1
EXHIBIT 1.1
1,900,000 SHARES*
COHR INC.
COMMON STOCK
UNDERWRITING AGREEMENT
_____________, 1996
XXXXXXX & COMPANY, INC.
XXXXXXXXXXX & CO., INC.
XXXXXXX, XXXXXX & CO.
WEDBUSH XXXXXX SECURITIES INC.
As Representatives of the several Underwriters
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
COHR Inc., a Delaware corporation (the "Company"), proposes to issue
and sell 1,500,000 shares of the Company's Common Stock, $.01 par value per
share (the "Common Stock"), to you and to the several other Underwriters (as
defined below). The shares of Common Stock sold by the Company are hereinafter
called the "Company Shares." The stockholders of the Company named in Schedule
II (the "Primary Selling Stockholders") propose to sell 400,000 shares of
Common Stock (the "Seller Shares") to you and the several other Underwriters.
The Company Shares and the Seller Shares are hereinafter collectively referred
to as the "Firm Shares." The Company and the stockholders of the Company named
in Schedule III (the "Over-Allotment Selling Stockholders") have also agreed to
grant to you and the other Underwriters an option (the "Option") to purchase up
to an additional 285,000 shares of Common Stock (the "Option Shares") on the
terms and for the purposes set forth in Section 1(b). The Firm Shares and the
Option Shares are referred to collectively
__________________________________
* Plus an option to purchase up to an additional 285,000 shares to cover
over-allotments.
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herein as the "Shares." The Primary Selling Stockholders and the
Over-Allotment Selling Stockholders are referred to collectively herein as the
Selling Stockholders. All shares of Common Stock of the Company, including the
Shares, are hereinafter referred to as "Common Stock."
It is understood that, subject to the conditions hereinafter stated,
the Firm Shares will be sold to you and the several other Underwriters named in
Schedule I hereto (collectively, the "Underwriters"), for whom you are acting
as representatives (the "Representatives").
The Company and the Selling Stockholder confirm as follows their
agreement with the Representatives and the several other Underwriters.
1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties and
agreements of the Company and the Selling Stockholders herein contained and
subject to all the terms and conditions of this Agreement, (i) the Company
agrees to sell an aggregate of 1,500,000 shares of Common Stock to the several
Underwriters, (ii) the Primary Selling Stockholders agree, severally and not
jointly, to sell an aggregate of 400,000 shares of Common Stock to the several
Underwriters and (iii) each of the Underwriters, severally and not jointly,
agrees to purchase from the Company and the Primary Selling Stockholders the
respective number of Firm Shares set forth opposite that Underwriter's name in
Schedule I hereto, at the purchase price of $______ for each Firm Share. The
number of Firm Shares to be purchased by each Underwriter from the Company and
the Primary Selling Stockholders shall be as nearly as practicable in the same
proportion to the total number of Firm Shares being sold by the Company and the
Primary Selling Stockholders as the number of Firm Shares being purchased by
each Underwriter bears to the total number of Firm Shares to be sold hereunder.
(b) Subject to all the terms and conditions of this
Agreement, the Company and the Over-Allotment Selling Stockholders grant the
Option to the several Underwriters to purchase, severally and not jointly, up
to the maximum number of Option Shares set forth on Schedule III hereto at the
same price per share as the Underwriters shall pay for the Firm Shares. The
Option may be exercised only to cover overallotments in the sale of the Firm
Shares by the Underwriters and may be exercised in whole or in part at any time
(but not more than once) on or before the 30th day after the date of this
Agreement upon written or telegraphic notice (the "Option Shares Notice") by
the Representatives to the Company, no later than 12:00 noon, New York City
time, at least two and no more than five business days before the date
specified for closing in the Option Shares Notice, (the "Option Closing Date"),
setting forth the aggregate number of Option Shares to be purchased and the time
and date for such purchase. On the Option Closing Date, the Company and the
Over-Allotment Selling Stockholders will issue and sell to the Underwriters the
number of Option Shares set forth in the Option Shares
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Notice, and each Underwriter will purchase such percentage of the Option Shares
as is equal to the percentage of Firm Shares that such Underwriter is
purchasing, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional shares.
2. Delivery and Payment. Delivery of the Firm Shares shall be
made to the Representatives for the accounts of the Underwriters against
payment of the purchase price by certified or official bank checks payable in
New York Clearing House (next-day) funds to the order of the Company at the
offices of Xxxxxx, Xxxxxx & Xxxxxxx LLP, One Wilshire Boulevard, Los Angeles,
California, at 7:00 a.m., Los Angeles time, on _________, 1996, or at such time
on such other date, not later than seven (7) business days after the date of
this Agreement, as may be agreed upon by the Company and the Representatives
(such date is hereinafter referred to as the "Closing Date").
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above for the delivery of the Firm Shares at the
time and on the date (which may be the Closing Date) specified in the Option
Shares Notice.
Certificates evidencing the Shares shall be in definitive form and
shall be registered in such names and in such denominations as the
Representatives shall request at least two (2) business days prior to the
Closing Date, by written notice to the Company. For the purpose of expediting
the checking and packaging of certificates for the Shares, the Company agrees
to make such certificates available for inspection at least twenty-four (24)
hours prior to the Closing Date.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Shares by the Company to the respective
Underwriters shall be borne by the Company. The Company will pay and save each
Underwriter and any subsequent holder of the Shares harmless from any and all
liabilities with respect to or resulting from any failure or delay in paying
Federal and state stamp and other transfer taxes, if any, which may be payable
or determined to be payable in connection with the original issuance or sale to
such Underwriter of the Shares.
3. Representations and Warranties of the Company. The Company
represents, warrants and covenants to each Underwriter that:
(a) A registration statement (Registration No. 333-14979)
on Form S-1 relating to the Shares, including a preliminary prospectus and such
amendments to such registration statement as may have been required to the date
of this Agreement, has been prepared by the Company under the provisions of the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
(collectively referred to as the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission")
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thereunder, and has been filed with the Commission. The term "Preliminary
Prospectus" as used herein means a preliminary prospectus as contemplated by
Rule 430 or Rule 430A of the Rules and Regulations included at any time as part
of the registration statement. Copies of such registration statement and
amendments and of each related preliminary prospectus have been delivered to
the Representatives. If such registration statement has not become effective,
a further amendment to such registration statement, including a form of final
prospectus, or, if the Representatives shall agree to the use of Rule 434 of
the Rules and Regulations, the information required to be included in any term
sheet filed pursuant to Rule 434(b) or (c), as applicable, of the Rules and
Regulations necessary to permit such registration statement to become effective
will be filed promptly by the Company with the Commission. If such
registration statement has become effective, a final prospectus, or, if the
Representatives shall agree to the use of Rule 434 of the Rules and
Regulations, the information required to be included in any term sheet filed
pursuant to Rule 434(b) or (c) of the Rules and Regulations, as applicable,
containing information permitted to be omitted at the time of effectiveness by
Rule 430A of the Rules and Regulations, or, if the Representatives shall agree
to the use of Rule 434 of the Rules and Regulations, the information required
to be included in any term sheet filed pursuant to Rule 434(b) or (c), as
applicable, of the Rules and Regulations will be filed promptly by the Company
with the Commission in accordance with Rule 424(b) of the Rules and
Regulations. The term "Registration Statement" means the registration
statement as amended at the time it becomes or became effective (the "Effective
Date"), and any registration statement filed pursuant to Rule 424(b) of the
Rules and Regulations with respect to the offering, including financial
statements and all exhibits and any information deemed to be included by Rule
430A and includes any registration statement relating to the offering
contemplated by this Agreement and filed pursuant to Rule 462(b) of the Rules
and Regulations. The term "Prospectus" means (i) if the Company does not rely
on Rule 434 of the Rules and Regulations, the prospectus as first filed with
the Commission pursuant to Rule 424(b) of the Rules and Regulations, (ii) if
the Company does not rely on Rule 434 of the Rules and Regulations and if no
prospectus is required to be filed pursuant to Rule 424(b), the form of final
prospectus included in the Registration Statement at the Effective Date, or
(iii) if the Company relies on Rule 434 of the Rules and Regulations, the term
sheet relating to the Shares and satisfying the requirements of Rule 434 that
is first filed pursuant to Rule 434(b)(7) of the Rules and Regulations,
together with the preliminary prospectus identified therein that such term
sheet supplements.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus, or instituted proceedings for
that purpose, and each such Preliminary Prospectus, has conformed in all
material respects to the requirements of the Act and the Rules and Regulations
and, as of its date, has not included any untrue statement of a material fact
or omitted to state a material fact
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required to be stated therein or necessary to make the statements therein in
light of the circumstances under which they were made not misleading and at the
time the Registration Statement became or becomes, as the case may be,
effective and at all times subsequent thereto up to and on the Closing Date and
on any later date on which Option Shares are to be purchased, (i) the
Registration Statement and Prospectus, and any amendments or supplements
thereto, contained and will contain all material information required to be
included therein by the Act and the Rules and Regulations and will in all
material respects conform to the requirements of the Act and the Rules and
Regulations, and (ii) neither the Registration Statement nor the Prospectus,
nor any amendment or supplement thereto, will include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading; provided, however,
that none of the representations and warranties contained in this subparagraph
shall apply to information contained in or omitted from the Registration
Statement or the Prospectus or any such amendment or supplement in reliance
upon, and in conformity with, written information furnished to the Company by
any Underwriter through you specifically for inclusion therein.
