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EXHIBIT 1.1
MONARCH DENTAL CORPORATION
2,750,000 SHARES(1)
COMMON STOCK
UNDERWRITING AGREEMENT
____, 0000
XXXXXXXXX & XXXXX LLC
XXXXXXXXXX SECURITIES
SALOMON BROTHERS INC.
x/x Xxxxxxxxx & Xxxxx LLC
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Monarch Dental Corporation, a Delaware corporation (herein called the
Company), proposes to issue and sell 2,750,000 shares of its authorized but
unissued Common Stock, $.01 par value (herein called the Common Stock), (said
2,750,000 shares of Common Stock being herein called the Underwritten Stock).
The Company also proposes to grant to the Underwriters (as hereinafter defined)
an option to purchase up to 412,500 additional shares of Common Stock (herein
called the Option Stock and with the Underwritten Stock herein collectively
called the Stock). The Common Stock is more fully described in the
Registration Statement and the Prospectus hereinafter mentioned.
The Company hereby confirms the agreements made with respect to the
purchase of the Stock by the several underwriters, for whom you are acting,
named in Schedule I hereto (herein collectively called the Underwriters, which
term shall also include any underwriter purchasing Stock pursuant to Section
3(b) hereof). You represent and warrant that you have been authorized by each
of the other Underwriters to enter into this Agreement on its behalf and to act
for it in the manner herein provided.
1. REGISTRATION STATEMENT. The Company has filed with the
Securities and Exchange Commission (herein called the Commission) a
registration statement on Form S-1 (No. 333-24409), including the related
preliminary prospectus, for the registration under the Securities Act of 1933,
as amended (herein called the Securities Act), of the Stock. Copies of such
registration statement and of each amendment thereto, if any, including the
related preliminary prospectus (meeting the requirements of Rule 430A of the
rules and regulations of the Commission, herein, the Rules and Regulations)
heretofore filed by the Company with the Commission have been delivered to you.
The term Registration Statement as used in this agreement shall mean
such registration statement, including all exhibits and financial statements,
all information omitted therefrom in reliance upon Rule 430A and contained in
the Prospectus referred to below, in the form in which it became effective, and
any registration statement filed pursuant to Rule 462(b) of the rules and
regulations of the Commission with respect to the Stock
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(1) Plus an option to purchase from the Company up to 412,500 additional
shares to cover over-allotments.
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(herein called a Rule 462(b) registration statement), and, in the event of any
amendment thereto after the effective date of such registration statement
(herein called the Effective Date), shall also mean (from and after the
effectiveness of such amendment) such registration statement as so amended
(including any Rule 462(b) registration statement). The term Prospectus as
used in this Agreement shall mean the prospectus relating to the Stock first
filed with the Commission pursuant to Rule 424(b) and Rule 430A (or if no such
filing is required, as included in the Registration Statement) and, in the
event of any supplement or amendment to such prospectus after the Effective
Date, shall also mean (from and after the filing with the Commission of such
supplement or the effectiveness of such amendment) such prospectus as so
supplemented or amended. The term Preliminary Prospectus as used in this
Agreement shall mean each preliminary prospectus included in such registration
statement prior to the time it becomes effective.
The Registration Statement has been declared effective under the
Securities Act, and no post-effective amendment to the Registration Statement
has been filed as of the date of this Agreement. The Company will prepare and
promptly file with the Commission the information omitted from the registration
statement pursuant to Rule 430A(a) of the Rules and Regulations pursuant to
subparagraph (1) or (4) of Rule 424(b) of the Rules and Regulations or as part
of a post-effective amendment to the registration statement (including a final
form of prospectus). The Company has caused to be delivered to you copies of
each Preliminary Prospectus and has consented to the use of such copies for the
purposes permitted by the Securities Act.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants as follows:
(i) Each of the Company and its subsidiaries has been duly
incorporated or has been duly formed as a limited partnership, and is
validly existing as a corporation or limited partnership in good
standing under the laws of the jurisdiction of its incorporation or
formation, as the case may be, has full corporate or partnership power
and corporate or partnership authority to own or lease its properties
and conduct its business as described in the Registration Statement and
the Prospectus and as being conducted, and is duly qualified as a
foreign corporation or partnership and in good standing in all
jurisdictions in which the character of the property owned or leased or
the nature of the business transacted by it makes qualification
necessary (except where the failure to be so qualified would not have a
material adverse effect on the business, properties, financial condition
or results of operations of the Company and its subsidiaries, taken as a
whole).
(ii) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, there has not been any
materially adverse change in the business, properties, financial
condition or results of operations of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in the
ordinary course of business, other than as set forth in the Registration
Statement and the Prospectus, and since such dates, except in the
ordinary course of business, neither the Company nor any of its
subsidiaries has entered into any material transaction not referred to
in the Registration Statement and the Prospectus.
(iii) The Registration Statement and the Prospectus comply, and
on the Closing Date (as hereinafter defined) and any later date on which
Option Stock is to be purchased, the Prospectus will comply, in all
material respects, with the provisions of the Securities Act and the
rules and regulations of the Commission thereunder; on the Effective
Date, the Registration Statement did not contain any untrue statement of
a material fact and did not omit to state any material fact required to
be stated therein or necessary in order to make the statements therein
not misleading; and on the Effective Date the Prospectus did not and, on
the Closing Date and any later date on which Option Stock is to be
purchased, will not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that none of the
representations and warranties in this subparagraph (iii) shall apply to
statements in, or omissions from, the Registration Statement or the
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Prospectus made in reliance upon and in conformity with information
herein or otherwise furnished in writing to the Company by or on behalf
of the Underwriters for use in the Registration Statement or the
Prospectus.
(iv) The Company has all requisite corporate power and corporate
authority to enter into this Agreement and perform the transactions
contemplated hereby. 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
such enforceability may be limited by (A) applicable bankruptcy,
insolvency, moratorium, reorganization, fraudulent conveyance or similar
laws in effect which affect the enforcement of creditors' rights
generally and (B) general principles of equity, whether considered in a
proceeding at law or in equity; the performance of this Agreement and
the consummation of the transactions herein contemplated will not result
in a breach or violation of any of the terms and provisions of, or
constitute a default under, (i) any material bond, debenture, note or
other evidence of indebtedness, or under any material lease, contract,
indenture, mortgage, deed of trust, loan agreement, joint venture or
other material agreement or instrument to which the Company is a party
or by which it or any of its properties may be bound, (ii) the charter
or bylaws of the Company, or (iii) any law, order, rule, regulation,
writ, injunction, judgment or decree of any court, government or
governmental agency or body, domestic or foreign, having jurisdiction
over the Company or its properties. No consent, approval, authorization
or order of or qualification with any court, government or governmental
agency or body, domestic or foreign, having jurisdiction over the
Company or its properties is required for the execution and delivery of
this Agreement and the consummation by the Company of the transactions
herein contemplated, except as may be required under the Securities Act
or under state or other securities or Blue Sky laws, all of which
requirements have been satisfied in all material respects.
