DRAFT: FEBRUARY 24, 1998
PENTEGRA DENTAL GROUP, INC.
COMMON STOCK
(PAR VALUE $.001 PER SHARE)
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UNDERWRITING AGREEMENT
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March __, 1998
Xxxx Xxxxxxxx Incorporated
EVEREN Securities, Inc.
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Xxxx Xxxxxxxx Incorporated
Cityplace
0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Dear Sirs:
Pentegra Dental Group, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and
sell to the Underwriters named in Schedule I hereto (the "Underwriters") an
aggregate of 2,500,000 shares (the "Firm Shares") of the Company's common
stock, par value $.001 per share ("Common Stock"), and, at the election of
the Underwriters, up to 375,000 additional shares of the Common Stock on the
terms and for the purposes set forth in Section 2 (the "Optional Shares").
The Firm Shares and the Optional Shares, if purchased, are hereinafter
collectively called the "Shares." This is to confirm the agreement concerning
the purchase of the Shares from the Company by the Underwriters, for whom you
are acting as representatives (the "Representatives").
1. The Company represents and warrants to, and agrees with, each
of the Underwriters that:
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(a) A registration statement on Form S-1 (File No. 333-37633)
with respect to the Shares has (i) been prepared by the Company in
conformity with the requirements of the United States Securities Act of
1933, as amended (the "Act"), and the rules and regulations (the "Rule
and Regulations") of the United States Securities and Exchange Commission
(the "Commission") thereunder, (ii) been filed with the Commission under
the Act and (iii) become effective under the Act. Copies of such
registration statement have been delivered by the Company to you as the
representatives (the "Representatives") of the Underwriters. As used in
this Agreement, "Effective Time" means the date and the time as of which
such registration statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; "Effective
Date" means the date of the Effective Time; "Preliminary Prospectus"
means each prospectus included in such registration statement, or
amendments thereof, before it became effective under the Act and any
prospectus filed with the Commission by the Company with the prior
written consent of the Representatives pursuant to Rule 424(a) of the
Rules and Regulations; "Registration Statement" means such registration
statement, as amended at the Effective Time, including all information
contained in the final prospectus filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations in accordance with Section 5(a)
hereof and deemed to be a part of the registration statement as of the
Effective Time pursuant to paragraph (b) of Rule 430A of the Rules and
Regulations; and "Prospectus" means such final prospectus, as first filed
with the Commission pursuant to paragraph (1) or (4) of Rule 424(b) of
the Rules and Regulations. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or
the Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects to the
requirements of the Act and the Rules and Regulations and do not and will
not, as of the applicable effective date (as to the Registration
Statement and any amendment thereto) and as of the applicable filing date
(as to the Prospectus and any amendment or supplement thereto) contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; PROVIDED that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or
the Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or on
behalf of any Underwriter specifically for inclusion therein (which
written information is specifically identified in Section 8(e)).
(c) After giving effect to (i) the repurchase by Pentegra
Investments, Inc., a Delaware corporation ("PII"), of certain shares of
common stock of PII (the "PII Common Stock Repurchases") pursuant to the
terms of the Share Repurchase Agreement dated as of December 10, 1997 by
and among PII and the stockholders of PII listed on the signature pages
thereto (the "PII Common Stock Repurchase Agreement") and (ii) the share
exchange
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(the "Share Exchange") among the Company and the holders of the
outstanding shares of common stock of PII, to be completed on the First
Time of Delivery (as hereinafter defined) pursuant to the terms of the
Exchange Agreement dated as of July 31, 1997 among the Company, PII and
the holders of common stock of PII (the "Share Exchange Agreement") (a
copy of which has been filed as an exhibit to the Registration
Statement), PII will be the only subsidiary (as defined in Section 15) of
the Company as of the First Time of Delivery, and the Company has never
had any other subsidiary.
(d) The Company, PII and each of the entities that, on or prior
to the First Time of Delivery, will have entered into an Acquisition
Agreement (as hereinafter defined) and/or a management service agreement
or similar contract (each, a "Service Agreement") with the Company
(collectively, the "PA Affiliates"), other than those PA Affiliates that
are sole proprietorships, have been duly organized and are validly
existing in good standing (to the extent applicable) under the laws of
their respective jurisdictions of organization, are duly registered and
qualified to transact business and are in good standing as foreign
corporations, professional corporations, professional associations,
limited liability companies or limited partnerships, as the case may be,
in each jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires such
qualification, and have all power and authority necessary to own, lease,
operate or hold their respective properties and to conduct the businesses
in which they are engaged. The PA Affiliates are listed on Schedule II
hereto, and the information contained in such Schedule is true and
correct.
(e) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the shares of capital stock of the Company
that will be issued and outstanding as of the First Time of Delivery
(before giving effect to the issuance and sale of the Shares hereunder)
have been duly and validly authorized and, when issued and delivered
pursuant to the Share Exchange Agreement and the Acquisition Agreements
(as hereinafter defined) on the First Time of Delivery, will be duly and
validly issued, fully paid and nonassessable, will not have been issued
in violation of any preemptive or similar rights and conform to the
description thereof contained in the Prospectus; and all of the issued
shares of capital stock of PII have been duly and validly authorized and
issued and are fully paid and nonassessable, have not been issued in
violation of any preemptive or similar rights and, as of the First Time
of Delivery, will be owned directly by the Company, free and clear of all
liens, encumbrances, equities or claims.
(f) The Shares to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be
duly and validly issued, fully paid and nonassessable and will not have
been issued in violation of or be subject to any preemptive or similar
rights; and the Shares will conform to the description thereof contained
in the Prospectus.