(c) Each of the Company and the Subsidiaries (as defined
below) has been duly incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation with full
power and authority (corporate and other) to own, lease and operate its
properties and conduct its business as described in the Registration Statement;
the Company owns all of the outstanding capital stock of the Subsidiaries free
and clear of any pledge, lien, security interest, encumbrance, claim or
equitable interest; each of the Company and the Subsidiaries is duly qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction in which the ownership or leasing of properties or the conduct of
its business requires such qualification except where the failure to be so
qualified would not have a material adverse effect on the condition (financial
or otherwise), earnings, operations, business or business prospects of the
Company and the Subsidiaries considered as one enterprise; each of the Company
and the Subsidiaries is not in violation of its respective charter or bylaws or
in material violation of any law, order, rule, regulation, writ, injunction or
decree of any government, government instrumentality or court, domestic or
foreign which violation is likely to have a material adverse effect on the
condition of the Company. The Company does not own or control, directly or
indirectly, any corporation, association or other entity, other than
_____________________, ______________________, and _______________ (the
"Subsidiaries).
(d) All of the outstanding shares of Common Stock of the
Company have been duly authorized, validly issued and are fully paid and
nonassessable; the Company has no shares of capital stock outstanding other
than the Common Stock; the Shares to be issued and sold by the Company have
been duly authorized and when issued
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and paid for as contemplated herein will be validly issued, fully paid and
nonassessable; no preemptive or similar rights exist with respect to any of the
Shares or the issue and sale thereof. The description of the capital stock of
the Company in the Registration Statement and the Prospectus is, and at the
Closing Date will be, complete and accurate in all respects. Except as set
forth in the Prospectus, the Company does not have outstanding, and at the
Closing Date will not have outstanding, any options to purchase, or any rights
or warrants to subscribe for, or any securities or obligations convertible
into, or any contracts or commitments to issue or sell, any shares of Common
Stock, or any such options, warrants, convertible securities or obligations.
(e) The consolidated financial statements included in the
Registration Statement or the Prospectus present fairly the financial condition
of the Company as of the respective dates thereof and the results of operations
and cash flows of the Company and its Subsidiaries for the respective periods
covered thereby, all in conformity with generally accepted accounting
principles applied on a consistent basis throughout the entire period involved,
except as otherwise disclosed in the Prospectus. No other financial statements
or schedules of the Company are required by the Act or the Rules and
Regulations to be included in the Registration Statement or the Prospectus.
Deloitte & Touche LLP (the "Accountants"), who have reported on such financial
statements and schedules, are independent accountants with respect to the
Company as required by the Act and the Rules and Regulations. The summary
financial and statistical data included in the Registration Statement present
fairly the information shown therein and have been compiled on a basis
consistent with the financial statements presented therein.
(f) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus and prior
to the Closing Date, except as set forth in or contemplated by the Registration
Statement and the Prospectus, (i) there has not been and will not have been any
change in the capitalization of the Company, or any material adverse change in
the business, properties, business prospects, condition (financial or
otherwise) or results of operations of the Company, arising for any reason
whatsoever, (ii) neither the Company nor any of its Subsidiaries has incurred
nor will any of them incur any material liabilities or obligations, direct or
contingent, nor has the Company or any of its Subsidiaries entered into nor
will they enter into any material transactions other than pursuant to this
Agreement and the transactions referred to herein, and (iii) the Company has
not and will not have paid or declared any dividends or other distributions of
any kind on any class of its capital stock.
(g) The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investing company," as such term is defined in the Investment Company Act of
1940, as amended.
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(h) There is not any pending or, to the Company's
knowledge, threatened action, suit, claim or proceeding against the Company,
any of its Subsidiaries or any of their respective officers or directors (based
upon information provided by such officers and directors in questionnaires
completed by such persons, copies of which have been provided to counsel to the
Underwriters) or any of their properties, assets or rights before any court or
governmental agency or body or otherwise which (i) might result in any material
adverse change in the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company or any of its Subsidiaries
considered as one enterprise, or might materially and adversely affect their
properties, assets or rights, (ii) might prevent consummation of the
transactions contemplated hereby, or (iii) is required to be, but is not,
disclosed in the Registration Statement; and there are no contracts or
documents of the Company or any of its Subsidiaries that are required to be
described in the Prospectus or be filed as exhibits to the Registration
Statement by the Act or by the Rules and Regulations which have not been
accurately described in all material respects in the Prospectus or filed as
exhibits to the Registration Statement, as the case may be. The contracts so
described in the Prospectus or filed as exhibits to the Registration Statement
have been duly authorized, executed and delivered by the Company, constitute
valid and binding agreements of the Company, are enforceable against the
Company in accordance with the terms thereof and are in full force and effect
on the date hereof, except as the enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditor's rights generally, or by general equitable principles;
and neither the Company nor any of its subsidiaries, nor to the best of the
Company's knowledge, any other party is in material breach of or default under
any such contracts.
(i) The Company is not, and at the Closing Date will not
be, in default, under any indenture, mortgage, deed of trust, loan agreement,
bond, debenture, note agreement or other evidence of indebtedness, or any
lease, contract or other agreement or instrument to which it is a party or by
which its property is bound or affected, which default might materially and
adversely affect the business, properties, business prospects, condition
(financial or other) or results of operations of the Company or any of its
Subsidiaries considered as one enterprise, to the best knowledge of the
Company, no other party under any indenture, mortgage, deed of trust, loan
agreement, bond, debenture, note agreement or other evidence of indebtedness,
or under any lease, contract or other agreement or instrument to which the
Company or any of its Subsidiaries is a party is in default in any respect
thereunder, which default might materially and adversely affect the business,
properties, business prospects, condition (financial or other) or results of
operations of the Company or its Subsidiaries considered as one enterprise.
(j) No consent, approval, authorization or order of, or
any filing or declaration with, any court or governmental agency or body is
required for the
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consummation by the Company of the transactions on its part contemplated
herein, except such as have been obtained under the Act, the Rules and
Regulations or the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and such as may be required under the state securities or Blue Sky laws
or the by-laws and rules of the National Association of Securities Dealers,
Inc. (the "NASD") in connection with the purchase and distribution by the
Underwriters of the Shares.
(k) The Company has full legal right, power and authority
to enter into this Agreement and perform the transactions contemplated hereby
and thereby. Each of this Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement on the part of
the Company, enforceable in accordance with its terms, except as rights to
indemnity and contribution hereunder may be limited by applicable law and
except as the enforcement of this Agreement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally, or by general equitable principles; and
the performance of this Agreement and the consummation of the transactions
herein and therein contemplated will not result in (i) a breach or violation of
any of the terms and provisions of or constitute a default under the charter or
bylaws of the Company or any of its Subsidiaries, or (ii) a material breach or
violation of any of the terms and provisions of or constitute a material
default under (A) any indenture, mortgage, deed of trust, loan agreement, bond,
debenture, note agreement or other evidence of indebtedness, or any lease,
contract or other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the property of the Company or any of its
Subsidiaries is bound, or (B) any law, order, rule, regulation, writ,
injunction, judgment or decree of any court or governmental agency or body
having jurisdiction over the Company any of its Subsidiaries or over the
properties of the Company or any of its Subsidiaries.
(l) Each of the Company and its Subsidiaries have good
and marketable title to all properties and assets described in the Prospectus,
as the case may be, as owned by it, free and clear of all liens, charges,
encumbrances or restrictions, except such as are described in the Prospectus or
are not material to the business of the Company or any of its Subsidiaries.