(v) There is not any pending or, to the best of the Company's
knowledge, threatened action, suit, claim or proceeding against the
Company or any of its officers or any of the Company's properties,
assets or rights before any court, government or governmental agency or
body, domestic or foreign, having jurisdiction over the Company or over
its officers or properties or otherwise which (i) if adversely decided,
would (x) result in a material adverse change in the operations,
business, financial condition, results of operations or business
prospects of the Company and its subsidiaries, taken as a whole, or (y)
would materially and adversely affect its properties, assets or rights,
(ii) if adversely decided, would prevent consummation of the
transactions contemplated hereby, or (iii) is required to be disclosed
in the Registration Statement or Prospectus and is not so disclosed; and
there are no agreements, contracts, leases or documents of the Company
required to be described or referred to in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration Statement by
the Securities Act or the Rules and Regulations which have not been
accurately described in all material respects or referred to in the
Registration Statement or Prospectus or filed as exhibits to the
Registration Statement.
(vi) The Stock is duly and validly authorized, and when issued
and sold to the Underwriters as provided herein, will be validly issued,
fully paid and nonassessable and conforms, in all material respects, to
the description thereof in the Prospectus. No further approval or
authority of the stockholders or the Board of Directors of the Company
will be required for the issuance and sale of the Stock as contemplated
herein.
(vii) Xxxxxx Xxxxxxxx LLP, which has examined the financial
statements of the Company, together with the related schedules and
notes, as of December 31, 1996, December 31, 1995 and December 31, 1994
filed with the Commission as a part of the Registration Statement, which
are included in the Prospectus, are independent accountants within the
meaning of the Securities Act and the Rules and Regulations; the audited
financial statements of the Company, together with the related schedules
and notes, and the unaudited financial information, forming part of the
Registration Statement and Prospectus, fairly present in all material
respects the financial position and the results of operations
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of the Company at the dates and for the periods to which they apply; and
all audited financial statements of the Company, together with the
related schedules and notes, and the unaudited consolidated financial
information, filed with the Commission as part of the Registration
Statement, have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
involved except as may be otherwise stated therein. The selected and
summary financial and statistical data included in the Registration
Statement present fairly in all material respects the information shown
therein and have been compiled on a basis consistent with the audited
financial statements presented therein. No other financial statements
or schedules are required to be included in the Registration Statement.
(viii) Except as set forth in the Registration Statement and
Prospectus, (A) the Company has valid title to all properties and assets
described in the Prospectus as owned by it, free and clear of any
pledge, lien, security interest, encumbrance, claim or equitable
interest, other than such as would not have a material adverse effect on
the condition (financial or otherwise), earnings, operations, business
or business prospects of the Company and its subsidiaries considered as
one enterprise, (B) the agreements to which the Company is a party
described in the Prospectus are valid agreements, enforceable against
the Company (as applicable) and, to the Company's knowledge, by the
Company against the other parties thereto, except as the enforcement
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles
and, to their knowledge, the other contracting party or parties thereto
are not in material breach or material default under any of such
agreements, and (C) the Company has valid and enforceable leases for all
properties described in the Prospectus as leased by it, except as the
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable
principles. Except as set forth in the Registration Statement and
Prospectus, the Company owns or leases all such properties as are
necessary to its operations as now conducted or as proposed to be
conducted, except where the failure to own or lease such properties
would not have a material adverse effect on the condition (financial or
otherwise), earnings, operations, business or business prospects of the
Company and its subsidiaries considered as one enterprise.
(ix) The Company has timely filed all necessary federal, state
and foreign income and franchise tax returns and have paid all taxes
shown thereon as due, and there is no tax deficiency that has been or,
to the best of the Company's knowledge, is reasonably likely to be
asserted against the Company that would have a material adverse effect
on the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company and its subsidiaries
considered as one enterprise; and all tax liabilities are adequately
provided for on the books of the Company.
(x) The Company and its subsidiaries maintain insurance with
recognized insurers of the types and in the amounts generally adequate
for their respective businesses and consistent with insurance coverage
maintained by similar companies in similar businesses, including, but
not limited to, insurance covering real and personal property owned or
leased by the Company against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect; the Company has not been refused
any insurance coverage sought or applied for; and the Company has any no
reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not materially and adversely affect
the condition (financial or otherwise), earnings, operations, business
or business prospects of the Company and its subsidiaries considered as
one enterprise.
(xi) Neither the Company nor any of its subsidiaries is
currently involved in any material labor dispute, nor, to the knowledge
of the Company, is any material labor dispute threatened which, if such
dispute were to occur, would be reasonably likely to result in a
material adverse change in the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company
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and its subsidiaries considered as one enterprise. No collective
bargaining agreement exists with any of the Company's employees and, to
the best of the Company's knowledge, no such agreement is imminent.
(xii) The Company owns or possesses adequate rights to use all
patents, patent rights, inventions, trade secrets, know-how, trademarks,
service marks, trade names and copyrights which are necessary to conduct
its businesses as described in the Prospectus except where to failure to
own or possess such rights would not have a material adverse affect on
the condition (financial or otherwise), earnings, operations, business
or business prospects of the Company and its subsidiaries considered as
one enterprise; the expiration of any patents, patent rights, trade
secrets, trademarks, service marks, trade names or copyrights would not
have a material adverse effect on the condition (financial or
otherwise), earnings, operations, business or business prospects of the
Company and its subsidiaries considered as one enterprise; and the
Company has not received any notice of, and has no knowledge of, any
infringement of or conflict with asserted rights of others with respect
to any patent, patent rights, inventions, trade secrets, know-how,
trademarks, service marks, trade names or copyrights which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect on the condition
(financial or otherwise), earnings, operations, business or business
prospects of the Company and its subsidiaries considered as one
enterprise.
(xiii) Neither the Company nor any of its subsidiaries is an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder.
(xiv) The Company has not distributed and will not distribute
prior to the later of (A) the Closing Date and (B) completion of the
distribution of the Stock any offering material in connection with the
offering and sale of the Stock other than any Preliminary Prospectuses,
the Prospectus, the Registration Statement and other materials, if any,
permitted by the Securities Act.
(xv) The Company has not, at any time during the last five (5)
years, (A) made any unlawful contribution to any candidate for foreign
office or failed to disclose fully any contribution in violation of law,
or (B) made any payment to any federal or state governmental officer or
official, or other person charged with similar public or quasi-public
duties, other than payments required or permitted by the laws of the
United States or any jurisdiction thereof.
(xvi) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might reasonably be expected
to cause or result in stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of the Stock.
(xvii) Each officer, director and beneficial owner of shares of
Common Stock has agreed in writing that such person will not, for a
period of one hundred eighty (180) days after the effective date of the
Registration Statement, offer to sell, contract to sell, or otherwise
sell, dispose of, loan, pledge or grant any rights with respect to any
shares of Common Stock, any options or warrants to purchase any shares
of Common Stock or any securities convertible into or exchangeable for
shares of Common Stock now owned or hereafter acquired directly by such
person or with respect to which such person has or hereafter acquires
the power of disposition, otherwise than (A) as a bona fide gift or
gifts, including without limitation transfers to beneficiaries or trusts
for estate planning purposes, provided the donee or donees thereof agree
in writing to be bound by this restriction, (B) as a distribution to
limited partners or stockholders of such person, provided that the
distributees thereof agree in writing to be bound by the terms of this
restriction, or (C) with the prior written consent of Xxxxxxxxx & Xxxxx
LLC on behalf of the Underwriters. Furthermore, such person will also
agree and consent to the entry of stop transfer instructions with the
Company's transfer agent against the transfer of the securities held by
such person except in compliance with this restriction. The Company has
provided to counsel for the Underwriters a complete and accurate list of
all security holders of the Company and the number
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and type of securities held by each security holder. The Company has
delivered to counsel for the Underwriters true, accurate and complete
copies of all of the agreements pursuant to which its officers,
directors and stockholders have agreed not to offer to sell, contract to
sell, or otherwise sell, dispose of, loan, pledge or grant any rights
with respect to any shares of Common Stock, any options or warrants to
purchase any shares of Common Stock or any securities convertible into
or exchangeable for shares of Common Stock (herein called the Lock-Up
Agreements) presently in effect.
