrees that for a
period of 90 days from the date of the final prospectus relating to the Offering
the undersigned will not, without the prior written consent of RBC Capital
Markets Corporation (which such consent may be withheld in its sole discretion),
directly or indirectly, (i) sell, offer to sell, contract to sell, hypothecate,
pledge, loan, grant any option to purchase or otherwise transfer or dispose of,
or file (or participate in the filing of) a registration statement with the
Securities and Exchange Commission (the “Commission”) in respect of, or
establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Commission
promulgated thereunder with respect to, any Common Stock of the Company or any
securities convertible into or exercisable or exchangeable for Common Stock,
(ii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of Common Stock
or any securities convertible into or exercisable or exchangeable for Common
Stock, whether any such transaction is to be settled by delivery of Common Stock
or such other securities, in cash or otherwise, or (iii) publicly announce an
intention to effect any transaction specified in clause (i) or (ii).

Notwithstanding the foregoing, this letter agreement (this “Agreement”) shall
not apply to (a) the sale of any Common Stock to the Underwriters pursuant to
Underwriting Agreement, (b) a bona fide gift or gifts, provided the recipient or
recipients thereof agree in writing to be bound by the terms of this Agreement,
(c) dispositions to any trust for the direct or indirect benefit of the
undersigned or the immediate family of the undersigned, provided that such trust

 

40

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agrees in writing to be bound by the terms of this Agreement, (d) dispositions
effected to the heirs or assigns of the undersigned, provided that such heir or
assign agrees in writing to be bound by the terms of this Agreement, (e) sale of
any Common Stock in a private transaction not effected from or through a broker
or dealer on a securities exchange, or through an inter-dealer quotation system
or electronic communications network or (f) the sale of any Common Stock
executed pursuant to the terms of paragraph (g) of the private letter ruling
received by E-Z-EM, Inc. on February 6, 2004. For purposes of this paragraph,
“immediate family” shall mean the undersigned and the spouse, lineal descendant,
father, mother, brother or sister of the undersigned.

The undersigned agrees and consents to the entry of stop transfer instructions
with the Company’s transfer agent and registrar against the transfer of shares
of Common Stock or securities convertible into or exchangeable or exercisable
for Common Stock held by the undersigned except in compliance with the foregoing
restrictions.

The undersigned understands that the Company, the Underwriters and the
Representatives will proceed with the Offering in reliance on this Agreement. If
(i) the Company notifies you in writing that it does not intend to proceed with
the Offering, (ii) the registration statement filed with the Securities and
Exchange Commission with respect to the Offering (the “Registration Statement”)
is withdrawn, (iii) for any reason the Underwriting Agreement shall be
terminated prior to the time of purchase (as defined in the Underwriting
Agreement), or (iv) the closing of the offering, as set forth in Section 2(b) of
the Underwriting Agreement, has not occurred on or before July 31, 2006, this
Agreement shall be terminated and the undersigned shall be released from its
obligations hereunder. The undersigned acknowledges that the Company’s
intentions with respect to the Offering represent confidential information of
the Company, and the undersigned agrees to keep this information confidential
prior to the filing of the Registration Statement.

This Agreement is irrevocable and will be binding on the undersigned and the
respective successors, heirs, personal representatives, and assigns of the
undersigned.

Yours very truly,

 

 

--------------------------------------------------------------------------------

Signature

 

 

--------------------------------------------------------------------------------

Printed Name of Holder

 

 

--------------------------------------------------------------------------------

Printed Name of Person Signing

(and indicate capacity of person signing as if

signing custodian, trustee, or on behalf of

an entity)

 

41

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FORM OF LOCK-UP AGREEMENT

May 1, 2006

RBC Capital Markets Corporation

One Liberty Plaza

165 Broadway

New York, NY 10006

 

  Re: AngioDynamics, Inc. (the “Company”)

Ladies and Gentlemen:

The undersigned is an owner of record or beneficially, or a pledgee of, certain
shares of common stock of the Company (“Common Stock”) or securities convertible
into or exchangeable or exercisable for Common Stock. The Company proposes to
carry out a public offering of Common Stock (the “Offering”) for which you will
act as representatives (the “Representatives”) of the several underwriters (the
“Underwriters”). The undersigned recognizes that the Offering will be of benefit
to the undersigned and will benefit the Company by, among other things, raising
additional capital for its operations. The undersigned acknowledges that you
will be relying upon the representations and agreements of the undersigned
contained in this letter in carrying out the Offering and in entering into
underwriting arrangements with the Company with respect to the Offering (the
“Underwriting Agreement”).