Each of the Company or one of its Subsidiaries has valid, subsisting and
enforceable leases for the properties described in the Prospectus as leased by
it, with such exceptions as are not material and do not materially interfere
with the use made and proposed to be made of such properties by the Company or
the Subsidiaries.
(m) No statement, representation, warranty or covenant
made by the Company in this Agreement or made in any certificate or document
required by Section 5 of this Agreement to be delivered to the Representatives
was or will be, when made, inaccurate, untrue or incorrect.
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(n) Neither the Company nor any of its Subsidiaries or
any of their respective directors, officers or controlling persons has taken,
directly or indirectly, any action designed, or which might reasonably be
expected, to cause or result, under the Act or otherwise, in, or which has
constituted, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares other than entering into
the lock-up agreements described in the Prospectus.
(o) Except as stated in the Prospectus, no holder of
securities of the Company has rights to the registration of any securities of
the Company because of the filing of the Registration Statement which rights
have not been waived by the holder thereof as of the date hereof.
(p) The Company has not been advised, and has no reason
to believe, that it has infringed any patents, patent rights, tradenames,
trademarks, copyrights, trade secret or other proprietary rights of other
persons which infringement would have a material adverse effect on the Company
or its business, properties, business prospects, condition (financial or
otherwise) or results of operations.
(q) The Company and each of its Subsidiaries have filed
all federal, state and foreign income tax returns which have been required to
be filed and have paid all taxes and assessments received by them or any of
them to the extent that such taxes have become due.
(r) The Company and each of its Subsidiaries own or
possess, and are operating in compliance with, all authorizations, approvals,
orders, licenses, registrations, other certificates and permits of and from all
state, federal and other governmental and regulatory officials and bodies,
necessary to conduct their respective businesses as contemplated in the
Prospectus, except where the failure to own or possess all such authorizations,
approvals, orders, licenses, registrations, other certificates and permits
would not materially and adversely affect the business, properties, business
prospects, condition (financial or otherwise) or results of operations of the
Company or any of its Subsidiaries considered as one enterprise, all of which
are valid and in full force and effect; there is no proceeding pending or
threatened (or any basis therefor known to the Company) which may cause any
such authorization, approval, order, license, registration, certificate or
permit to be revoked, withdrawn, canceled, suspended or not renewed; and the
Company and each of its Subsidiaries are conducting their businesses in
compliance with all laws, rules and regulations applicable thereto except where
such noncompliance would not materially and adversely affect the business,
properties, business prospects, condition (financial or otherwise) or results
of operations of the Company and each of its Subsidiaries considered as one
enterprise.
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4. Representations and Warranties of the Selling Stockholders.
Each of the Selling Stockholders, severally and not jointly, represents and
warrants with respect to the Seller Shares or Option Shares set forth opposite
his name on Schedule II or Schedule III hereto that:
(a) This Agreement, the Custody Agreement signed by the
Selling Stockholders and ____________________ as Custodian, relating to the
deposit of the Seller Shares or Option Shares, as appropriate, (the "Custody
Agreement") and the Power of Attorney appointing certain individuals as the
Selling Stockholder's attorneys-in-fact to the extent set forth therein,
relating to the transactions contemplated hereby and by the Registration
Statement (the "Power of Attorney") have been duly authorized, executed and
delivered by or on behalf of the Selling Stockholder and are valid and binding
agreements of the Selling Stockholder enforceable in accordance with their
terms, except as rights to indemnity and contribution hereunder may be limited
by applicable law and except as enforcement hereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditor's rights generally, or by general equitable principles.
(b) The execution and delivery by each of the Selling
Stockholders of, and the performance by each such Selling Stockholder of its
obligations under, this Agreement, the Custody Agreement and the Power of
Attorney do not contravene any provision of applicable law, and will not result
in (a) any violation of the Selling Stockholder's charter or bylaws, (b) the
material breach or violation of any of the terms and provisions, or constitute
a material default under, any indenture, mortgage, deed of trust, loan
agreement, bond, debenture, note agreement or other evidence of indebtedness,
or any lease, contract or other agreement or instrument to which the Selling
Stockholder is a party or by which its properties are bound, (c) the material
breach or violation of any statute, rule or regulation, of any regulatory body
or administrative agency or other governmental agency or body having
jurisdiction over the Selling Stockholder or any of its properties or
operations, or (d) the breach or violation of any judgment, order, writ or
decree of any government, arbitrator, court, regulatory body or administrative
agency, or other governmental agency or body having jurisdiction over the
Selling Stockholder or any of its properties or operations;
(c) No authorization, approval or consent of any
regulatory body or administrative agency or other governmental agency or body
is necessary in connection with the performance of this Agreement and
consummation of the transactions herein contemplated by the Selling
Stockholders except such as have been obtained under the Act or such as may be
required under state or other securities or Blue Sky laws or the by-laws and
rules of the NASD in connection with the purchase and the distribution of the
Shares by the Underwriters;
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(d) The Selling Stockholder has, and on the Closing Date
or Option Closing Date, as the case may be, will have, valid marketable title
to such Selling Stockholder's Seller Shares and Option Shares and the legal
right and power, and all authorization and approval required by law, to enter
into this Agreement, the Custody Agreement and the Power-of-Attorney, and to
sell, transfer and deliver such Seller Shares and Option Shares, except that no
representation is made with respect to federal and state securities laws.
(e) Delivery of the Selling Stockholders' Seller Shares
or Option Shares against payment therefor will transfer to the Underwriters
marketable title to such Seller Shares or Option Shares, free and clear of any
security interests, claims, liens, equities and other encumbrances.
(f) All information furnished by or on behalf of the
Selling Stockholder for use in the Registration Statement and Prospectus is,
and on the Closing Date or the Option Closing Date, as the case may be, will
be, true, correct, and complete, and does not, and on the Closing Date will
not, contain any untrue statement of a material fact or omit to state any
material fact necessary to make such information not misleading.
(g) There is not any pending or, to the Selling
Stockholder's knowledge, threatened action, suit, claim or proceeding against
the Selling Stockholder or any of its properties, assets or rights before any
court or governmental agency or body or otherwise which (i) might prevent
consummation of the transactions contemplated hereby, or (ii) is required to
be, but is not, disclosed in the Registration Statement; and there are no
contracts or documents of the Selling Stockholder that are required to be
described in the Prospectus or be filed as exhibits to the Registration
Statement by the Act or by the Rules and Regulations which have not been
accurately described in all material respects in the Prospectus or filed as
exhibits to the Registration Statement, as the case may be. The contracts so
described in the Prospectus or filed as exhibits to the Registration Statement
are in full force and effect as of the date hereof.
(h) Neither the Selling Stockholder nor any of its
respective directors, officers or controlling persons has taken, directly or
indirectly, any action designed, or which might reasonably be expected, to
cause or result, under the Act or otherwise, in, or which has constituted,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares other than entering into the
lock-up agreements described in the Prospectus.
(i) Without taking any action to verify independently the
Company's representations or warranties made in this Agreement, and without
assuming responsibility for the accuracy, completeness or fairness of such
representations and warranties, nothing has come to the attention of such
Selling Stockholder to cause such
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Selling Stockholder to believe the Company's representations and warranties
contained in this Agreement are not accurate.
(j) The Selling Stockholder is not aware that any
Preliminary Prospectus, the Registration Statement or the Prospectus includes
any untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading.
5. Further Agreements of the Company. The Company agrees with
the several Underwriters as follows:
(a) The Company will not, either prior to the Effective
Date or thereafter during such period as the Prospectus is required by law to
be delivered in connection with sales of the Shares by an Underwriter or
dealer, file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representatives within a reasonable period of time prior to the filing thereof
and the Representatives shall not have objected thereto in good faith.
(b) The Company will use its best efforts to cause the
Registration Statement to become effective, and will notify the Representatives
promptly, and will confirm such advice in writing, (1) when the Registration
Statement has become effective and when any post- effective amendment thereto
becomes effective, (2) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus or for additional
information, (3) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose or the threat thereof, (4) of the happening of any
event during the period mentioned in the second sentence of Section 5(e) that
in the judgment of the Company makes any statement made in the Registration
Statement or the Prospectus untrue or that requires the making of any changes
in the Registration Statement or the Prospectus in order to make the statements
therein, in light of the circumstances in which they are made, not misleading
and (5) of receipt by the Company or any representative or attorney of the
Company of any other communication from the Commission relating to the
Registration Statement, any Preliminary Prospectus or the Prospectus or, if
within nine months of the Effective Date, relating to the Company. If at any
time the Commission shall issue any order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible moment. If the Company
has omitted any information from the Registration Statement pursuant to Rule
430A of the Rules and Regulations, the Company will use its best efforts to
comply with the provisions of and make all requisite filings with the
Commission pursuant to said Rule 430A and to notify the Representatives
promptly of all such filings.