(xviii) Except as set forth in the Registration Statement and
Prospectus, (A) the Company is in compliance with all rules, laws and
regulations relating to the use, treatment, storage and disposal of
toxic substances and protection of health or the environment (herein
called Environmental Laws) which are applicable to its business, except
to the extent that any failure to so comply would not have a material
adverse effect on the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company and its
subsidiaries considered as one enterprise, (B) the Company has received
no notice from any governmental authority or third party of an asserted
claim under Environmental Laws, which claim is required to be disclosed
in the Registration Statement, and (C) no property which is owned,
leased or occupied by the Company has been designated as a Superfund
site pursuant to the Comprehensive Response, Compensation, and Liability
Act of 1980, as amended (42 U.S.C. Section 9601, et seq.), or otherwise
designated as a contaminated site under applicable state or local law.
(xix) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with management's general or
specific authorizations, (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.
(xx) There are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or
guarantees of indebtedness by the Company to or for the benefit of any
of the officers or directors of the Company or any of the members of the
families of any of them, which are required to be disclosed in the
Registration Statement or Prospectus and are not so disclosed.
(xxi) Prior to the Closing Date, the Stock to be issued and sold
by the Company will be authorized for listing on The Nasdaq Stock
Market, Inc. (herein called Nasdaq) National Market upon official notice
of issuance.
3. PURCHASE OF THE STOCK BY THE UNDERWRITERS.
(a) On the basis of the representations and warranties and subject to
the terms and conditions herein set forth, the Company agrees to issue
and sell 2,750,000 shares of the Underwritten Stock to the several
Underwriters, and each of the Underwriters agrees to purchase from the
Company the respective aggregate number of shares of Underwritten Stock
set forth opposite its name in Schedule I. The price at which such
shares of Underwritten Stock shall be sold by the Company and purchased
by the several Underwriters shall be $____ per share. In making this
Agreement, each Underwriter is contracting severally and not jointly;
except as provided in paragraphs (b) and (c) of this Section 3, the
agreement of each Underwriter is to purchase only the respective number
of shares of the Underwritten Stock specified in Schedule I.
(b) If for any reason one or more of the Underwriters shall fail or
refuse (otherwise than for a reason sufficient to justify the
termination of this Agreement under the provisions of Section 8 or 9
hereof) to purchase and pay for the number of shares of the Stock agreed
to be purchased by such
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Underwriter or Underwriters, the Company shall immediately give notice
thereof to you, and the non-defaulting Underwriters shall have the right
within 24 hours after the receipt by you of such notice to purchase, or
procure one or more other Underwriters to purchase, in such proportions
as may be agreed upon between you and such purchasing Underwriter or
Underwriters and upon the terms herein set forth, all or any part of the
shares of the Stock which such defaulting Underwriter or Underwriters
agreed to purchase. If the non-defaulting Underwriters fail so to make
such arrangements with respect to all such shares and portion, the
number of shares of the Stock which each non-defaulting Underwriter is
otherwise obligated to purchase under this Agreement shall be
automatically increased on a pro rata basis to absorb the remaining
shares and portion which the defaulting Underwriter or Underwriters
agreed to purchase; provided, however, that the non-defaulting
Underwriters shall not be obligated to purchase the shares and portion
which the defaulting Underwriter or Underwriters agreed to purchase if
the aggregate number of such shares of the Stock exceeds 10% of the
total number of shares of the Stock which all Underwriters agreed to
purchase hereunder. If the total number of shares of the Stock which
the defaulting Underwriter or Underwriters agreed to purchase shall not
be purchased or absorbed in accordance with the two preceding sentences,
the Company shall have the right, within 24 hours next succeeding the
24-hour period above referred to, to make arrangements with other
underwriters or purchasers satisfactory to you for purchase of such
shares and portion on the terms herein set forth. In any such case,
either you or the Company shall have the right to postpone the Closing
Date determined as provided in Section 5 hereof for not more than seven
business days after the date originally fixed as the Closing Date
pursuant to said Section 5 in order that any necessary changes in the
Registration Statement, the Prospectus or any other documents or
arrangements may be made. If neither the non-defaulting Underwriters
nor the Company shall make arrangements within the 24-hour periods
stated above for the purchase of all the shares of the Stock which the
defaulting Underwriter or Underwriters agreed to purchase hereunder,
this Agreement shall be terminated without further act or deed and
without any liability on the part of the Company to any non-defaulting
Underwriter and without any liability on the part of any non-defaulting
Underwriter to the Company. Nothing in this paragraph (b), and no
action taken hereunder, shall relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this
Agreement.
(c) On the basis of the representations, warranties and covenants
herein contained, and subject to the terms and conditions herein set
forth, the Company grants an option to the several Underwriters to
purchase, severally and not jointly, up to 412,500 shares in the
aggregate of the Option Stock from the Company at the same price per
share as the Underwriters shall pay for the Underwritten Stock. Said
option may be exercised only to cover over-allotments in the sale of the
Underwritten Stock by the Underwriters and may be exercised in whole or
in part at any time (but not more than once) on or before the thirtieth
day after the date of this Agreement upon written or telegraphic notice
by you to the Company setting forth the aggregate number of shares of
the Option Stock as to which the several Underwriters are exercising the
option. Delivery of certificates for the shares of Option Stock, and
payment therefor, shall be made as provided in Section 5 hereof. The
number of shares of the Option Stock to be purchased by each Underwriter
shall be the same percentage of the total number of shares of the Option
Stock to be purchased by the several Underwriters as such Underwriter is
purchasing of the Underwritten Stock, as adjusted by you in such manner
as you deem advisable to avoid fractional shares.
4. OFFERING BY UNDERWRITERS.
(a) The terms of the initial public offering by the Underwriters of
the Stock to be purchased by them shall be as set forth in the
Prospectus. The Underwriters may from time to time change the public
offering price after the closing of the initial public offering and
increase or decrease the concessions and discounts to dealers as they
may determine.
(b) The information set forth in the last paragraph on the front
cover page and under "Underwriting" in the Registration Statement, any
Preliminary Prospectus and the Prospectus relating
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to the Stock filed by the Company (insofar as such information relates
to the Underwriters) constitutes the only information furnished by the
Underwriters to the Company for inclusion in the Registration Statement,
any Preliminary Prospectus, and the Prospectus, and you on behalf of the
respective Underwriters represent and warrant to the Company that the
statements made therein are correct.
5. DELIVERY OF AND PAYMENT FOR THE STOCK.
(a) Delivery of certificates for the shares of the Underwritten Stock
and the Option Stock (if the option granted by Section 3(c) hereof shall
have been exercised not later than 7:00 A.M., San Francisco time, on the
date two business days preceding the Closing Date), and payment
therefor, shall be made at the office of [Xxxxxxx, Xxxxxxx & Xxxxxxxx
LLP, 000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000], at 7:00
a.m., San Francisco time, on the fourth business day after the date of
this Agreement, or at such time on such other day, not later than seven
full business days after such fourth business day, as shall be agreed
upon in writing by the Company and you. The date and hour of such
delivery and payment (which may be postponed as provided in Section 3(b)
hereof) are herein called the Closing Date.