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(g) The Company has the power and authority to enter into this
Agreement and to issue, sell and deliver the Shares to the Underwriters
as provided herein. This Agreement has been duly authorized, executed
and delivered by the Company and constitutes a valid and binding
agreement of the Company enforceable against the Company in accordance
with its terms, subject to the effect of (i) any applicable bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or
affecting creditors' rights generally and (ii) general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(h) The Company has the power and authority to enter into each
of the acquisition transactions to be consummated as of the First Time of
Delivery, as described in the Registration Statement and the Prospectus
(collectively, the "Acquisitions"), each of the agreements pursuant to
which an Acquisition is being consummated (collectively, the "Acquisition
Agreements" and, together with the Service Agreements, the "Transaction
Agreements") and each of the Service Agreements to which it is (or, as of
the First Time of Delivery, will be) a party. Each PA Affiliate has the
power and authority to enter into each Transaction Agreement to which it
is (or, as of the First Time of Delivery, will be) a party. The
execution and delivery of, and the performance by the Company and the PA
Affiliates of their respective obligations under, the Transaction
Agreements to which they are parties, respectively, have been duly and
validly authorized by the Company and the PA Affiliates and each
Transaction Agreement has been (or, in the case of any such Transaction
Agreement to be entered into between the date of this Agreement and the
time of the deliveries to be made under this Agreement on the First Time
of Delivery, will, as of the First Time of Delivery, be) duly executed
and delivered by the Company and each PA Affiliate that is a party to
such agreement, and constitutes (or, in the case of any such Transaction
Agreement to be entered into between the date of this Agreement and the
time of the deliveries to be made under this Agreement as of the First
Time of Delivery, will, as of the First Time of Delivery, constitute) the
legal, valid and binding agreement of the Company and each such PA
Affiliate, enforceable in accordance with its terms, except as that
enforceability may be subject to the effect of (i) any applicable
bankruptcy, insolvency, reorganization, moratorium or other laws relating
to or affecting creditors' rights generally and (ii) general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(i) The execution, delivery and performance of this Agreement
and each of the Transaction Agreements by the Company and the
consummation of the transactions contemplated hereby and thereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Company, PII or any of the PA Affiliates is a party or by which the
Company, PII or any of the PA Affiliates is bound or to which any of the
property or assets of the Company, PII or any of the PA Affiliates is
subject, nor will such actions result in any violation of the provisions
of the
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charter, by-laws or other organizational documents of the Company,
PII or any of the PA Affiliates or any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company, PII or any of the PA Affiliates or any of
their respective properties or assets; except for the registration of the
Shares under the Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the United
States Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and applicable state securities laws in connection with the purchase and
distribution of the Shares by the Underwriters, no consent, approval,
authorization or order of, or filing or registration with, any such court
or governmental agency or body is required for the execution, delivery
and performance of this Agreement by the Company or the consummation of
the transactions contemplated hereby; and no consent, approval,
authorization or order of, or filing or registration with, any court or
governmental agency or body is required for the execution, delivery and
performance of any of the Transaction Agreements or the consummation of
the transactions contemplated thereby.
(j) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to (i)
require the Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be owned by such
person, (ii) require the Company to include such securities in the
securities registered pursuant to the Registration Statement or (iii)
except as described in the Prospectus, require that any securities be
registered pursuant to any other registration statement filed by the
Company under the Act.
(k) Except as described in the Registration Statement, the
Company has not sold or issued any shares of Common Stock during the
six-month period preceding the date of the Prospectus, including any
sales pursuant to Rule 144A under, or Regulations D or S of, the Act.
(l) None of the Company, PII or any of the PA Affiliates has
sustained, since the date of the latest audited financial statements
included in the Prospectus, any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in
the Prospectus; and, since such date, (i) there has not been any material
change in the capital stock or long-term or short-term debt of the
Company, PII or any of the PA Affiliates or any material adverse change,
or any development involving a prospective material adverse change, in or
affecting the general affairs, management, consolidated financial
position, stockholders' equity, results of operations or prospects of the
Company, otherwise than as set forth or contemplated in the Prospectus
and (ii) except as may otherwise be disclosed in the Prospectus, the
Company has not (A) issued or granted any securities, (B) incurred any
liability or obligation, direct, indirect or contingent, other than
liabilities and obligations that were incurred in the ordinary
5
course of business, (C) entered into any transaction not in the ordinary
course of business or (D) declared or paid any dividend on its capital
stock.
(m) The financial statements (including the related notes and
any supporting schedules) filed as part of the Registration Statement or
included in the Prospectus present fairly the financial condition and
results of operations of the entities purported to be shown thereby, at
the dates and for the periods indicated, and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved; the pro forma balance
sheet of the Company, together with the related notes, as set forth in
the Registration Statement and the Prospectus, present fairly the
information shown therein, have been prepared in accordance with the
applicable provisions of Article 11 of Regulation S-X promulgated by the
Commission with respect to pro forma financial statements and have been
properly compiled on the pro forma basis described therein and, in the
opinion of the Company, the assumptions used in the preparation thereof
are reasonable and the adjustments used therein are appropriate to give
effect to the transactions or circumstances referred to therein; and the
other financial and statistical information and data set forth in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto) is, in all material respects, accurately presented
and has been prepared on a basis consistent with such financial
statements and the books and records of the Company.
(n) Coopers & Xxxxxxx LLP, who have certified certain financial
statements of the Company, whose report appears in the Prospectus and who
have delivered the initial letter referred to in Section 7(i) hereof, are
independent public accountants as required by the Act and the Rules and
Regulations.
(o) None of the Company, PII or the PA Affiliates (i) is in
violation of its charter, by-laws or other organizational documents, (ii)
is in default in any material respect, and no event has occurred which,
with notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party or by which it is
bound or to which any of its properties or assets is subject, except, in
the case of those PA Affiliates that are sole proprietorships, for any
such defaults as would not, individually or in the aggregate, adversely
affect the Company or (iii) is in violation in any material respect of
any law, ordinance, governmental rule, regulation or court decree to
which it or its property or assets may be subject or has failed to obtain
any material license, permit, certificate, franchise or other
governmental authorization or permit necessary to the ownership of its
property or to the conduct of its business, except, in the case of those
PA Affiliates that are sole proprietorships, for any such violations or
failures as would not, individually or in the aggregate, adversely affect
the Company.
