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EXHIBIT 1.1
600,000 Units
VISTA LASER CENTERS OF THE PACIFIC, INC.
Each Unit Consisting of Two Shares of Common Stock and
One Common Stock Purchase Warrant
UNDERWRITING AGREEMENT
September ____, 1996
▇▇▇▇▇▇▇▇▇ & Co.
As Representative (the "Representative")
of the Several Underwriters Named in Schedule I
c/▇ ▇▇▇▇▇▇▇▇▇ & Co.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs:
Vista Laser Centers of the Pacific, Inc., a Nevada corporation (the
"Company"), proposes to sell an aggregate of 600,000 units (the "Firm Units") to
the several underwriters named in Schedule I (the "Underwriters") on the terms
and conditions set forth herein, each consisting of two shares of the Company's
Common Stock, par value $.01 (the "Common Stock") and one five-year Class C
Warrant (a "Warrant") to purchase one share of Common Stock at any time within
five years (the "Units") after the Effective Date, as defined herein, on the
terms set forth in the Registration Statement, as defined herein. The Company
also agrees to sell to the Underwriters up to 90,000 Units for the purpose of
covering over-allotments (the "Additional Units") if and as requested by the
Underwriters pursuant to Section 2 hereof. The Firm Units and the Additional
Units are collectively referred to herein as the "Securities."
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form SB-2 (File No. 333-___) (including the
preliminary prospectus therein) relating to the Securities (the "Registration
Statement"). As used in
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this Agreement, the term "Registration Statement" means the Registration
Statement as amended when declared effective by the Commission, including
financial statements, exhibits and the information, if any, deemed to be a part
of the registration statement pursuant to Rule 430A under the Act, and the term
"Prospectus" means the prospectus in the form first filed with the Commission
pursuant to Rule 424(b) under the Act; provided, however, that until such filing
(if any) the term "Prospectus" shall mean the prospectus included in the
Registration Statement; and provided further, that if no prospectus is filed on
behalf of the Company pursuant to Rule 424(b) or if any other Prospectus is used
to confirm sales of Securities prior to the Closing Date (as hereinafter
defined), the term "Prospectus" shall mean any prospectus used to confirm sales
of Securities prior to the Closing Date.
2. Agreements to Sell and Purchase. On the basis of the representations
and warranties contained in this Agreement, and subject to its terms and
conditions, the Company agrees to issue and sell the Firm Units to the several
Underwriters and each Underwriter agrees, severally and not jointly, to purchase
from the Company at a price of $9.09 per Firm Unit (the " Unit Purchase Price")
the number of Firm Units set forth opposite the name of such Underwriter in
Schedule I.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
and sell to the several Underwriters, as determined by the Representative, and
the Underwriters shall have the right to purchase, severally and not jointly, an
aggregate of up to 90,000 Additional Units from the Company at the Unit Purchase
Price. Additional Units may be purchased in the manner provided in Section 4
solely for the purpose of covering over-allotments made in connection with the
offering of the Firm Units.
The Company will not, directly or indirectly, offer, sell, contract to
offer or sell, make subject to any purchase option or otherwise dispose of any
securities of the Company or any securities convertible into or exchangeable for
Common Stock, except to the Underwriters pursuant to this Agreement, for a
period of 120 days after the commencement of the public offering of the
Securities by the Underwriters without the prior written consent of the
Representative. The Company further agrees to not grant any stock options,
rights or warrants during this 120-day period. Notwithstanding the foregoing,
during such period the Company may (i) grant stock options pursuant to the
Company's existing stock options plans, (ii) issue Common Stock upon the
exercise of any option or warrant or the conversion of any security outstanding
on the date hereof and (iii) issue Common Stock upon the exercise of any Warrant
issued pursuant to the Registration Statement.
The Company has caused each of its directors, officers and holders of
2% or more of any of its outstanding classes of capital stock (the "Principal
Stockholders") to agree to not directly or indirectly, offer, sell, contract to
offer or sell, make subject to any purchase option or otherwise dispose of any
securities of the Company or any securities convertible into or exchangeable for
securities of the Company for a period of not less than twelve (12) months
following the Effective Date (as defined herein) without the prior written
consent of the Representative.
3. Terms of Public Offering. The Company is advised by you and
acknowledges that the Underwriters propose (i) to make a public offering of
their respective portions of the Securities
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as soon after the Effective Date of the Registration Statement and the
determination of the public offering price as in your judgment is advisable and
(ii) initially to offer the Securities at the public offering price upon the
terms set forth in the Prospectus.
4. Delivery and Payment. The Firm Units will be delivered by or on
behalf of the Company to you for the accounts of the several Underwriters to the
Representative's agent in New York, New York, against payment of the purchase
price therefor by bank wire or by check or checks, in United States dollars and
in next day funds, payable to the order of the Company at the offices of
▇▇▇▇▇▇▇▇▇ & Co., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, at 9:30 a.m.
EST, ________________, 1996 (which date shall not be more than ten (10) business
days after the Effective Date) or at such other place or time as you and the
Company may determine, such time being herein referred to as the "Closing Date."
It is understood that you, acting individually and not in a
representative capacity, may (but shall not be obligated to) make payment to the
Company on behalf of any other Underwriter for the Securities to be purchased by
such Underwriter. Any such payment by you shall not relieve any such Underwriter
of any of its obligations hereunder.
Delivery to the Underwriters of and payment for any Additional Units
purchased by the Underwriters shall be made in the same place and manner as for
delivery and payment of the Firm Units, at 9:30 a.m. EST, on such date or dates
(individually an "Option Closing Date" and collectively the "Option Closing
Dates"), which may be the same as the Closing Date, but shall in no event be
earlier than the Closing Date nor later than ten (10) business days after the
giving of written notice from you to the Company of your determination to
purchase specified amounts of Additional Units. Any such notice may be given at
any time within thirty (30) days after the Effective Date.
Certificates for the Firm Units and any Additional Units shall be
registered in such names and issued in such denominations as you shall request
in writing not later than two full business days prior to the Closing Date or
any applicable Option Closing Date. Such certificates shall be made available to
you for inspection not later than 9:30 a.m., EST, on the business day next
preceding the Closing Date or applicable Option Closing Date. Certificates in
definitive form evidencing the Firm Units and Additional Units shall be
delivered to you on the Closing Date or applicable Option Closing Date with any
transfer taxes thereon duly paid by the Company, for the respective accounts of
the several Underwriters.
5. Agreements of the Company. The Company agrees with you as follows:
(a) To cause the Registration Statement to be declared
effective by the Commission at the earliest possible date (the "Effective
Date").
(b) The Company will advise you promptly and, if requested by
you, will confirm such advice in writing (i) when the Registration Statement has
become effective (if such Registration Statement has not become effective prior
to the execution of this Agreement), if and when any Prospectus is mailed (or
otherwise transmitted) for filing pursuant to Rule 424 under the Act, and
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when any post-effective amendment to the Registration Statement becomes
effective, (ii) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or for
additional information, (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of the
suspension of qualification of the Securities for offer or sale in any
jurisdiction, or the initiation of any proceeding for such purposes and (iv) of
the happening of any event during the period referred to in Section 5(e) below
that makes any statement made in the Registration Statement or the Prospectus
untrue or that requires the making of any additions to or changes in the
Registration Statement or the Prospectus in order to make the statements therein
not misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, the Company will
make every reasonable effort to obtain the withdrawal or lifting of such order
at the earliest possible time.
(c) The Company will furnish to you one signed copy of the
Registration Statement as first filed with the Commission and of each amendment
to it, including all exhibits, and will furnish to you or to each Underwriter
designated by you such number of conformed copies of the registration statement
as so filed and of each amendment to it, without exhibits, as you may reasonably
request.