(b) If the option granted by Section 3(c) hereof shall be exercised
after 7:00 a.m., San Francisco time, on the date two business days
preceding the Closing Date, delivery of certificates for the shares of
Option Stock, and payment therefor, shall be made at the office of
[Xxxxxxx, Phleger & Xxxxxxxx LLP, 000 Xxxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxx 00000], at 7:00 a.m., San Francisco time, on the third
business day after the exercise of such option.
(c) Payment for the Stock purchased from the Company shall be made to
the Company or its order by certified or official bank check, or by wire
transfer, in same day funds. Such payment shall be made upon delivery
of certificates for the Stock to you for the respective accounts of the
several Underwriters against receipt therefor signed by you.
Certificates for the Stock to be delivered to you shall be registered in
such name or names and shall be in such denominations as you may request
at least one business day before the Closing Date, in the case of
Underwritten Stock, and at least one business day prior to the purchase
thereof, in the case of the Option Stock. Such certificates will be
made available to the Underwriters for inspection, checking and
packaging at the offices of __________________, New York, New York _____
on the business day prior to the Closing Date or, in the case of the
Option Stock, by 3:00 p.m., New York time, on the business day preceding
the date of purchase.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the
Company for shares to be purchased by any Underwriter whose check shall
not have been received by you on the Closing Date or any later date on
which Option Stock is purchased for the account of such Underwriter.
Any such payment by you shall not relieve such Underwriter from any of
its obligations hereunder.
6. FURTHER AGREEMENTS OF THE COMPANY. The Company covenants and
agrees as follows:
(a) The Company will (i) prepare and timely file with the Commission
under Rule 424(b) a Prospectus containing information previously omitted
at the time of effectiveness of the Registration Statement in reliance
on Rule 430A and (ii) not file any amendment to the Registration
Statement or supplement to the Prospectus of which you shall not
previously have been advised and furnished with a copy or to which you
shall have reasonably objected in writing or which is not in compliance
with the Securities Act or the Rules and Regulations.
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(b) The Company will promptly notify each Underwriter in the event of
(i) the request by the Commission for amendment of the Registration
Statement or for supplement to the Prospectus or for any additional
information, (ii) the issuance by the Commission to the Company of any
stop order suspending the effectiveness of the Registration Statement,
(iii) the receipt by the Company of notice or other information
concerning the institution or intended institution of any action or
proceeding for that purpose, (iv) the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Stock for sale in any jurisdiction, or (v) the receipt by the Company of
notice of the initiation or threatening of any proceeding for such
purpose. The Company will make every reasonable effort to prevent the
issuance of such a stop order and, if such an order shall at any time be
issued, to obtain the withdrawal thereof at the earliest possible
moment.
(c) The Company will (i) on or before the Closing Date, deliver to
you a signed copy of the Registration Statement as originally filed and
of each amendment thereto filed prior to the time the Registration
Statement becomes effective and, promptly upon the filing thereof, a
signed copy of each post-effective amendment, if any, to the
Registration Statement (together with, in each case, all exhibits
thereto unless previously furnished to you) and will also deliver to
you, for distribution to the Underwriters, a sufficient number of
additional conformed copies of each of the foregoing (but without
exhibits) so that one copy of each may be distributed to each
Underwriter, (ii) as promptly as possible deliver to you and send to the
several Underwriters, at such office or offices as you may designate, as
many copies of the Prospectus as you may reasonably request, and (iii)
thereafter from time to time during the period in which a prospectus is
required by law to be delivered by an Underwriter or dealer, likewise
send to the Underwriters as many additional copies of the Prospectus and
as many copies of any supplement to the Prospectus and of any amended
prospectus, filed by the Company with the Commission, as you may
reasonably request for the purposes contemplated by the Securities Act.
(d) If at any time during the period in which a prospectus is
required by law to be delivered by an Underwriter or dealer any event
relating to or affecting the Company, or of which the Company shall be
advised in writing by you, shall occur as a result of which it is
necessary to supplement or amend the Prospectus in order to make the
Prospectus not misleading in the light of the circumstances existing at
the time it is delivered to a purchaser of the Stock, the Company will
forthwith prepare and file with the Commission a supplement to the
Prospectus or an amended prospectus so that the Prospectus as so
supplemented or amended will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances existing
at the time such Prospectus is delivered to such purchaser, not
misleading. If, after the initial public offering of the Stock by the
Underwriters and during such period, the Underwriters shall propose to
vary the terms of offering thereof by reason of changes in general
market conditions or otherwise, you will advise the Company in writing
of the proposed variation, and if such proposed variation requires that
the Prospectus be supplemented or amended, the Company will forthwith
prepare and file with the Commission a supplement to the Prospectus or
an amended prospectus setting forth such variation. The Company
authorizes the Underwriters and all dealers to whom any of the Stock may
be sold by the several Underwriters to use the Prospectus, as from time
to time amended or supplemented, in connection with the sale of the
Stock in accordance with the applicable provisions of the Securities Act
and the applicable rules and regulations thereunder for such period.
(e) Prior to the filing thereof with the Commission, the Company will
submit to you, for your information, a copy of any post-effective
amendment to the Registration Statement and any supplement to the
Prospectus or any amended prospectus proposed to be filed.
(f) The Company will cooperate, when and as requested by you, in the
qualification of the Stock for offer and sale under the securities or
blue sky laws of such jurisdictions as you may designate and, during the
period in which a prospectus is required by law to be delivered by an
Underwriter or dealer, in keeping such qualifications in good standing
under said securities or blue sky laws; provided, however, that the
Company shall not be obligated to file any general consent to service of
process or
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to qualify as a foreign corporation in any jurisdiction in which it is
not so qualified. The Company will, from time to time, prepare and file
such statements, reports, and other documents as are or may be required
to continue such qualifications in effect for so long a period as you
may reasonably request for distribution of the Stock.
(g) During a period of five years commencing with the date hereof,
the Company will furnish to you, and to each Underwriter who may so
request in writing, copies of all periodic and special reports furnished
to stockholders of the Company and of all information, documents and
reports filed with the Commission (including the Report on Form SR
required by Rule 463 of the Commission under the Securities Act).
(h) Not later than the 45th day following the end of the fiscal
quarter first occurring after the first anniversary of the Effective
Date, the Company will make generally available to its security holders
an earnings statement in accordance with Section 11(a) of the Securities
Act and Rule 158 thereunder.
(i) The Company agrees to pay all costs and expenses incident to the
performance of its obligations under this Agreement, including all costs
and expenses incident to (i) the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus,
(ii) the filing fee of the National Association of Securities Dealers,
Inc. (herein called the NASD) in connection with the NASD's review of
the underwriting arrangements of the offering, (iii) the furnishing to
the Underwriters of copies of any Preliminary Prospectus and of the
several documents required by paragraph (c) of this Section 6 to be so
furnished, (iv) the printing of this Agreement and related documents
delivered to the Underwriters, (v) the preparation, printing and filing
of all supplements and amendments to the Prospectus referred to in
paragraph (d) of this Section 6, (vi) the furnishing to you and the
Underwriters of the reports and information referred to in paragraph (g)
of this Section 6 and (vii) the printing and issuance of stock
certificates, including the transfer agent's fees.
(j) The Company agrees to reimburse you, for the account of the
several Underwriters, for blue sky fees and related disbursements
(including counsel fees and disbursements and cost of printing memoranda
for the Underwriters) paid by or for the account of the Underwriters or
their counsel in qualifying the Stock under state securities or blue sky
laws.
