Exhibit
10.1


 


3,850,000 Shares


 


Power Medical Interventions, Inc.


 


Common Stock


 


UNDERWRITING AGREEMENT


 


October 25, 2007


 


	
  JEFFERIES & COMPANY,
  INC.

  
	
  LAZARD CAPITAL MARKETS LLC

  
	
  WILLIAM BLAIR &
  COMPANY L.L.C.

  



 


 


As Representatives of the
several Underwriters


 


 


	
  c/o JEFFERIES &
  COMPANY, INC.

  	
   

  	
   

  
	
    520 Madison
  Avenue

  	
   

  	
   

  
	
    New York, New
  York 10022

  	
   

  	
   

  



 


	
  c/o LAZARD CAPITAL MARKETS
  LLC

  	
   

  	
   

  
	
    30 Rockefeller
  Plaza

  	
   

  	
   

  
	
    New York, New
  York 10020

  	
   

  	
   

  



 


	
  c/o WILLIAM BLAIR &
  COMPANY L.L.C.

  	
   

  	
   

  
	
    222 West Adams
  Street

  	
   

  	
   

  
	
    Chicago,
  Illinois 60606

  	
   

  	
   

  



 


Ladies and
Gentlemen:


 


Introductory. Power
Medical Interventions, Inc., a Delaware corporation (the “Company”), proposes to issue and sell to
the several underwriters named in Schedule A (the “Underwriters”) an aggregate of 3,850,000 shares
of its common stock, par value $.001 per share (the “Shares”). The 3,850,000 Shares to be sold by the Company are called
the “Firm Shares.”  In addition, the Company has granted to the
Underwriters an option to purchase up to an additional 577,500 Shares as
provided in Section 2. The additional 577,500 Shares to be sold by the
Company pursuant to such option are collectively called the “Optional Shares.”  The Firm Shares and, if and to the
extent such option is exercised, the Optional Shares are collectively called
the “Offered Shares.”  Jefferies & Company, Inc. (“Jefferies”) and Lazard Capital Markets LLC
(“LCM”) have agreed to act as
representatives of the several Underwriters (in such capacity, the “Representatives”) in connection with the
offering and sale of the Offered Shares.


 

















 


The Company has prepared and filed with the
Securities and Exchange Commission (the “Commission”)
a registration statement on Form S-1 (File No. 333-142926), which
contains a form of prospectus to be used in connection with the public offering
and sale of the Offered Shares. Such registration statement, as amended,
including the financial statements, exhibits and schedules thereto, in the form
in which it was declared effective by the Commission under the Securities Act
of 1933, as amended, and the rules and regulations promulgated thereunder
(collectively, the “Securities Act”),
including any information deemed to be a part thereof at the time of
effectiveness pursuant to Rule 430A under the Securities Act, is called the
“Registration Statement.”  Any registration statement filed by the
Company pursuant to Rule 462(b) under the Securities Act is called the “Rule 462(b) Registration Statement,” and from and after the
date and time of filing of the Rule 462(b) Registration Statement the term “Registration
Statement” shall include the Rule 462(b) Registration Statement. The
preliminary prospectus dated October 5, 2007 filed with the Commission is
called the “Preliminary Prospectus,” and
the Preliminary Prospectus, together with the final prospectus, in the form
first used by the Underwriters to confirm sales of the Offered Shares or in the
form first made available to the Underwriters by the Company to meet requests
of purchasers pursuant to Rule 173 under the Securities Act, are called the “Prospectus.”  As used herein, “Applicable Time”
is 10:00 pm (New York time) on October 25, 2007. As used herein, “free writing prospectus”
has the meaning set forth in Rule 405 under the Securities Act, and “Time of Sale Prospectus” means the preliminary prospectus,
as amended or supplemented immediately prior to the Applicable Time, together
with the free writing prospectuses, if any, identified in Schedule B
hereto, and each “road show” (as defined in Rule 433 under the Securities Act),
if any, related to the offering of the Shares contemplated hereby that is a “written
communication” (as defined in Rule 405 under the Securities Act) (each such
road show, a “Road Show”). As used herein, the
terms “Registration Statement,” “Rule
462(b) Registration Statement”, “Preliminary Prospectus”,  “Time of Sale Prospectus” and “Prospectus”
shall include the documents, if any, incorporated by reference therein. All
references in this Agreement to (i) the Registration Statement, the 462(b)
Registration Statement, any Preliminary Prospectus, or the Prospectus, or any
amendments or supplements to any of the foregoing, shall include any copy
thereof filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System (“EDGAR”)
and (ii) the Prospectus shall be deemed to include the “electronic Prospectus” provided for use in
connection with the offering of the Offered Shares as contemplated by
Section 3(o) of this Agreement.


 


In the event that the Company has only one
subsidiary, then all references herein to “subsidiaries” of the Company shall
be deemed to refer to such single subsidiary, mutatis  mutandis.


 


The Company hereby confirms its agreements
with the Underwriters as follows:


 


Section 1.              Representations
and Warranties.


 


The Company hereby represents, warrants and
covenants to each Underwriter, as of the date of this Agreement, as of the
First Closing Date (as hereinafter defined) and as of each Option Closing Date
(as hereafter defined), if any, and covenants with each Underwriter, as
follows:


 


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(a)           Compliance with Registration
Requirements. The Registration Statement and any Rule 462(b)
Registration Statement have been declared effective by the Commission under the
Securities Act. The Company has complied to the Commission’s satisfaction with
all requests of the Commission for additional or supplemental information. No
stop order suspending the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement is in effect and no proceedings for
such purpose have been instituted or are pending or, to the best knowledge of
the Company, are contemplated or threatened by the Commission.


 


Each
preliminary prospectus when filed complied, and the Prospectus when filed will
comply in all material respects with the Securities Act and, if filed by
electronic transmission pursuant to EDGAR (except as may be permitted by
Regulation S-T under the Securities Act), was, or when filed will be, identical
in substance to the copy thereof delivered to the Underwriters for use in
connection with the offer and sale of the Offered Shares. Each of the
Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto, at the time it became effective and at all
subsequent times, complied and will comply in all material respects with the
Securities Act and did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. As of the Applicable
Time, the Time of Sale Prospectus did not, and at the time of each sale of the
Offered Shares and at the First Closing Date (as defined in Section 2), the
Time of Sale Prospectus, as then amended or supplemented by the Company, if
applicable, will not, contain any 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. The Prospectus
as of its date did not, and as subsequently amended or supplemented, will not
as of the date of such amendment or supplement, contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The representations and warranties set forth in the three
immediately preceding sentences do not apply to statements in or omissions from
the Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment thereto, or the Prospectus or the Time of Sale
Prospectus, or any amendments or supplements thereto, made in reliance upon and
in conformity with information relating to any Underwriter furnished to the
Company in writing by the Representatives expressly for use therein, it being
understood and agreed that the only such information furnished by the
Representatives to the Company consists of the Underwriters’ Information (as
defined in Section 9(b) below). There are no contracts or other documents
required to be described in the Time of Sale Prospectus or the Prospectus or to
be filed as exhibits to the Registration Statement which have not been
described or filed as required.


 


The Company is
not an “ineligible issuer” in connection with the offering of the Offered
Shares pursuant to Rules 164, 405 and 433 under the Securities Act. Any free
writing prospectus that the Company is required to file pursuant to Rule 433(d)
under the Securities Act has been, or will be, filed with the Commission in
accordance with the requirements of the Securities Act. Each free writing
prospectus that the Company has filed, or is required to file, pursuant to Rule
433(d) under the Securities Act or that was 


 


3

















 


prepared
by or behalf of or used or referred to by the Company (each an “Issuer Free Writing Prospectus”) complies
or will comply in all material respects with the requirements
of Rule 433 under the Securities Act including timely filing with the
Commission or retention where required and legending, and each such Issuer Free
Writing Prospectus, as of its issue date and at all subsequent times through
the completion of the public offer and sale of the Offered Shares did not, does
not and will not include any information that conflicted, conflicts with or
will conflict with the information contained in the Registration Statement, the
Prospectus or any preliminary prospectus, including any document incorporated
by reference therein. The Company makes no representation or warranty with
respect to any statement in or omission from any Issuer Free Writing Prospectus
that was made in reliance upon and in conformity with written information
furnished by the Underwriters through the Representatives expressly for use
therein. Except for the free writing prospectuses, if any, identified in
Schedule B hereto, and electronic road shows, if any, furnished to you before
first use, the Company has not prepared, used or referred to, and will not,
without your prior consent, prepare, use or refer to, any free writing
prospectus.


 


(b)           Offering Materials Furnished to
Underwriters. The Company has delivered to the Representatives two
complete copies of the Registration Statement, each amendment thereto and any
Rule 462(b) Registration Statement and of each consent and certificate of
experts filed as a part thereof, and conformed copies of the Registration
Statement, each amendment thereto and any Rule 462(b) Registration Statement
(without exhibits) and preliminary prospectuses, the Time of Sale Prospectus,
the Prospectus, as amended or supplemented, and any Issuer Free Writing Prospectus,
in such quantities and at such places as the Representatives have reasonably
requested for each of the Underwriters.


 


(c)           Distribution of Offering Material
By the Company. The Company has not distributed and will not
distribute, prior to the later of (i) the expiration or termination of the
option granted to the several Underwriters in Section 2, (ii) the completion of
the Underwriters’ distribution of the Offered Shares and (iii) the
expiration of 25 days after the date of the Prospectus, any offering material
in connection with the offering and sale of the Offered Shares other than a
preliminary prospectus, the Time of Sale Prospectus, the Prospectus, any Issuer
Free Writing Prospectus reviewed and consented to by the Representatives, or
the Registration Statement. Each Issuer Free Writing Prospectus, as of its
issue date and at all subsequent times through the completion of the public
offer and sale of the Offered Shares or until any earlier date that the Company
notified or notifies the Representatives, did not, does not and will not
include any information that conflicted, conflicts or will conflict with the
information contained in the Registration Statement, Preliminary Prospectus,
Time of Sale Prospectus or the Prospectus, including any document incorporated
by reference therein that has not been superseded or modified, or included or
would include an untrue statement of a material fact or omitted or would omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. The foregoing sentence does not apply to statements
in or omissions from any free writing prospectus made in reliance upon, and in
conformity with, written information furnished to the Company through the
Representatives by or on 


 


4

















 


behalf
of any Underwriter specifically for inclusion therein, which information the
parties hereto agree is limited to the Underwriters’ Information (as defined
below).


 


(d)           The Underwriting Agreement. This Agreement has been duly
authorized, executed and delivered by, the Company and, assuming the due
authorization, execution and delivery thereof by the Representatives on behalf
of the Underwriters, is a valid and binding agreement of, the Company,
enforceable in accordance with its terms, except as rights to indemnification
hereunder may be limited by applicable law and except as the enforcement hereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors or
by general equitable principles.


 


(e)           Authorization of the Offered
Shares. The Offered Shares have been duly authorized for issuance
and sale pursuant to this Agreement and, when issued and delivered by the Company
pursuant to this Agreement against payment of the consideration set forth
herein, will be validly issued, fully paid and nonassessable, and the issuance
and sale of the Offered Shares is not subject to any preemptive rights, rights
of first refusal or other similar rights to subscribe for or purchase the
Offered Shares.


 


(f)            No Applicable Registration or
Other Similar Rights. There are no persons with registration or
other similar rights to have any equity or debt securities registered for sale
under the Registration Statement or included in the offering contemplated by
this Agreement, except for such rights as have been duly waived.