(d) The Company will not file any amendment or supplement to
the Registration Statement, whether before or after the time when it becomes
effective, or make any amendment, supplement or change to the Prospectus of
which you shall not previously have been advised or to which you shall
reasonably object.
(e) From time to time during such period as in the opinion of
counsel for the Underwriters a prospectus is required by law to be delivered in
connection with sales by an Underwriter or a dealer, the Company will furnish to
each Underwriter and dealer as many copies of the Prospectus (and of any
amendment or supplement to it) as such Underwriter or dealer may reasonably
request.
(f) If during the period specified in Section 5(e) any event
shall occur as a result of which, in the opinion of counsel for the Underwriters
or in the judgment of the Company, it becomes necessary to amend or supplement
the Prospectus in order to make the statements therein, in light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if it is necessary to amend or supplement the Prospectus to comply with any
law, the Company forthwith will prepare and file with the Commission an
appropriate amendment or supplement to the Prospectus so that the statements in
the Prospectus as so amended or supplemented will not, in light of the
circumstances when it is so delivered, be misleading, or so that the Prospectus
will comply with law, and will furnish to each Underwriter and to such dealers
as you shall specify such number of copies thereof as such Underwriter or
dealers may reasonably request.
(g) Prior to any public offering of the Securities, the
Company will cooperate with you and counsel for the Underwriters in connection
with the registration or qualification of the Securities for offer and sale by
the several Underwriters and by dealers under the securities or Blue Sky laws of
such jurisdictions as you may reasonably request, will continue such
qualification in effect so long as reasonably required for distribution of the
Securities and will file such consents to
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service of process or other documents as may be necessary in order to effect
such registration or qualification; provided, however, that the Company shall
not be required to register or qualify as a foreign corporation or to take any
action which would subject it to the service of process in suits, other than as
to matters and transactions relating to the offer and sale of the Securities, in
any jurisdiction where it is not now so subject.
(h) At or prior to the Effective Date, the Company will
register the Securities with the Securities and Exchange Commission under the
provisions of Section 12(g) of the Securities Exchange Act of 1934 and will
maintain such registration in effect for a period of five (5) years from the
Effective Date.
(i) The Company will make generally available to its
securities holders, as soon as reasonably practicable, an earnings statement
covering a period of at least 12 months after the Effective Date (but in no
event commencing later than 90 days after such date) which shall satisfy the
provisions of Section 11(a) of the Act as defined in Rule 158 thereunder, and
will advise you in writing when such statement has been so made available.
(j) During the period of five (5) years after the Effective
Date, the Company will deliver to the Representatives: (i) copies of such
financial statements and annual, periodic, special or other reports filed or
required to be filed with the Commission, at the time of filing with the
Commission; (ii) copies of all other statements, documents or other information
that the Company shall mail or otherwise make available to any class of its
security holders; and (iii) from time to time such other information concerning
the Company as you may reasonably request; provided, however, that the Company
shall have no obligation to disclose material, nonpublic information.
(k) The Company will pay all costs, expenses, fees and taxes
incident to (i) the preparation, printing, filing and distribution under the Act
of the Registration Statement (including financial statements, schedules and
exhibits), each preliminary prospectus and all amendments and supplements to any
of them prior to or during the period specified in Section 5(e), but not
exceeding nine months after the Effective Date, (ii) the printing and delivery
of the Prospectus and all amendments or supplements to it during the period
specified in Section 5(e), but not exceeding nine months after the Effective
Date, (iii) the printing and delivery of this Agreement, the Preliminary and any
Supplemental Blue Sky Memoranda and all other agreements, memoranda,
correspondence and other documents printed and delivered in connection with the
offering of the Securities, (iv) the registration or qualification of the
Securities for offer and sale under the securities or Blue Sky laws of the
several states (including the reasonable fees and disbursements of counsel for
the Underwriters relating to such registration or qualification), (v) fees
relating to filings and clearance with the National Association of Securities
Dealers, Inc. (the "NASD") in connection with the offering, (vi) the listing of
the Securities on the Boston Stock Exchange ("BSE") and the National Association
of Securities Dealers Automated Quotation system ("NASDAQ"), (vii) furnishing
such copies of the Registration Statement, any preliminary prospectus, the
Prospectus and all amendments and supplements thereto as may be requested for
use in connection with the offer or sale of the Securities by the Underwriters
or by dealers to whom Securities may be sold, (viii) the fees, expenses,
disbursements and costs of Company's counsel, accountants, transfer agent and
other retained professionals, if any, (ix) the performance by the Company of
its obligations under this Agreement,
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and (x) the costs of prospectus memorabilia and of placing any "tombstone"
advertisement in such publications as the Company and the Representative shall
determine. The provisions of this Section 5(k) are intended to relieve the
Underwriters from the payment of the costs and expenses that the Company hereby
agrees to pay and shall not affect any agreement that the Company may make, or
may have made, for the sharing of any such costs and expenses.
(l) In addition to the expenses described in Section 5(k), the
Company shall pay the Representative as a nonaccountable reimbursement for the
expenses incurred by the Representative in connection with the offering (a) at
the Closing on the Closing Date, three percent (3%) of the gross proceeds (based
on the public offering price) of the Securities sold in the offering on such
Closing Date, less the greater of (i) any amounts previously paid to the
Representative as an accountable expense or (ii) $25,000, as a nonaccountable
reimbursement for the expenses incurred by the Representative in connection with
the offering, and (b) at the Closing on any Option Closing Date, three percent
(3%) of the gross proceeds (based on the public offering price) of the
Securities sold in the offering on such Option Closing Date less any amounts
previously paid to the Representative as an accountable expense and not deducted
from the nonaccountable reimbursement paid under subpart (a) above.
If the sale of the Securities provided for herein is not consummated by
reason of any failure, refusal or inability on the part of the Company to
perform any agreement on its part to be performed, or because any other
condition of the Underwriter's obligations hereunder is not fulfilled, the
Company will reimburse the Representative for all out-of-pocket disbursements
(including fees and disbursements of counsel) incurred by the Representative up
to $75,000 (less amounts previously paid as a nonaccountable reimbursement
pursuant to the immediately preceding paragraph) in connection with the
investigation, preparation to market and marketing of the Securities or in
contemplation of performing such obligations hereunder, except as otherwise
agreed by the Company in writing, but the Company shall not be liable to any of
the several Underwriters for damages on account of loss of anticipated profits
from the sale by them of the Securities.
(m) The Company will do and perform all things required or
necessary to be done and performed under this Agreement by the Company prior to
the Closing Date or any Option Closing Date and to satisfy all conditions
precedent to the delivery of the Securities.
(n) The Company will cause the Securities to be listed on the
BSE and the NASDAQ.
(o) The Company will comply fully and in a timely manner with
the applicable provisions of Rule 424 and Rule 430A under the Act.
(p) The Company will apply the net proceeds of the sale of the
Securities sold by it in accordance with the statements under the caption "USE
OF PROCEEDS" in the Prospectus. Prior to the application of such net proceeds,
the Company will invest or reinvest such proceeds only in Eligible Investments.