(k) The provisions of paragraphs (i) and (j) of this Section are
intended to relieve the Underwriters from the payment of the expenses
and costs which the Company hereby agrees to pay and shall not affect
any agreement which the Company may make, or may have made, for the
sharing of any such expenses and costs. Except as provided in
paragraphs (i) and (j) of this Section, the Underwriters shall pay all
of their own expenses, including the fees and disbursements of their
counsel, in connection with the offering of the Stock.
(l) The Company hereby agrees that, without the prior written consent
of Xxxxxxxxx & Xxxxx LLC on behalf of the Underwriters, the Company will
not, for a period of 180 days following the commencement of the public
offering of the Stock by the Underwriters, directly or indirectly, (i)
sell, offer, contract to sell, make any short sale, pledge, sell any
option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase or otherwise transfer or
dispose of any shares of Common Stock or any securities convertible into
or exchangeable or exercisable for or any rights to purchase or acquire
Common Stock or (ii) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences or
ownership of Common Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or
such other securities, in cash or otherwise. The foregoing sentence
shall not apply to (A) the Stock to be sold to the Underwriters pursuant
to this Agreement, (B) shares of Common Stock issued by the Company upon
the exercise of options granted under the stock option plans of the
Company (herein called the Option Plans), all as described in footnote 4
to the table under
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the caption "Capitalization" in the Preliminary Prospectus, and (C)
options to purchase Common Stock granted under the Option Plans.
(m) If at any time during the 25-day period after the Registration
Statement becomes effective any rumor, publication or event relating to
or affecting the Company shall occur as a result of which in your
opinion the market price for the Stock has been or is likely to be
materially affected (regardless of whether such rumor, publication or
event necessitates a supplement to or amendment of the Prospectus), the
Company will, after written notice from you advising the Company to the
effect set forth above, forthwith prepare, consult with you concerning
the substance of, and disseminate a press release or other public
statement, reasonably satisfactory to you, responding to or commenting
on such rumor, publication or event.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person (including each partner or officer thereof)
who controls any Underwriter within the meaning of Section 15 of the
Securities Act from and against any and all losses, claims, damages or
liabilities, joint or several, to which such indemnified parties or any
of them may become subject under the Securities Act, the Securities
Exchange Act of 1934, as amended (herein called the Exchange Act), or
the common law or otherwise, and the Company agrees to reimburse each
such Underwriter and controlling person for any legal or other expenses
(including, except as otherwise hereinafter provided, reasonable fees
and disbursements of counsel) incurred by the respective indemnified
parties in connection with defending against any such losses, claims,
damages or liabilities or in connection with any investigation or
inquiry of, or other proceeding which may be brought against, the
respective indemnified parties, in each case arising out of or based
upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (including the Prospectus
as part thereof and any Rule 462(b) registration statement) or any post-
effective amendment thereto (including any Rule 462(b) registration
statement), or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or (ii) any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus or the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any amendment thereof or
supplement thereto) or the omission or alleged omission to state therein
a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that (1) the indemnity agreement of the
Company contained in this paragraph (a) shall not apply to any such
losses, claims, damages, liabilities or expenses if such statement or
omission was made in reliance upon and in conformity with information
furnished as herein stated or otherwise furnished in writing to the
Company by or on behalf of any Underwriter for use in any Preliminary
Prospectus or the Registration Statement or the Prospectus or any such
amendment thereof or supplement thereto, and (2) the indemnity agreement
contained in this paragraph (a) with respect to any Preliminary
Prospectus shall not inure to the benefit of any Underwriter from whom
the person asserting any such losses, claims, damages, liabilities or
expenses purchased the Stock which is the subject thereof (or to the
benefit of any person controlling such Underwriter) if at or prior to
the written confirmation of the sale of such Stock a copy of the
Prospectus (or the Prospectus as amended or supplemented) was not sent
or delivered to such person and the untrue statement or omission of a
material fact contained in such Preliminary Prospectus was corrected in
the Prospectus (or the Prospectus as amended or supplemented) unless the
failure is the result of noncompliance by the Company with paragraph (c)
of Section 6 hereof. The indemnity agreement of the Company contained
in this paragraph (a) and the representations and warranties of the
Company contained in Section 2 hereof shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of
any indemnified party and shall survive the delivery of and payment for
the Stock.
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(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its officers who signs the Registration Statement
on his own behalf or pursuant to a power of attorney, each of its
directors, each other Underwriter and each person (including each
partner or officer thereof) who controls the Company or any such other
Underwriter within the meaning of Section 15 of the Securities Act, from
and against any and all losses, claims, damages or liabilities, joint or
several, to which such indemnified parties or any of them may become
subject under the Securities Act, the Exchange Act, or the common law or
otherwise and to reimburse each of them for any legal or other expenses
(including, except as otherwise hereinafter provided, reasonable fees
and disbursements of counsel) incurred by the respective indemnified
parties in connection with defending against any such losses, claims,
damages or liabilities or in connection with any investigation or
inquiry of, or other proceeding which may be brought against, the
respective indemnified parties, in each case arising out of or based
upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (including the Prospectus
as part thereof and any Rule 462(b) registration statement) or any post-
effective amendment thereto (including any Rule 462(b) registration
statement) or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading or (ii) any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus
(as amended or as supplemented if the Company shall have filed with the
Commission any amendment thereof or supplement thereto) or the omission
or alleged omission to state therein a material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, if such statement or omission was
made in reliance upon and in conformity with information furnished as
herein stated or otherwise furnished in writing to the Company by or on
behalf of such indemnifying Underwriter for use in the Registration
Statement or the Prospectus or any such amendment thereof or supplement
thereto. The indemnity agreement of each Underwriter contained in this
paragraph (b) shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any indemnified
party and shall survive the delivery of and payment for the Stock.