 


(g)           No Material Adverse Change. Except as otherwise disclosed in
the Time of Sale Prospectus, subsequent to the respective dates as of which
information is given in the Time of Sale Prospectus:  (i)  there has been no material adverse
change, or any development that could reasonably be expected to result in a
material adverse change, in the condition, financial or otherwise, or in the
earnings, business, operations or prospects, whether or not arising from
transactions in the ordinary course of business, of the Company and its
subsidiaries, considered as one entity (any such change is called a “Material Adverse Change”); (ii) neither
the Company nor any of its subsidiaries have incurred any material liability or
obligation, indirect, direct or contingent, not in the ordinary course of
business nor entered into any transaction or agreement not in the ordinary
course of business that is material to the Company and its subsidiaries
considered as one entity; and (iii) there has been no dividend or
distribution of any kind declared, paid or made by the Company or, except for
dividends paid to the Company or other subsidiaries, by any of its subsidiaries
on any class of capital stock or any repurchase or redemption by the Company or
any of its subsidiaries of any class of capital stock.


 


(h)           Independent Accountants.
Ernst & Young LLP, who have expressed their opinion with respect to the
financial statements (which term as used in this Agreement includes the related
notes thereto) and supporting schedules, if any, filed with the Commission as a
part of the Registration Statement and included in the Preliminary Prospectus,
the Prospectus and Time of Sale Prospectus (each, an “Applicable
Prospectus” and collectively, the “Applicable
Prospectuses”), are, to the best 


 


5

















 


knowledge
of the Company, (i) independent public or certified public accountants as
required by the Securities Act and the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), (ii) in compliance
with the applicable requirements relating to the qualification of accountants
under Rule 2-01 of Regulation S-X and (iii) a registered public accounting firm
as defined by the Public Company Accounting Oversight Board (the “PCAOB”) whose registration has not been
suspended or revoked and who has not requested such registration to be
withdrawn.


 


(i)            Preparation of the Financial
Statements. The financial statements filed with the Commission as a
part of the Registration Statement and included in the Preliminary Prospectus,
the Time of Sale Prospectus and the Prospectus present fairly in all material
respects the consolidated financial position of the Company and its
subsidiaries as of and at the dates indicated and the results of their
operations and cash flows for the periods specified. The supporting schedules
included in the Registration Statement, if any, present fairly the information
required to be stated therein. Such financial statements and supporting
schedules, if any, have been prepared in conformity with generally accepted
accounting principles in the United States applied on a consistent basis
throughout the periods involved, except as may be expressly stated in the
related notes thereto. No other financial statements or supporting schedules
are required to be included in the Registration Statement or any Applicable
Prospectus. The financial data set forth in each Applicable Prospectus under
the captions “Prospectus Summary—Summary Selected Financial Data,” “Selected
Financial Data” and “Capitalization” fairly present the information set forth
therein on a basis consistent with that of the audited financial statements contained
in the Registration Statement and each Applicable Prospectus. To the best
knowledge of the Company, no person who has been suspended or barred from being
associated with a registered public accounting firm, or who has failed to
comply with any sanction pursuant to Rule 5300 promulgated by the PCAOB, has
participated in or otherwise aided the preparation of, or audited, the
financial statements, supporting schedules, if any, or other financial data
filed with the Commission as a part of the Registration Statement and included
in any Applicable Prospectus.


 


(j)            Company’s Accounting System.
The Company and each of its subsidiaries make and keep accurate books and
records and maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorization; (ii) 
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management’s
general or specific authorization; and (iv) the recorded accountability
for assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Except as
described in each Applicable Prospectus, there has not been and is no
material weakness in the Company’s internal control over financial reporting
(whether or not remediated) and since December 31, 2006, there has been no
change in the Company’s internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting.


 


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(k)           Incorporation and Good Standing
of the Company and its Subsidiaries. Each of the Company and its
subsidiaries has been duly incorporated or organized, as the case may be, and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation or organization and has the corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in each Applicable Prospectus and, in the case of the
Company, to enter into and perform its obligations under this Agreement. Each
of the Company and each subsidiary is duly qualified as a foreign corporation
in each other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure to be so qualified would not reasonably be expected to
result in a Material Adverse Change. All of the issued and outstanding capital
stock or other equity or ownership interests of each subsidiary have been duly
authorized and validly issued, are fully paid and nonassessable and are owned
by the Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance or adverse claim. The
Company does not own or control, directly or indirectly, any corporation,
association or other entity other than the subsidiaries listed in
Exhibit 21 to the Registration Statement.


 


(l)            Capitalization and Other Capital
Stock Matters. The authorized, issued and outstanding capital stock
of the Company is as set forth in each Applicable Prospectus under the caption “Capitalization”
(other than for subsequent issuances, if any, pursuant to employee benefit
plans described in the Time of Sale Prospectus or upon the exercise of
outstanding options or warrants described in each Applicable Prospectus). The
Shares (including the Offered Shares) conform in all material respects to the
description thereof contained in the Time of Sale Prospectus. All of the issued
and outstanding Shares have been duly authorized and validly issued, are fully
paid and nonassessable and have been issued in compliance with federal and
state securities laws. None of the outstanding Shares was issued in violation
of any preemptive rights, rights of first refusal or other similar rights to
subscribe for or purchase securities of the Company. There are no authorized or
outstanding options, warrants, preemptive rights, rights of first refusal or
other rights to purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of the Company or any of its
subsidiaries other than those accurately described in each Applicable
Prospectus. The description of the Company’s stock option, stock bonus and
other stock plans or arrangements, and the options or other rights granted
thereunder, set forth in each Applicable Prospectus accurately and fairly
presents the information required to be shown with respect to such plans,
arrangements, options and rights.


 


(m)          Stock Exchange Listing.
The Offered Shares have been approved for listing on the Nasdaq Global Market,
subject only to official notice of issuance.


 


(n)           Non-Contravention of Existing
Instruments; No Further Authorizations or Approvals Required. Neither
the Company nor any of its subsidiaries is in violation of its charter or by-laws
or other organizational document (the “Charter
Documents”). Neither the Company nor any subsidiary is in violation
or default (or, with the giving of notice or lapse of time, would be in violation
or default) (“Default”) under any
indenture, mortgage, loan or credit agreement, note, contract, franchise, lease
or other instrument to 


 


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which
the Company or any of its subsidiaries is a party or by which it or any of them
may be bound (including, without limitation, any credit agreement, indenture,
pledge agreement, security agreement or other instrument or agreement
evidencing, guaranteeing, securing or relating to indebtedness of the Company
or any of its subsidiaries ), or to which any of the property or assets of
the Company or any of its subsidiaries is subject (each, an “Existing Instrument”), except for such
Defaults as would not, individually or in the aggregate, reasonably be expected
to result in a Material Adverse Change. The Company’s execution, delivery and
performance of this Agreement, consummation of the transactions contemplated
hereby and by each Applicable Prospectus and the issuance and sale of the
Offered Securities (i) have been duly authorized by all necessary
corporate action and will not result in any violation of the provisions of the Charter
Documents of the Company or any subsidiary, as applicable, (ii) will not
conflict with or constitute a breach of, or Default or a Debt Repayment Triggering
Event (as defined below) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any
of its subsidiaries pursuant to, or require the consent of any other party to,
any Existing Instrument and (iii) will not result in any violation of any
law, administrative regulation or administrative or court decree applicable to
the Company or any subsidiary. No consent, approval, authorization or other
order of, or registration or filing with, any court or other governmental or
regulatory authority or agency, is required for the Company’s execution,
delivery and performance of this Agreement and consummation of the transactions
contemplated hereby and by each Applicable Prospectus, except such as have been
obtained or made by the Company and are in full force and effect under the
Securities Act, applicable state securities or blue sky laws and from the NASD.
As used herein, a “Debt Repayment Triggering
Event” means any event or condition which gives, or with the giving
of notice or lapse of time would give, the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder’s behalf)
the right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Company or any of its subsidiaries.


 


(o)           Regulatory Compliance and No Material Actions or Proceedings.
Except as set forth in the Time of Sale Prospectus, the Company has complied in
all material respects with, is not in material violation of, and has not
received any written notices of violation with respect to, any foreign,
federal, state or local statute, law or regulation, including without
limitation all statutes, rules, or regulations applicable to the ownership,
testing, development, manufacture, packaging, processing, use, distribution,
marketing, labeling, promotion, sale, offer for sale, storage, import, export
or disposal of any product manufactured or distributed by the Company (“Applicable Laws”), or any license,
certificate, approval, clearance, authorization, permit, supplement or
amendment required by any Applicable Laws (“Authorizations”).
Except as set forth in Time of Sale Prospectus, the Company possesses all
required Authorizations and such Authorizations are in full force and effect. Except
as set forth in Time of Sale Prospectus, the Company is, and its products are,
in compliance in all material respects with all Authorizations and Applicable
Laws, including, but not limited to, all laws, statutes, rules, regulations, or
orders administered, issued or enforced by the Federal Food and Drug
Administration (the “FDA”) or any
other federal or foreign governmental authority having authority over the
Company or any of its products (“Governmental
Authority”). Except as set forth in 


 


8

















 


the
Time of Sale Prospectus, the Company has not received from the FDA or any other
Governmental Authority any notice of adverse findings, regulatory letters, notices
of violations, Warning Letters, criminal proceeding notices under Section 305
of the Federal Food, Drug, and Cosmetic Act (, or other similar communication
from the FDA or other Governmental Authority alleging or asserting
noncompliance with Applicable Laws or any Authorizations, and there have been
no seizures conducted or threatened by the FDA or other Governmental Authority,
and no recalls, market withdrawals, field notifications, notifications of
misbranding or adulteration, safety alerts or similar actions relating to the
safety or efficacy of the Company’s products conducted, requested or threatened
by the FDA or other Governmental Authority. Except as set forth in the Time of
Sale Prospectus, the Company has not, either voluntarily or involuntarily,
initiated, conducted, or issued or caused to be initiated, conducted or issued,
any recall, market withdrawal, safety alert, “dear doctor” letter, or other
similar notice or action relating to the alleged lack of safety or efficacy of
any of the Company’s products or any alleged product defect or violation, and
the Company has no knowledge that the FDA or other Governmental Authority has
initiated, conducted or intends to initiate any such notice or action. Except
as set forth in the Time of Sale Prospectus, the Company has not received
notice of any claim, action, suit, proceeding, hearing, enforcement,
investigation, arbitration or other similar action from the FDA or other
Governmental Authority alleging that any product operation or activity is in violation
of any Applicable Laws or Authorizations and has no knowledge that the FDA or
any other such Governmental Authority intends to assert or commence any such
claim, litigation, arbitration, action, suit, investigation or proceeding. Except
as set forth in the Time of Sale Prospectus, each regulatory submission for the
Company’s products has been filed, cleared and maintained in compliance with
all Applicable Laws and Authorizations, including without limitation applicable
federal statutes, rules, regulations or orders administered or promulgated by
the FDA or other Governmental Authority, and all laboratory and clinical
studies, and tests currently being conducted and that support clearance of its
products are or have been conducted in material compliance with all Applicable
Laws and Authorizations. Except as set forth in Time of Sale Prospectus, no
filing or submission to the FDA or any other Governmental Authority, contains
any material omission or false information, and the Company has not received any
notices or correspondence from any Governmental Authority (including, but not
limited to, the FDA) requiring suspension of any studies, tests, or clinical
trials conducted or currently being conducted by or on behalf of the Company. Except
as set forth in the Time of Sale Prospectus, the Company is not aware of any
facts which are reasonably likely to cause (i) the nonapproval or
non-clearance, withdrawal, or recall of any products sold or intended to be
sold by the Company, (ii) a change in the marketing classification or labeling
of any such products, (iii) a termination or suspension of marketing clearance
of any such products, or clinical trials being conducted by or on behalf of the
Company or (iv) a suspension or revocation of any of the Company’s Authorizations.
The Company has not received notice (whether complete or pending) of any
proceeding seeking recall, suspension or seizure of any products sold or
proposed to be sold by the Company.