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(p) Neither the Company, PII nor any of the PA Affiliates has
violated any foreign, federal, state or local law or regulation relating
to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, "Environmental Laws"), or any foreign, federal or state
law relating to the practice of dentistry or governing the provision of
dental services or the collection and/or application of fees therefrom
(collectively, "Applicable Healthcare Laws"), or any foreign, federal or
state law relating to discrimination in the hiring, promotion or pay of
employees or any applicable foreign, federal or state wages and hours
laws, or any provisions of the United States Employee Retirement Income
Security Act of 1976, as amended (together with the rules and regulations
thereunder, "ERISA"), or the rules and regulations promulgated
thereunder, which, singly or in the aggregate, might have a material
adverse effect on the consolidated financial position, stockholders'
equity, results of operations, business or prospects of the Company and
PII, taken as a whole ("Material Adverse Effect").
(q) Each of the Company, PII and the PA Affiliates has such
permits, licenses, franchises and authorizations of governmental or
regulatory authorities ("permits"), including, without limitation, under
any applicable Environmental Laws and Applicable Healthcare Laws and
related governmental regulations, as are necessary to own its respective
properties and to conduct its business in the manner described in the
Prospectus, subject in each case to such qualifications as may be set
forth in the Prospectus and except where the failure to have such permits
would not, singly or in the aggregate, have a Material Adverse Effect;
each of the Company, PII and the PA Affiliates has fulfilled and
performed all of its 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 permits, subject in
each case to such qualifications as may be set forth in the Prospectus
and except where the failure so to fulfill or perform or the occurrence
of such an event would not, singly or in the aggregate, have a Material
Adverse Effect; and, except as described in the Prospectus, none of such
permits contains any restriction that is materially burdensome to the
Company, PII or the PA Affiliates. Each of the (i) dentists and (ii)
other professionals involved in providing dental care to patients (each,
a "Dental Professional") who is employed by or affiliated with a PA
Affiliate has such permits under Applicable Healthcare Laws and related
governmental regulations (including, as applicable, state and local
licenses to practice dentistry and federal Drug Enforcement Agency
Controlled Substances Registration certificates) as are necessary to
provide dental care in such jurisdictions as are contemplated by the
Service Agreement to be entered into between that PA Affiliate and the
Company as of the First Time of Delivery; each of such Dental
Professionals has fulfilled and performed all of his or her material
obligations with respect to such permits and no event has occurred which
allows, or after notice or lapse of time (or both) would allow,
revocation or termination thereof or would result in any other material
impairment of the rights of the holder of such permit; and, except as
described in the Prospectus, no such permit contains any restrictions
that are
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materially burdensome to the holder thereof or the PA Affiliate with
which that holder is affiliated or employed. The Company's and each
PA Affiliate's business practices do not violate any foreign, federal or
state laws regarding dentist ownership of (or financial relationship
with), and referral to, entities providing dental-related goods or
services, or laws respecting financial interests held by dentists in
entities to which they may refer patients for the provision of
dental-related goods or services. None of the PA Affiliates (or any of
their respective predecessors) has billed or accepted payment from any
Medicare, Medicaid or CHAMPUS program during the two years preceding the
date of this Agreement in an aggregate amount that was material to their
respective total xxxxxxxx or payments for either of those years.
(r) The Company, PII and each of the PA Affiliates have good
and marketable title in fee simple to all real property that has been or,
pursuant to the Acquisition Agreements, is to be acquired by the Company
on or before the First Closing Date and good and marketable title to all
personal property owned by them that has been or, pursuant to the
Acquisition Agreements, is to be acquired by the Company on or before the
First Closing Date, in each case free and clear of all liens,
encumbrances and defects, except such as are described in the Prospectus
or such as do not materially adversely affect the value of such property
and do not interfere with the use made and proposed to be made of such
property by the Company, PII and the PA Affiliates; and all real property
and buildings held under lease by the Company, PII and the PA Affiliates
are held by them under valid, subsisting and enforceable leases, with
such exceptions as are not material and do not interfere with the use
made and proposed to be made of such property and buildings by the
Company, PII and the PA Affiliates. Each PA Affiliate has obtained all
consents of third parties necessary under each lease (whether relating to
real property or personal property) to which it is a party for the
consummation of the transactions contemplated by the Transaction
Agreements to which it is (or, as of the First Time of Delivery, will be)
a party.
(s) The Company, PII and each of the PA Affiliates carry, or
otherwise are covered by, insurance in such amounts and covering such
risks (including, without limitation, malpractice risks) as is adequate
for the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in
similar businesses; and none of the Company, PII or any of the PA
Affiliates has received any notice of cancellation or nonrenewal with
respect to such insurance.
(t) Each of the Company, PII and the PA Affiliates owns or
possesses adequate rights to use all material patents, patent
applications, trademarks, service marks, trade names, trademark
registrations, service xxxx registrations, copyrights and licenses used
in the conduct of its business and the Company has no reason to believe
that the conduct of their respective businesses will conflict with, and
has not received any notice of any claim of conflict with, any such
rights of others.
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(u) There are no legal or governmental proceedings (domestic or
foreign) pending to which the Company, PII or any of the PA Affiliates is
a party or of which any property or assets of the Company, PII or any of
the PA Affiliates is the subject which, singly or in the aggregate, if
determined adversely to the Company, PII or any of the PA Affiliates,
might have a Material Adverse Effect; and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by any
governmental authorities or threatened by others.
(v) There are no contracts or other documents that are required
to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations which
have not been described in the Prospectus or filed as exhibits to the
Registration Statement as required.
(w) No relationship, direct or indirect, exists between or
among the Company, on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company, on the other hand,
that is required to be described in the Prospectus and that is not so
described.
(x) No labor disturbance by the employees of the Company, PII
or any of the PA Affiliates exists or, to the knowledge of the Company,
is imminent which might be expected to, singly or in the aggregate, have
a Material Adverse Effect; none of the Company, PII or any of the PA
Affiliates has ever been party to a collective bargaining agreement; and
there are no significant unfair labor practice complaints pending against
the Company, PII or any of the PA Affiliates or, to the best of the
Company's knowledge, threatened against any of them. The Company is in
compliance in all material respects with all presently applicable
provisions of ERISA; no "reportable event" (as defined in ERISA) has
occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company would have any liability; the Company has not incurred
and does not expect to incur liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the United States Internal Revenue Code of 1986,
as amended, including the regulations and published interpretations
thereunder (the "Code"); and each "pension plan" for which the Company
would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing
has occurred, whether by action or by failure to act, which would cause
the loss of such qualification.