(c) Each party indemnified under the provisions of paragraphs (a) and
(b) of this Section 7 agrees that, upon the service of a summons or
other initial legal process upon it in any action or suit instituted
against it or upon its receipt of written notification of the
commencement of any investigation or inquiry of, or proceeding against,
it in respect of which indemnity may be sought on account of any
indemnity agreement contained in such paragraphs, it will promptly give
written notice (herein called the Notice) of such service or
notification to the party or parties from whom indemnification may be
sought hereunder. No indemnification provided for in such paragraphs
shall be available to any party who shall fail so to give the Notice if
the party to whom such Notice was not given was unaware of the action,
suit, investigation, inquiry or proceeding to which the Notice would
have related and was prejudiced by the failure to give the Notice, but
the omission so to notify such indemnifying party or parties of any such
service or notification shall not relieve such indemnifying party or
parties from any liability which it or they may have to the indemnified
party for contribution or otherwise than on account of such indemnity
agreement. Any indemnifying party shall be entitled at its own expense
to participate in the defense of any action, suit or proceeding against,
or investigation or inquiry of, an indemnified party. Any indemnifying
party shall be entitled, if it so elects within a reasonable time after
receipt of the Notice by giving written notice (herein called the Notice
of Defense) to the indemnified party, to assume (alone or in conjunction
with any other indemnifying party or parties) the entire defense of such
action, suit, investigation, inquiry or proceeding, in which event such
defense shall be conducted, at the expense of the indemnifying party or
parties, by counsel chosen by such indemnifying party or parties and
reasonably satisfactory to the indemnified party or parties; provided,
however, that (i) if the indemnified party or parties reasonably
determine that there may be a conflict between the positions of the
indemnifying party or parties and of the indemnified party or parties in
conducting the defense of such action, suit, investigation, inquiry or
proceeding or that there may be legal defenses available to such
indemnified party or parties different from or in addition to those
available to the indemnifying party or parties, then counsel for the
indemnified party or parties shall be entitled to conduct the defense to
the extent reasonably determined by such counsel to be necessary
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to protect the interests of the indemnified party or parties and (ii) in
any event, the indemnified party or parties shall be entitled to have
counsel chosen by such indemnified party or parties participate in, but
not conduct, the defense. If, within a reasonable time after receipt of
the Notice, an indemnifying party gives a Notice of Defense and the
counsel chosen by the indemnifying party or parties is reasonably
satisfactory to the indemnified party or parties, the indemnifying party
or parties will not be liable under paragraphs (a) through (c) of this
Section 7 for any legal or other expenses subsequently incurred by the
indemnified party or parties in connection with the defense of the
action, suit, investigation, inquiry or proceeding, except that (A) the
indemnifying party or parties shall bear the reasonable legal and other
expenses incurred in connection with the conduct of the defense as
referred to in clause (i) of the proviso to the preceding sentence
(provided that the expenses of not more than one such counsel shall be
so borne) and (B) the indemnifying party or parties shall bear such
other expenses as it or they have authorized to be incurred by the
indemnified party or parties. If, within a reasonable time after receipt
of the Notice, no Notice of Defense has been given, the indemnifying
party or parties shall be responsible for any reasonable legal or other
expenses incurred by the indemnified party or parties in connection with
the defense of the action, suit, investigation, inquiry or proceeding.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) of this Section 7, 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 the
losses, claims, damages or liabilities referred to in paragraph (a) or
(b) of this Section 7 (i) in such proportion as is appropriate to
reflect the relative benefits received by each indemnifying party from
the offering of the Stock 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 each indemnifying party
in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, or actions in respect thereof,
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 shall be deemed to be in the same respective proportions as
the total net proceeds from the offering of the Stock received by the
Company and the total underwriting discount received by the
Underwriters, as set forth in the table on the cover page of the
Prospectus, bear to the aggregate public offering price of the Stock.
Relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by each indemnifying party and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) 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 in the first
sentence of this paragraph (d). The amount paid by an indemnified party
as a result of the losses, claims, damages or liabilities, or actions in
respect thereof, referred to in the first sentence of this paragraph (d)
shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigation,
preparing to defend or defending against any action or claim which is
the subject of this paragraph (d). Notwithstanding the provisions of
this paragraph (d), no Underwriter shall be required to contribute any
amount in excess of the underwriting discount applicable to the Stock
purchased by such Underwriter. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this paragraph (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
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Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted
against it in respect of which contribution may be sought, it will
promptly give written notice of such service to the party or parties
from whom contribution may be sought, but the omission so to notify such
party or parties of any such service shall not relieve the party from
whom contribution may be sought from any obligation it may have
hereunder or otherwise (except as specifically provided in paragraph (c)
of this Section 7).
(e) The Company agrees that it will not, without the prior written
consent of each Underwriter, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit
or proceeding in respect of which indemnification may be sought
hereunder (whether or not such Underwriter or any person who controls
such Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act is a party to such claim, action, suit
or proceeding) unless such settlement, compromise or consent includes an
unconditional release of such Underwriter and each such controlling
person from all liability arising out of such claim, action, suit or
proceeding.
8. TERMINATION. This Agreement may be terminated by you at any time
prior to the Closing Date by giving written notice to the Company if after the
date of this Agreement trading in the Common Stock shall have been suspended by
the Commission or Nasdaq, or if there shall have occurred (i) the engagement in
hostilities or an escalation of major hostilities by the United States or the
declaration of war or a national emergency by the United States on or after the
date hereof, (ii) any outbreak of hostilities or other national or
international calamity or crisis or change in economic or political conditions
if the effect of such outbreak, calamity, crisis or change in economic or
political conditions in the financial markets of the United States would, in
the Underwriters' reasonable judgment, make the offering or delivery of the
Stock impracticable, (iii) suspension of trading in securities generally or a
material adverse decline in value of securities generally on the New York Stock
Exchange, the American Stock Exchange or Nasdaq, or limitations on prices
(other than limitations on hours or numbers of days of trading) for securities
on either such exchange or system, (iv) the enactment, publication, decree or
other promulgation of any federal or state statute, regulation, rule or order
of, or commencement of any proceeding or investigation by, any court,
legislative body, agency or other governmental authority which in the
Underwriters' reasonable opinion materially and adversely affects or will
materially or adversely affect the business or operations of the Company, (v)
declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in the
Underwriters' reasonable opinion has a material adverse effect on the
securities markets in the United States. If this Agreement shall be terminated
pursuant to this Section 8, there shall be no liability of the Company to the
Underwriters and no liability of the Underwriters to the Company; provided,
however, that, in the event of any such termination, the Company agrees to
indemnify and hold harmless the Underwriters from all costs or expenses
incident to the performance of the obligations of the Company under this
Agreement, including all costs and expenses referred to in paragraphs (i) and
(j) of Section 6 hereof.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Stock shall be subject to the
performance by the Company of all its obligations to be performed hereunder at
or prior to the Closing Date or any later date on which Option Stock is to be
purchased, as the case may be, and to the following further conditions:
(a) The Registration Statement shall have become effective; and no
stop order suspending the effectiveness thereof shall have been issued
and no proceedings therefor shall be pending or threatened by the
Commission.
(b) The legality and sufficiency of the sale of the Stock hereunder
and the validity and form of the certificates representing the Stock,
all corporate proceedings and other legal matters incident to the
foregoing, and the form of the Registration Statement and of the
Prospectus (except as to the financial
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statements contained therein), shall have been approved at or prior to
the Closing Date by Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, counsel for the
Underwriters.
(c) (i) You shall have received from Xxxxxxx, Procter & Xxxx LLP,
counsel for the Company, addressed to the Underwriters and dated the
Closing Date, covering the matters set forth in Annex A and if Option
Stock is purchased at any date after the Closing Date, additional
opinions from such counsel, addressed to the Underwriters and dated such
later date, confirming that the statements expressed as of the Closing
Date in such opinions remain valid as of such later date; (ii) you shall
have received from Xxxxxx & Xxxxx LLP, regulatory counsel for the
Company, addressed to the Underwriters and dated the Closing Date,
covering the matters set forth on Annex B.
(d) (i) As of the Effective Date, the statements made in the
Registration Statement and the Prospectus shall have been true and
correct and neither the Registration Statement nor the Prospectus shall
have omitted to state any material fact required to be stated therein or
necessary in order to make the statements therein, respectively, not
misleading, (ii) since the Effective Date, no event shall have occurred
which should have been set forth in a supplement or amendment to the
Prospectus which has not been set forth in such a supplement or
amendment, (iii) since the respective dates as of which information is
given in the Registration Statement in the form in which it originally
became effective and the Prospectus contained therein, there shall not
have been any material adverse change or any development involving a
prospective material adverse change in or affecting the business,
properties, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, and, since such dates,
except in the ordinary course of business, neither the Company nor any
of its subsidiaries shall have entered into any material transaction not
referred to in the Registration Statement in the form in which it
originally became effective and the Prospectus contained therein, (iv)
neither the Company nor any of its subsidiaries shall have any material
contingent obligations which are not disclosed in the Registration
Statement and the Prospectus, (v) there are not any pending or known
threatened legal proceedings to which the Company or any of its
subsidiaries is a party or of which property of the Company or any of
its subsidiaries is the subject which are material and which are not
disclosed in the Registration Statement and the Prospectus, (vi) there
are not any franchises, contracts, leases or other documents which are
required to be filed as exhibits to the Registration Statement which
have not been filed as required, (vii) the representations and
warranties of the Company herein shall be true and correct in all
material respects as of the Closing Date or any later date on which
Option Stock is to be purchased, as the case may be, and (viii) there
shall not have been any material change in the market for securities in
general or in political, financial or economic conditions from those
reasonably foreseeable as to render it impracticable in your reasonable
judgment to make a public offering of the Stock, or a material adverse
change in market levels for securities in general (or those of companies
in particular) or financial or economic conditions which render it
inadvisable to proceed.