 


(p)           Labor Matters. (i) Neither the Company nor any of its subsidiaries
are party to or bound by any collective bargaining agreement with any labor
organization; (ii) there is no union representation question existing with
respect to the employees of the


 


9

















 


Company or any of its subsidiaries, and, to the
knowledge of the Company after due inquiry, no union organizing activities are
taking place that, could, individually or in the aggregate, reasonably be
expected to have or result in a Material Adverse Change; (iii) to the
Company’s knowledge, no union organizing or decertification efforts are
underway or threatened against the Company or any of its subsidiaries;
(iv) no labor strike, work stoppage, slowdown, or other material labor
dispute is pending against the Company, or, to the knowledge of the Company,
threatened against the Company or any of its subsidiaries; (v) there is no
worker’s compensation liability, experience or matter that would be reasonably
expected to have or result in a Material Adverse Change; (vi) to the
knowledge of the Company, after due inquiry, there is no threatened or pending
liability against the Company or any of its subsidiaries pursuant to the Worker
Adjustment Retraining and Notification Act of 1988, as amended (“WARN”), or any similar state or local law; (vii) there
is no employment-related charge, complaint, grievance, investigation, unfair
labor practice claim, or inquiry of any kind, pending against the Company or
any of its subsidiaries that would reasonably be expected to, individually or
in the aggregate, have or result in a Material Adverse Effect; (viii) to
the knowledge of the Company, after due inquiry, no employee or agent of the
Company or any of its subsidiaries has committed any act or omission giving
rise to liability for any violation identified in subsection (vi) and
(vii) above, other than such acts or omissions that would not,
individually or in the aggregate, reasonably be expected to have or result in a
Material Adverse Change; and (ix) no term or condition of employment
exists through arbitration awards, settlement agreements, or side agreement
that is contrary to the express terms of any applicable collective bargaining
agreement.


 


(q)           Intellectual Property Rights. Except as disclosed in the
Time of Sale Prospectus, (i) the Company owns, possesses rights to use, or can
acquire on reasonable terms rights to use all Intellectual Property (as defined
below) used in or otherwise reasonably necessary for the conduct of the
business of the Company, as now conducted or proposed to be conducted, as
described in the Registration Statement, the Time of Sale Prospectus or the
Prospectus (collectively, the “Company
Business”), (ii) to the knowledge of the Company, the Company
Business does not infringe, misappropriate or otherwise violate the
Intellectual Property rights of any third party, (iii) there is no pending or,
to the knowledge of the Company, threatened action, suit, proceeding or claim
by others alleging any such infringement, misappropriation or violation or
otherwise challenging the rights of the Company to use any Intellectual
Property owned by the Company or used in connection with the Company Business,
(iv) the Company has not received any written notice of such claim that has not
been resolved, (v) the Intellectual Property owned by the Company and, to the
knowledge of the Company, the Intellectual Property licensed to the Company
have not been adjudged invalid or unenforceable, in whole or in part, and there
is no pending or threatened action, suit, proceeding or claim by others
challenging the validity or scope of any such Intellectual Property, and the
Company is unaware of any facts which would be reasonably likely to form a
basis for any such claim, (vi) to the Company’s knowledge, no current or former
employee of the Company is in or has ever been in violation in any material
respect of any term of any employment contract, patent disclosure agreement,
invention assignment agreement, non-competition agreement, non-solicitation
agreement, nondisclosure agreement or any restrictive covenant to or with a
former employer where the basis of 


 


10

















 


such
violation relates to such employee’s employment with the Company, or actions
undertaken by the employee while employed with the Company. The term “Intellectual
Property” as used herein means all patents, patent applications, trade and
service marks, trade and service mark registrations, trade names, copyrights,
licenses, inventions, trade secrets, know-how and other intellectual property.


 


(r)            The
Company is in compliance in all material respects with all applicable standards
of the International Standards Organization, and all related applicable laws,
statutes, ordinances, rules or regulations, except such noncompliance as would
not, individually or in the aggregate, be expected to result in a Material
Adverse Change.


 


(s)           To
the Company’s knowledge, there are no rulemaking or similar proceedings before
the FDA which are directed to the Company or any of the products that the Company
has developed, is developing or proposes to develop or uses or proposes to use
which, if resolved in a manner unfavorable to the Company, would result in a
Material Adverse Change.


 


(t)            Title to Properties. The Company and each of its
subsidiaries has good and marketable title to all of the real and personal
property and other assets reflected as owned in the financial statements
referred to in Section 1(i) above (or elsewhere in any Applicable Prospectus),
in each case free and clear of any security interests, mortgages, liens,
encumbrances, equities, adverse claims and other defects, except such as do not
materially and adversely affect the value of such property and do not
materially interfere with the use made or proposed to be made of such property
by the Company or such subsidiary. The real property, improvements, equipment
and personal property held under lease by the Company or any subsidiary are
held under valid and enforceable leases, with such exceptions as are not
material and do not materially interfere with the use made or proposed to be
made of such real property, improvements, equipment or personal property by the
Company or such subsidiary.


 


(u)           Tax Law Compliance. The Company and its subsidiaries have
filed all necessary federal, state and foreign income and franchise tax returns
or have properly requested extensions thereof and have paid all taxes required
to be paid by any of them and, if due and payable, any related or similar
assessment, fine or penalty levied against any of them except as may be being
contested in good faith and by appropriate proceedings. The Company has made
adequate charges, accruals and reserves in the applicable financial statements
referred to in Section 1(i) above in respect of all federal, state and
foreign income and franchise taxes for all periods as to which the tax
liability of the Company or any of its subsidiaries has not been finally
determined.


 


(v)           Company Not an “Investment Company”. The Company has been
advised of the rules and requirements under the Investment Company Act
of 1940, as amended (the “Investment
Company Act”). The Company is not, and will not be, either after
receipt of payment for the Offered Shares or after the application of the
proceeds therefrom as described under “Use of Proceeds” in each Applicable
Prospectus, an “investment company”
within the meaning of Investment Company Act and will 


 


11

















 


conduct
its business in a manner so that it will not become subject to the Investment
Company Act.


 


(w)          Insurance. Each of the Company and its subsidiaries are
insured by recognized, financially sound and reputable institutions with
policies in such amounts and with such deductibles and covering such risks as
are reasonable and customary for their businesses including, but not limited
to, policies covering real and personal property owned or leased by the Company
and its subsidiaries against theft, damage, destruction, acts of vandalism and
earthquakes and policies covering the Company and its subsidiaries for product
liability claims. The Company has no reason to believe that it or any
subsidiary will not be able (i) to renew its existing insurance coverage
as and when such policies expire or (ii) to obtain comparable coverage
from similar institutions as may be necessary or appropriate to conduct its
business as now conducted and at a cost that would not result in a Material
Adverse Change. Neither of the Company nor any subsidiary has been denied any
insurance coverage which it has sought or for which it has applied.


 


(x)            No Price Stabilization or Manipulation; Compliance with Regulation M.
The Company has not taken, directly or indirectly, any action designed to or
that might be reasonably expected to cause or result in stabilization or
manipulation of the price of the Shares or any other “reference security” (as defined in Rule 100
of Regulation M under the Exchange Act (“Regulation M”)) whether to
facilitate the sale or resale of the Offered Shares or otherwise, and has taken
no action which would directly or indirectly violate Regulation M. The Company
acknowledges that the Underwriters may engage in passive market making
transactions in the Offered Shares on the Nasdaq Global Market in accordance
with Regulation M.


 


(y)           Related Party Transactions. There are no business relationships
or related-party transactions involving the Company or any of its subsidiaries
or any other person required to be described in each Applicable Prospectus
which have not been described as required.


 


(z)            NASD Matters. All of the information provided to the
Underwriters or to counsel for the Underwriters by the Company, its officers
and directors and to the best knowledge of the Company by the holders of any
securities (debt or equity) or options to acquire any securities of the Company
in connection with letters, filings or other supplemental information provided
to NASD Regulation Inc. pursuant to NASD Conduct Rule 2710 or 2720 is
true, complete and correct.


 


(aa)         Parties to Lock-Up Agreements. Each of the
Company’s directors and executive officers and each of the other persons and
entities listed in Exhibit B has executed and delivered to
Jefferies and LCM a lock-up agreement in substantially the form of Exhibit C
hereto. Exhibit B hereto contains a true, complete and correct list
of all directors and officers of the Company. If any additional persons shall
become directors or executive officers of the Company prior to the end of the
Company Lock-up Period (as defined below), the Company shall cause each such
person, prior to or contemporaneously with their appointment or election as a
director or executive officer of 


 


12

















 


the
Company, to execute and deliver to Jefferies and LCM an agreement in the form
attached hereto as Exhibit C.


 


(bb)         Statistical and Market-Related Data. The
statistical, demographic and market-related data included in the Registration
Statement and each Applicable Prospectus are based on or derived from sources
that the Company believes to be reliable and accurate or represent the Company’s
good faith estimates that are made on the basis of data derived from sources
that the Company believes to be reliable.


 


(cc)         No Unlawful Contributions or Other Payments. Neither the
Company nor any of its subsidiaries nor, to the best of the Company’s
knowledge, any employee or agent of the Company or any subsidiary, has made any
contribution or other payment to any official of, or candidate for, any
federal, state or foreign office in violation of any law or of the character
required to be disclosed in the Registration Statement and each Applicable
Prospectus.


 


(dd)         Disclosure
Controls and Procedures; Deficiencies in or Changes to Internal Control Over
Financial Reporting. Except as set forth in the Time
of Sale Prospectus, the Company and its subsidiaries have established and
maintain disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)), which (i) are designed to ensure that material
information relating to the Company, including its consolidated subsidiaries,
is made known to the Company’s principal executive officer and its principal
financial officer by others within those entities; (ii) transactions are
recorded as necessary to permit the preparation of financial statements in
conformity with GAAP and to maintain accountability for assets; (iii) have
been evaluated by management of the Company and its subsidiaries for
effectiveness as of the end of the Company’s most recent fiscal quarter; and
(iv) are effective in all material respects to perform the functions for
which they were established. Except as set forth in the Time of Sale
Prospectus, the Company is not aware of (i) any significant deficiencies
or material weaknesses in the design or operation of internal control over
financial reporting (whether or not remediated) which are reasonably likely to
adversely affect the Company’s or any of its subsidiaries’ ability to record,
process, summarize and report financial information or (ii) any fraud,
whether or not material, that involves management or other employees who have a
significant role in the Company’s or any of its subsidiaries’ internal control
over financial reporting. The Company is not aware of any change in its
internal control over financial reporting that has occurred during its most
recent fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the Company’s or any of its subsidiaries’ internal control
over financial reporting.


 


(ee)         Compliance with Environmental Laws. Except as described in
each Applicable Prospectus and except as would not, singly or in the aggregate,
result in a Material Adverse Change, (i) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign statute,
law, rule, regulation, ordinance, code, policy or rule of common law or any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or 


 


13

















 


wildlife,
including, without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, “Hazardous Materials”)
or to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively, “Environmental Laws”), except such as would
not reasonably be expected to result in a Material Adverse Change, (ii) the
Company and its subsidiaries have all material permits, authorizations and
approvals required under any applicable Environmental Laws and are each in
compliance with their requirements, and (iii) there are no pending or, to the
best knowledge of the Company, threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its subsidiaries and (iv) there
are no events or circumstances known to the Company that might reasonably be
expected to form the basis of an order for clean-up or remediation, or an
action, suit or proceeding by any private party or governmental body or agency,
against or affecting the Company or any of its subsidiaries relating to
Hazardous Materials or any Environmental Laws.