(y) The Company and each of the PA Affiliates (i) have filed
all federal, state, local and foreign income and franchise tax returns
required to be filed through the date hereof and (ii) have paid all taxes
due thereon. No tax deficiency has been determined adversely to the
Company, PII or any of the PA Affiliates which has resulted in (nor does
the Company have any knowledge of any tax deficiency which, if determined
adversely to the
9
Company, PII or any of the PA Affiliates, might result in), singly or in
the aggregate, a Material Adverse Effect.
(z) None of the Company, PII or the PA Affiliates, nor any
director, officer, agent, employee or other person associated with or
acting on behalf of the Company, PII or the PA Affiliates, has used any
corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government official
or employee from corporate funds; violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or made any
bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
(aa) The Company (i) makes and keeps accurate books and records
and (ii) maintains internal accounting controls which provide reasonable
assurance that (A) transactions are executed in accordance with
management's authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain
accountability for its assets, (C) access to its assets is permitted only
in accordance with management's authorization and (D) the reported
accountability for its assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
difference.
(bb) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of toxic
wastes, medical wastes, hazardous wastes or hazardous substances by the
Company or PII (or, to the knowledge of the Company, any of their
predecessors in interest) at, upon or from any of the property now or
previously owned, leased or operated by the Company or PII in violation
of any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit or which could require remedial action under any
applicable law, ordinance, rule, regulation, order, judgment, decree or
permit, except for any violation or remedial action which would not have,
or could not reasonably be expected to have, singularly or in the
aggregate with all such violations and remedial actions, a Material
Adverse Effect; there has been no material spill, discharge, leak,
emission, injection, escape, dumping or release of any kind onto such
property or into the environment surrounding such property of any toxic
wastes, medical wastes, solid wastes, hazardous wastes or hazardous
substances due to or caused by the Company or PII or with respect to
which the Company or PII have knowledge, except for any such spill,
discharge, leak, emission, injection, escape, dumping or release which
would not have or would not be reasonably likely to have, singularly or
in the aggregate with all such spills, discharges, leaks, emissions,
injections, escapes, dumpings and releases, a Material Adverse Effect;
and the terms "hazardous wastes," "toxic wastes," "hazardous substances"
and "medical wastes" shall have the meanings specified in any applicable
local, state, federal and foreign laws or regulations with respect to
environmental protection.
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(cc) In connection with the offering of the Shares contemplated
hereby, the Company has conducted a review of the effect of Environmental
Laws on the business, operations and properties of the Company, PII and
the PA Affiliates in the course of which it has identified and evaluated
associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit, license
or approval, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such review,
the Company has concluded that such associated costs and liabilities
would not, singly or in the aggregate, result in a Material Adverse
Effect or any development involving a prospective Material Adverse
Effect.
(dd) The Company has not taken and will not take, directly or
indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of shares of the Common Stock
to facilitate the sale or resale of the Shares.
(ee) Neither the Company nor PII is, and upon consummation of
the transactions contemplated hereby neither will be, an "investment
company" within the meaning of such term under the Investment Company Act
of 1940, as amended, and the rules and regulations of the Commission
thereunder.
2. Subject to the terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, the Company
agrees to sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at a
purchase price per share of $______, the number of Firm Shares set opposite
that Underwriter's name in Schedule I hereto. The respective purchase
obligations of the Underwriters with respect to the Firm Shares shall be
adjusted by the Representatives so that no Underwriter shall be obligated to
purchase Optional Shares in other than 100-share amounts.
The Company hereby grants to the Underwriters the right to purchase at
their election up to 375,000 Optional Shares, at the purchase price per share
set forth in the paragraph above, for the sole purpose of covering
overallotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the
Company, given within a period of 30 calendar days after the date of this
Agreement and setting forth the aggregate number of Optional Shares to be
purchased and the date on which such Optional Shares is to be delivered, as
determined by the Representatives but in no event earlier than the First Time
of Delivery (as hereinafter defined) or, unless the Representatives and the
Company otherwise agree in writing, earlier than two or later than ten
business days after the date of such notice. Optional Shares shall be
purchased severally for the account of the Underwriters in proportion to the
number of Firm Shares set opposite the name of such Underwriters in Schedule
I hereto.
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The Company shall not be obligated to deliver any of the Shares to be
delivered at the First Time of Delivery or the Second Time of Delivery (as
hereinafter defined), as the case may be, except upon payment for all the
Shares to be purchased at such Time of Delivery (as hereinafter defined) as
provided herein.
3. Upon authorization by you of the release of the Firm Shares,
the several Underwriters propose to offer the Firm Shares for sale upon the
terms and conditions set forth in the Prospectus.