12.
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(c) The Company will furnish to each of the
Representatives, without charge, two (2) signed copies of the Registration
Statement and of any post-effective amendment thereto and all exhibits thereto
and will furnish to the Representatives, without charge, for transmittal to
each of the other Underwriters, a copy of the Registration Statement and any
post-effective amendment thereto, including financial statements and schedules
but without exhibits.
(d) The Company will comply with all the provisions of
any undertakings contained in the Registration Statement.
(e) On the Effective Date, and thereafter from time to
time, the Company will deliver to each of the Underwriters, without charge, as
many copies of the Prospectus or any amendment or supplement thereto as the
Representatives may reasonably request. The Company consents to the use of the
Prospectus or any amendment or supplement thereto by the several Underwriters
and by all dealers to whom the Shares may be sold, both in connection with the
offering or sale of the Shares and for any period of time thereafter during
which the Prospectus is required by law to be delivered in connection
therewith. If during such period of time any event shall occur which, in the
judgment of the Company or counsel to the Underwriters, should be set forth in
the Prospectus in order to make any statement therein, in the light of the
circumstances under which it was made, not misleading, or if it is necessary to
supplement or amend the Prospectus to comply with law, the Company will
forthwith prepare and duly file with the Commission an appropriate supplement
or amendment thereto, and will deliver to each of the Underwriters, without
charge, such number of copies of such supplement or amendment to the Prospectus
as the Representatives may reasonably request. Neither your consent to, nor
the Underwriters' delivery of, any such supplement or amendment shall
constitute a waiver of any of the conditions set forth in Section 7.
(f) Prior to any public offering of the Shares, the
Company will cooperate with the Representatives and counsel to the Underwriters
in connection with the registration or qualification of the Shares for offer
and sale under the securities or Blue Sky laws of such jurisdictions as the
Representatives may reasonably request; provided that in no event shall the
Company be obligated to qualify to do business in any jurisdiction where it is
not now so qualified or to take any action which would subject it to general
service of process in any jurisdiction where it is not now so subject.
(g) The Company will furnish to its stockholders as soon
as practicable after the end of each fiscal year an annual report (including a
balance sheet and statements of income, shareholders' equity and cash flow of
the Company and its consolidated subsidiaries, if any, audited by the Company's
independent public accounts) so long as the Company is subject to the reporting
requirements of the Exchange Act.
13.
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(h) During the period of five years commencing on the
Effective Date, the Company will furnish to the Representatives and each other
Underwriter who may so request copies of such financial statements and other
periodic and special reports as the Company may from time to time distribute
generally to the holders of any class of its capital stock, and will furnish to
the Representatives and each other Underwriter who may so request a copy of
each annual or other report it shall be required to file with the Commission.
(i) The Company will make generally available to holders
of its securities as soon as may be practicable but in no event later than the
last day of the fifteenth (15th) calendar month following the calendar quarter
in which the Effective Date falls, an earnings statement (which need not be
audited but shall be in reasonable detail) for a period of twelve (12) months
after the Effective Date, and satisfying the provisions of Section 11(a) of the
Act (including Rule 158 of the Rules and Regulations).
(j) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will
pay, or reimburse if paid by the Representatives, all costs and expenses
incident to the performance of the obligations of the Company under this
Agreement, including but not limited to costs and expenses of or relating to
(1) the preparation, printing and filing of the Registration Statement and
exhibits to it, each Preliminary Prospectus, Prospectus and any amendment or
supplement to the Registration Statement or prospectus, (2) the preparation and
delivery of certificates representing the Shares, (3) the printing of this
Agreement, the Agreement Among Underwriters, any Dealer Agreements, any
Underwriters' Questionnaires, (4) furnishing (including costs of shipping and
mailing) such copies of the Registration Statement, the Prospectus and any
Preliminary Prospectus, and all amendments and supplements thereto, as may be
requested for use in connection with the offering and sale of the Shares by the
Underwriters or by dealers to whom Shares may be sold, (5) the listing of the
Shares on the Nasdaq National Market system, (6) any filings required to be
made by the Underwriters with the National Association of Securities Dealers,
Inc. ("NASD"), and the fees and expenses of counsel for the Underwriters in
connection therewith, (7) the registration or qualification of the Shares for
offer and sale under the securities laws or Blue Sky laws of such jurisdictions
designated pursuant to Section 5(f), including the reasonable fees and expenses
of counsel to the Underwriters in connection therewith, and the preparation and
printing of preliminary, supplemental and final Blue Sky memoranda, (8) fees
and expenses of counsel to the Company (but not those of counsel for the
Underwriters, except as otherwise provided herein) and (9) the transfer agent
for the Shares.
(k) If this Agreement shall be terminated by the Company
pursuant to any of the provisions hereof (otherwise than pursuant to Section 9
hereof) or if for any
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reason the Company shall be unable to perform its obligations hereunder or
thereunder, the Company will reimburse the several Underwriters for all
out-of-pocket expenses (including the fees and expenses of counsel to the
Underwriters) reasonably incurred by them in connection herewith.
(l) The Company will not at any time, (i) directly or
indirectly, take any action designed, or which might reasonably be expected, to
cause or result in, or which will constitute, stabilization of the price of the
shares of Common Stock to facilitate the sale or resale of any of the Shares,
(ii) sell, bid for, purchase or pay anyone any compensation for soliciting
purchases of, the Shares or (iii) pay or agree to pay to any person any
compensation for soliciting another to purchase any other securities of the
Company.
(m) The Company will apply the net proceeds from the
offering and sale of the Shares to be sold by the Company in the manner set
forth in the Prospectus under "Use of Proceeds."
(n) The Company will not, and will cause each of its
officers, directors and optionholders to enter into agreements with the
Representatives to the effect that they will not for a period of 180 days after
the Effective Date with respect to the Company and all other persons who enter
such agreements, without the prior written consent of the Representatives,
sell, contract to sell or otherwise dispose of any shares of Common Stock or
rights to acquire such shares (other than the sale of the Shares hereunder and
the issuance of shares of Common Stock by the Company upon exercise of stock
options pursuant to employee stock option plans).
6. Agreements of the Selling Stockholders. Each Selling
Stockholder agrees with respect to the Seller Shares or Option Shares set forth
opposite his name on Schedule II or Schedule III hereto to pay or cause to be
paid all taxes, including the cost of original issue tax stamps, if any, on the
transfer and sale of the Seller Shares or Option Shares and the fees and
expenses of counsel and accountants retained by such Selling Stockholder,
except such fees and expenses that are paid by the Company, if any. The
Selling Stockholders will pay and save each Underwriter and any subsequent
holder of the Seller Shares or Option Shares harmless from any and all
liabilities with respect to or resulting from any failure or delay in paying
Federal and state stamp and other transfer taxes, if any, which may be payable
or determined to be payable in connection with the original issuance or sale to
such Underwriter of the Seller Shares. The Company agrees to pay all costs and
expenses incident to the performance of the obligations of the Selling
Stockholders under this Agreement (except as set forth above), including, but
not limited to, all expenses incident to the delivery of the certificates for
the Seller Shares or Option Shares, the costs and expenses incident to the
preparation, printing and filing of the Registration Statement (including all
exhibits thereto) and the Prospectus and any
15.
16
amendments or supplements thereto, the expenses of qualifying the Seller Shares
and Option Shares under the securities or blue sky laws of various
jurisdictions, all filing fees payable in connection with the review of the
offering of the Shares by the NASD, and the cost of furnishing to the
Underwriters the required copies of the Registration Statement and Prospectus
and any amendments or supplements thereto; provided that the Selling
Stockholders agree to pay or cause to be paid its pro rata share (based on the
percentage which the number of Seller Shares and Option Shares to be sold by
the Over-Allotment Selling Stockholders sold bears to the total number of
Shares sold) of all underwriting discounts and commissions.