 


(ff)           ERISA Compliance. The Company and its subsidiaries and any “employee benefit plan” (as defined under
the Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder (collectively, “ERISA”)) established or maintained by the
Company, its subsidiaries or their “ERISA
Affiliates” (as defined below) are in compliance in all material
respects with ERISA. “ERISA Affiliate”
means, with respect to the Company or a subsidiary, any member of any group of
organizations described in Sections 414(b),(c),(m) or (o) of the Internal
Revenue Code of 1986, as amended, and the regulations and published
interpretations thereunder (the “Code”)
of which the Company or such subsidiary is a member. No “reportable event” (as defined under ERISA)
has occurred or is reasonably expected to occur with respect to any “employee
benefit plan” established or maintained by the Company, its subsidiaries or any
of their ERISA Affiliates. No “employee benefit plan” established or maintained
by the Company, its subsidiaries or any of their ERISA Affiliates, if such “employee
benefit plan” were terminated, would have any “amount of unfunded benefit liabilities” (as defined under
ERISA). Neither the Company, its subsidiaries nor any of their ERISA Affiliates
has incurred or reasonably expects to incur any liability under
(i) Title IV of ERISA with respect to termination of, or withdrawal
from, any “employee benefit plan” or (ii) Sections 412, 4971, 4975 or
4980B of the Code. Each “employee benefit plan” established or maintained by
the Company, its subsidiaries or any of their ERISA Affiliates that is intended
to be qualified under Section 401(a) of the Code is so qualified and
nothing has occurred, whether by action or failure to act, which would cause
the loss of such qualification.


 


(gg)         Brokers. Except for the underwriting discounts and
commissions payable to the Underwriters as described in the Time of Sale
Prospectus and the Prospectus, there is no broker, finder or other party that
is entitled to receive from the Company any brokerage or finder’s fee or other
fee or commission as a result of any transactions contemplated by this
Agreement.


 


14

















 


(hh)         No Outstanding Loans or Other Extensions of Credit.
Since May 14, 2007, neither the Company nor any of its subsidiaries has
extended or maintained credit, arranged for the extension of credit, or renewed
any extension of credit, in the form of a personal loan, to or for any director
or executive officer (or equivalent thereof) of the Company and/or such
subsidiary, except for such extensions of credit as are expressly permitted by
Section 13(k) of the Exchange Act.


 


(ii)           Compliance with Laws. Except
as set forth in the Time of Sale Prospectus under the heading “Business—Government
Regulation—Domestic Regulation of Our Products and Businesses—Pervasive and
continuing regulation,” the Company has not been advised, and has no reason to
believe, that it and each of its subsidiaries are not conducting business in
compliance with all applicable laws, rules and regulations of the jurisdictions
in which it is conducting business, except where failure to be so in compliance
would not result in a Material Adverse Change.


 


(jj)           Dividend Restrictions. No subsidiary of the Company is
prohibited or restricted, directly or indirectly, from paying dividends to the
Company, or from making any other distribution with respect to such subsidiary’s
equity securities or from repaying to the Company or any other subsidiary of
the Company any amounts that may from time to time become due under any loans
or advances to such subsidiary from the Company or from transferring any
property or assets to the Company or to any other subsidiary.


 


(kk)         Foreign Corrupt Practices Act. Neither the Company nor any
of its subsidiaries nor, to the knowledge of the Company, any director,
officer, agent, employee, affiliate or other person acting on behalf of the
Company or any of its subsidiaries is aware of or has taken any action,
directly or indirectly, that has resulted or would result in a violation of the
Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder and the Company and its subsidiaries and, to the
knowledge of the Company, the Company’s affiliates have conducted their
respective businesses in compliance with the FCPA and have instituted and
maintain policies and procedures designed to ensure, and which are reasonably
expected to continue to ensure, continued compliance therewith.


 


(ll)           Money Laundering Laws. The operations of the Company and its
subsidiaries are, and have been conducted at all times, in compliance with
applicable financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all applicable jurisdictions, the rules and regulations
thereunder and any related or similar applicable rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”) and no action, suit or
proceeding by or before any court or governmental agency, authority or body or
any arbitrator involving the Company or any of its subsidiaries with respect to
the Money Laundering Laws is pending or, to the best knowledge of the Company,
threatened.


 


(mm)       OFAC. Neither the Company nor any of its subsidiaries nor,
to the knowledge of the Company, any director, officer, agent, employee,
affiliate or person acting on behalf of the Company or any of its subsidiaries
is currently subject to any U.S. 


 


15

















 


sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”); and the Company will not directly or indirectly use
the proceeds of this offering, or lend, contribute or otherwise make available
such proceeds to any subsidiary, joint venture partner or other person or
entity, for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.


 


(nn)         Agreements Filed as Exhibits. There is no franchise, lease,
contract, agreement or document required by the Securities Act to be described
in the Preliminary Prospectus and the Prospectus or to be filed as an exhibit
to the Registration Statement which is not described or filed therein as
required; and all descriptions of any such franchises, leases, contracts,
agreements or documents contained in the Registration Statement fairly
summarize such documents in all material respects. Other than as described in
the Time of Sale Prospectus, no such franchise, lease, contract or agreement
filed as an exhibit to the Registration Statement has been suspended or
terminated for convenience or default by the Company or any of the other
parties thereto, and neither the Company nor any of its subsidiaries has
received notice or has any other knowledge of any such pending or threatened
suspension or termination, except for such pending or threatened suspensions or
terminations that would not reasonably be expected to, singularly or in the
aggregate, result in a Material Adverse Change.


 


(oo)         Margin Securities. Neither the Company nor any of its
subsidiaries own any “margin securities” as that term is defined in Regulation
U of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), and none of the
proceeds of the sale of the Offered Shares will be used, directly or
indirectly, for the purpose or purchasing or carrying any margin security, 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 of the Offered Shares to be considered a “purpose credit”
within the meanings of Regulation T, U or X of the Federal Reserve Board.


 


(pp)         Forward Looking Statements. No forward looking statement
(within the meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act) contained in either the Time of Sale Prospectus or the Prospectus
has been made or reaffirmed without a reasonable basis or has been disclosed
other than in good faith.


 


(qq)         Corporate Governance. The Company has
taken all necessary actions to ensure that, upon and at all times after the
effectiveness of the Registration Statement, it will be in compliance with all
provisions of the Sarbanes-Oxley Act of 2002 and all rules and regulations
promulgated thereunder or implementing the provisions thereof (the “Sarbanes-Oxley Act”) that are then in
effect and applicable to the Company, and is actively taking steps to ensure
that it will be in compliance with other provisions of the Sarbanes-Oxley Act
not currently applicable to it upon and at all times as such provisions require
compliance by the Company.


 


The Company has taken all necessary actions to ensure
that, upon and at all times after the Nasdaq Global Market shall have approved
the Offered Shares for inclusion therein, it will be in compliance with all
applicable corporate governance 


 


16

















 


requirements
set forth in the Nasdaq Marketplace Rules that are then in effect and is
actively taking steps to ensure that it will be in compliance with other
applicable corporate governance requirements set forth in the Nasdaq
Marketplace Rules not currently applicable to it upon and at all times as such
provisions require compliance by the Company.


 


(rr)           Transactions, Arrangements with Affiliates.
There are no transactions, arrangements or other relationships between and/or
among the Company, any of its affiliates (as such term is defined in Rule 405
of Securities Act) and any unconsolidated entity, including, but not limited
to, any structured finance, special purpose or limited purpose entity that
could reasonably be expected to materially affect the Company’s liquidity or
the availability of or requirements for its capital resources required to be
described in the Preliminary Prospectus and the Prospectus which have not been
described as required.


 


(ss)         Common Control with Underwriters. Neither
the Company nor, to the best knowledge of the Company, any of its affiliates
(within the meaning of NASD Conduct Rule 2720(b)(1)(a)) directly or indirectly
controls, is controlled by, or is under common control with, or is an
associated person (within the meaning of Article 1, Section 1(ee) of the bylaws
of the NASD) of, any member firm of the NASD, other than as described in the “Underwriting”
section of the Time of Sale Prospectus and the Prospectus.


 


Any
certificate signed by any officer of the Company or any of its subsidiaries and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company to each Underwriter as to
the matters covered thereby.


 


The Company
acknowledges that the Underwriters and, for purposes of the opinions to be
delivered pursuant to Section 6 hereof, counsel to the Company and counsel to
the Underwriters, will rely upon the accuracy and truthfulness of the foregoing
representations and hereby consents to such reliance.


 


Section 2.              Purchase,
Sale and Delivery of the Offered Shares.


 


(a)           The Firm Shares. Upon the terms herein set forth, the
Company agrees to issue and sell to the several Underwriters an aggregate of
3,850,000 Firm Shares. On the basis of the representations, warranties and
agreements herein contained, and upon the terms but subject to the conditions
herein set forth, the Underwriters agree, severally and not jointly, to
purchase from the Company the respective number of Firm Shares set forth
opposite their names on Schedule A. The purchase price per Firm
Share to be paid by the several Underwriters to the Company shall be $10.23 per
share.


 


(b)           The First Closing Date. Delivery of certificates for the
Firm Shares to be purchased by the Underwriters and payment therefor shall be
made at the offices of Jones Day, 222 East 41st Street, New York,
New York (or such other place as may be agreed to by the Company and the
Representatives) at 9:00 a.m. New York time, on October 31, 


 


17

















 


2007
or such other time and date not later than 1:30 p.m. New York time, on
November 15, 2007 as the Representatives shall designate by notice to the
Company (the time and date of such closing are called the “First Closing Date”). The Company hereby
acknowledges that the circumstances under which the Representatives may provide
notice to postpone the First Closing Date as originally scheduled include, but
are in no way limited to, any determination by the Company or the
Representatives to recirculate to the public copies of an amended or
supplemented Prospectus or a delay as contemplated by the provisions of
Section 11.


 


(c)           The Optional Shares; Option Closing Date. In addition, on
the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the Company
hereby grants an option to the several Underwriters to purchase, severally and
not jointly, up to an aggregate of Optional Shares from the Company at the
purchase price per share to be paid by the Underwriters for the Firm Shares. The
option granted hereunder is for use by the Underwriters solely in covering any
over-allotments in connection with the sale and distribution of the Firm Shares.
The option granted hereunder may be exercised at any time and from time to time
in whole or in part upon notice by the Representatives to the Company which
notice may be given at any time within 30 days from the date of this
Agreement. Such notice shall set forth (i) the aggregate number of
Optional Shares as to which the Underwriters are exercising the option,
(ii) the names and denominations in which the certificates for the
Optional Shares are to be registered and (iii) the time, date and place at
which such certificates will be delivered (which time and date may be
simultaneous with, but not earlier than, the First Closing Date; and in the
event that such time and date are simultaneous with the First Closing Date, the
term “First Closing Date” shall
refer to the time and date of delivery of certificates for the Firm Shares and
such Optional Shares). Any such time and date of delivery, if subsequent to the
First Closing Date, is called an “Option
Closing Date” and shall be determined by the Representatives and
shall not be earlier than three nor later than five full business days after
delivery of such notice of exercise. If any Optional Shares are to be
purchased, each Underwriter agrees, severally and not jointly, to purchase the
number of Optional Shares (subject to such adjustments to eliminate fractional
shares as the Representatives may determine) that bears the same proportion to
the total number of Optional Shares to be purchased as the number of Firm
Shares set forth on Schedule A opposite the name of such
Underwriter bears to the total number of Firm Shares. The Representatives may
cancel the option at any time prior to its expiration by giving written notice
of such cancellation to the Company.


 


(d)           Public Offering of the Offered
Shares. The
Representatives hereby advise the Company that the Underwriters intend to offer
for sale to the public, initially on the terms set forth in the Time of Sale
Prospectus and the Prospectus, their respective portions of the Offered Shares
as soon after this Agreement has been executed and the Registration Statement
has been declared effective as the Representatives, in their sole judgment,
have determined is advisable and practicable.


 


18
















 


(e)           Payment for the Offered Shares.  Payment for the Offered Shares shall be made
at the First Closing Date (and, if applicable, at each Option Closing Date) by
wire transfer of immediately available funds to the order of the Company.