For the purposes of this Agreement, "Eligible Investments" shall mean the
following investments so long as they have maturities of one year or less: (i)
obligations issued or
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guaranteed by the United States or by any person controlled or supervised by or
acting as an instrumentality of the United Stated pursuant to authority granted
by Congress; (ii) obligations issued or guaranteed by any state or political
subdivision thereof rated either Aa or higher, or MIG 1 or higher, by ▇▇▇▇▇'▇
Investors Service, Inc. or AA or higher, or an equivalent, by Standard & Poor's
Corporation, both of New York, New York, or their successors; (iii) commercial
or finance paper which is rated either Prime-1 or higher or an equivalent by
▇▇▇▇▇'▇ Investors Services, Inc. or A-1 or higher or an equivalent by Standard &
Poor's Corporation, both of New York, New York, or their successors; and (iv)
certificates of deposit or time deposits of banks or trust companies, organized
under the laws of the United States, and which the Representative first approves
in writing, which approval shall not be unreasonably withheld; provided,
further, the Representative's consent to the deposit of proceeds initially with
______________, is hereby given and confirmed.
(q) The Company shall use its best efforts to cause its
officers, directors and beneficial owners of ten percent (10%) or more of any of
its registered securities to deliver a copy of any of the Commission Forms 3, 4
or 5 filed with the Commission to the Representative and the Company shall
deliver copies of all such Forms received by it to the Representative promptly
following receipt thereof. In addition, the Company agrees to promptly deliver
to the Representative copies of any Commission Schedules 13D or 13G received by
the Company, directly or indirectly, which relate to any of the Company's
securities.
(r) The Company will maintain sufficient authorized but
unissued shares of Common Stock to cover exercise of all Underwriters' Warrants,
as defined herein. The Company will maintain sufficient authorized but unissued
Common Stock to cover the exercise of all Underwriters' Underlying Securities,
as defined herein.
(s) Prior to the Closing Date, the Company will cause to be
released in full any and all liens encumbering the assets of the Company or any
of its subsidiaries which have been pledged for the purpose of securing personal
obligations of any shareholder, director or officer of the Company to any
lender.
6. Representations and Warranties of the Company. The term "Company" as
used in this Section 6 shall include Vista Laser Centers of the Pacific, Inc.
and any and all of its subsidiaries existing as of the Closing Date or any
Option Closing Date. The Company represents and warrants to each Underwriter
that:
(a) The Commission has not issued any order preventing or
suspending the use of any preliminary Prospectus with respect to the Securities.
The preliminary Prospectus dated September __, 1996, as amended, contained all
statements required to be stated therein in accordance with the Act, conformed
in all material respects with the requirements of the Act and did not include
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein not misleading. At the time of
effectiveness of the Registration Statement and at all times subsequent thereto
up to the Closing Date or any Option Closing Date, the Registration Statement
and the Prospectus and any amendments and supplements thereto have complied and
will comply in all material respects with the provisions of the Act. The
Registration Statement and the Prospectus and any supplements or amendments
thereto do not, and at the Closing Date and any
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Option Closing Date will not, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, except that the representations and
warranties contained in this sentence shall not apply to statements or omissions
in the Registration Statement or Prospectus (or any supplement or amendment to
them) based upon information furnished to the Company by or on behalf of such
Underwriter contained in the last paragraph on the cover page of the Prospectus,
the first paragraph of text on the inside front cover of the Prospectus
concerning stabilization and over-allotment by the Underwriters, and the section
captioned "Underwriting," concerning the terms of the offering by the
Underwriters. Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the requirements of the
Exchange Act and the applicable rules and regulations of the Commission
thereunder and did not include any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein not
misleading.
(b) The accountants who certified the consolidated financial
statements included in the Registration Statement are independent certified
public accountants within the meaning of the Act.
(c) The consolidated financial statements included in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) present fairly the financial position of the Company and its
consolidated subsidiaries at the dates indicated and the results of its
operations and changes in its financial position for the periods specified. Such
financial statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout such periods. The
supporting schedules included in the Registration Statement present fairly the
information required to be stated therein. No other financial statements or
schedules are required to be included in the Registration Statement or the
Prospectus.
(d) The Company (i) keeps and will continue to keep books,
records and accounts that, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of the assets of the Company and (ii)
maintains and will continue to maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (A) transactions are executed
in accordance with management's general or specific authorization, (B)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets, (C) access to assets is permitted only in
accordance with management's general or specific authorization and (D) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. Neither the Company nor any of its subsidiaries, nor any employee
or agent of the Company or any of its subsidiaries, has made, directly or
indirectly, any payment of funds of the Company or any subsidiary or received or
retained funds in violation of any law, rule or regulation.
(e) Since the dates as of which information is given in the
Registration Statement, except as otherwise stated or contemplated therein: (i)
there has been no material adverse change in the condition, financial or
otherwise, of the Company and its subsidiaries taken as a
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whole, or in the earnings, business affairs or business prospects of the Company
and its subsidiaries taken as a whole, whether or not arising in the ordinary
course of business; (ii) there have been no material transactions entered into
by the Company or any of its subsidiaries other than transactions in the
ordinary course of business; (iii) neither the Company nor any of its
subsidiaries has incurred any material obligation, contingent or otherwise; (iv)
there has been no change in the capital stock or debt of the Company or any of
its subsidiaries, and (v) there has been no dividend or distribution of any kind
declared, paid or made by the Company on its capital stock.
(f) The Company and each of its subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, has the power and authority and holds all
licenses necessary or required to carry on its business and to own or lease and
operate its properties as described in the Registration Statement, and is duly
qualified and in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification. All of the
outstanding capital stock of each subsidiary of the Company has been duly
authorized and validly issued and is fully paid and nonassessable and is owned
by the Company free of any restriction on transfer, lien, encumbrance, security
interest or claim whatsoever. Except as set forth in the Registration Statement,
the Company does not own, and at the Closing Date will not own, directly or
indirectly, any share of stock or any other security of any corporation or have
any equity interest in any firm, partnership, joint venture, association or
other entity. Except as set forth on Schedule II hereto, there is no outstanding
right, warrant or option to acquire, or instrument convertible into or
exchangeable for, any capital stock or other equity interest in the Company or
any of its subsidiaries.
(g) All the outstanding shares of all the Company's
outstanding classes of capital stock are duly authorized and have been validly
issued and are fully paid, nonassessable and free of pre-emptive rights. All
outstanding shares of all classes of capital stock of the Company and all
rights, warrants or options to acquire, and all instruments convertible or
exchangeable for, shares of Common Stock of the Company have been issued in
accordance with applicable Federal and state securities laws. The Securities to
be sold by the Company are duly authorized and, when delivered to the
Underwriters against payment therefor as provided by this Agreement, will have
been validly issued and will be fully paid, nonassessable and free of preemptive
or similar rights.
(h) The authorized capital stock of the Company, including the
Common Stock, conforms to the description thereof in the Registration Statement
and the Prospectus. All outstanding Securities will be listed on the BSE and the
NASDAQ, subject only to official notice of issuance. The certificates for the
Securities are in valid and proper legal form. Except as set forth on Schedule
III, no holder of securities of the Company has any right to require the Company
to register shares of any class of capital stock or other securities.
(i) Neither the Company nor any of its subsidiaries is in
violation of any term or provision of its charter or bylaws or in default in the
performance or observance of any material obligation, agreement or condition
contained in any bond, debenture, note or any other evidence of indebtedness or
in any indenture or other instrument or agreement to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries
or any property of the
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Company or any of its subsidiaries is bound.
(j) This Agreement has been duly authorized, executed and
delivered by the Company. The Company has full power and authority to enter into
and perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement, the compliance by the Company with all provisions
hereof and the consummation of the transactions contemplated hereby will not
conflict with or result in a breach of any of the terms or provisions of, or a
default under, the charter or by laws of the Company or any of its subsidiaries
or any agreement, indenture or other instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries
or any property of the Company or any of its subsidiaries is bound, or violate
or conflict with any law, regulation or ruling or any order, judgment or decree
applicable to the Company or any of its subsidiaries or to any property of the
Company or any of its subsidiaries. No consent, approval, authorization or order
of any court or any governmental agency or body is required for the consummation
by the Company of the transactions contemplated hereby, except such as have been
obtained or may be required under the Act or under state securities or Blue Sky
Laws.