7. Conditions of the Obligations of the Underwriters. The
obligations of each Underwriter hereunder are subject to the following
conditions:
(a) Notification that the Registration Statement has
become effective shall be received by the Representatives not later than 5:00
p.m., New York City time, on the date of this Agreement or at such later date
and time as shall be consented to in writing by the Representative and all
filings required by Rule 424 and Rule 430A of the Rules and Regulations shall
have been made.
(b) (i) No stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending before or threatened by the Commission or the authorities of any such
jurisdiction, (iii) any request for additional information on the part of the
staff of the Commission or any such authorities shall have been complied with
to the satisfaction of the staff of the Commission or any such authorities and
(iv) after the date hereof, no amendment or supplement to the Registration
Statement or the Prospectus shall have been filed unless a copy thereof was
first submitted to the Representatives and the Representatives do not object
thereto in good faith, and the Representatives shall have received
certificates, dated the Closing Date and signed by the Chief Executive Officer
or the Chairman of the Board of Directors of the Company and the Chief
Financial Officer of the Company (who may, as to proceedings threatened, rely
upon the best of their information and belief) to the effect of clauses (i),
(ii) and (iii).
(c) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) there shall not
have been a material adverse change in the general affairs, business, business
prospects, properties, management, condition (financial or otherwise) or
results of operations of the Company or any of its Subsidiaries, whether or not
arising from transactions in the ordinary course of business, in each case
other than as set forth in or contemplated by the Registration Statement and
16.
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the Prospectus and (ii) neither the Company or any of its Subsidiaries shall
have sustained any material loss or interference with its business or
properties from fire, explosion, flood or other casualty, whether or not
covered by insurance, or from any labor dispute or any court or legislative or
other governmental action, order or decree, which is not set forth in the
Registration Statement and the Prospectus, if in the judgment of the
Representatives any such development makes it impracticable or inadvisable to
consummate the sale and delivery of the Shares by the Underwriters at the
public offering price.
(d) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall have been
no litigation or other proceeding instituted against the Company, any of its
Subsidiaries or any of their respective officers or directors in their
capacities as such, before or by any Federal, state or local court, commission,
regulatory body, administrative agency or other governmental body, domestic or
foreign, in which litigation or proceeding an unfavorable ruling, decision or
finding would materially and adversely affect the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of the Company or any of its subsidiaries.
(e) Each of the representations and warranties of the
Company and the Selling Stockholders contained herein shall be true and correct
in all material respects at the Closing Date and, with respect to the Option
Shares, at the Option Closing Date, and all covenants and agreements contained
herein to be performed on the part of the Company and the Selling Stockholders
and all conditions contained herein to be fulfilled or complied with by the
Company and the Selling Stockholdesr at or prior to the Closing Date and, with
respect to the Option Shares, at the Option Closing Date, shall have been duly
performed, fulfilled or complied with.
(f) The Representatives shall have received on the
Closing Date and on any later date on which Option Shares are purchased, as the
case may be, the following opinion of Xxxxxx, Xxxxxx & Xxxxxxx LLP, counsel to
the Company, dated the Closing Date or such later date, addressed to the
Underwriters and with reproduced copies or signed counterparts thereof for each
of the Underwriters, to the effect that:
(i) Each of the Company and _________ and
________ (the U.S. Subsidiaries") has been duly incorporated and is a validly
existing corporation in good standing under the laws of its jurisdiction of
incorporation;
(ii) Each of the Company and the U.S. Subsidiaries
has the corporate power to own, lease and operate its properties and to conduct
its business as described in the Prospectus;
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18
(iii) Each of the Company and its U.S. Subsidiaries
is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction, if any, in which the ownership or leasing of its
properties or the conduct of its business requires such qualification, except
where the failure so to qualify would not have a material adverse effect on the
financial condition, earnings, operations, business or business prospects of
the Company or its U.S. Subsidiaries considered as one enterprise. To such
counsel's knowledge, the Company does not own or control, directly or
indirectly, any corporation, association or other entity other than the
Subsidiaries.
(iv) The authorized, issued and outstanding
capital stock of the Company was as set forth in the Prospectus under the
caption "Capitalization" as of the dates stated therein, and the issued and
outstanding shares of capital stock of the Company have been duly authorized
and validly issued, are fully paid and nonassessable and have not been issued
in violation of any preemptive right or, to such counsel's knowledge, any
co-sale right, registration right, right of first refusal or other similar
right;
(v) The Shares to be issued by the Company
pursuant to the terms of this Agreement will be, upon issuance and delivery
against payment therefor in accordance with the terms hereof, duly authorized,
validly issued, fully paid and nonassessable, and will not be issued in
violation of any preemptive right or, to such counsel's knowledge, any co-sale
right, registration right, right of first refusal or other similar right, and
to such counsel's knowledge, the stockholders of the Company have no right of
first refusal or other similar rights to purchase any of these Shares;
(vi) The Company has corporate power and authority
to enter into this Agreement and to issue, sell and deliver to the Underwriters
the Shares to be issued and sold by it hereunder;
(vii) This Agreement has been duly authorized by
all necessary corporate action on the part of the Company and has been duly
executed and delivered by the Company and, assuming due authorization,
execution and delivery of this Agreement by you, this Agreement is a valid and
binding agreement of the Company, enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally or by general equitable principles, and except that no opinion is
expressed as to the enforceability of the indemnification and contribution
provisions contained in Section 8 of this Agreement;
(viii) The Registration Statement has become
effective under the Act and, to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement have been issued and
no proceedings for that purpose have been instituted or are pending or
threatened under the Act;
18.
19
(ix) The terms and provisions of the Common Stock
of the Company conform in all material respects to the description thereof
contained in "Description of Capital Stock" in the Registration Statement and
Prospectus;
(x) The information in the Prospectus under the
caption "Description of Capital Stock," to the extent that it constitutes a
summary of the legal matters, documents or proceedings referred to therein
fairly presents the information required to be presented by the Act or the
Rules and Regulations with respect to such legal matters documents and
proceedings; and the forms of certificates evidencing the Common Stock comply
with Delaware law;
(xi) The description in the Registration Statement
and the Prospectus of the charter and bylaws of the Company and of statutes and
contracts described therein fairly presents the information required to be
presented by the Act or the Rules and Regulations;
(xii) To such counsel's knowledge, there are no
agreements, contracts, leases or documents of a character required to be
described or referred to in the Registration Statement or Prospectus or to be
filed as an exhibit to the Registration Statement which are not described or
referred to therein and filed as required;
(xiii) The execution, delivery and performance of
this Agreement by the Company and the consummation by the Company of the
transactions herein and therein contemplated do not result in (a) any violation
of the Company's charter or bylaws, or (b) the breach or violation of any of
the terms and provisions, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement, bond, debenture, note agreement or
other evidence of indebtedness, or any lease, contract or other agreement or
instrument described in the Registration Statement or filed as an exhibit
thereto to which the Company or either of the U.S. Subsidiaries is a party or
by which its properties are bound, (c) the breach or violation of any federal,
California or, to the best of our knowledge, local statute, rule or regulation;
provided however, that no opinion need be rendered concerning state securities
or Blue Sky laws, or (d) to the best of such counsel's knowledge, the breach or
violation of any judgment, order, writ or decree of any government, arbitrator,
court, regulatory body or administrative agency, or other governmental agency
or body having jurisdiction over the Company or any of its properties or
operations;
(xiv) No authorization, approval or consent of any
regulatory body or administrative agency or other governmental agency or body
is necessary in connection with the performance of this Agreement and
consummation of the transactions herein contemplated by the Company, except
such as have been obtained under the Act or
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20
such as may be required under state or other securities or Blue Sky laws in
connection with the purchase and the distribution of the Shares by the
Underwriters;
(xv) To such counsel's knowledge, there are no
legal or governmental proceedings pending or threatened against the Company of a
character which are required to be disclosed in the Registration Statement or
the Prospectus, by the Act or the applicable Rules and Regulations, other than
those described therein;
(xvi) To such counsel's knowledge, except as set
forth in the Registration Statement and Prospectus, no holders of Common Stock
or other securities of the Company have registration rights with respect to
securities of the Company and, except as set forth in the Registration
Statement and Prospectus, all holders of securities of the Company having
rights to registration of such shares of Common Stock, or other securities,
because of the filing of the Registration Statement by the Company have, with
respect to the offering contemplated thereby, waived such rights or such rights
have expired by reason of lapse of time following notification of the Company's
intent to file the Registration Statement, or have included securities in the
Registration Statement pursuant to the exercise of such rights; and
(xvii) The Registration Statement and the Prospectus
(other than the financial statements, including supporting schedules, and
financial data as to which such counsel need express no opinion) as of the
Effective Date complied as to form in all material respects with the
requirements of the Act and the Rules and Regulations with respect to
registration statements on Form S-1.