 


It is
understood that the Representatives have been authorized, for their own accounts
and the accounts of the several Underwriters, to accept delivery of and receipt
for, and make payment of the purchase price for, the Firm Shares and any
Optional Shares the Underwriters have agreed to purchase.  Jefferies and LCM, individually and not as
the Representatives of the Underwriters, may (but shall not be obligated to)
make payment for any Offered Shares to be purchased by any Underwriter whose
funds shall not have been received by the Representatives by the First Closing
Date or the applicable Option Closing Date, as the case may be, for the account
of such Underwriter, but any such payment shall not relieve such Underwriter
from any of its obligations under this Agreement.


 


(f)            Delivery of the Offered Shares.  The Company shall deliver, or cause to be
delivered, to the Representatives for the accounts of the several Underwriters
certificates for the Firm Shares at the First Closing Date, against the
irrevocable release of a wire transfer of immediately available funds for the
amount of the purchase price therefor. 
The Company shall also deliver, or cause to be delivered, to the
Representatives for the accounts of the several Underwriters, certificates for
the Optional Shares the Underwriters have agreed to purchase at the First
Closing Date or the applicable Option Closing Date, as the case may be, against
the irrevocable release of a wire transfer of immediately available funds for
the amount of the purchase price therefor. 
The certificates for the Offered Shares shall be in definitive form and
registered in such names and denominations as the Representatives shall have
requested at least two full business days prior to the First Closing Date (or
the applicable Option Closing Date, as the case may be) and shall be made
available for inspection on the business day preceding the First Closing Date
(or the applicable Option Closing Date, as the case may be) at a location in
New York City as the Representatives may designate.  Time shall be of the essence, and delivery at
the time and place specified in this Agreement is a further condition to the
obligations of the Underwriters.


 


Section
3.              Additional Covenants of
the Company.


 


The Company further covenants and agrees with
each Underwriter as follows:


 


(a)           Delivery of Registration Statement, Time of Sale Prospectus and
Prospectus.  The Company shall
furnish to you, at your request, without charge, four signed copies of the
Registration Statement, any amendments thereto and any Rule 462(b) Registration
Statement (including exhibits thereto) and for delivery to each other
Underwriter a conformed copy of the Registration Statement, any amendments
thereto and any Rule 462(b) Registration Statement (without exhibits thereto)
and shall furnish to you in New York City, without charge, prior to 10:00 a.m.
New York City time on the business day next succeeding the date of this
Agreement and during the period mentioned in Section 3(e) or 3(f) below, as
many copies of the Time of Sale Prospectus, the 


 


19

















 


Prospectus
and any supplements and amendments thereto or to the Registration Statement as
you may reasonably request.


 


(b)           Representatives’ Review of
Proposed Amendments and Supplements.   Prior to amending or supplementing the
Registration Statement (including any registration statement filed under
Rule 462(b) under the Securities Act), any preliminary prospectus, the
Time of Sale Prospectus or the Prospectus, the Company shall furnish to the
Representatives for review, a reasonable amount of time prior to the proposed
time of filing or use thereof, a copy of each such proposed amendment or
supplement, and the Company shall not file or use any such proposed amendment
or supplement without the Representatives’ consent, and to file with the
Commission within the applicable period specified in Rule 424(b) under the
Securities Act any prospectus required to be filed pursuant to such Rule.


 


(c)           Free Writing Prospectuses.  The Company shall furnish to the
Representatives for review, a reasonable amount of time prior to the proposed
time of filing or use thereof, a copy of each proposed free writing prospectus
or any amendment or supplement thereto to be prepared by or on behalf of, used
by, or referred to by the Company and the Company shall not file, use or refer
to any proposed free writing prospectus or any amendment or supplement thereto
without the Representatives’ consent. 
The Company shall furnish to each Underwriter, without charge, as many
copies of any Issuer Free Writing Prospectus as such Underwriter may reasonably
request.  If at any time when a
prospectus is required by the Securities Act (including, without limitation,
pursuant to Rule 173(d)) to be delivered in connection with sales of the Offered
Shares (but in any event if at any time through and including the First Closing
Date) there occurred or occurs an event or development as a result of which any
Issuer Free Writing Prospectus conflicted or would conflict with the
information contained in the Registration Statement or included or would
include an untrue statement of a material fact or omitted or would omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances prevailing at that subsequent time, not misleading,
the Company shall promptly amend or supplement such Issuer Free Writing
Prospectus to eliminate or correct such conflict or so that the statements in
such Issuer Free Writing Prospectus as so amended or supplemented will not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances prevailing at such subsequent time, not misleading, as the case
may be; provided, however, that prior to amending or supplementing any such Issuer
Free Writing Prospectus, the Company shall furnish to the Representatives for
review, a reasonable amount of time prior to the proposed time of filing or use
thereof, a copy of such proposed amended or supplemented free writing
prospectus and the Company shall not file, use or refer to any such amended or
supplemented Issuer Free Writing Prospectus without the Representatives’
consent.


 


(d)           Filing of Underwriter Free Writing Prospectuses.  The Company shall not take any action that
would result in an Underwriter or the Company being required to file with the
Commission pursuant to Rule 433(d) under the Securities Act a free writing
prospectus prepared by or on behalf of the Underwriter that the Underwriter
otherwise would not have been required to file thereunder.


 


20

















 


(e)           Amendments and Supplements to Time of Sale Prospectus.  If the Time of Sale Prospectus is being used
to solicit offers to buy the Offered Shares at a time when the Prospectus is
not yet available to prospective purchasers and any event shall occur or
condition exist as a result of which it is necessary to amend or supplement the
Time of Sale Prospectus so that the Time of Sale Prospectus does not include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances when
delivered to a prospective purchaser, not misleading, or if any event shall occur
or condition exist as a result of which the Time of Sale Prospectus conflicts
with the information contained in the Registration Statement as then amended,
or if, in the opinion of counsel for the Underwriters, it is necessary to amend
or supplement the Time of Sale Prospectus to comply with applicable law,
including the Securities Act, the Company shall (subject to Sections 3(b) and
3(c)) forthwith prepare, file with the Commission and furnish, at its own
expense, to the Underwriters and to any dealer upon request, either amendments
or supplements to the Time of Sale Prospectus so that the statements in the
Time of Sale Prospectus as so amended or supplemented will not include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances when
delivered to a prospective purchaser, not misleading or so that the Time of
Sale Prospectus, as amended or supplemented, will no longer conflict with the
Registration Statement, or so that the Time of Sale Prospectus, as amended or
supplemented, will comply with applicable law including the Securities Act.


 


(f)            Securities Act Compliance.  After the date of this Agreement, and until
the date on which the Prospectus is no longer required to be delivered in
connection with sales by an Underwriter or dealer under the Securities Act (the
“Prospectus Delivery Period”), the Company shall promptly advise the
Representatives in writing (i) of the receipt of any comments of, or requests
for additional or supplemental information from, the Commission, (ii) of the
time and date of any filing of any post-effective amendment to the Registration
Statement, any Rule 462(b) Registration Statement or any amendment or
supplement to any preliminary prospectus, the Time of Sale Prospectus, any Issuer
Free Writing Prospectus or the Prospectus, (iii) of the time and date that any
post-effective amendment to the Registration Statement or any Rule 462(b)
Registration Statement becomes effective and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto, any Rule 462(b) Registration
Statement or any amendment or supplement to any Preliminary Prospectus, the
Time of Sale Prospectus or the Prospectus or of any order preventing or
suspending the use of any preliminary prospectus, the Time of Sale Prospectus,
any Issuer Free Writing Prospectus or the Prospectus, or of any proceedings to
remove, suspend or terminate from listing or quotation the Shares from any
securities exchange upon which they are listed for trading or included or
designated for quotation, or of the threatening or initiation of any
proceedings for any of such purposes.  If
the Commission shall enter any such stop order at any time, the Company will
use its best efforts to obtain the lifting of such order at the earliest
possible moment.  Additionally, the
Company agrees that it shall comply with the provisions of Rule 424(b), Rule 433
and Rule 430A, as applicable, under the Securities Act and will use its
reasonable efforts to confirm that any filings made by the Company under such
Rule 424(b) or Rule 433 are received in a timely manner by the Commission.


 


21

















 


(g)           Amendments and Supplements to the Prospectus and Other Securities Act
Matters.  If during the
Prospectus Delivery Period any event shall occur or condition exist as a result
of which it is necessary to amend or supplement the Prospectus so that the
Prospectus does not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if in the opinion of the Representatives or counsel for the
Underwriters it is otherwise necessary to amend or supplement the Prospectus to
comply with applicable law, including the Securities Act, the Company agrees
(subject to Section 3(b) and 3(c)) to promptly prepare, file with the
Commission and furnish at its own expense to the Underwriters and to dealers,
amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not include an untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances when the Prospectus
is delivered to a purchaser, be misleading or so that the Prospectus, as
amended or supplemented, will comply with applicable law including the
Securities Act.  Neither the
Representatives’ consent to, or delivery of, any such amendment or supplement
shall constitute a waiver of any of the Company’s obligations under Sections
3(b) or (c).


 


(h)           Blue Sky Compliance. 
The Company shall cooperate with the Representatives and counsel for the
Underwriters to qualify or register the Offered Shares for sale under (or
obtain exemptions from the application of) the state securities or blue sky
laws or Canadian provincial securities laws (or other foreign laws) of those
jurisdictions designated by the Representatives, shall comply with such laws
and shall continue such qualifications, registrations and exemptions in effect
so long as required for the distribution of the Offered Shares.  The Company shall not be required to qualify
as a foreign corporation or to take any action that would subject it to general
service of process in any such jurisdiction where it is not presently qualified
or where it would be subject to taxation as a foreign corporation.  The Company will advise the Representatives
promptly of the suspension of the qualification or registration of (or any such
exemption relating to) the Offered 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 Company shall use its best efforts to obtain the withdrawal
thereof at the earliest possible moment.


 


(i)            Use of Proceeds.  The
Company shall apply the net proceeds from the sale of the Offered Shares sold
by it in the manner described under the caption “Use of Proceeds” in each
Applicable Prospectus.


 


(j)            Transfer Agent.  The
Company shall engage and maintain, at its expense, a registrar and transfer
agent for the Shares.


 


(k)           Earnings Statement. 
As soon as practicable, the Company will make generally available to its
security holders and to the Representatives an earnings statement (which need
not be audited) covering a period of at least twelve months beginning with the
first fiscal quarter of the Company occurring after the date of this 


 


22

















 


Agreement
which shall satisfy the provisions of Section 11(a) of the Securities Act and
the rules and regulations of the Commission thereunder.


 


(l)            Periodic Reporting Obligations.  The Company shall file, on a timely basis,
with the Commission and, if required, with the Nasdaq Stock Market all reports
and documents required to be filed under the Exchange Act.  Additionally, the Company shall report the
use of proceeds from the issuance of the Offered Shares as may be required
under Rule 463 under the Securities Act.


 


(m)          Listing. 
The Company will use its best efforts to list, subject to notice of
issuance, the Offered Shares on the Nasdaq Global Market.


 


(n)           Company to Provide Copy of the
Prospectus in Form That May be Downloaded from the Internet.  The
Company shall cause to be prepared and delivered, at its expense, within one
business day from the effective date of this Agreement, to Jefferies and LCM an
“electronic Prospectus” to be used
by the Underwriters in connection with the offering and sale of the Offered
Shares.  As used herein, the term “electronic Prospectus” means a form of Time
of Sale Prospectus, and any amendment or supplement thereto, that meets each of
the following conditions: (i) it shall be encoded in an electronic format,
satisfactory to Jefferies and LCM, that may be transmitted electronically by
the Representatives and the other Underwriters to offerees and purchasers of
the Offered Shares; (ii) it shall disclose the same information as the
paper Time of Sale Prospectus, except to the extent that graphic and image
material cannot be disseminated electronically, in which case such graphic and
image material shall be replaced in the electronic Prospectus with a fair and
accurate narrative description or tabular representation of such material, as
appropriate; and (iii) it shall be in or convertible into a paper format
or an electronic format, satisfactory to each of Jefferies and LCM, that will
allow investors to store and have continuously ready access to the Time of Sale
Prospectus at any future time, without charge to investors (other than any fee
charged for subscription to the Internet as a whole and for on-line time).  The Company hereby confirms that it has
included or will include in the Prospectus filed pursuant to EDGAR or otherwise
with the Commission and in the Registration Statement at the time it was
declared effective an undertaking that, upon receipt of a request by an
investor or his or her representative, the Company shall transmit or cause to
be transmitted promptly, without charge, a paper copy of the Time of Sale
Prospectus.