In consideration of the foregoing, the undersigned hereby agrees that for a
period of 90 days from the date of the final prospectus relating to the Offering
the undersigned will not, without the prior written consent of RBC Capital
Markets Corporation (which such consent may be withheld in its sole discretion),
directly or indirectly, (i) sell, offer to sell, contract to sell, hypothecate,
pledge, loan, grant any option to purchase or otherwise transfer or dispose of,
or file (or participate in the filing of) a registration statement with the
Securities and Exchange Commission (the “Commission”) in respect of, or
establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Commission
promulgated thereunder with respect to, any Common Stock of the Company or any
securities convertible into or exercisable or exchangeable for Common Stock,
(ii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of Common Stock
or any securities convertible into or exercisable or exchangeable for Common
Stock, whether any such transaction is to be settled by delivery of Common Stock
or such other securities, in cash or otherwise, or (iii) publicly announce an
intention to effect any transaction specified in clause (i) or (ii).

Notwithstanding the foregoing, this letter agreement (this “Agreement”) shall
not apply to (a) the sale of any Common Stock to the Underwriters pursuant to
Underwriting Agreement, (b) a bona fide gift or gifts, provided the recipient or
recipients thereof agree in writing to be bound by the terms of this Agreement,
(c) dispositions to any trust for the direct or indirect benefit of the
undersigned or the immediate family of the undersigned, provided that such trust

 

42

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agrees in writing to be bound by the terms of this Agreement, (d) dispositions
effected to the heirs or assigns of the undersigned, provided that such heir or
assign agrees in writing to be bound by the terms of this Agreement, (e) sale of
any Common Stock in a private transaction not effected from or through a broker
or dealer on a securities exchange, or through an inter-dealer quotation system
or electronic communications network or (f) the sale of any Common Stock
executed pursuant to the terms of paragraph (g) of the private letter ruling
received by E-Z-EM, Inc. on February 6, 2004. For purposes of this paragraph,
“immediate family” shall mean the undersigned and the spouse, lineal descendant,
father, mother, brother or sister of the undersigned.

The undersigned agrees and consents to the entry of stop transfer instructions
with the Company’s transfer agent and registrar against the transfer of shares
of Common Stock or securities convertible into or exchangeable or exercisable
for Common Stock held by the undersigned except in compliance with the foregoing
restrictions.

The undersigned understands that the Company, the Underwriters and the
Representatives will proceed with the Offering in reliance on this Agreement. If
(i) the Company notifies you in writing that it does not intend to proceed with
the Offering, (ii) the registration statement filed with the Securities and
Exchange Commission with respect to the Offering (the “Registration Statement”)
is withdrawn, (iii) for any reason the Underwriting Agreement shall be
terminated prior to the time of purchase (as defined in the Underwriting
Agreement), or (iv) the closing of the offering, as set forth in Section 2(b) of
the Underwriting Agreement, has not occurred on or before July 31, 2006, this
Agreement shall be terminated and the undersigned shall be released from its
obligations hereunder. The undersigned acknowledges that the Company’s
intentions with respect to the Offering represent confidential information of
the Company, and the undersigned agrees to keep this information confidential
prior to the filing of the Registration Statement.

This Agreement is irrevocable and will be binding on the undersigned and the
respective successors, heirs, personal representatives, and assigns of the
undersigned.

Yours very truly,

 

 

--------------------------------------------------------------------------------

Signature

 

 

--------------------------------------------------------------------------------

Printed Name of Holder

 

 

--------------------------------------------------------------------------------

Printed Name of Person Signing

(and indicate capacity of person signing as if

signing custodian, trustee, or on behalf of

an entity)

 

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EXHIBIT B

PATENT SECTIONS

 

If we fail to adequately protect our intellectual property rights, our business
may suffer.

Our success depends in part on obtaining, maintaining and enforcing our patents,
trademarks and other proprietary rights, and our ability to avoid infringing the
proprietary rights of others. We take precautionary steps to protect our
technological advantages and intellectual property. We rely upon patent, trade
secret, copyright, know-how and trademark laws, as well as license agreements
and contractual provisions, to establish our intellectual property rights and
protect our products. However, these measures may not adequately protect our
intellectual property rights.

Our patents may not provide commercially meaningful protection, as competitors
may be able to design around our patents to produce alternative, non-infringing
designs. Additionally, we may not be able to effectively protect our rights in
unpatented technology, trade secrets and confidential information. Although we
require our new employees, consultants and corporate partners to execute
confidentiality agreements, these agreements may not provide effective
protection of our information or, in the event of unauthorized use or
disclosure, may not provide adequate remedies.

If third parties claim that our products infringe their intellectual property
rights, we may be forced to expend significant financial resources and
management time defending against such actions and our results of operations
could suffer.

Third parties may claim that our products infringe their patents and other
intellectual property rights. Identifying third-party patent rights can be
particularly difficult because, in general, patent applications can be
maintained in secrecy for at least 18 months after their earliest priority date.
Some companies in the medical device industry have used intellectual property
infringement litigation to gain a competitive advantage. If a competitor were to
challenge our patents, licenses or other intellectual property rights, or assert
that our products infringe its patent or other intellectual property rights, we
could incur substantial litigation costs, be forced to make expensive changes to
our product design, license rights in order to continue manufacturing and
selling our products, or pay substantial damages. Third-party infringement
claims, regardless of their outcome, would not only consume our financial
resources but also divert our management’s time and effort. Such claims could
also cause our customers or potential customers to purchase competitors’
products or defer or limit their purchase or use of our affected products until
resolution of the claim.