In addition, such counsel shall state that,
although they have not verified the accuracy or completeness of the statements
contained in the Registration Statement or the Prospectus, nothing has come to
the attention of such counsel that caused them to believe that, at the time the
Registration Statement became effective, the Registration Statement (except as
to financial statements, including supporting schedules, and financial data, as
to which such counsel need express no opinion) contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or at the
Closing Date or any later date on which the Option Shares are to be purchased,
as the case may be, the Registration Statement or the Prospectus (except as
aforesaid) contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
Counsel rendering the foregoing opinion may
rely as to questions of law not involving the laws of the United States or the
State of California and the State of Delaware upon opinions of local counsel,
and as to questions of fact upon
20.
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representations or certificates of officers of the Company and of government
officials, in which case their opinion is to state that they are so relying and
that they have no knowledge of any material misstatement or inaccuracy in such
opinions, representations or certificate. Copies of any opinion,
representation or certificate so relied upon shall be delivered to you, as
Representatives of the Underwriters, and to Underwriters' counsel.
(g) You shall have received on the Closing Date and on
any later date on which Option Shares are purchased, as the case may be, the
following opinions with respect to the Seller Shares, dated the Closing Date,
and with respect to the Option Shares, if any, dated the Option Closing Date,
from Xxxxxx, Xxxxxx & Xxxxxxx LLP, counsel to the Healthcare Association of
Southern California and the Over-Allotment Selling Stockholders and Xxxxxxxxx
and Xxxxxxx, Inc., counsel to Hospital Council Coordinated Programs, Inc.,
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, covering the following matters:
(i) This Agreement has been duly authorized,
executed and delivered by or on behalf each of the Selling Stockholders;
(ii) The execution and delivery by each of the
Selling Stockholders of, and the performance by each such Selling Stockholder
of its obligations under, this Agreement, the Custody Agreement and the Power
of Attorney will not result in (a) any violation of the Company's charter or
bylaws, (b) the breach or violation of any of the terms and provisions, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement, bond, debenture, note agreement or other evidence of indebtedness,
or any lease, contract or other agreement or instrument to which the Selling
Stockholder is a party or by which its properties are bound, (c) the breach or
violation of any federal, California or, to the best of our knowledge, local
statute, rule or regulation; provided however, that no opinion need be rendered
concerning state securities or Blue Sky laws, or (d) to the best of such
counsel's knowledge, the breach or violation of any judgment, order, writ or
decree of any government, arbitrator, court, regulatory body or administrative
agency, or other governmental agency or body having jurisdiction over the
Selling Stockholder or any of its properties or operations;
(iii) No authorization, approval or consent of any
regulatory body or administrative agency or other governmental agency or body
is necessary in connection with the performance of this Agreement and
consummation of the transactions herein contemplated by the Selling
Stockholders, except such as have been obtained under the Act or such as may be
required under state or other securities or Blue Sky laws in connection with
the purchase and the distribution of the Shares by the Underwriters;
(iv) Each of the Underwriters who has purchased
Seller Shares in good faith and without notice of any adverse claim within the
meaning of the applicable
21.
22
Uniform Commercial Code, upon payment for such Seller Shares, has received good
and valid title to such Seller Shares, free and clear of any security
interests, claims, liens, and encumbrances, except for security interests,
claims, liens, and encumbrances created or imposed by, or in favor of, the
Underwriters; and
(v) Each of the Custody Agreement and the Power
of Attorney has been duly authorized, executed and delivered by or on behalf of
each Selling Stockholder and is a valid and binding agreement of each Selling
Stockholder, enforceable in accordance with its terms except as to (A) rights
to indemnity and contribution hereunder which may be limited by applicable law,
(B) bankruptcy and laws relating to the rights and remedies of creditors
generally, and (C) the availability of equitable remedies.
Counsel rendering the foregoing opinion may rely as
to questions of law not involving the laws of the United States or the State of
California and the State of Delaware upon opinions of local counsel, and as to
questions of fact upon representations or certificates of the Selling
Stockholders or officers of the Selling Stockholders no knowledge of any
material misstatement or inaccuracy in such opinions, representations or
certificate. Representatives of the Underwriters, and to Underwriters'
counsel.
(h) The Representatives shall have received an opinion,
dated the Closing Date and, with respect to the Option Shares, the Option
Closing Date, from Cooley Godward LLP, counsel to the Underwriters, with
respect to the Registration Statement, the Prospectus and this Agreement, which
opinion shall be satisfactory in all respects to the Representatives.
(i) Concurrently with the execution and delivery of this
Agreement, the Accountants shall have furnished to the Representatives a
letter, dated the date of its delivery, addressed to the Representatives and in
form and substance satisfactory to the Representatives, confirming that they
are independent accountants with respect to the Company as required by the Act
and the Rules and Regulations and with respect to certain financial and other
statistical and numerical information contained in the Registration Statement.
At the Closing Date and, with respect to the Option Shares, the Option Closing
Date, the Accountants shall have furnished to the Representatives a letter,
dated the date of its delivery, which shall confirm, on the basis of a review
in accordance with the procedures set forth in the letter from the Accountants,
that nothing has come to their attention during the period from the date of the
letter referred to in the prior sentence to a date (specified in the letter)
not more than five (5) days prior to the Closing Date or the Option Closing
Date, as applicable, which would require any change in their letter dated the
date hereof if it were required to be dated and delivered at the Closing Date
or the Option Closing Date, as applicable.
22.
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(j) Concurrently with the execution and delivery of this
Agreement and at the Closing Date and, with respect to the Option Shares, the
Option Closing Date, there shall be furnished to the Representatives an
accurate certificate, dated the date of its delivery, signed by each of the
Chief Executive Officer and the Chief Financial Officer of the Company, in form
and substance satisfactory to the Representative, to the effect that:
(i) Each signer of such certificate has carefully
examined the Registration Statement and the Prospectus and (A) as of the date
of such certificate, such documents are true and correct in all material
respects and do not omit to state a material fact required to be stated therein
or necessary in order to make the statements therein not untrue or misleading,
and (B) in the case of the certificate delivered at the Closing Date or the
Option Closing Date, as applicable, since the Effective Date no event has
occurred as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein not untrue or misleading in
any material respect.
(ii) Each of the representations and warranties of
the Company contained in this Agreement were, when originally made, and are, at
the time such certificate is delivered, true and correct in all material
respects.
(iii) Each of the covenants required to be
performed by the Company herein on or prior to the date of such certificate has
been duly, timely and fully performed and each condition herein required to be
satisfied or fulfilled on or prior to the date of such certificate has been
duly, timely and fully satisfied or fulfilled.
(k) Concurrently with the execution and delivery of this
Agreement and at the Closing Date and, with respect to the Option Shares, the
Option Closing Date, there shall be furnished to the Representatives a
certificate, dated as of the date of delivery, signed by each of the Selling
Stockholders (or its attorney-in-fact on its behalf) to the effect that the
representations and warranties of the Selling Stockholders contained in this
Agreement were, when originally made, and are, at the time such certificate is
delivered, true and correct in all material respects.
(l) On or prior to the Closing Date the Representatives
shall have received the executed agreements referred to in Section 5(n).
(m) The Shares shall be qualified for sale in such
jurisdictions as the Representatives may reasonably request, and each such
qualification shall be in effect and not subject to any stop order or other
proceeding on the Closing Date or the Option Closing Date, as applicable.
(n) Prior to the Closing Date, the Shares to be sold by
the Company hereunder shall have been duly authorized for listing on the Nasdaq
National Market
23.
24
upon official notice of issuance. The Shares to be sold be the Selling
Stockholders hereunder are listed on the Nasdaq National Market.
(o) The Company shall have furnished to the
Representatives such certificates and documents, in addition to those
specifically mentioned herein, as the Representatives may have reasonably
requested as to thec accuracy and completeness at the Closing Date and the
Option Closing Date of any statement in the Registration Statement or the
Prospectus as to the accuracy at the Closing Date and the Option Closing Date
of the representations and warranties of the Company herein, as to the
performance by the Company of its obligations hereunder, or as to the
fulfillment of the conditions concurrent and precedent to the obligations
hereunder of the Representatives.