 


(o)           Agreement Not to Offer or Sell
Additional Shares.  During the
period commencing on and including the date hereof and ending on and including
the 180th day following the date of the Time of Prospectus (as the same may be
extended as described below, the “Lock-up
Period”), the Company will not, without the prior written consent of
each of Jefferies and LCM (which consent may be withheld at the sole discretion
of Jefferies and LCM), directly or indirectly, sell (including, without
limitation, any short sale), offer, contract or grant any option to sell,
pledge, transfer or establish an open “put equivalent position” within the
meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or
transfer, or announce the offering of, or file any registration statement other
than on Form S-8 under the Securities Act in respect of, any Shares, options,
rights or warrants to acquire Shares or securities exchangeable or exercisable
for 


 


23

















 


or
convertible into Shares (other than as contemplated by this Agreement with
respect to the Offered Shares or described in the Prospectus under the heading “Shares
Eligible for Future Sale—Registration Rights”) or publicly announce the intention
to do any of the foregoing; provided, however, that the Company may issue
Shares or options to purchase Shares, or issue Shares upon exercise of options,
pursuant to any stock option, stock bonus or other stock plan or arrangement
described in each Applicable Prospectus, but only if the holders of such
shares, options, or shares issued upon exercise of such options, agree in
writing not to sell, offer, dispose of or otherwise transfer any such shares or
options during such Lock-up Period without the prior written consent of each of
Jefferies and LCM (which consent may be withheld at the sole discretion of the
Jefferies and LCM).  Notwithstanding the
foregoing, if (i) during the last 17 days of the Lock-up Period, the Company
issues an earnings release or material news or a material event relating to the
Company occurs or (ii) prior to the expiration of the Lock-up Period, the
Company announces that it will release earnings results during the 16-day
period beginning on the last day of the Lock-up Period, then in each case the
Lock-up Period will be extended until the expiration of the 18-day period
beginning on the date of the issuance of the earnings release or the occurrence
of the material news or material event, as applicable, unless each of Jefferies
and LCM waive, in writing, such extension (which waiver may be withheld at the
sole discretion of Jefferies and LCM), except that such extension will not
apply if, within three business days prior to the 15th calendar day before the
last day of the Lock-up Period, the Company delivers a certificate, signed by
the Chief Financial Officer or Chief Executive Officer of the Company,
certifying on behalf of the Company that (i) the Shares are “actively traded
securities” (as defined in Regulation M), (ii) the Company meets the applicable
requirements of paragraph (a)(1) of Rule 139 under the Securities Act
in the manner contemplated by NASD Conduct Rule 2711(f)(4), and (iii) the
provisions of NASD Conduct Rule 2711(f)(4) are not applicable to any
research reports relating to the Company published or distributed by any of the
Underwriters during the 15 days before or after the last day of the Lock-up
Period (before giving effect to such extension).  The Company will provide the Representatives
with prior notice of any such announcement that gives rise to an extension of
the Lock-up Period.


 


(p)           Investment Limitation.  The Company shall not invest, or otherwise
use the proceeds received by the Company from its sale of the Offered Shares in
such a manner as would require the Company or any of its subsidiaries to
register as an investment company under the Investment Company Act.


 


(q)           No Stabilization or Manipulation; Compliance with
Regulation M.  The Company
will not take, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of the
price of the Shares or any other reference security, whether to facilitate the
sale or resale of the Offered Shares or otherwise, and the Company will, and shall
cause each of its affiliates to, comply with all applicable provisions of
Regulation M.  If the limitations of Rule
102 of Regulation M (“Rule 102”)
do not apply with respect to the Offered Shares or any other reference security
pursuant to any exception set forth in Section (d) of Rule 102, then promptly
upon notice from the Representatives (or, if later, at the time stated in the
notice), the Company will, and shall cause each of its affiliates to, comply
with Rule 102 


 


24

















 


as
though such exception were not available but the other provisions of Rule 102
(as interpreted by the Commission) did apply.


 


(r)            Existing Lock-Up Agreements.  During the Lock-up Period, the Company will
enforce all existing agreements between the Company and any of its security
holders that prohibit the sale, transfer, assignment, pledge or hypothecation
of any of the Company’s securities.  In
addition, the Company will direct the transfer agent to place stop transfer
restrictions upon any such securities of the Company that are bound by such
existing “lock-up” agreements for the duration of the periods contemplated in
such agreements, including, without limitation, “lock-up” agreements entered
into by the Company’s officers and directors pursuant to Section 6(h).


 


Jefferies and LCM, on
behalf of the several Underwriters, may, acting together and in their sole
discretion, waive in writing the performance by the Company of any one or more
of the foregoing covenants or extend the time for their performance.


 


Section 4.              Payment
of Expenses.  The Company
agrees to pay all costs, fees and expenses incurred in connection with the
performance of its obligations hereunder and in connection with the
transactions contemplated hereby, including without limitation (i) all
expenses incident to the issuance and delivery of the Offered Shares (including
all printing and engraving costs), (ii) all fees and expenses of the
registrar and transfer agent of the Shares, (iii) all necessary issue,
transfer and other stamp taxes in connection with the issuance and sale of the
Offered Shares to the Underwriters, (iv) all fees and expenses of the
Company’s counsel, independent public or certified public accountants and other
advisors, (v) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration
Statement (including financial statements, exhibits, schedules, consents and
certificates of experts), the Time of Sale Prospectus, the Prospectus, any free
writing prospectus prepared by or on behalf of, used by, or referred to by the
Company, and each preliminary prospectus, and all amendments and supplements
thereto, and this Agreement, (vi) all filing fees, attorneys’ fees and
expenses incurred by the Company or the Underwriters in connection with
qualifying or registering (or obtaining exemptions from the qualification or
registration of) all or any part of the Offered Shares for offer and sale under
the state securities or blue sky laws or the provincial securities laws of
Canada, and, if requested by the Representatives, preparing and printing a “Blue
Sky Survey” or memorandum and a “Canadian wrapper”, and any supplements
thereto, advising the Underwriters of such qualifications, registrations, determinations
and exemptions, (vii) the filing fees incident to, and the reasonable fees
and expenses of counsel for the Underwriters in connection with, the NASD’s
review, if any, and approval of the Underwriters’ participation in the offering
and distribution of the Offered Shares, (viii) the costs and expenses of
the Company relating to investor presentations on any “road show” undertaken in
connection with the marketing of the offering of the Shares, including, without
limitation, expenses associated with the preparation or dissemination of any
electronic road show, expenses associated with the production of road show
slides and graphics, fees and expenses of any consultants engaged in connection
with the road show presentations with the prior approval of the Company, travel
and lodging expenses of the representatives, employees and officers of the
Company and of the Representatives and any such consultants, and the cost of
any aircraft chartered in connection with the road show, (ix) the fees and
expenses associated with listing the Offered Shares on the Nasdaq National
Market, and (x) all other fees, costs and expenses of the 


 


25

















 


nature referred to in Item 13 of Part II of the
Registration Statement.  Except as
otherwise expressly provided in this Section 4 or in Sections 7, 9 or 10 below,
the Underwriters shall bear their own expenses, including the fees and
disbursements of their counsel.


 


Section 5.              Covenant of the Underwriters.  Each Underwriter severally and not jointly,
covenants with the Company not to take any action that would result in the
Company being required to file with the Commission pursuant to Rule 433(d)
under the Securities Act a free writing prospectus prepared by or on behalf of
such Underwriter that otherwise would not be required to be filed by the
Company thereunder, but for the action of the Underwriter.


 


Section 6.              Conditions of the Obligations of the Underwriters.  The obligations of the several Underwriters
to purchase and pay for the Offered Shares as provided herein on the First
Closing Date and, with respect to the Optional Shares, each Option Closing
Date, shall be subject to the accuracy of the representations and warranties on
the part of the Company set forth in Section 1 hereof as of the date
hereof and as of the First Closing Date as though then made and, with respect
to the Optional Shares, as of each Option Closing Date as though then made, to
the timely performance by the Company of its covenants and other obligations hereunder,
and to each of the following additional conditions:


 


(a)           Accountants’ Comfort Letter. 
On the date hereof, the Representatives shall have received from Ernst
& Young LLP, the independent registered public accountants for the Company,
(i) a letter dated the date hereof addressed to the Underwriters, in form
and substance satisfactory to the Representatives, containing statements and
information of the type ordinarily included in accountant’s “comfort letters”
to underwriters, delivered according to Statement of Auditing Standards No. 72
(or any successor bulletin), with respect to the audited and unaudited
financial statements and certain financial information contained in the
Registration Statement, the Time of Sale Prospectus and, with respect to each
letter dated the date hereof only, the Prospectus (and the Representatives
shall have received an additional copy of such accountants’ letter for each of
the several Underwriters), and (ii) confirming that they are (A) independent
registered public accountants as required by the Securities Act and the
Exchange Act and (B) in compliance with the applicable requirements relating to
the qualification of accountants under Rule 2-01 of Regulation S-X.


 


(b)           Compliance with Registration Requirements; No Stop Order; No Objection
from NASD.  For the period
from and after effectiveness of this Agreement and prior to the First Closing
Date and, with respect to the Optional Shares, each Option Closing Date:


 


(i)            the
Company shall have filed the Prospectus with the Commission (including the
information required by Rule 430A under the Securities Act) in the manner and
within the time period required by Rule 424(b) under the Securities Act; or the
Company shall have filed a post-effective amendment to the Registration Statement
containing the information required by such Rule 430A, and such post-effective
amendment shall have become effective;


 


26

















 


(ii)           no
stop order suspending the effectiveness of the Registration Statement, any Rule 462(b)
Registration Statement, or any post-effective amendment to the Registration
Statement, shall be in effect and no proceedings for such purpose shall have
been instituted or threatened by the Commission; and


 


(iii)          the
NASD shall have raised no objection to the fairness and reasonableness of the
underwriting terms and arrangements.


 


(c)           No Material Adverse Change or Ratings Agency Change.  For the period from and after the date of
this Agreement and through and including the First Closing Date and, with
respect to the Optional Shares, each Option Closing Date in the judgment of the
Representatives there shall not have occurred any Material Adverse Change.


 


(d)           Opinion of Counsel for the
Company.  On each of the First
Closing Date and each Option Closing Date, the Representatives shall have
received the opinion of Foley Hoag LLP, counsel for the Company, dated as of
such Closing Date, the form of which is attached as Exhibit A-1
(and the Representatives shall have received an additional copy of such counsel’s
legal opinion for each of the several Underwriters).


 


(e)           Opinion of Intellectual Property Counsel of the
Company.  On
each of the First Closing Date and each Option Closing Date, the
Representatives shall have received the opinion of Kenyon & Kenyon LLP,
intellectual property counsel for the Company, dated as of such Closing Date,
the form of which is attached as Exhibit A-2 (and the
Representatives shall have received an additional copy of such counsel’s legal
opinion for each of the several Underwriters).


 


(e)           Opinion of Regulatory Counsel of the Company.  On each of the First Closing Date and each
Option Closing Date, the Representatives shall have received the opinion of
Hogan & Hartson LLP, regulatory counsel for the Company, dated as of such
Closing Date, the form of which is attached as Exhibit A-3 (and the
Representatives shall have received an additional copy of such counsel’s legal
opinion for each of the several Underwriters).