(k) Except as disclosed in the Prospectus, there is no
material action, suit or proceeding pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of its
subsidiaries is the subject, and no such action, suit or proceeding is
threatened or, to the best of the Company's knowledge, contemplated. No labor
disturbance by the employees of the Company or any of its subsidiaries exists or
is imminent that might be expected to materially and adversely affect the
earnings, business affairs or business prospects of the Company and its
subsidiaries taken as a whole, and the Company is not aware of any existing or
imminent labor disturbances by the employees of any of its principal suppliers
or customers that might be expected to result in any material adverse change in
the earnings, business affairs or business prospects of the Company and its
subsidiaries.
(l) Except as otherwise set forth in the Registration
Statement, the Company and each of its subsidiaries have good and marketable
title, free and clear of all liens, claims and encumbrances, except liens for
taxes not yet due and payable, to all property and assets that are described in
the Registration Statement as being owned by the Company and its subsidiaries,
subject only to such exceptions as in the aggregate are not material and do not
adversely affect the earnings, business affairs or business prospects of the
Company and its subsidiaries. All material leases to which the Company or any of
its subsidiaries is a party are valid and binding and no default has occurred
thereunder, and the Company and its subsidiaries enjoy peaceful and undisturbed
possession under all such leases.
(m) Neither the Company nor any of its subsidiaries is in
violation of any law, ordinance, governmental rule or regulation or court decree
to which it may be subject, or has failed to obtain and maintain in full force
and effect any license, permit, certificate or other governmental authorization
necessary to the ownership of any property of the Company or any of its
subsidiaries, or to the conduct of the business of the Company or any of its
subsidiaries, except for any such violation or failure that would not have had a
material adverse effect on the financial condition, earnings, business affairs
or business prospects of the Company.
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(n) There are no contracts or other documents that are
required to be filed as exhibits to or described in the Registration Statement
which have not been so filed or described. Each contract so described has been
duly and validly executed and delivered and is in full force and effect in
accordance with its terms.
(o) Except as set forth in the Registration Statement and
Prospectus, neither the Company nor any of its subsidiaries has violated any
environmental, safety or similar law applicable to its business, nor any
federal, provincial, state or local U.S. or Canadian law relating to
discrimination in the hiring, promotion or pay of employees, employment
conditions, working hours, employee benefits, nor any provisions of the Employee
Retirement Income Security Act or the rules and regulations promulgated
thereunder, except for any such violation that would not have had a material
adverse effect on the financial condition, earnings, business affairs or
business prospects of the Company.
(p) To the knowledge of the Company and its directors and
officers, the real property owned, leased or otherwise utilized by the Company
and its subsidiaries in connection with the operation of their businesses,
including without limitation any subsurface soils and ground water is free of
contamination from any substance or material presently known to be toxic or
hazardous, including without limitation any radioactive substance, methane,
volatile hydrocarbons, industrial solvents or any other material or substance
which based on present knowledge could now or at any time in the future cause a
material detriment to or materially impair the beneficial use thereof by the
Company or such subsidiary or constitute or cause a significant health, safety
or other environmental hazard to occupants or users thereof; such real property
does not contain any underground storage or treatment tanks, active or abandoned
water, gas or oil ▇▇▇▇▇, or any other underground improvements or structures,
other than the foundations, footings or other supports for the improvements
located thereon.
(q) The Company and each of its subsidiaries maintains
reasonably adequate insurance for the conduct of their respective businesses and
the value of their respective properties. All such insurance is issued and in
force on the date hereof. The Company engaged or consulted with an appropriately
qualified insurance and risk management professional who has evaluated the
probability of occurrence and estimated severity of the casualty, liability,
property damage and similar risks encountered in the business of the Company and
its subsidiaries and advised the Company that it is adequately insured against
material losses.
(r) The Company and each of its subsidiaries have such
permits, licenses, franchises and authorizations of governmental or regulatory
authorities ("permits") as are necessary to own, lease and operate their
respective properties and to conduct their businesses in the manner described in
the Prospectus, subject to such qualifications as may be set forth in the
Prospectus. The Company and each of its subsidiaries have fulfilled and
performed all of their material obligations with respect to such permits, and no
event has occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material impairment of
the rights of the holder of any such permit, subject in each case to such
qualification as may be set forth in the Prospectus. Except as described in the
Prospectus, such permits contain no restrictions that are materially burdensome
to the Company or any of its subsidiaries.
12
(s) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(t) All tax returns required to be filed by the Company and
each of its subsidiaries in any jurisdiction have been filed, other than those
filings being contested in good faith, and all material taxes, including
withholding taxes, penalties and interest, assessments, fees and other charges
due or claimed to be due from such entities have been paid, other than those
being contested in good faith and for which adequate reserves have been provided
or those currently payable without penalty or interest.
(u) Vista Laser Centers of the Pacific, Inc. is classified as
a "C" corporation with the Internal Revenue Service. The Company and its
subsidiaries are subject to direct taxation of their earnings (subject to group
or consolidated tax reporting) and the shareholders thereof are not subject to
taxation on the undistributed earnings of the Company or its subsidiaries.
(v) The Company's Board of Directors consists of those persons
listed in the Prospectus. Except as disclosed in the Prospectus, none of such
persons is employed by the Company nor is any of them affiliated with the
Company, except for service on its Board of Directors.
(w) Except as provided for herein, no broker's or finder's
fees or commissions are due and payable by the Company, and none will be paid by
it.
(x) The Company is eligible to use Form SB-2 for the
registration of the Securities.
(y) Neither the Company nor, to its knowledge after due and
diligent inquiry, any person other than any Underwriter, has made any
representation, promise or warranty, whether verbal or in writing, to anyone,
whether an existing shareholder or not, that any of the Securities will be
reserved for or directed to them during the proposed public offering.
(z) Except as set forth in the Prospectus, the Company has not
established, contributed to or maintained any "employee benefit plan" as defined
in the Employment Retirement Income Security Act or in the Internal Revenue Code
of 1986, as amended.
(aa) Neither the Company nor, to its knowledge, any of its
officers, directors or affiliates has taken, directly or indirectly, any action
designed to cause or result in, or which has constituted the stabilization or
manipulation of the price of the outstanding Preferred Stock or any other
outstanding securities of the Company to facilitate the sale or resale of the
Securities in the offering.
7. Sale Restrictions and Lockup Agreements.
The Company agrees to not permit or cause any of the shares of
any of its outstanding classes of capital stock (or securities which can be
converted, exchanged or exercised
13
for any such stock) owned by any Principal Stockholders to be offered, sold or
disposed of, directly or indirectly, in any manner whatsoever (including
pursuant to Rule 144 under the Act) for a period of not less than twelve (12)
months following the Effective Date without obtaining the prior written approval
of the Representative. The Company shall cause the Principal Stockholders to
execute an agreement (the "Lockup Agreement") with the Underwriters regarding
such restrictions in form and substance satisfactory to the Representative and
its counsel.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), from and against any and all losses,
claims, damages, liabilities, judgments and expenses (including any
investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claim
asserted) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any preliminary
prospectus or the Prospectus or in any amendment or supplement thereto, or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities,
judgments or expenses are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information furnished to the
Company by or on behalf of such Underwriter contained in the last paragraph on
the cover page of the Prospectus, the first paragraph of text on page 2 of the
Prospectus, concerning stabilization and over-allotment by the Underwriters, and
the section captioned "Underwriting," concerning the terms of the offering by
the Underwriters.