It is understood that 175,000 of the Firm Shares will initially be
reserved by the several Underwriters for offer and sale upon the terms and
conditions set forth in the Prospectus and in accordance with the rules and
regulations of the National Association of Securities Dealers, Inc. to
employees and persons having business relationships with the Company who have
heretofore delivered to you offers or indications of interest to purchase
shares of Firm Shares in form satisfactory to you, and that any allocation of
such Firm Shares among such persons will be made in accordance with timely
directions received by you from the Company; PROVIDED that under no
circumstances will you or any Underwriter be liable to the Company or to any
such person for any action taken or omitted in good faith in connection with
such offering to employees and persons having business relationships with the
Company. It is further understood that any shares of such Firm Shares which
are not purchased by such persons will be offered by the Underwriters to the
public upon the terms and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as Xxxx Xxxxxxxx Incorporated may request in writing
upon at least 48 hours' prior notice to the Company shall be delivered by or
on behalf of the Company to Xxxx Xxxxxxxx Incorporated, for the account of
such Underwriter, against payment by or on behalf of such Underwriter of the
purchase price therefor by wire transfer of immediately available funds to
the Company. The Company will cause the certificates representing the Shares
to be made available for checking and packaging at least 24 hours prior to
the Time of Delivery (as defined below) with respect thereto at the office of
Xxxx Xxxxxxxx Incorporated, 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxx 00000-0000 (the "Designated Office"). The time and date of such
delivery and payment shall be, with respect to the Firm Shares, 9:00 a.m.,
Dallas time, on March __, 1998 or such other time and date as Xxxx Xxxxxxxx
Incorporated and the Company may agree upon in writing, and with respect to
the Optional Shares, 9:00 a.m., Dallas time, on the date specified by Xxxx
Xxxxxxxx Incorporated in the written notice given by Xxxx Xxxxxxxx
Incorporated of the Underwriters' election to purchase such Optional Shares,
or such other time and date as Xxxx Xxxxxxxx Incorporated and the Company may
agree upon in writing. Such time and date for delivery of the Firm Shares is
herein called the "First Time of Delivery," such time and date for delivery
of the Optional Shares, if not the First Time of Delivery, is herein called
the "Second Time of Delivery," and each such time and date for delivery is
herein called a "Time of Delivery."
12
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Shares and any additional documents requested by the
Underwriters, will be delivered at the offices of Xxxxxxx Xxxxxx L.L.P., 0000
Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000 (the "Closing Location"),
and the Shares will be delivered at the Designated Office, all at each Time
of Delivery. A meeting will be held at the Closing Location at 4:00 p.m.,
Houston time, on the Business Day next preceding each Time of Delivery, at
which meeting the final drafts of the documents to be delivered pursuant to
the preceding sentence will be available for review by the parties hereto.
For the purposes of this Agreement, "Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in the United States are generally authorized or obligated by
law or executive order to close or a day when the Commission's office in
Washington, D.C. is closed.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Act not later than Commission's close of business on the second
business day following the execution and delivery of this Agreement or,
if applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Act; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus except as permitted herein;
to advise the Representatives, promptly after it receives notice thereof,
of the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish the Representatives with
copies thereof; to advise the Representatives, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of
any order preventing or suspending the use of any Preliminary Prospectus
or the Prospectus, of the suspension of the qualification of the Shares
for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by
the Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or
suspending any such qualification, to use promptly its best efforts to
obtain its withdrawal;
(b) To furnish promptly to each of the Representatives and to
counsel for the Underwriters a signed copy of the Registration Statement
as originally filed with the Commission, and each amendment thereto filed
with the Commission, including all consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such number of
the following documents as the Representatives shall reasonably request:
(i) conformed copies of the Registration Statement as originally filed
with the Commission and each amendment thereto
13
and, (ii) each Preliminary Prospectus, the Prospectus and any amended or
supplemented Prospectus; and, if the delivery of a prospectus is required
at any time after the Effective Time in connection with the offering or
sale of the Shares or any other securities relating thereto and if, at
such time, any events shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary to amend or supplement the Prospectus in order to comply with
the Act or the Exchange Act, to notify the Representatives and, upon
their request, to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many
copies as the Representatives may from time to time reasonably request of
an amended or supplemented Prospectus which will correct such statement
or omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the
Representatives, be required by the Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy
thereof to the Representatives and counsel for the Underwriters and
obtain the consent of the Representatives to the filing;
(f) To make generally available to its securityholders as soon
as practicable, but in any event not later than 18 months after the
effective date of the Registration Statement (as defined in Rule 158(c))
under the Act, an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and
the rules and regulations thereunder of the Commission (including, at the
option of the Company, Rule 158);
(g) During a period of five years from the Effective Date, to
furnish to the Representatives copies of all reports or other
communications (financial or otherwise) furnished to shareholders, and
deliver to the Representatives (i) as soon as they are available, copies
of any reports and financial statements furnished to or filed with the
Commission or any national securities exchange or quotation system on
which any class of securities of the Company is listed or included; and
(ii) such additional information concerning the business and financial
condition of the Company as the Representatives may from time to time
reasonably request (such financial statements to be on a consolidated
basis to the extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its stockholders generally or to the
Commission);
14
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Shares for offering
and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of the Shares,
provided that in connection therewith the Company shall not be required
to qualify as a foreign corporation, to submit to taxation or to file a
general consent to service of process in any jurisdiction;
(i) During the period beginning from the date hereof and
continuing to and including the date 180 days after the effective date of
the Prospectus (the "180-Day Lockup Period"), not to, directly or
indirectly, (1) offer for sale, sell, pledge, issue, distribute or
otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition by any
person at any time in the future of) any shares of Common Stock or any
securities convertible into or exchangeable for shares of Common Stock,
or sell or grant options, rights or warrants with respect to any shares
of Common Stock or any securities convertible into or exchangeable for
shares of Common Stock, or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the
economic benefits or risks of ownership of such shares of Common Stock,
whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case without the prior written consent of Xxxx
Xxxxxxxx Incorporated, except for (i) the issuance of the Shares
hereunder, (ii) the issuances of shares of Common Stock in connection
with the Share Exchange and the Acquisitions, as described in the
Prospectus, (iii) the grant of options or other awards pursuant to the
Company's 1997 Stock Compensation Plan, as in effect on the date hereof,
and (iv) the issuance of up to 1,500,000 shares of Common Stock in
connection with future acquisitions, PROVIDED that each recipient of
shares of Common Stock referred to in clause (iii) or (iv) agrees with
the Company not to offer for sale, sell or otherwise dispose of (or enter
into any transaction or device which is designed to, or could be expected
to, result in the disposition by any person at any time in the future of)
any of such shares during the 180-Day Lockup Period; and to cause each
(A) director, (B) officer, (C) each person or entity (other than PII) who
is, prior to the First Closing Date, a stockholder of the Company (if
any), and (D) each person or entity who will receive shares of Common
Stock in connection with the Share Exchange, to furnish to the
Representatives, prior to the First Time of Delivery, a letter or
letters, in form and substance satisfactory to the Representatives,
pursuant to which each such person shall agree not to, directly or
indirectly, offer for sale, sell, assign, pledge, issue, distribute,
grant any option or enter into any contract for the sale or otherwise
transfer or dispose of any shares of Common Stock or any other securities
of the Company or any security or other instrument which by its terms is
convertible into or exercisable or exchangeable for shares of Common
Stock or other securities of the Company, whether now owned or hereafter
acquired by such person or entity or with respect to which such person or
entity has or hereafter acquires the power of disposition, including,
without limitation, any shares of Common Stock issuable under any
employee stock option or
15
warrant, during (A) the 180-Day Lockup Period, without the prior written
consent of Xxxx Xxxxxxxx Incorporated, and (B) the period of one year
from the date of the Prospectus (the "One-Year Lockup Period"), without
the prior written consent of the Company, PROVIDED that the Company will
not waive the foregoing restrictions applicable during the One-Year
Lockup Period with respect to any shares of Common Stock (or other
securities) without first notifying and consulting with Xxxx Xxxxxxxx
Incorporated. The Company further agrees that, during the 180-Day Lockup
Period, it will not, without the prior written consent of Xxxx Xxxxxxxx
Incorporated, waive any provision of any agreement relating to any
restriction imposed on any of its stockholders (including each person
and entity who will receive shares of Common Stock in connection with
the Acquisitions) with respect to the transfer or other disposition of
shares of Common Stock or securities convertible into or exchangeable
for Common Stock and will take all reasonable steps to enforce any such
provision so as to limit the transfer or other disposition of those
shares of Common Stock or securities convertible into or exchangeable
for Common Stock during the 180-Day Lockup Period.