 


(f)            Opinion of Counsel for the Underwriters.  On each of the First Closing Date and each
Option Closing Date, the Representatives shall have received the opinion (including
the negative assurance statement) of Jones Day, counsel for the Underwriters,
in form and substance satisfactory to the Underwriters, dated as of such
Closing Date.


 


(g)           Officers’ Certificate. 
On each of the First Closing Date and each Option Closing Date, the
Representatives shall have received a written certificate executed by the Chief
Executive Officer or President of the Company and the Chief Financial Officer
of the Company, dated as of such Closing Date, to the effect set forth in subsection (b)(ii)
of this Section 6, and further to the effect that:


 


(i)            for
the period from and including the date of this Agreement through and including
such Closing Date, there has not occurred any Material Adverse Change;


 


27

















 


(ii)           the
representations, warranties and covenants of the Company set forth in
Section 1 of this Agreement are true and correct with the same force and
effect as though expressly made on and as of such Closing Date; and


 


(iii)          the
Company has complied with all the agreements hereunder and satisfied all the
conditions on its part to be performed or satisfied hereunder at or prior to
such Closing Date.


 


(h)           Bring-down Comfort Letter. 
On each of the First Closing Date and each Option Closing Date the
Representatives shall have received from Ernst & Young LLP independent registered
public accountants for the Company, a letter dated such date, in form and
substance satisfactory to the Representatives, to the effect that they reaffirm
the statements made in the letter furnished by them pursuant to
subsection (a) of this Section 6, except that the specified date
referred to therein for the carrying out of procedures shall be no more than
three business days prior to the First Closing Date or the applicable Option
Closing Date, as the case may be (and the Representatives shall have received
an additional copy of such accountants’ letter for each of the several
Underwriters).


 


(i)            Lock-Up Agreement from Certain
Securityholders of the Company.  On or prior to the date hereof, the
Company shall have furnished to the Representatives an agreement in
substantially the form of Exhibit C hereto from the persons listed
on Exhibit B hereto, and such agreement shall be in full force and
effect on each of the First Closing Date and each Option Closing Date.


 


(j)            Additional Documents.  On
or before each of the First Closing Date and each Option Closing Date, the
Representatives and counsel for the Underwriters shall have received such
information and documents as they may reasonably request for the purposes of
enabling them to pass upon the issuance and sale of the Offered Shares as
contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions or
agreements, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Offered Shares as contemplated
herein and in connection with the other transactions contemplated by this
Agreement shall in all material respects be reasonably satisfactory in form and
substance to the Representatives and counsel for the Underwriters.


 


If any condition
specified in this Section 6 is not satisfied when and as required to be
satisfied, this Agreement may be terminated by the Representatives by notice to
the Company at any time on or prior to the First Closing Date and, with respect
to the Optional Shares, at any time on or prior to the applicable Option
Closing Date, which termination shall be without liability on the part of any
party to any other party, except that Section 4, Section 6 and
Section 9 shall at all times be effective and shall survive such termination.


 


Section 7.              Reimbursement of Underwriters’ Expenses.  If this Agreement is terminated by the
Representatives pursuant to Section 6 or clause (i), (v) or (vi) of Section 12 


 


28

















 


or if the sale to the Underwriters of the Offered
Shares on the First Closing Date is not consummated because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or to comply with any provision hereof, the Company agrees to reimburse the
Representatives and the other Underwriters (or such Underwriters as have
terminated this Agreement with respect to themselves), severally, upon demand
for all out-of-pocket expenses that shall have been reasonably incurred by the
Representatives and the Underwriters in connection with the proposed purchase
and the offering and sale of the Offered Shares, including but not limited to
fees and disbursements of counsel, printing expenses, travel expenses, postage,
facsimile and telephone charges.


 


Section 8.              Effectiveness
of this Agreement.  This
Agreement shall not become effective until the later of (i) the execution
of this Agreement by the parties hereto and (ii) notification by the
Commission to the Company and the Representatives of the effectiveness of the
Registration Statement under the Securities Act.


 


Section 9.              Indemnification.


 


(a)           Indemnification
of the Underwriters.  The
Company agrees to indemnify and hold harmless each Underwriter and their
respective affiliates, its officers and employees, and each person, if any, who
controls any Underwriter within the meaning of the Securities Act or the
Exchange Act against any loss, claim, damage, liability or expense whatsoever
(or any action, investigation or proceeding in respect thereof), as incurred,
to which such Underwriter or such officer, employee or controlling person may
become subject, under the Securities Act, the Exchange Act, other federal or
state statutory law or regulation, or the laws or regulations of foreign
jurisdictions where Offered Shares have been offered or sold or at common law
or otherwise (including in settlement of any litigation), insofar as such loss,
claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon (A) (i) any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, or any amendment thereto, including any information deemed to be a
part thereof pursuant to Rule 430A under the Securities Act, or the omission or
alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading; or (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, the Time of Sale Prospectus, any free writing
prospectus that the Company has used, referred to or filed, or is required to
file, pursuant to Rule 433(d) of the Securities Act or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; or (iii)
any act or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the Shares or the
offering contemplated hereby, and which is included as part of or referred to
in any loss, claim, damage, liability or action arising out of or based upon
any matter covered by clause (i) or (ii) above, provided that the Company shall
not be liable under this clause (iii) to the extent that a court of competent
jurisdiction shall have determined by a final judgment that such loss, claim,
damage, liability or action resulted directly from any such acts or failures to
act undertaken or omitted to be taken by such Underwriter through its bad faith
or willful misconduct or 


 


 


29

















 


(B)
the violation of any laws or regulations of foreign jurisdictions where Offered
Shares have been offered or sold; and to reimburse each Underwriter and each
such officer, employee and controlling person for any and all expenses
(including the fees and disbursements of counsel chosen by Jefferies and LCM)
as such expenses are reasonably incurred by such Underwriter or such officer,
employee or controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action; provided, however, that the foregoing indemnity agreement
shall not apply to any loss, claim, damage, liability or expense to the extent,
but only to the extent, arising out of or based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with written information furnished to the Company by the
Representatives expressly for use in the Registration Statement, any
preliminary prospectus, the Time of Sale Prospectus, any such free writing prospectus
or the Prospectus (or any amendment or supplement thereto), it being understood
and agreed that the only such information furnished by the Representatives to
the Company consists of the Underwriters’ Information (as defined in subsection
(b) below).  The indemnity agreement set
forth in this Section 9(a) shall be in addition to any liabilities that
the Company may otherwise have.


 


(b)           Indemnification of the Company,
its Directors and Officers.  Each Underwriter agrees, severally and not
jointly, to indemnify and hold harmless the Company, each of its directors,
each of its officers who signed the Registration Statement and each person, if
any, who controls the Company within the meaning of the Securities Act or the
Exchange Act, against any loss, claim, damage, liability or expense, as
incurred, to which the Company, or any such director, officer or controlling
person may become subject, under the Securities Act, the Exchange Act, or other
federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of such Underwriter), insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated below)
arises out of or is based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement, any preliminary
prospectus the Time of Sale Prospectus, any free writing prospectus that the
Company has used, referred to or filed, or is required to file, pursuant to
Rule 433(d) of the Securities Act or the Prospectus (or such amendment or
supplement thereto), or arises out of or is based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, such preliminary prospectus, the Time of Sale Prospectus, such free
writing prospectus that the Company has used, referred to or filed, or is
required to file, pursuant to Rule 433(d) of the Securities Act, the Prospectus
(or such amendment or supplement thereto), in reliance upon and in conformity
with written information furnished to the Company by the Representatives
expressly for use therein; and to reimburse the Company, or any such director,
officer or controlling person for any legal and other expense reasonably
incurred by the Company, or any such director, officer or controlling person in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action.  The Company hereby 


 


30

















 


acknowledges
that the only information that the Representatives and the Underwriters have
furnished to the Company expressly for use in the Registration Statement, any
preliminary prospectus, the Time of Sale Prospectus, any free writing
prospectus that the Company has filed, or is required to file, pursuant to Rule
433(d) of the Securities Act or the Prospectus (or any amendment or supplement
thereto) are the statements set forth in the table in the first paragraph and fourth,
thirteenth, fourteenth, fifteenth, sixteenth, seventeenth and twenty-first
paragraphs under the caption “Underwriting” in the Time of Sale Prospectus and
the Prospectus (the “Underwriters’
Information”). The indemnity agreement set forth in this
Section 9(b) shall be in addition to any liabilities that each Underwriter
may otherwise have. Notwithstanding the provisions of this Section 9(b), in no
event shall any indemnity by an Underwriter under this Section 9(b) exceed the
total compensation received by such Underwriter in accordance with Section 2.


 


(c)           Notifications and Other Indemnification Procedures.  Promptly after receipt by an indemnified
party under this Section 9 of notice of the commencement of any action,
such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under this Section 9, notify the
indemnifying party in writing of the commencement thereof, but the omission so
to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 9 or to the extent it is
not materially prejudiced as a proximate result of such failure.  In case any such action is brought against
any indemnified party and such indemnified party seeks or intends to seek
indemnity from an indemnifying party, the indemnifying party will be entitled
to participate in, and, to the extent that it shall elect, jointly with all
other indemnifying parties similarly notified, by written notice delivered to
the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; provided, however, if the defendants in
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that a conflict may
arise between the positions of the indemnifying party and the indemnified party
in conducting the defense of any such action or that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties.  Upon receipt of notice from the indemnifying
party to such indemnified party of such indemnifying party’s election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 9 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless
(i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the fees and
expenses of more than one separate counsel (together with local counsel),
representing the indemnified parties who are parties to such action), which
counsel (together with any local counsel) for the indemnified parties shall be
selected by Jefferies and LCM (in the case of counsel for the indemnified
parties 


 


31

















 


referred
to in Section 8(a) above) or by the Company (in the case of counsel for
the indemnified parties referred to in Section 8(b) above)); (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action or the indemnifying party does not
diligently defend the action after assumption of the defense, in which case, if
such indemnified party notifies the indemnifying party in writing that it
elects to employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of (or, in
the case of a failure to diligently defend the action after assumption of the
defense, to continue to defend) such action on behalf of such indemnified party;
or (iii) the indemnifying party has authorized in writing the employment of
counsel for the indemnified party at the expense of the indemnifying party, in
each of which cases the fees and expenses of counsel shall be at the expense of
the indemnifying party and shall be paid as they are incurred.


 


(d)           Settlements.  The
indemnifying party under this Section 9 shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party against any
loss, claim, damage, liability or expense by reason of such settlement or
judgment.  Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by Section 9(c) hereof, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more
than 30 days after receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement.  No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
consent includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding.


 


Section 10.            Contribution.  If the indemnification provided for in
Section 9 is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages, liabilities or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount paid or payable by
such indemnified party, as incurred, as a result of any losses, claims,
damages, liabilities or expenses (or any action, investigation or proceeding in
respect thereof) referred to therein (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, on the one
hand, and the Underwriters, on the other hand, from the offering of the Offered
Shares pursuant to this Agreement or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company, on the one
hand, and the Underwriters, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses (or any action, investigation or proceeding in respect
thereof), as well as any other relevant equitable considerations.  The


 


32

















 


relative benefits received by the Company, on the one
hand, and the Underwriters, on the other hand, in connection with the offering
of the Offered Shares pursuant to this Agreement shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of the
Offered Shares pursuant to this Agreement (before deducting expenses) received
by the Company, and the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth on the front cover page of the
Prospectus, bear to the aggregate initial public offering price of the Offered
Shares as set forth on such cover.  The
relative fault of the Company, on the one hand, and the Underwriters, on the
other hand, shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
the Company, on the one hand, or the Underwriters, on the other hand, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission provided
that the parties hereto agree that the information furnished to the
Company by the Underwriters consists solely of the Underwriters’ Information.