(b) In case any action shall be brought against any
Underwriter or any person controlling such Underwriter, based upon any
preliminary Prospectus, the Registration Statement or the Prospectus or any
amendment or supplement thereto and with respect to which indemnity may be
sought against the Company, such Underwriter shall promptly notify the Company
in writing and the Company shall assume the defense thereof, including the
employment of counsel and payment of all fees and expenses. Any Underwriter or
any such controlling person shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Underwriter or such
controlling person unless (i) the employment of such counsel has been
specifically authorized in writing by the Company, (ii) the Company has failed
to assume the defense and employ counsel or (iii) the named parties to any such
action (including any impleaded parties) include both such Underwriter or such
controlling person and the Company and such Underwriter or such controlling
person shall have been advised by counsel that there may be one or more legal
defenses available to it that are different from or additional to those
available to the Company (in which case the Company shall not have the right to
assume the defense of such action on behalf of such Underwriter or such
controlling person, it being understood, however, that the Company shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all such Underwriters and controlling
14
persons, which firm shall be designated in writing by the Representative, and
that all such fees and expense shall be reimbursed as they are incurred). The
Company shall not be liable for any settlement of any such action effected
without their written consent, but if settled with the written consent of the
Company, the Company agrees that each person so consenting shall indemnify and
hold harmless any Underwriter and any such controlling person from and against
any loss or liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for reasonable fees and
expenses of counsel is contemplated by the second sentence of this paragraph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than ten business days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could
have been a party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, any person controlling the Company to the same
extent as the foregoing indemnity from the Company to each Underwriter but only
with reference to information furnished by or on behalf of such Underwriter
contained in the last paragraph of the cover page of the Prospectus, the last
paragraph of text on the inside front cover of the Prospectus concerning
stabilization and over-allotment by the Underwriters, and the section captioned
"Underwriting," concerning the terms of the offering by the Underwriters. In
case any action shall be brought against the Company, any of its directors, any
such officer, any such controlling person based on the Registration Statement,
the Prospectus or any preliminary Prospectus and in respect of which indemnity
may be sought against any Underwriter, such Underwriter shall have the rights
and duties given to the Company (except that if the Company shall have assumed
the defense thereof such Underwriter shall not be required to do so, but may
employ separate counsel therein and participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Underwriter),
and the Company, its directors, any such officers, and any such controlling
person shall have the rights and duties given to such Underwriter by Section
8(b) hereof.
(d) If the indemnification provided for in this Section 8 is
unavailable to the Underwriters or the Company, as the case may be, in respect
of any losses, claims, damages, liabilities, judgments or expenses referred to
therein, then each indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities, judgments and expenses
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other hand
from the offering of the Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Underwriters on the other hand in connection with
15
the statements of omissions that resulted in such losses, claims, damages,
liabilities, judgments or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other hand shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company 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 and in the notes thereto. The relative fault
of the Company on the one hand and of the Underwriters on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or by the
Underwriters, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 8 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities, judgments or expenses referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, 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, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 8 are several in proportion to the respective
underwriting commitment of each Underwriter and not joint.
The indemnity and contribution agreements contained in this
Section 8 and the representations and warranties of the Company in this
Agreement shall remain operative and in full force and effect regardless of any
termination of this Agreement or any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter.
9. Conditions to Underwriters' Obligations. The several obligations of
the Underwriters to purchase the Firm Units under this Agreement are subject to
the satisfaction of each of the following conditions:
(a) All of the representations and warranties of the Company
contained in this Agreement shall be true and correct on the Closing Date and
any Option Closing Date with the same force and effect as if made on and as of
the Closing Date and any Option Closing Date.
(b) The Registration Statement shall have become effective not
later than 5:00 p.m. EST, on the date of this Agreement or at such later date
and time as you may approve in
16
writing and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall have
been commenced or shall be pending before or contemplated by the Commission, and
any request for additional information on the part of the Commission shall have
been fulfilled.
(c) Since the date of the latest balance sheet included in the
Registration Statement and in the Prospectus: (i) there shall not have occurred
any material adverse change, or any development involving a prospective material
adverse change, in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries,
whether or not arising in the ordinary course of business; (ii) there shall not
have been any change in the capital stock or increase in the long-term debt of
the Company or any of its subsidiaries from that set forth in the Registration
Statement and the Prospectus; and (iii) the Company and its subsidiaries shall
have no liability or obligation, direct or contingent, that is material to the
Company and its subsidiaries taken as a whole, other than those reflected in the
Registration Statement and the Prospectus.
(d) You shall have received on the Closing Date a certificate
dated the Closing Date signed by the principal executive officer and the
principal financial or accounting officer of the Company confirming the matters
set forth in Section 9(c) and to the effect that (i) no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceeding for that purpose is pending before or, to the knowledge of such
signers, contemplated by the commission; (ii) the Company has performed all
agreements and satisfied all conditions on its part to be performed or satisfied
under this Agreement at or prior to the Closing Date; (iii) the representations
and warranties of the Company herein contained are true and correct to the same
extent as if made on and as of the Closing Date; (iv) there is no litigation or
governmental proceeding pending or threatened against the Company or any of its
subsidiaries or any property of the Company or any of its subsidiaries that is
required to be disclosed in the Registration Statement and the Prospectus and is
not so disclosed; and (v) there is no failure by the Company or any of its
subsidiaries to comply with any applicable Federal, state or other law or
regulation relating to the conduct of the business of the Company and its
subsidiaries that may have a material adverse effect on the condition, financial
or otherwise, or on the earnings, business affairs or business prospects of the
Company and its subsidiaries, taken as a whole, other than as set forth in the
Registration Statement and the Prospectus.
(e) You shall have received on the Closing Date or on any
Option Closing Date an opinion (satisfactory to you and counsel for the
Underwriters), dated the Closing Date or Option Closing Date, as applicable, of
Law Office of ▇▇▇▇▇▇▇ ▇. Hair, counsel for the Company, to the effect that:
(i) the Company and each of its subsidiaries is a
corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its
incorporation and has the corporate power and authority to
carry on its business and to own, lease and operate its
properties as described in the Registration Statement and the
Prospectus;
17
(ii) the Company and each of its subsidiaries is duly
qualified and in good standing as a foreign corporation
authorized to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of property
requires such qualification, except where the failure so to
qualify would not have a material adverse effect on the
earnings, business affairs or business prospects of the
Company and its subsidiaries, taken as a whole;
(iii) (A) the Company has the corporate power and
authority to enter into and perform this Agreement and to
issue, sell and deliver the Securities; and (B) this Agreement
has been duly and validly authorized, executed and delivered
by the Company;
(iv) (A) the authorized and issued capital stock of
the Company is correctly set forth in the Registration
Statement and Prospectus under the caption "Capitalization,"
and (B) the Securities to be sold by the Company hereunder
have been duly authorized and, when issued and delivered and
paid for hereunder, will be validly issued, fully paid and
nonassessable and free of pre-emptive or similar rights;
(v) all of the issued and outstanding shares of
capital stock of each subsidiary of the Company have been duly
authorized and validly issued, are fully paid and
nonassessable and, to such counsel's knowledge, are owned (or
will be owned on the Closing Date) by the Company free and
clear of any mortgage, pledge, lien, encumbrance, claim or
equity; there is no outstanding right, warrant or option to
acquire, or instrument convertible into or exchangeable for,
any shares of capital stock or other equity interest in any
subsidiary;
(vi) the description of the Securities contained or
to be contained in the Company's Registration Statement on
Form 8-A under the caption "Description of Registrant's
Securities to be Registered," is true and correct in all