(j) To use the net proceeds received by it from the sale of the
Shares pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds"; and
(k) Prior to filing with the Commission any reports with
respect to the offering and sale of the Shares and the application of the
proceeds therefrom as may be required under the Act, the Rules and
Regulations, the Exchange Act or the rules and regulations of the
Commission thereunder, to furnish a copy thereof to the counsel for the
Underwriters and receive and consider its comments thereon, and to
deliver promptly to the Representatives a signed copy of each such report
filed by it with the Commission.
6. The Company covenants and agrees to pay (a) the costs incident
to the authorization, issuance, sale and delivery of the Shares and any taxes
payable in that connection; (b) the costs incident to the preparation,
printing and filing under the Act of the Registration Statement and any
amendments and exhibits thereto; (c) the costs of distributing the
Registration Statement as originally filed and each amendment thereto and any
post-effective amendments thereof (including, in each case, exhibits), any
Preliminary Prospectus, the Prospectus and any amendment or supplement to the
Prospectus, all as provided in this Agreement; (d) the costs of producing and
distributing this Agreement and any other related documents in connection
with the offering, purchase, sale and delivery of the Shares; (e) the filing
fees incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of sale of the Shares; (f) any
applicable listing or other fees; (g) the fees and expenses of qualifying the
Shares under the securities laws of the several jurisdictions as provided in
Section 5(h) and of preparing, printing and distributing a Blue Sky
Memorandum, if any (including related fees and expenses of counsel to the
Underwriters), (h) all costs and expenses of the Underwriters, including the
fees and disbursements of counsel for the Underwriters, incident to the offer
and sale of the Shares by the Underwriters to employees and persons having
business relationships with the Company, as described in Section 3,
16
(i) all fees and expenses of an independent underwriter; and (j) all other
costs and expenses incident to the performance of the obligations of the
Company under this Agreement; PROVIDED that, except as provided in this
Section 6 and in Section 11, the Underwriters shall pay their own costs and
expenses, including the costs and expenses of their counsel, any transfer
taxes on the Shares which they may sell and the expenses of advertising any
offering of the Shares made by the Underwriters.
7. The respective obligations of the Underwriters hereunder are
subject to the accuracy, when made and as of each Time of Delivery, of the
representations and warranties of the Company contained herein, to the
performance by the Company of its obligations hereunder, and to each of the
following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 5(a); no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall
have been issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and any request of the
Commission for inclusion of additional information in the Registration
Statement or the Prospectus or otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Time of Delivery that the Registration
Statement or the Prospectus or any amendment or supplement thereto
contains an untrue statement of a fact which, in the opinion of counsel
for the Underwriters, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein
or is necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Shares,
the Registration Statement and the Prospectus, and all other legal
matters relating to this Agreement and the transactions contemplated
hereby, shall be reasonably satisfactory in all material respects to
counsel for the Underwriters, and the Company shall have furnished to
such counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
(d) Xxxxxxx Xxxxxx L.L.P. shall have furnished to the
Representatives its written opinion, as counsel to the Company, addressed
to the Underwriters and dated such Time of Delivery, in form and
substance satisfactory to the Representatives, to the effect that:
(i) The Company and PII have been duly incorporated and
are validly existing as corporations in good standing under the
laws of the State of Delaware, are duly registered and qualified
to transact business and are in good standing as foreign
corporations in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective
businesses requires such qualification (except where the failure
to register or qualify would not have a Material Adverse
17
Effect), and have all power and authority necessary to own, lease,
operate or hold their respective properties and conduct the
businesses in which they are engaged and, to such counsel's
knowledge, neither the Company nor PII is in violation of any
provision of its charter, by-laws or other organizational
documents;
(ii) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital
stock of the Company (A) have been duly and validly authorized and
issued, (B) are fully paid and nonassessable, (C) have not been
issued in violation of any preemptive or similar rights under the
Company's charter or by-laws, the laws of the State of Delaware
or, to the knowledge of such counsel, otherwise and (D) conform to
the description thereof contained in the Prospectus; after giving
effect to the Share Exchange and the closing of the Acquisitions
and the issuance of the shares of Common Stock contemplated by the
Acquisition Agreements, but without giving effect to the issuance
of the Shares pursuant to the terms of this Agreement, the Company
has issued and outstanding ________ shares of Common Stock and no
shares of preferred stock; and all of the issued shares of capital
stock of PII (A) have been duly and validly authorized and issued,
(B) are fully paid and nonassessable, (C) have not been issued in
violation of any preemptive or similar rights under PII's charter
or by-laws, the laws of the State of Delaware or, to the knowledge
of such counsel, otherwise and (D) after giving effect to (1) the
repurchase of an aggregate of 245,835 shares of Class B preferred
stock of PII pursuant to the terms of the [Share Repurchase
Agreement] dated as of __________ ___, 1997 by and among PII and
________________ (the "PII Preferred Stock Repurchase Agreement")
and the redemption of all the remaining outstanding shares of
preferred stock of PII pursuant to the terms of the Certificate of