(e) You shall have received on the Closing Date and on any later date
on which Option Stock is purchased a certificate, dated the Closing Date
or such later date, as the case may be, and signed by the President and
the Chief Financial Officer of the Company, stating that the respective
signers of said certificate have carefully examined the Registration
Statement in the form in which it originally became effective and the
Prospectus contained therein and any supplements or amendments thereto,
and that the statements included in clauses (i) through (vii) of
paragraph (d) of this Section 9 are true and correct.
(f) You shall have received from Xxxxxx Xxxxxxxx LLP a letter or
letters, addressed to the Underwriters and dated the Closing Date and
any later date on which Option Stock is purchased, confirming that they
are independent public accountants with respect to the Company within
the meaning of the Securities Act and the applicable published rules and
regulations thereunder and based upon the procedures described in their
letter delivered to you concurrently with the execution of this
Agreement (herein called the Original Letter), but carried out to a date
not more than three business
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days prior to the Closing Date or such later date on which Option Stock
is purchased (i) confirming, to the extent true, that the statements and
conclusions set forth in the Original Letter are accurate as of the
Closing Date or such later date, as the case may be, and (ii) setting
forth any revisions and additions to the statements and conclusions set
forth in the Original Letter which are necessary to reflect any changes
in the facts described in the Original Letter since the date of the
Original Letter or to reflect the availability of more recent financial
statements, data or information. The letters shall not disclose any
change, or any development involving a prospective change, in or
affecting the business or properties of the Company or any of its
subsidiaries which, in your sole judgment, makes it impractical or
inadvisable to proceed with the public offering of the Stock or the
purchase of the Option Stock as contemplated by the Prospectus.
(g) You shall have been furnished evidence in usual written or
telegraphic form from the appropriate authorities of the several
jurisdictions, or other evidence satisfactory to you, of the
qualification referred to in paragraph (f) of Section 6 hereof.
(h) Prior to the Closing Date, the Stock to be issued and sold by the
Company shall have been duly authorized for listing by the Nasdaq
National Market, subject to official notice of issuance.
All the agreements, opinions, certificates and letters mentioned above or
elsewhere in this Agreement, to the extent forms of such documents are not
attached hereto, shall be deemed to be in compliance with the provisions hereof
only if Xxxxxxx, Phleger & Xxxxxxxx LLP, counsel for the Underwriters, shall be
satisfied that they comply in form and scope.
In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company;
provided, however, that (i) in the event of such termination, the Company
agrees to indemnify and hold harmless the Underwriters from all costs or
expenses incident to the performance of the obligations of the Company under
this Agreement, including all costs and expenses referred to in paragraphs (i)
and (j) of Section 6 hereof, and (ii) if this Agreement is terminated by you
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein, to fulfill any of the conditions herein, or to
comply with any provision hereof other than by reason of a default by any of
the Underwriters, the Company will reimburse the Underwriters severally upon
demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the transactions contemplated hereby.
10. CONDITIONS OF THE OBLIGATION OF THE COMPANY. The obligation of
the Company to deliver the Stock shall be subject to the conditions that (a)
the Registration Statement shall have become effective and (b) no stop order
suspending the effectiveness thereof shall be in effect and no proceedings
therefor shall be pending or threatened by the Commission.
In case either of the conditions specified in this Section 10 shall not
be fulfilled, this Agreement may be terminated by the Company by giving notice
to you. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company;
provided, however, that in the event of any such termination the Company agrees
to indemnify and hold harmless the Underwriters from all costs or expenses
incident to the performance of the obligations of the Company under this
Agreement, including all costs and expenses referred to in paragraphs (i) and
(j) of Section 6 hereof.
11. REIMBURSEMENT OF CERTAIN EXPENSES. In addition to its other
obligations under Section 7 of this Agreement, the Company hereby agrees to
reimburse on a quarterly basis the Underwriters for all reasonable legal and
other expenses incurred in connection with investigating or defending any
claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in paragraph (a) of Section 7 of this Agreement, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the obligations under this Section 11 and
16
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the possibility that such payments might later be held to be improper;
provided, however, that (i) to the extent any such payment is ultimately held
to be improper, the persons receiving such payments shall promptly refund them,
together with interest at the Prime Rate as published in The Wall Street
Journal on the business day (or if not so published, then on the next business
day when published) when such reimbursement payment was made and (ii) such
persons shall provide to the Company, upon request, reasonable assurances and
evidence of their ability to effect any refund, when and if due.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of the Company and the several Underwriters and, with
respect to the provisions of Section 7 hereof, the several parties (in addition
to the Company and the several Underwriters) indemnified under the provisions
of said Section 7, and their respective personal representatives, successors
and assigns. Nothing in this Agreement is intended or shall be construed to
give to any other person, firm or corporation any legal or equitable remedy or
claim under or in respect of this Agreement or any provision herein contained.
The term "successors and assigns" as herein used shall not include any
purchaser, as such purchaser, of any of the Stock from any of the several
Underwriters.
13. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters,
shall be mailed, telegraphed, telecopied or delivered to Xxxxxxxxx & Xxxxx LLC,
Xxx Xxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, with a copy to S. Xxxxxxx
Xxxx, P.C., Xxxxxxx, Phleger & Xxxxxxxx LLP, 000 Xxxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxx 00000; and if to the Company, shall be mailed, telegraphed,
telecopied or delivered to it at its office, Monarch Dental Corporation, 0000
Xxxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, Attention: Xxxx X. Xxxx,
with a copy to Xxxx X. XxXxxxxx, P.C., Xxxxxxx, Procter & Xxxx XXX, Xxxxxxxx
Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000. All notices given by telegraph or
telecopy shall be promptly confirmed by letter delivered via U.S. Mail.
14. MISCELLANEOUS. The reimbursement, indemnification and
contribution agreements contained in this Agreement and the representations,
warranties and covenants in this Agreement shall remain in full force and
effect regardless of (a) any termination of this Agreement, (b) any
investigation made by or on behalf of any Underwriter or controlling person
thereof, or by or on behalf of the Company, or their respective directors or
officers, and (c) delivery and payment for the Stock under this Agreement;
provided, however, that if this Agreement is terminated prior to the Closing
Date, the provisions of paragraph (l) of Section 6 hereof shall be of no
further force or effect.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of California.
17
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Please sign and return to the Company the enclosed duplicates of this
letter, whereupon this letter will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
MONARCH DENTAL CORPORATION
By:
---------------------------
Xxxx X. Xxxx
Chief Executive Officer
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
XXXXXXXXX & XXXXX LLC
XXXXXXXXXX SECURITIES
SALOMON BROTHERS INC.