material respects and fairly presents the information called
for with respect to the Securities, and the statements in the
Registration Statement and the Prospectus under the captions
"The Company," "Risk Factors," "Proposed Business", "Federal
Income Tax Considerations", and "Shares Eligible for Future
Sale", insofar as such statements constitute a summary of the
statutes, rules, regulations, documents or proceedings
referred to therein, are true and correct in all material
respects and fairly present the information called for by the
Act with respect thereto;
(vii) the Registration Statement has become effective
under the Act, the Company has complied in a timely manner
with the applicable provisions of Rule 424 and Rule 430A under
the Act, and no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for
that purpose is pending before or, to the knowledge of such
counsel, contemplated by the Commission;
(viii) such counsel does not know of any legal or
governmental proceeding
18
pending or threatened to which the Company or any of its
subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is subject that is required
to be described in the Registration Statement or Prospectus
and is not so described;
(ix) such counsel does not know of any contract or
other document that is required to be described in the
Registration Statement or Prospectus or is required to be
filed as an exhibit to the Registration Statement that is not
described or filed as required; the descriptions thereof or
references thereto in the Registration Statement and
Prospectus are accurate in all material respects; and to such
counsel's knowledge, each such contract or other document is
in full force and effect in accordance with its terms;
(x) neither the Company nor any of its subsidiaries
is in violation of its charter or bylaws, and neither the
Company nor any of its subsidiaries, to the knowledge of such
counsel, is in default in the performance of any obligation,
agreement or condition contained in any bond, debenture, note
or any other evidence of indebtedness or in any material
indenture or other agreement to which the Company or any of
its subsidiaries is a party or by which the Company or any of
its subsidiaries or any property of the Company or any of its
subsidiaries is bound;
(xi) the Company and each of its subsidiaries has
such permits, licenses, franchises and authorizations of
governmental or regulatory authorities ("permits") as are
necessary to own, lease and operate its respective properties
and to conduct its business in the manner described in the
Prospectus, subject to such qualifications as may be set forth
in the Prospectus; to the best of such counsel's knowledge,
after due inquiry, the Company and each of its subsidiaries
has fulfilled and performed all of its material obligations
with respect to such permits and no event has occurred which
allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other
material impairment of the rights of the holder of any such
permit, subject in each case to such qualification as may be
set forth in the Prospectus; and, except as described in the
Prospectus, such permits contain no restrictions that are
materially burdensome to the Company or any of its
subsidiaries;
(xii) the execution, delivery and performance of this
Agreement and the consummation of the transactions
contemplated hereby will not conflict with or constitute a
breach of any of the terms or provisions of, or a default
under, the charter or bylaws of the Company or any of its
subsidiaries or any agreement, indenture or other instrument
to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries or any
property of the Company or any of its subsidiaries is bound,
or (assuming compliance with all applicable state securities
and Blue Sky laws) violate or conflict with any laws,
administrative regulations or rulings or orders, judgments or
decrees applicable to the Company or any of its subsidiaries
or to any property of the Company or any of its subsidiaries;
19
(xiii) except for the order of the Commission (which
has been obtained) declaring the Registration Statement
effective and except for permits and similar authorizations
required under the securities or Blue Sky laws of certain
jurisdictions, no consent, approval, authorization or other
order of any court or regulatory body, administrative agency
or other governmental body is required for the consummation of
the transactions contemplated by this Agreement; and no
consents or waivers from the holders of the Company's capital
stock or debt securities are required in connection with the
consummation of the transactions contemplated hereby;
(xiv) to such counsel's knowledge, after due inquiry,
neither the Company nor any of its subsidiaries has violated
any environmental, safety or similar law applicable to its
business, nor any federal or state law relating to
discrimination in the hiring, promotion or pay of employees
nor any applicable federal or state wages and hours laws, nor
any provisions of the Employee Retirement Income Security Act
or the rules and regulations promulgated thereunder, which in
each case might result in any material adverse change in the
business, prospects, financial condition or results of
operations of the Company and its subsidiaries taken as a
whole;
(xv) to such counsel's knowledge, after due inquiry,
all material leases to which the Company or any of its
subsidiaries is a party are valid and binding and no default
has occurred or is continuing thereunder, which might result
in any material adverse change in the business, prospects,
financial condition or results of operations of the Company
and its subsidiaries taken as a whole;
(xvi) the Company is not an "investment company" or a
company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended;
(xvii) except as set forth on Schedule III, to such
counsel's knowledge, after due inquiry, no holder of any
security of the Company has any right to require registration
of any outstanding class of capital stock or any other
security of the Company;
(xviii) each document, if any, filed pursuant to the
Exchange Act and incorporated by reference in the Registration
Statement and the Prospectus (except for financial statements
and schedules as to which such counsel need not express any
opinion) complied in all material respects with the
requirements of the Exchange Act and the applicable rules and
regulations of the Commission thereunder;
(xix) the Company is classified as a "C" corporation
with the Internal Revenue Service. The Securities constitute
an equity interest in the Company, and not indebtedness of the
Company, for federal income tax purposes under Section 385 of
the Internal Revenue Code of 1986, as amended.
(xx) The certificates evidencing the Securities to be
delivered hereunder are
20
in due and proper form under Nevada law and the Securities
conform in all material respects to the description thereof
contained in the Prospectus.
(xxi) the Underwriters' Warrants, as hereafter
defined, have been duly authorized, executed, delivered, and
validly issued by the Company; the Underwriters' Underlying
Securities, as hereafter defined, to be issued on exercise of
the Underwriters' Warrants, and Common Stock to be issued on
the exercise of the Underwriters' Underlying Securities, will
be duly authorized, validly issued, fully paid, nonassessable,
and free of preemptive rights; the holders thereof will not be
subject to personal liability by reason of being such holders;
no governmental or regulatory approvals are required in
connection with the execution and delivery of the
Underwriters' Warrants, the issuance of the Underwriters'
Underlying Securities upon exercise thereof and issuance of
Common Stock on the exercise of Underwriters' Underlying
Securities (other than such approval as may be required by the
NASD); and the execution, delivery, and exercise of the
Underwriters' Warrants and conversion of Underwriters'
Underlying Securities will not conflict with or constitute a
breach of any of the terms or provisions of, or a default
under, the Articles of Incorporation or bylaws of the Company
or any agreement, indenture, other instrument, order, or
decree to which the Company is a party or by which it is
bound, or any law or regulation applicable to the Company;
(xxii) no transfer or other taxes are required to be
paid under Nevada law in connection with the sale and delivery
of the Securities and Underwriters' Warrants to the
Underwriters hereunder.
(xxiii) the Company has sufficient authorized but
unissued shares of Common Stock to cover exercise of any and
all Underwriters' Warrants; the Company has sufficient
authorized but unissued shares of Common Stock to cover the
exercise of any and all Underwriters' Underlying Securities.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company, counsel for
the Underwriters, representatives of the independent public accountants for the
Company and you at which the contents of the Registration Statement and
Prospectus and related matters were discussed and, although such counsel is not
passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and Prospectus, on the basis of the foregoing, no facts have come to
the attention of such counsel that lead them to believe that the Registration
Statement or the Prospectus contain an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading (it being understood that such
counsel need express no comment with respect to the financial statements,
schedules and other financial and statistical data included in the Registration
Statement or Prospectus).
In giving such opinion such counsel may rely as to matters of fact, to
the extent proper, on certificates of responsible officers of the Company. To
the extent such opinion involves matters
21
governed by the laws of jurisdictions other than the United States, such counsel
may rely on the opinions of local counsel satisfactory to the Underwriters. Such
opinion shall be to such further effect with respect to other legal matters
relating to this Agreement and the sale of the Securities hereunder as you
reasonably may request.
(f) You shall have received from ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇,
P.C., counsel for the Representative, such opinion or opinions, dated as of the
Closing Date, with respect to the incorporation of the Company, the validity of
the Firm Units being sold on such Closing Date, the Registration Statement, the
Prospectus and other related matters as you reasonably may request, and such
counsel shall have received such papers and information as they reasonably
request to enable them to pass upon such matters. In rendering its opinion, such
counsel shall be entitled to rely upon the opinion of the Company's counsel
delivered pursuant to Section 9(e) above and upon certificates of the Company's
officers executed in support thereof.