(p) The Selling Stockholders shall have furnished to the
Representatives such certificates and documents, in addition to those
specifically mentioned herein, as the Representatives may have reasonably
requested (including certificates of the officers of the Selling Stockholders,
when the Selling Stockholder is not a natural person), at the Closing Date and
the Option Closing Date of the representations and warranties of the Company
herein, as to the performance by the Selling Stockholders of their obligations
hereunder, or as to the fulfillment of the conditions concurrent and precedent
to the obligations hereunder of the Representatives.
8. Indemnification.
(a) The Company will indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person, if any, who controls each Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, liabilities, expenses and damages (including any and
all investigative, legal and other expenses reasonably incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding or
any claim asserted), to which they, or any of them, may become subject under
the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims,
liabilities, expenses or damages (1) arise out of or are based on any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any
amendment or supplement to the Registration Statement or the Prospectus, or the
omission or alleged omission to state in such document a material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances in which they were made, (2) arise out of or are
based in whole or in part on any inaccuracy in the representations and
warranties of the Company contained herein or (3) arise out of or are based
upon any failure of the Company to perform its obligations hereunder or under
laws in connection with the transactions contemplated hereby; provided,
however, that the Company will not be liable (A) to any
24.
25
Underwriter, the directors, officers, employees of such Underwriter and any
person controlling such Underwriter to the extent that such loss, claim,
liability, expense or damage arises from the sale of the Shares in the public
offering to any person by an Underwriter and is based on an untrue statement or
omission or alleged untrue statement or omission made in reliance on and in
conformity with information relating to any Underwriter furnished in writing to
the Company by the Representatives, on behalf of any Underwriter expressly for
inclusion in the Registration Statement, the Preliminary Prospectus or the
Prospectus, and (B) to any Underwriter, the directors, officers, employees or
agents of such Underwriter or any person controlling such Underwriter with
respect to any loss, claim, liability, expense, charge or damage arising out of
or based on any untrue statement or omission or alleged untrue statement or
omission or alleged omission to state a material fact in the Preliminary
Prospectus which is corrected in the Prospectus if the person asserting any
such loss, claim, liability, charge or damage purchased Shares from such
Underwriter but was not sent or given a copy of the Prospectus at or prior to
the written confirmation of the sale of such Shares to such person. The
Company acknowledges that the statements set forth under the heading
"Underwriting" in the Preliminary Prospectus and the Prospectus constitute the
only information relating to any Underwriter furnished in writing to the
Company by the Representatives on behalf of the Underwriters expressly for
inclusion in the Registration Statement, the Preliminary Prospectus or the
Prospectus. This indemnity agreement will be in addition to any liability that
the Company might otherwise have.
(b) Each Selling Stockholder agrees to indemnify and hold
harmless each Underwriter, the directors, officers, employees and agents of
each Underwriter and each person, if any, who controls each Underwriter within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, and the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either such section, from and against any and all losses, claims,
liabilities, expenses and damages (including any and all investigative, legal
and other expenses reasonably incurred in connection with, and any amount paid
in settlement of, any action, suit or proceeding or any claim asserted) to
which they, or any of them, may become subject under the Act, the Exchange Act
or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims liabilities expenses or damages (i)
arise out of or are based on any untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any amendment or supplement to the Registration
Statement or the Prospectus, or the omission or alleged omission to state in
such document a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances under
which they were made, (2) arise out of or are based in whole or in part on any
inaccuracy in the representations and warranties of a Selling Stockholder
contained herein, or (3) arise out
25.
26
of or are based upon any failure of a Selling Stockholder to perform its
obligations hereunder; provided, however, that the Selling Stockholders will
not be liable (1) to any Underwriter, the directors, officers, employees of
such Underwriter and any person controlling such Underwriter to the extent that
such loss, claim, liability, expense or damage arises from the sale of the
Shares in the public offering to any person by an Underwriter and is based on
an untrue statement or omission or alleged untrue statement or omission made in
reliance on and in conformity with information relating to any Underwriter
furnished in writing to the Company by the Representatives, on behalf of any
Underwriter expressly for inclusion in the Registration Statement, the
Preliminary Prospectus or the Prospectus, and (2) to any Underwriter, the
directors, officers, employees or agents of such Underwriter or any person
controlling such Underwriter with respect to any loss, claim, liability,
expense, charge or damage arising out of or based on any untrue statement or
omission or alleged untrue statement or omission or alleged omission to state a
material fact in the Preliminary Prospectus which is corrected in the
Prospectus if the person asserting any such loss, claim, liability, charge or
damage purchased Shares from such Underwriter but was not sent or given a copy
of the Prospectus at or prior to the written confirmation of the sale of such
Shares to such person. Each Selling Stockholder acknowledges that the
statements set forth under the heading "Underwriting" in the Preliminary
Prospectus and the Prospectus constitute the only information relating to any
Underwriter furnished in writing to the Company by the Representatives on
behalf of the Underwriters expressly for inclusion in the Registration
Statement, the Preliminary Prospectus or the Prospectus. This indemnity
agreement will be in addition to any liability that the Selling Stockholders
might otherwise have.
(c) Each Underwriter will indemnify the Company each the
Selling Stockholder, each person, if any, who controls the Company and each
Selling Stockholder within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, each director of the Company and each officer of the
Company who signs the Registration Statement to the same extent as the
foregoing indemnity from the Company to each Underwriter, as set forth in
Section 8(a) or 8(b) as applicable, but only insofar as losses, claims,
liabilities, expenses or damages arise out of or are based on any untrue
statement or omission or alleged untrue statement or omission made in reliance
on and in conformity with information relating to any Underwriter furnished in
writing to the Company by the Representatives on behalf of such Underwriter
expressly for use in the Registration Statement, the Preliminary Prospectus or
the Prospectus. The Company and the Selling Stockholders acknowledge that the
statements set forth under the heading "Underwriting" in the Preliminary
Prospectus and the Prospectus constitute the only information relating to any
Underwriter furnished in writing to the Company by the Representatives on
behalf of the Underwriters expressly for inclusion in the Registration
Statement, the Preliminary Prospectus or the Prospectus. This indemnity will
be in addition to any liability that such Underwriter might otherwise have.
26.
27
(d) Any party that proposes to assert the right to be
indemnified under this Section 8 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 8, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying
party will not relieve it from any liability that it may have to any
indemnified party under the foregoing provisions of this Section unless, and
only to the extent that, such omission results in the loss of substantive
rights or defenses by the indemnifying party. If any such action is brought
against any indemnified party and it notifies the indemnifying party of its
commencement, the indemnifying party will be entitled to participate in and, to
the extent that it elects by delivering written notice to the indemnified party
promptly after receiving notice of the commencement of the action from the
indemnified party, jointly with any other indemnifying party similarly
notified, to assume the defense of the action, with counsel satisfactory to the
indemnified party, and after notice from the indemnifying party to the
indemnified party of its election to assume the defense, the indemnifying party
will not be liable to the indemnified party for any legal or other expenses
except as provided below and except for the reasonable costs of investigation
subsequently incurred by the indemnified party in connection with the defense.
The indemnified party will have right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel will be at the
expense of such indemnified party unless (1) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying party, (2)
the indemnified party has reasonably concluded (based on advice of counsel)
that there may be legal defenses available to it or other indemnified parties
that are different from or in addition to those available to the indemnifying
party, (3) a conflict or potential conflict exists (based on advice of counsel
to the indemnified party) between the indemnified party and the indemnifying
party (in which case the indemnifying party will not have the right to direct
the defense of such action on behalf of the indemnified party) or (4) the
indemnifying party has not, in fact, employed counsel to assume the defense of
such action within a reasonable time after receiving notice of the commencement
of the action, in each of which cases the reasonable fees, disbursements and
other charges of counsel will be at the expense of the indemnifying party or
parties. It is understood that the indemnifying party or parties shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees, disbursements and other charges of more than
one separate firm admitted to practice in such jurisdiction at any one time for
all such indemnified party or parties. All such fees, disbursements and other
charges will be reimbursed by the indemnifying party promptly as they are
incurred. Any indemnifying party will not be liable for any settlement of any
action or claim effected without its written consent (which consent will not be
unreasonably withheld).
27.