By Xxxxxxxxx & Xxxxx LLC
By
------------------------------
Managing Director
Acting on behalf of the several Underwriters,
including themselves, named in Schedule I hereto.
18
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SCHEDULE I
UNDERWRITERS
NUMBER
OF
SHARES
TO BE
UNDERWRITERS PURCHASED
------------ ---------
Xxxxxxxxx & Xxxxx LLC . . . . . . . . . . . . . . . . . . . . . .
Xxxxxxxxxx Securities . . . . . . . . . . . . . . . . . . . . . .
Salomon Brothers, Inc . . . . . . . . . . . . . . . . . . . . . .
----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . .
==========
20
ANNEX A
MATTERS TO BE COVERED IN THE OPINION OF
XXXXXXX, PROCTER & XXXX LLP
COUNSEL FOR THE COMPANY
(i) Each of the Company and its subsidiaries that are
corporations has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, is duly qualified as a foreign corporation and in good
standing in each state of the United States of America in which its
ownership or leasing of property requires such qualification (except
where the failure to be so qualified would not have a material adverse
effect on the business, properties, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole), and
has full corporate power and authority to own or lease its properties
and conduct its business as described in the Registration Statement;
each of the Company's subsidiaries that is a limited partnership has
been duly formed and is validly existing and in good standing as a
limited partnership under the laws of the jurisdiction of its formation,
is duly qualified to do business in and is in good standing in each
state of the United States of America in which its ownership or leasing
of property requires such qualification (except where the failure to be
so qualified would not have a material adverse effect on the business,
properties, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole), and has full partnership power
and authority to own or lease its properties and conduct its business as
described in the Registration Statement; all the issued and outstanding
capital stock of each of the corporate subsidiaries of the Company has
been duly authorized and validly issued and is fully paid and
nonassessable, and is owned of record by the Company free and clear of
all liens, encumbrances and security interests known to such counsel;
all the outstanding partnership interests in each of the subsidiaries of
the Company that is a limited partnership is owned of record by the
Company or one or more subsidiaries of the Company, free and clear of
all liens, encumbrances and security interests known to such counsel;
and to the best of such counsel's knowledge, there are no options,
warrants or other rights to purchase, agreements or other obligations to
issue or other rights to convert any obligations into shares of capital
stock, partnership interests or other ownership interests in any of such
subsidiaries that are outstanding;
(ii) the authorized capital stock of the Company consists of
____ _______ shares of Preferred Stock, $0.01 par value, of which no
shares are outstanding, and ____________ shares of Common Stock, $.01
par value, of which there are outstanding _____________ shares
(including the Underwritten Stock plus the number of shares of Option
Stock issued on the date hereof); all required corporate proceedings
have been taken validly to authorize such authorized capital stock; all
of the outstanding shares of such capital stock (including the
Underwritten Stock and the shares of Option Stock issued, if any) have
been duly and validly issued and when paid for by the Underwriters
pursuant to the Underwriting Agreement will be fully paid and
nonassessable; any Option Stock purchased after the Closing Date, when
issued and delivered to and paid for by the Underwriters as provided in
the Underwriting Agreement, will have been duly and validly issued and
be fully paid and nonassessable; and no preemptive rights of, or rights
of refusal in favor of, stockholders exist with respect to the Stock, or
the issue and sale thereof, pursuant to the Certificate of Incorporation
or Bylaws of the Company and, to the knowledge of such counsel, there
are no contractual preemptive rights that have not been waived, rights
of first refusal or rights of co-sale which exist with respect to the
issue and sale of the Stock;
(iii) the Registration Statement has become effective under the
Securities Act and, to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement or suspending
or preventing the use of the Prospectus is in effect and, to the
knowledge of such counsel, no proceedings for that purpose have been
instituted or are pending or contemplated by the Commission;
A-1
21
(iv) the Registration Statement and the Prospectus (except as to
the financial statements and schedules and other financial data
contained therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of the
Securities Act and with the rules and regulations of the Commission
thereunder;
(v) the statements under the captions "Management-Employee Stock
and Other Benefit Plans," Description of Capital Stock," "Business-Legal
Proceedings" and "Legal Matters" (as such section relates to such
counsel) in the Registration Statement and the Prospectus fairly present
in all material respects the information required to be included in the
Registration Statement or the Prospectus under Items 9, 10 and 11(c) of
Form S-1 the Securities Act and the rules and regulations of the
Commission thereunder;
(vi) such counsel do not know of any franchises, contracts,
leases, documents or legal proceedings, pending or threatened, which in
the opinion of such counsel are of a character required to be described
in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement, which are not described and
filed as required;
(vii) the Underwriting Agreement has been duly authorized,
executed and delivered by the Company;
(viii) the issue and sale by the Company of the shares of Stock
sold by the Company as contemplated by the Underwriting Agreement will
not conflict with, or result in a breach of, the Certificate of
Incorporation or Bylaws of the Company or any of its subsidiaries or any
agreement or instrument known to such counsel to which the Company or
any of its subsidiaries is a party or any applicable federal,
Massachusetts or Texas law or regulation, or any order, writ, injunction
or decree known to such counsel of any federal, Massachusetts or Texas
court or governmental instrumentality;
(ix) all holders of securities of the Company who, to such
counsel's knowledge, have rights to cause the Company to register shares
of Common Stock or other securities because of the filing of the
Registration Statement by the Company have 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; and
(x) no consent, approval, authorization or order of any federal,
Massachusetts or Texas court or governmental agency or body is required
for the consummation of the transactions contemplated in the
Underwriting Agreement, except such as have been obtained under the
Securities Act and such as may be required under state securities or
blue sky laws or the NASD in connection with the purchase and
distribution of the Stock by the Underwriters.
In addition, such counsel shall state that they have participated
in conferences with directors, officers and other representatives of the
Company, representatives of the independent public accountants for the
Company, representatives of the Underwriters and representatives of
counsel for the Underwriters, at which conferences the contents of the
Registration Statement and the Prospectus and related matters were
discussed and, although such counsel has not independently verified and
are not passing upon and assume no responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the Prospectuses (other than with respect to the opinions
set forth in paragraphs (iv) and (v) above), no facts have come to such
counsel's attention which lead such counsel to believe that the
Registration Statement, on the Effective Date thereof, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
contained therein not misleading, or that the Prospectus, on the date
thereof or as of the date of such opinion, contained or contains an
untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make the
statements contained therein, in the light of the circumstances under
which they were made, not
A-2
22
misleading (it being understood that such counsel need express no view
with respect to the financial statements and related notes, the
financial statement schedules and other financial, statistical and
accounting data included in the Registration Statement or the
Prospectus).
------------------------------
Counsel rendering the foregoing opinion may rely as to questions of law
not involving the laws of the United States or of the General Corporation Law
of The State of Delaware, upon opinions of local counsel satisfactory in form
and scope to counsel for the Underwriters. Copies of any opinions so relied
upon shall be delivered to the Representatives and to counsel for the
Underwriters and the foregoing opinion shall also state that counsel knows of
no reason the Underwriters are not entitled to rely upon the opinions of such
local counsel.
A-3
23
ANNEX B
MATTERS TO BE COVERED IN THE OPINION OF
XXXXXX & XXXXX LLP
REGULATORY COUNSEL FOR THE COMPANY
[Requested form to be prepared by Xxxxxxx, Phleger & Xxxxxxxx LLP]
B-1