(g) At the time of execution of this Agreement and on each
Closing Date or Option Closing Date, you shall have received a letter, addressed
to you, from KPMG Peat Marwick LLP, independent accountants, confirming that
they are independent certified public accountants within the meaning of the
Securities Act and the applicable Rules and Regulations, and stating, as of the
date of such letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given or incorporated in the Registration Statement and
Prospectus, as of a date not more than five days prior to the date of such
letter) the conclusions and findings of such firm with respect to the financial
information contained in the Registration Statement and prospectus, and other
matters covered by its letter delivered to you concurrently with the execution
of this Agreement, and confirming the conclusions and findings set forth in such
prior letter.
(h) The Company shall not have failed at or prior to the
Closing Date to perform or comply with any of the agreements herein contained
and required to be performed or complied with by the Company at or prior to the
Closing Date.
(i) The Securities shall have been approved for listing upon
notice of issuance by the BSE and the NASDAQ. The several obligations of the
Underwriters to purchase any Additional Units hereunder are subject to
satisfaction on and as of any Option Closing Date of the conditions set forth in
Section 9 (a) through (i) above, except that the opinion called for in Section 9
(e) and the letter referred to in Section 9 (g) shall be revised to reflect the
sale of the Additional Units.
10. Post-Effective Agreements and Covenants of the Company. The Company
agrees and covenants to act or cause others to act as described below following
the Effective Date:
(a) For a period of five (5) years from the Effective Date,
the Company shall cause the appointment of a non-voting advisor, designated by
the Representative, to its Board of Directors. Such designee shall attend
meetings of the Board and shall be entitled to receive reimbursement for all
reasonable costs incurred in attending such meetings, including, but not
22
limited to, food, lodging and transportation.
To the extent permitted by law, the Company agrees to
indemnify the Underwriters and their designee against any and all claims arising
out of the designee's service as a non-voting advisor to the Board of Directors.
In the event the Company maintains a liability insurance policy affording
coverage for the acts of its officers and directors, it shall use its best
efforts to include each of the Underwriters and their designee as insureds under
such policy.
If the Representative does not exercise its option to
designate an advisor to the Company's Board of Directors, the Representative
shall nonetheless have the right to send a representative (who need not be the
same individual from meeting to meeting) to observe each meeting of the Board of
Directors. The Company agrees to give the Representative notice of each such
meeting and to provide the Representative with an agenda and minutes of the
meeting no later than the time it gives such notice and provides such items to
the directors.
(b) The Company shall retain American Stock Transfer & Trust
Company, as transfer agent, unless otherwise agreed to by Representative, for
the Securities for a period of five (5) years following the Effective Date. In
addition, for a period of five (5) years following the Effective Date, at the
request of the Representative, the Company shall cause such transfer agent to
provide the Representative on a monthly basis with copies of the Company's stock
transfer sheets and, when requested by the Representative, a current list of the
Company's securities holders, including a list of the beneficial owners of
securities held by a depository trust company, and other nominees.
(c) For a period of five (5) years from the Effective Date,
the Company shall provide to the Representative on a timely basis quarterly
statements setting forth such information regarding the Company's results of
operations and financial position (including balance sheets, profit and loss
statements, and cash flow statements) as is regularly prepared by management of
the Company.
(d) For a period of five (5) years from the Effective Date,
the Company shall continue to retain the accountants retained in accordance with
Section 9(g) hereof (or another nationally recognized accounting firm reasonably
acceptable to the Representative).
(e) For a period of five (5) years from the Effective Date,
the Company, at its expense, shall cause its regularly engaged independent
certified public accountants to review (but not audit) the Company's financial
statements for each of the first three (3) fiscal quarters prior to the
announcement of quarterly financial information, the filing of the Company's
Form 10-Q quarterly report and the filing of quarterly financial information to
stockholders.
(f) For a period of five (5) years from the Effective Date,
the Company shall provide the Representative, on a not less than annual basis,
with internal forecasts setting forth projected results of operations for each
quarterly and annual period in the two fiscal years following the respective
dates of such forecasts. Such forecasts shall be provided to the Representative
more frequently than annually if prepared more frequently by management. Revised
forecasts shall be
23
prepared and provided to the Representative when required to reflect more
current information, revised assumptions or actual results that differ
materially from those set forth in the forecasts.
(g) The Company shall use its best efforts to cause the
Securities to be designated for quotation on the BSE and the NASDAQ and maintain
such listing for as long as the Securities are qualified for inclusion in the
BSE and the NASDAQ.
(h) Until such time as the Securities or the Common Stock are
listed for trading on the New York Stock Exchange, the American Stock Exchange
or NASDAQ-NMS, the Company shall cause its legal counsel to provide the
Representative with a list, to be updated at least annually, of those states in
which non-issuer transactions in the Securities or Common Stock are exempt from
registration under the Blue Sky laws of the several states.
(i) The Company will use the proceeds of the offering only as
set forth in the Registration Statement.
11. Underwriters' Warrants.
(a) In order to induce the Underwriters to enter into this
Agreement, the Company, for consideration of $0.001 per warrant, shall execute
and deliver to the Representative 60,000 five-year warrants (the "Underwriters'
Warrants") to purchase 60,000 Units at an exercise price per Underwriters'
Warrant equal to 120% of the public offering price of the Firm Units. Execution
and delivery of the Underwriters' Warrants shall be made to the Representative
at the Closing on the Closing Date. The Underwriters' Warrants shall be
registered in the name of any underwriter or any officer thereof or any member
of the selling group as specified by the Representative in writing to the
Company at least two days before the Closing Date. The cost of original issue
tax stamps, if any, in connection with the execution and delivery of the
Underwriters' Warrants shall be borne by the Company.
(b) The term "Underwriters' Underlying Securities" shall
include all Common Stock and Common Stock purchase warrants to be issued upon
the exercise of Underwriters' Warrants. The Underwriters' Warrants shall not be
redeemable by the Company and shall provide for adjustments in the number of
shares of Underwriters' Underlying Securities into which such warrants may be
exercised and to the exercise price thereof in order to prevent dilution in
the event of subsequent splits, consolidations, mergers or other actions
affecting the Common Stock. The Company shall reserve and at all times have
available a sufficient number of shares of its Common Stock to be issued upon
the exercise of the Underwriters' Warrants or upon the exercise of the
Underwriters' Underlying Securities. The Company shall not call for redemption
or redeem any of the Underwriters' Underlying Securities prior to commencement
of the Warrant Exercise Term, as defined herein, and then only upon such terms
and provisions for notice as are applicable to redemption of the Securities sold
in the offering.
(c) The Company and the Representative agree that the
Representative may designate that the Underwriters' Warrants be issued in
varying amounts directly to itself, other underwriters, their respective
officers or to members of the selling group. However, such
24
designation will only be made by the Representative if it determines and
substantiates to the Company that such issuance will not violate the applicable
rules of the NASD. The Representative and the Company agree that any transfers
of the Underwriters' Warrants will only be made if they do not violate the
registration provisions of the Act.
(d) The Underwriters' Warrants may not be exercised or
transferred (except as set forth in section (c) above) during the 12-month
period following the Effective Date. Thereafter, until the fifth anniversary of
the Effective Date (the "Warrant Exercise Term"), the Underwriters' Warrants
shall be exercisable at the exercise price set forth in Section 11(a) in
accordance with the terms of the Underwriters' Warrants. If any of the
Underwriters' Warrants are not exercised by 5:00 p.m. EST on the fifth
anniversary of the Effective Date, all such Underwriters' Warrants remaining
unexercised shall expire.
(e) At any time during the Warrant Exercise Term, the
Representative or the holders of a majority of the Underwriters' Warrants,
acting together, shall have the right to demand on one occasion that the Company
(and the Company shall) prepare and file one Post- Effective Amendment to the
Registration Statement or prepare and file a new registration statement, if then
required under the Act, registering or qualifying for distribution to the public
the Underwriters' Warrants, Underwriters' Underlying Securities and Common Stock
issued or issuable upon exercise thereof. The Company shall bear all expenses
incurred in preparation and filing of any Post-Effective Amendment to the
Registration Statement or new registration statement to be filed pursuant to
this Section 11(e) including, without limitation, attorneys' fees, accounting
and auditing fees, and printing and mailing expenses. The Company shall cause
any such filing to remain effective for not less than ninety (90) days.