Designations, Rights and Preferences of Preferred Stock of PII
filed with the Secretary of State of the State of Delaware on June
2, 1997 (the "PII Certificate of Designations") and the plan of
redemption adopted by the Board of Directors of PII by unanimous
written consent dated as of [August 16, 1997] (the "PII Plan of
Redemption"), all as described in the Registration Statement and
the Prospectus (collectively, the "Repurchase and Redemption
Transactions"), (2) the PII Common Stock Repurchases and (3) the
Share Exchange, will be owned directly by the Company, free and
clear of all liens, encumbrances, equities or claims;
(iii) The Shares being issued and sold by the Company to
the Underwriters at such Time of Delivery have been duly and
validly authorized and, when issued and delivered against payment
therefor as provided in this Agreement, will be duly and validly
issued, fully paid and nonassessable and will not have been issued
in violation of or be subject to any preemptive or similar rights
under the Company's charter or by-laws, the laws of the State of
Delaware or, to the knowledge of such counsel, otherwise;
18
(iv) Except as disclosed in the Prospectus, there are no
restrictions upon the voting or transfer of any of the Shares
pursuant to the Company's charter or by-laws, the laws of the
State of Delaware or, to the knowledge of such counsel, otherwise;
(v) The form of certificate representing shares of
Common Stock conforms to the applicable requirements of the
Delaware General Corporation Law;
(vi) Other than as set forth in the Prospectus, such
counsel does not know of any legal or governmental proceedings
(domestic or foreign) pending to which the Company or PII is a
party or of which any property or assets of the Company or PII is
the subject which is of a character required to be disclosed in
the Registration Statement and the Prospectus and which, if
determined adversely to the Company or PII, might, singly or in
the aggregate, have a Material Adverse Effect; and such counsel
does not know of any such proceedings that are threatened by any
governmental authorities or threatened by others;
(vii) The Registration Statement was declared effective
under the Act, the Prospectus was filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations and, to the
knowledge of such counsel after making telephone inquiries to the
staff of the Commission at such Time of Delivery, no stop order
suspending the effectiveness of the Registration Statement has
been issued and no proceeding for that purpose is pending or
threatened by the Commission;
(viii) The Registration Statement and the Prospectus and
any further amendments or supplements thereto made by the Company
prior to such Time of Delivery (other than the financial
statements and schedules (including the notes thereto and the
auditors' reports thereon) and the other financial data included
therein and the exhibits thereto, as to which such counsel need
express no opinion) appear on their face to have been
appropriately responsive in all material respects to the
requirements of the Act and the Rules and Regulations;
(ix) To the knowledge of such counsel, (i) there are no
contracts, indentures, mortgages, loan agreements, notes, leases
or other instruments required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto
other than those described or referred to therein or filed as
exhibits thereto and (ii) the descriptions thereof or references
thereto are correct;
(x) The Company has full corporate power and authority
to enter into this Agreement and to issue, sell and deliver the
Shares to the Underwriters as provided herein, and this Agreement
has been duly authorized, executed and delivered by the Company;
19
(xi) The execution and delivery of this Agreement, the
issuance and sale of the Shares being delivered at such Time of
Delivery by the Company and the compliance by the Company with all
of the provisions of this Agreement and the consummation of the
transactions contemplated hereby will not conflict with or result
in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which
the Company or PII is a party or by which the Company or PII is
bound or to which any of the property or assets of the Company or
PII is subject and which has been filed as an exhibit to the
Registration Statement, nor will such actions result in any
violation of the provisions of the charter or by-laws of the
Company or PII or any statute or any order, rule or regulation
known to such counsel of any court or governmental agency or body
(whether domestic or foreign) having jurisdiction over the Company
or PII or any of their properties or assets, other than (i) state
securities laws of the various states or other jurisdictions or
(ii) dental regulations (as to which such counsel shall deliver a
reasoned opinion as contemplated by Subsection 7(d)(xii) below);
and, except for the registration of the Shares under the Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and
applicable state securities laws in connection with the purchase
and distribution of the Shares by the Underwriters, no consent,
approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is required
for the execution, delivery and performance of this Agreement by
the Company or the consummation of the transactions contemplated
hereby;
(xii) The Company has the corporate power and authority to
enter into the Transaction Agreements to which it is a party and
to perform its obligations thereunder; the execution and delivery
of, and the performance by the Company of its obligations under,
the Transaction Agreements have been duly and validly authorized
by the Company, and each Transaction Agreement has been duly
executed and delivered by the Company and is a legal, valid and
binding agreement of the Company, enforceable in accordance with
its terms, except as that enforceability may be subject to the
effect of (A) any applicable bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
creditors' rights generally and (B) general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law); PROVIDED that the opinion set
forth in this subparagraph with respect to enforceability of the
Transaction Agreements will be subject to a reasoned analysis of
the prohibition against the corporate practice of dentistry in the
State of Texas established by the Tex. Health & Safety Code Xxx.
arts. 4548a and 4551a(8) and the line of analogous court decisions
relating to the corporate practice of medicine including XXXXX
BROS., INC. V. FIRST MEDICAL ASSOC., 715 S.W.2d 782 (Tex.