 


The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
Section 9(c), any legal or other fees or expenses reasonably incurred by
such party in connection with investigating or defending any action or
claim.  The provisions set forth in
Section 9(c) with respect to notice of commencement of any action shall
apply if a claim for contribution is to be made under this Section 10; provided, however, that no additional
notice shall be required with respect to any action for which notice has been
given under Section 9(c) for purposes of indemnification.


 


The Company and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this
Section 10 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 in this Section 10.


 


Notwithstanding the provisions of this
Section 10, no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions received by such
Underwriter in connection with the Offered Shares underwritten by it and
distributed to the public.  No person
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.  The Underwriters’ obligations to contribute
pursuant to this Section 10 are several, and not joint, in proportion to
their respective underwriting commitments as set forth opposite their
respective names on Schedule A. 
For purposes of this Section 10, each officer and employee of an
Underwriter and each person, if any, who controls an Underwriter within the
meaning of the Securities Act or the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each
officer of the Company who signed the Registration Statement, and each person,
if any, who controls the Company with the meaning of the Securities Act and the
Exchange Act shall have the same rights to contribution as the Company.


 


Section 11.            Default of One or More of the
Several Underwriters.  If, on the First Closing Date or the
applicable Option Closing Date, as the case may be, any one or more of the
several Underwriters shall fail or refuse to purchase Offered Shares that it or
they have 


 


33

















 


agreed to purchase hereunder on such date, and the
aggregate number of Offered Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase does not exceed 10% of
the aggregate number of the Offered Shares to be purchased on such date, the
Representatives may make arrangements satisfactory to the Company for the
purchase of such Offered Shares by other persons, including any of the
Underwriters, but if no such arrangements are made by such Closing Date, the
other Underwriters shall be obligated, severally and not jointly, in the
proportions that the number of Firm Shares set forth opposite their respective
names on Schedule A bears to the aggregate number of Firm Shares
set forth opposite the names of all such non-defaulting Underwriters, or in
such other proportions as may be specified by the Representatives with the
consent of the non-defaulting Underwriters, to purchase the Offered Shares
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase on such date. If, on the First Closing Date or the applicable
Option Closing Date, as the case may be, any one or more of the Underwriters
shall fail or refuse to purchase Offered Shares and the aggregate number of
Offered Shares with respect to which such default occurs exceeds 10% of the
aggregate number of Offered Shares to be purchased on such date, and
arrangements satisfactory to the Representatives and the Company for the
purchase of such Offered Shares are not made within 48 hours after such
default, this Agreement shall terminate without liability of any party to any
other party except that the provisions of Section 4, Section 7, Section 9
and Section 10 shall at all times be effective and shall survive such
termination.  In any such case either the
Representatives or the Company shall have the right to postpone the First
Closing Date or the applicable Option Closing Date, as the case may be, but in
no event for longer than seven days in order that the required changes, if any,
to the Registration Statement and the Prospectus or any other documents or
arrangements may be effected.


 


As used in this Agreement, the term “Underwriter” shall be deemed to include any
person substituted for a defaulting Underwriter under this
Section 11.  Any action taken under
this Section 11 shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.


 


Section 12.            Termination of this Agreement.  Prior to the
purchase of the Firm Shares by the Underwriters on the First Closing Date this
Agreement may be terminated by the Representatives by notice given to the
Company if at any time (i) trading or quotation in any of the Company’s
securities shall have been suspended or limited by the Commission or by the Nasdaq
Global Market, or trading in securities generally on either the Nasdaq Stock
Market or the New York Stock Exchange shall have been suspended or limited, or
minimum or maximum prices shall have been generally established on any of such
stock exchanges by the Commission or the NASD; (ii) a general banking
moratorium shall have been declared by any of federal, New York, Delaware or
California authorities; (iii) a material disruption has occurred in commercial
banking or securities settlement or clearance services in the United States; (iv) there
shall have occurred any outbreak or escalation of national or international
hostilities or any crisis or calamity, or any change in the United States or
international financial markets, or any substantial change or development
involving a prospective substantial change in United States’ or international
political, financial or economic conditions, as in the judgment of the
Representatives is material and adverse and makes it impracticable or
inadvisable to market the Offered Shares in the manner and on the terms
described in the Time of Sale Prospectus or the Prospectus or to enforce
contracts for the sale of securities; (iv) in the judgment of the
Representatives there shall have occurred any Material Adverse Change; or (v)
the Company 


 


34

















 


shall have sustained a loss by strike, fire, flood,
earthquake, accident or other calamity of such character as in the judgment of
the Representatives may interfere materially with the conduct of the business
and operations of the Company regardless of whether or not such loss shall have
been insured.  Any termination pursuant
to this Section 12 shall be without liability on the part of (a) the
Company to any Underwriter, except that the Company shall be obligated to
reimburse the expenses of the Representatives and the Underwriters pursuant to
Sections 4 and 7 hereof, (b)  any Underwriter to the Company, or
(c) of any party hereto to any other party except that the provisions of
Section 9 and Section 10 shall at all times be effective and shall
survive such termination.


 


Section
13.            No Advisory or Fiduciary
Relationship.  The Company acknowledges and agrees that (i)
the purchase and sale of the Offered Shares pursuant to this Agreement,
including the determination of the public offering price of the Offered Shares
and any related discounts and commissions, is an arm’s-length commercial
transaction between the Company, on the one hand, and the several Underwriters,
on the other hand, (ii) in connection with the offering contemplated hereby and
the process leading to such transaction each Underwriter is and has been acting
solely as a principal and is not the agent or fiduciary of the Company, or its
stockholders, creditors, employees or any other party, (iii) no Underwriter has
assumed or will assume an advisory or fiduciary responsibility in favor of the
Company with respect to the offering contemplated hereby or the process leading
thereto (irrespective of whether such Underwriter or Lazard Frères & Co. LLC has advised or is currently
advising the Company on other matters) and no Underwriter and Lazard Frères & Co. LLC has any obligation to the
Company with respect to the offering contemplated hereby except the obligations
expressly set forth in this Agreement, (iv) the Underwriters, Lazard Frères & Co. LLC and their respective
affiliates may be engaged in a broad range of transactions that involve
interests that differ from those of the Company, and (v) the Underwriters and
Lazard Frères & Co. LLC have
not provided any legal, accounting, regulatory or tax advice with respect to
the offering contemplated hereby and the Company has consulted its own legal,
accounting, regulatory and tax advisors to the extent it deemed appropriate.


 


Section 14.            Representations and Indemnities to
Survive Delivery.  Except as otherwise expressly set forth
herein, the respective indemnities, agreements, representations, warranties and
other statements of the Company, of its officers and of the several
Underwriters set forth in or made pursuant to this Agreement will remain in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or the Company or any of its or their partners, officers or
directors or any controlling person, as the case may be, and, anything herein
to the contrary notwithstanding, will survive delivery of and payment for the
Offered Shares sold hereunder and any termination of this Agreement.


 


Section 15.            Notices.  All communications hereunder shall be in
writing and shall be mailed, hand delivered or telecopied and confirmed to the
parties hereto as follows:


 


35

















 


If to the
Representatives:

Jefferies & Company, Inc.

520 Madison Avenue

New York, New York 10022

Facsimile:  (212) 284-2280  

Attention:  General Counsel


 


and


 


Lazard Capital
Markets LLC

30 Rockefeller Plaza

New York, NY 10020

Facsimile: (212) 830-3615

Attention: General Counsel


 


with a copy
to:

Jones Day

222 E. 41st Street

New York, New York  10017


 


If to the
Company:

Power Medical Interventions, Inc.

2021  Cabot Blvd. W.

Langhorne, PA  19047

Facsimile:  (267) 775-8122

Attention:  Chief Financial Officer


 


Any party hereto may change the address for
receipt of communications by giving written notice to the others.


 


Section 16.            Successors.  This Agreement will
inure to the benefit of and be binding upon the parties hereto, including any
substitute Underwriters pursuant to Section 11 hereof, and to the benefit
of the employees, officers and directors and controlling persons referred to in
Section 9 and Section 10, and in each case their respective
successors, and no other person will have any right or obligation
hereunder.  The term “successors” shall not include any purchaser
of the Offered Shares as such from any of the Underwriters merely by reason of
such purchase.


 


Section 17.            Partial Unenforceability.  The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof.  If any Section, paragraph or provision of
this Agreement is for any reason determined to be invalid or unenforceable,
there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.


 


Section 18.            Governing Law Provisions.  This Agreement
shall be governed by and construed in accordance with the internal laws of the
State of New York applicable to agreements made and to be performed in such
state.  Any legal suit, action or
proceeding arising 


 


36

















 


out of or based upon this Agreement or the
transactions contemplated hereby may be instituted in the federal courts of the
United States of America located in the Borough of Manhattan in the City of New
York or the courts of the State of New York in each case located in the Borough
of Manhattan in the City of New York (collectively, the “Specified Courts”), and each party
irrevocably submits to the exclusive jurisdiction (except for proceedings
instituted in regard to the enforcement of a judgment of any such court, as to
which such jurisdiction is non-exclusive) of such courts in any such suit,
action or proceeding.  Service of any
process, summons, notice or document by mail to such party’s address set forth
above shall be effective service of process for any suit, action or other
proceeding brought in any such court. 
The parties irrevocably and unconditionally waive any objection to the
laying of venue of any suit, action or other proceeding in the Specified Courts
and irrevocably and unconditionally waive and agree not to plead or claim in
any such court that any such suit, action or other proceeding brought in any
such court has been brought in an inconvenient forum.


 


Section 19.            General Provisions.  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 be executed in two or more counterparts, each one of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. 
This Agreement may not be amended or modified unless in writing 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.  The Table of Contents and the
Section headings herein are for the convenience of the parties only and shall
not affect the construction or interpretation of this Agreement.


 


Each of the parties hereto acknowledges that
it is a sophisticated business person who was adequately represented by counsel
during negotiations regarding the provisions hereof, including, without
limitation, the indemnification provisions of Section 9 and the
contribution provisions of Section 10, and is fully informed regarding
said provisions.  Each of the parties
hereto further acknowledges that the provisions of Sections 9 and 10
hereto fairly allocate the risks in light of the ability of the parties to
investigate the Company, its affairs and its business in order to assure that
adequate disclosure has been made in the Registration Statement, the Time of
Sale Prospectus, each Issuer Free Writing Prospectus and the Prospectus (and
any amendments and supplements thereto), as required by the Securities Act and
the Exchange Act.


 


37

















 


If the foregoing is in accordance with your
understanding of our agreement, kindly sign and return to the Company the
enclosed copies hereof, whereupon this instrument, along with all counterparts
hereof, shall become a binding agreement in accordance with its terms.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John P. Gandolfo

  	
   

  
	
   

  	
   

  	
  Name: /s/ John P. Gandolfo

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  



 


The foregoing Underwriting Agreement is
hereby confirmed and accepted by the Representatives in New York, New York as
of the date first above written.


 


JEFFERIES & COMPANY, INC.


LAZARD CAPITAL MARKETS LLC


WILLIAM BLAIR & COMPANY, L.L.C.


Acting as Representatives of the


several Underwriters named in


the attached Schedule A.


 


	
  By

  	
  JEFFERIES & COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Michael A. Bauer

  	
   

  
	
   

  	
  Name: Michael A. Bauer

  
	
   

  	
  Title: Managing Director

  



 


 


	
  By:

  	
  LAZARD CAPITAL MARKETS LLC

  



 


 


	
  By:

  	
  /s/ David G. McMillan, Jr.

  	
   

  
	
   

  	
  Name: David G. McMillan, Jr.

  
	
   

  	
  Title:   Managing Director

  



 


 


	
  By

  	
  WILLIAM BLAIR & COMPANY, L.L.C.

  



 


	
  By:

  	
  /s/ Brent Smith

  	
   

  
	
   

  	
  Name: Brent Smith

  
	
   

  	
  Title: Principal

  



 


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