(f) If at any time before the seventh anniversary of the
Effective Date, the Company shall prepare and file one or more Post-Effective
Amendments to the Registration Statement (which for purposes of this Section 11
shall include filings on Form 1-A under the ▇▇▇▇ ▇▇▇) or any new registration
statement under the Act, in connection with any actual or planned distribution
of equity or debt securities of the Company (including "shelf registrations"
pursuant to Rule 415 of the Act), or in connection with actual or planned
distributions of equity or debt securities previously issued by the Company to
be sold by holders thereof, the Company shall include or cause to be included
therein for registration or qualification for distribution the Underwriters'
Warrants, all issued and unissued Underwriters' Underlying Securities and all
Common Stock issued or issuable upon exercise thereof.
(g) Not less than thirty (30) days prior to the earlier of the
proposed or actual filing date of any Post-Effective Amendment to the
Registration Statement or any new registration statement as to which holders of
Underwriters' Warrants, Underwriters' Underlying Securities or Common Stock
issued upon conversion thereof have piggyback registration rights pursuant to
Section 11(f), the Company shall give written notice of such filing to each
holder thereof. The Company's obligation to provide such written notice shall
continue until the later of (i) registration of all Underwriters' Warrants,
Underwriters' Underlying Securities and Common Stock issued or issuable upon
exercise thereof, or (ii) the seventh anniversary of the Effective Date. Within
not more than twenty (20) days following receipt of any such notice from the
Company, holders of
25
Underwriters' Warrants and Underwriters' Underlying Securities shall give
written notice to the Company of the quantity and description of securities that
such holder wishes to be registered or qualified for distribution under the
proposed Post-Effective Amendment to the Registration Statement or new
registration statement. The Company shall bear all expenses and fees incurred in
connection with the preparation and filing of any Post-Effective Amendment to
the Registration Statement or any new registration statement. The Company shall
cause any such filing to remain effective for not less than ninety (90) days.
12. Effective Date of Agreement and Termination. If the Registration
Statement has not been declared effective prior to the date of this Agreement,
this Agreement shall become effective at such time, after notification of the
effectiveness of the Registration Statement has been released by the Commission,
as you and the Company shall agree upon the public offering price and the Unit
Purchase Price. If the public offering price and the Unit Purchase Price shall
not have been determined prior to 6:00 P.M. New York time, on the seventh full
business day after the Registration Statement shall have become effective, this
Agreement shall thereupon terminate without liability on the part of the
Underwriters or the Company, except as set forth herein. If the Registration
Statement has been declared effective prior to the date of this Agreement, this
Agreement shall become effective upon execution and delivery by you and the
Company.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Company if any of the following has occurred or
in your opinion is likely to occur:
(a) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, any adverse change or
development involving a prospective adverse change in or affecting particularly
the condition, financial or otherwise, of the Company or any of its
subsidiaries, or the earnings, business affairs or business prospects of the
Company or any of its subsidiaries taken as a whole, whether or not arising in
the ordinary course of business, as would, in your judgment, make the offering
or delivery of the Securities impracticable;
(b) any outbreak of hostilities or other national or
international calamity or crisis, if the effect of such outbreak, calamity or
crisis on the financial markets of the United States or elsewhere would, in your
judgment, make the offering or delivery of the Securities impracticable;
(c) suspension of trading in securities on any United States
stock exchange or system or limitation on prices (other than limitations on
hours or numbers of days of trading) for securities on any such exchange or
system;
(d) the enactment, publication, decree or other promulgation
of any Federal or state statute, regulation, rule or order of any court or other
governmental authority that in your opinion materially and adversely affects, or
will materially and adversely affect, the business or operations of the Company
or any of its subsidiaries;
(e) declaration of a banking moratorium by either federal,
provincial, state or local U.S. or Canadian authorities; or
26
(f) the taking of any action by any federal, provincial, state
or local U.S. or Canadian government or agency in respect of its monetary or
fiscal affairs that in your opinion has a material adverse effect on the
financial or securities markets in the United States or upon the Company's
ability to utilize the offering proceeds in the manner described in the
Registration Statement.
If on the Closing Date or on any Option Closing Date, any one or more
of the Underwriters shall fail or refuse to purchase the Firm Units or
Additional Units which it or they have agreed to purchase hereunder on such
date, and the aggregate number of Firm Units or Additional Units which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the total number of Units to be purchased on such
date, each non-defaulting Underwriter shall be obligated severally, in the
proportion which the number of Firm Units set forth opposite its name in
Schedule I bears to the total Firm Units that all the non-defaulting
Underwriters have agreed to purchase, or in such other proportion as you may
specify, to purchase the Firm Units or Additional Units that such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the number of Firm Units or Additional
Units which any Underwriter has agreed to purchase pursuant to Section 2 hereof
be increased pursuant to this Section 12 by an amount in excess of one-ninth of
such number of Firm Units or Additional Units, as the case may be, without the
written consent of such Underwriter.
If on the Closing Date or on any Option Closing Date, any Underwriter
or Underwriters shall fail or refuse to purchase Firm Units or Additional Units
and the aggregate number Firm Units or Additional Units with respect to which
such default occurs is more than one-tenth of the aggregate number of Units to
be purchased on such date, and arrangements satisfactory to you and the Company
for purchase of such Units are not made within 48 hours after such default, this
Agreement will terminate without liability on the part of any nondefaulting
Underwriter or the Company. In any such case that does not result in termination
of this Agreement, either you or the Company shall have the right to postpone
the Closing Date or any Option Closing Date but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected. Any action taken under this section shall not relieve any defaulting
Underwriter from liability in respect of any default of any such Underwriter
under this Agreement.
13. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company, c/o Law Office
of ▇▇▇▇▇▇▇ ▇. Hair, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇. Hair, and (b) if to any Underwriter or to you, c/▇ ▇▇▇▇▇▇▇▇▇ & Co. at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: T. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ or in any case to such other address as the person to be notified may
have requested in writing.
The respective indemnities, contribution agreements, representations,
agreements, covenants, warranties and other statements of the Company, its
officers and directors, and the several Underwriters set forth in or made
pursuant to this Agreement shall remain operative and in full force and effect,
and will survive delivery of and payment for the Securities, regardless of (i)
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter or by or on behalf of the Company, its officers or directors,
any controlling person of the Company, (ii)
27
acceptance of the Securities and payment for them hereunder and (iii)
termination of this Agreement.
If this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, or if for any reason any of the
conditions to this Agreement have not been fulfilled, the Company will reimburse
the several Underwriters for all out-of-pocket expenses (including the fees and
expenses of counsel) reasonably incurred by them in connection with this
Agreement and the transactions contemplated hereby.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the
Underwriters, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other persons shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Securities from any of the several Underwriters merely because of
such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
Very truly yours,
VISTA LASER CENTERS OF THE PACIFIC,INC.
By:__________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇ III, President
Confirmed in New York, New York
on the date first above written,
on behalf of themselves and the
other several Underwriters named
in Schedule ▇.
▇▇▇▇▇▇▇▇▇ & CO.
By:___________________________________
T. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
28
SCHEDULE I
Firm Units
Underwriters To Be Purchased
---------------
▇▇▇▇▇▇▇▇▇ & Co ................................................
Total ......................................................... 600,000
29
SCHEDULE II
Rights, Warrants and Options to Acquire Securities
1.
2.
Convertible Instruments
A.
B.
30
SCHEDULE III
Registration Rights