28
(e) In order to provide for just and equitable
contributions in circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 8 is applicable in accordance with its
terms but for any reason is held to be unavailable to any indemnified party,
the Company, the Selling Stockholders and the Underwriters will contribute to
the total losses, claims, liabilities, expenses and damages (including any
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted, but after deducting any contribution received by the Company
from persons other than the Underwriters, such as persons who control the
Company within the meaning of the Act, officers of the Company who signed the
Registration Statement and directors of the Company, who also may be liable for
contribution) to which the Company and any one or more of the Underwriters or
the Selling Stockholders may be subject in such proportion as shall be
appropriate to reflect benefits received by the Company, the Underwriters and
the Selling Stockholders. The relative benefits received by the Company, the
Underwriters and the Selling Stockholders shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company or the Selling Stockholders bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. If, but
only if, the allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution shall be made in such proportion
as is appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company, the Underwriters
and the Selling Stockholders with respect to the statements or omissions which
resulted in such loss, claim, liability, expenses or damage, or action in
respect thereof, as well as any other relevant equitable considerations with
respect to such offering. Such relative fault shall be determined by reference
to whether the 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, the Representatives on behalf of the Underwriters or
the Selling Stockholders, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Underwriters and the Selling
Stockholders agree that it would not be just and equitable if contributions
pursuant to this Section 8(e) were to be determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by
any other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, liability, expense or damage,
or action in respect thereof, referred to above in this Section 8(e) shall be
deemed to include, for purpose of this Section 8(e), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(e), no Underwriter shall be required to contribute
any amount in excess of the underwriting discounts received by it and no
28.
29
person found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) will be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribution as provided in this Section 8(e) are several in
proportion to their respective underwriting obligations and not joint. For
purposes of this Section 8(e), any person who controls a party to this
Agreement within the meaning of the Act will have the same rights to
contribution as that party, and each officer of the Company who signed the
Registration Statement will have the same rights to contribution as the
Company, subject in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action
against any such party in respect of which a claim for contribution may be made
under this Section 8(e), will notify any such party or parties, from whom
contribution may be sought from any other obligation it or they may have under
this Section 8(e). No party will be liable for contribution with respect to
any action or claim settled without its written consent (which consent will not
be unreasonably withheld).
(f) The indemnity and contribution agreements contained
in this Section 8 and the representations and warranties of the Company and the
Selling Stockholders contained in this Agreement shall remain operative and in
full force and effect regardless of (i) any investigation made by or on behalf
of the Underwriters, (ii) acceptance of any of the Shares and payment therefor
or (iii) any termination of this Agreement.
9. Termination. The obligations of the several Underwriters
under this Agreement may be terminated at any time on or prior to the Closing
Date by notice to the Company and the Attorney-in-Fact for the Selling
Stockholders from the Representatives, without liability on the part of any
Underwriter to the Company or the Selling Stockholders if, prior to delivery
and payment for the Shares as the case may be, in the sole judgment of the
Representatives, (i) trading in any of the equity securities of the Company
shall have been suspended by the Commission, by an exchange that lists the
Shares or by the Nasdaq National Market, (ii) trading in securities generally
on the New York Stock Exchange shall have been suspended or limited or minimum
or maximum prices shall have been generally established on such exchange, or
additional material governmental restrictions, not in force on the date of this
Agreement, shall have been imposed upon trading in securities generally by such
exchange or by order of the Commission or any court or other governmental
authority, (iii) a general banking moratorium shall have been declared by
either Federal or New York State authorities or (iv) any material adverse
change in the financial or securities markets in the United States or in
political, financial or economic conditions in the United States or any
outbreak or material escalation of hostilities or other calamity or crisis
shall have occurred, the effect
29.
30
of which is such as to make it, in the sole judgment of the Representatives,
impracticable to market the Shares.
10. Substitution of Underwriters. If any one or more of the
Underwriters shall fail or refuse to purchase any of the Firm Shares which it
or they have agreed to purchase hereunder, and the aggregate number of Firm
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase is not more than one-tenth of the aggregate number of Firm
Shares, the other Underwriters shall be obligated, severally, to purchase the
Firm Shares which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase, in the proportions which the number of Firm Shares
which they have respectively agreed to purchase pursuant to Section 1 bears to
the aggregate number of Firm Shares which all such non-defaulting Underwriters
have so agreed to purchase, or in such other proportions as the Representatives
may specify; provided that in no event shall the maximum number of Firm Shares
which any Underwriter has become obligated to purchase pursuant to Section 1 be
increased pursuant to this Section 8 by more than one-ninth of such number of
Firm Shares without the prior written consent of such Underwriter. If any
Underwriter or Underwriters shall fail or refuse to purchase any Firm Shares
and the aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase exceeds one-tenth of the
aggregate number of the Firm Shares and arrangements satisfactory to the
Representative and the Company for the purchase of such Firm Shares are not
made within forty-eight (48) hours after such default, this Agreement will
terminate without liability on the part of any non- defaulting Underwriter or
the Company or the Selling Stockholders for the purchase or sale of any Firm
Shares under this Agreement. In any such case either the Representatives or
the Company shall have the right to postpone the Closing Date, but in no event
for longer than seven (7) days, in order that the required changes, if any, in
the Registration Statement and the Prospectus or in any other documents or
arrangements may be effected. Any action taken pursuant to this Section 8
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
11. Miscellaneous. Notice given pursuant to any of the provisions
of this Agreement shall be in writing and, unless otherwise specified, shall be
mailed or delivered (a) if to the Company, at the office of the Company, 00000
Xxxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000-0000, Attention: Xxxx Xxxxxx, Chief
Executive Officer with a copy to Xxxxxx X. Xxxxxx, Esq., Xxxxxx, Xxxxxx &
Xxxxxxx LLP, Xxx Xxxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, XX 00000, (b) if to the
Underwriters, to the Representatives at the offices of Xxxxxxx & Company, Inc.
000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Corporate Finance Department
with a copy to D. Xxxxxxx Xxxx, Esq., Cooley Godward LLP, 0000 Xxxxxxxxx Xxxxx,
Xxxxx 0000, Xxx Xxxxx, XX 00000 or (c) if to the Selling Stockholders, to the
Attorney-in-Fact for the Selling Stockholders at COHR Inc., 21540
30.
00
Xxxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000-0000. Any such notice shall be effective
only upon receipt. Any notice under such Section 8 or 9 may be made by telex
or telephone, but if so made shall be subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of the
several Underwriters and the Company and of the controlling persons, directors
and officers referred to in Section 8, and their respective successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement. The term "successors and assigns" as used in this Agreement
shall not include a purchaser, as such purchaser, of Shares from any of the
several Underwriters.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to contracts made and to be
performed entirely within such State.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Company and the Underwriters each hereby waive any right they may
have to a trial by jury in respect of any claim based upon or arising out of
this Agreement or the transactions contemplated hereby.
31.
32
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
Very truly yours,
COHR INC.
By:
--------------------------------
Title:
-----------------------------
SELLING STOCKHOLDERS
By:
--------------------------------
As Attorney-in-Fact for the Selling
Stockholders
Confirmed as of the date first above
mentioned:
XXXXXXX & COMPANY, INC.
XXXXXXXXXXX & CO., INC.
XXXXXXX, XXXXXX & CO.
WEDBUSH XXXXXX SECURITIES INC.
Acting on behalf of themselves and as
the Representatives of the other
several Underwriters named in
Schedule I hereof.
By: XXXXXXX & COMPANY, INC.
By:
--------------------------
Title:
-----------------------
32.
33
SCHEDULE I - UNDERWRITERS
Number of
Shares to be
Name of Underwriter Purchased
------------------- ---------------
Xxxxxxx & Company, Inc.
Xxxxxxxxxxx & Co., Inc.
Xxxxxxx, Xxxxxx & Co.
Wedbush Xxxxxx Securities Inc.
---------
TOTAL 1,900,000
=========
34
SCHEDULE II - PRIMARY SELLING STOCKHOLDERS
SELLER SHARES
Number of
Stockholder Seller Shares
----------- -------------
Healthcare Association of Southern California
Hospital Council of San Diego and Imperial Counties
-------
TOTAL 400,000
=======
35
SCHEDULE III - OVER-ALLOTMENT SELLING STOCKHOLDERS
OPTION SHARES
Number of
Stockholder Option Shares
----------- -------------
Xxxx Xxxxxx 20,000
Xxxxx Xxxxxxxx 3,000
Xxxxx Xxxxxxxxx 2,000
------
TOTAL 25,000
======