In January 2004, Diomed filed an action against us alleging that our VenaCure
products for the treatment of varicose veins infringe a patent held by Diomed
for a laser system that competes with our VenaCure products. Diomed’s complaint
seeks injunctive relief and compensatory and treble damages. In October 2005,
VNUS Medical Technologies filed an action against us, Diomed and another
defendant alleging, among other things, that the manufacture, use and sale of
our VenaCure products infringe several patents held by VNUS and seeking
injunctive relief and compensatory and treble damages. For fiscal 2005, and the
first nine months of fiscal 2006, sales of our VenaCure products accounted for
approximately 13% and 14%, respectively, of our total sales. If Diomed or VNUS
Medical Technologies is successful in its action against us, our results of
operations could suffer.

 

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Intellectual Property

As of May 1, 2006, we owned 40 U.S. patents and had exclusive licenses to seven
U.S. patents. Additionally, we had 28 pending U.S. patent applications.
Internationally, we had 24 issued patents and 24 pending patent applications,
all of which are foreign counterparts of the U.S. cases.

We believe that our success is dependent, to a large extent, on patent
protection and the proprietary nature of our technology. We intend to continue
to file and prosecute patent applications for our technology in jurisdictions
where we believe that patent protection is effective and advisable. Generally,
for products that we believe are appropriate for patent protection, we will
attempt to obtain patents in the United States and other appropriate
jurisdictions.

Notwithstanding the foregoing, the patent positions of medical device companies,
including our company, are uncertain and involve complex and evolving legal and
factual questions. The coverage sought in a patent application can be denied or
significantly reduced either before or after the patent is issued. Consequently,
there can be no assurance that any of our pending patent applications will
result in an issued patent. There is also no assurance that any existing or
future patent will provide significant protection or commercial advantage, or
whether any existing or future patent will be circumvented by a more basic
patent, thus requiring us to obtain a license to produce and sell the product.
Generally, patent applications can be maintained in secrecy for at least 18
months after their earliest priority date. In addition, publication of
discoveries in the scientific or patent literature often lags behind the actual
discoveries. Therefore, we cannot be certain that we were the first to invent
the subject matter covered by each of our pending U.S. patent applications or
that we were the first to file non-U.S. patent applications for such subject
matter.

If a third party files a patent application relating to an invention claimed in
our patent application, we may be required to participate in an interference
proceeding declared by the U.S. Patent and Trademark Office to determine who
owns the patent. Such proceeding could involve substantial uncertainties and
cost, even if the eventual outcome is favorable to us. There can be no assurance
that our patents, if issued, would be upheld as valid in court.

Third parties may claim that our products infringe their patents and other
intellectual property rights. Some companies in the medical device industry have
used intellectual property infringement litigation to gain a competitive
advantage. If a competitor were to challenge our patents, licenses or other
intellectual property rights, or assert that our products infringe its patent or
other intellectual property rights, we could incur substantial litigation costs,
be forced to make expensive changes to our product designs, license rights in
order to continue manufacturing and selling our products, or pay substantial
damages. Third-party infringement claims, regardless of their outcome, would not
only consume our financial resources but also divert our management’s time and
effort. Such claims could also cause our customers or potential customers to
defer or limit their purchase or use of the affected products until resolution
of the claim.

In January 2004, Diomed filed an action against us alleging that our VenaCure
products for the treatment of varicose veins infringe on a patent held by
Diomed. Diomed’s complaint seeks injunctive relief and compensatory and treble
damages. In October 2005, VNUS filed a patent infringement action against
several companies, one of which was AngioDynamics, seeking similar relief. In
January 2006, we filed a declaratory judgement action in the U.S. District Court
for the District of Delaware seeking a declaration by the court that the claims
of two recently issued U.S. patents issued to Diomed are invalid. If either
Diomed or VNUS is successful in its action, our results of operations could be
negatively affected. See “ — Legal Proceedings” for additional details.

We rely on trade secret protection for certain unpatented aspects of our
proprietary technology. There can be no assurance that others will not
independently develop or otherwise acquire substantially equivalent

 

45

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proprietary information or techniques, that others will not gain access to our
proprietary technology or disclose such technology, or that we can meaningfully
protect our trade secrets. We have a policy of requiring key employees and
consultants to execute confidentiality agreements upon the commencement of an
employment or consulting relationship with us. Our confidentiality agreements
also require our employees to assign to us all rights to any inventions made or
conceived during their employment with us. We also generally require our
consultants to assign to us any inventions made during the course of their
engagement by us. There can be no assurance, however, that these agreements will
provide meaningful protection or adequate remedies for us in the event of
unauthorized use, transfer or disclosure of confidential information or
inventions.

The laws of foreign countries generally do not protect our proprietary rights to
the same extent as do the laws of the United States. In addition, we may
experience more difficulty enforcing our proprietary rights in certain foreign
jurisdictions.

 

46