App.--Dallas 1986, writ ref'd n.r.e.);
20
(xiii) Each of the Acquisitions has been consummated
pursuant to the terms of the Acquisition Agreement related
thereto;
(xiv) The PII Common Stock Repurchases have been completed
pursuant to the terms of the PII Common Stock Repurchase
Agreement, the Share Exchange has been completed pursuant to the
terms of the Share Exchange Agreement and the Repurchase and
Redemption Transactions have been completed pursuant to the terms
of the PII Preferred Stock Repurchase Agreement, the PII
Certificate of Designations and the PII Plan of Redemption;
(xv) The Shares and the shares of Common Stock issued in
connection with the Share Exchange and the Acquisitions have been
approved for listing, subject to notice of issuance, on the
American Stock Exchange;
(xvi) Neither the Company nor any subsidiary is an
"investment company" within the meaning of such term under the
Investment Company Act of 1940 and the rules and regulations of
the Commission thereunder; and
(xvii) To such counsel's knowledge, there are no contracts,
agreements or understandings between the Company and any person
granting such person the right to (i) require the Company to file
a registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person,
(ii) require the Company to include such securities in the
securities registered pursuant to the Registration Statement or
(iii) except as described in the Prospectus, require that any
securities be registered pursuant to any other registration
statement filed by the Company under the Act.
In rendering such opinion, such counsel may state that its opinion is
limited to matters governed by the Federal laws of the United States of
America, the laws of the State of Texas and the corporate laws of the
State of Delaware. Such counsel shall also have furnished to the
Representatives a written statement, addressed to the Underwriters and
dated such Time of Delivery, in form and substance satisfactory to the
Representatives, to the effect that (x) such counsel has acted as counsel
to the Company in connection with the preparation of the Registration
Statement, and (y) based on the foregoing, no facts have come to the
attention of such counsel which lead it to believe that the Registration
Statement (other than (i) the financial statements and schedules
(including the notes thereto and the auditors' reports thereon) included
therein or omitted therefrom and (ii) the other financial information
contained therein or omitted therefrom, and it being understood that such
counsel is not, by this statement, making any statement as to the
accuracy of any statement or representation contained in any exhibit to
the Registration Statement), as of the Effective Date, contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading, or that the
21
Prospectus contains any untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The foregoing opinion and
statement may be qualified by a statement to the effect that such counsel
does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or
the Prospectus.
(e) Xxxxxxxxx X. Xxxxxx, general counsel of the Company, shall
have furnished to the Representatives her opinion, addressed to the
Underwriters and dated such Time of Delivery, in form and substance
satisfactory to the Representatives, to the effect that:
(i) The Company and PII have been duly incorporated and
are validly existing as corporations in good standing under the
laws of the State of Delaware, are duly registered and qualified
to transact business and are in good standing as foreign
corporations in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective
businesses requires such qualification (except where the failure
so to register or qualify would not have a Material Adverse
Effect), and have all power and authority necessary to own, lease,
operate or hold their respective properties and conduct the
businesses in which they are engaged and, to such counsel's
knowledge, neither the Company nor PII is in violation of any
provision of its charter, by-laws or other organizational
documents;
(ii) The Shares being issued and sold by the Company to
the Underwriters at such Time of Delivery have been duly and
validly authorized and, when issued and delivered against payment
therefor as provided in this Agreement, will be duly and validly
issued, fully paid and nonassessable and will not have been issued
in violation of or be subject to any preemptive or similar rights
under the Company's charter or by-laws, the laws of the State of
Delaware or, to the knowledge of such counsel, otherwise;
(iii) There are no restrictions upon the voting or
transfer of any of the Shares pursuant to the Company's charter or
by-laws, the laws of the State of Delaware or, to such counsel's
knowledge, otherwise;
(iv) To the best of such counsel's knowledge and other
than as set forth in the Prospectus, there are no legal or
governmental proceedings (domestic or foreign) pending to which
the Company or PII is a party or of which any property or assets
of the Company or PII is the subject which, if determined
adversely to the Company or PII, might, singly or in the
aggregate, have a Material Adverse Effect; and, to the best of
such counsel's knowledge, no such proceedings are threatened or
contemplated by any governmental authorities or threatened by
others;
22
(v) The Company has full corporate power and authority
to enter into this Agreement and to issue, sell and deliver the
Shares to the Underwriters as provided herein, and this Agreement
has been duly authorized, executed and delivered by the Company;
(vi) The execution and delivery of this Agreement, the
issuance and sale of the Shares being delivered at such Time of
Delivery by the Company and the compliance by the Company with all
of the provisions of this Agreement and the consummation of the
transactions contemplated hereby will not conflict with or result
in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which
the Company or PII is a party or by which the Company or PII is
bound or to which any of the property or assets of the Company or
PII is subject and which has been filed as an exhibit to the
Registration Statement, nor will such actions result in any
violation of the provisions of the charter or by-laws of the
Company or PII or any statute or any order, rule or regulation
known to such counsel of any court or governmental agency or body
(whether domestic or foreign) having jurisdiction over the Company
or PII or any of their properties or assets, other than (i) state
securities laws of the various states or other jurisdictions or
(ii) dental regulations (as to which such counsel shall deliver a
reasoned opinion as contemplated by subsection 7(e)(vii) below);
and, except for the registration of the Shares under the Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and
applicable state securities laws in connection with the purchase
and distribution of the Shares by the Underwriters, no consent,
approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is required
for the execution, delivery and performance of this Agreement by
the Company or the consummation of the transactions contemplated
hereby;
(vii) The Company has the corporate power and authority to
enter into the Transaction Agreements to which it is a party and
to perform its obligations thereunder; the execution and delivery
of, and the performance by the Company of its obligations under,
the Transaction Agreements have been duly and validly authorized
by the Company, and each Transaction Agreement has been duly
executed and delivered by the Company and is a legal, valid and
binding agreement of the Company, enforceable in accordance with
its terms, except as that enforceability may be subject to the
effect of (A) any applicable bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
creditors' rights generally and (B) general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law); PROVIDED that the opinion set
forth in this subparagraph with respect to enforceability of the
Transaction Agreements in each of the applicable jurisdictions may
be subject to a reasoned analysis of the
23
prohibition against the corporate practice of dentistry in the
applicable jurisdiction, as set forth in an opinion of other
counsel delivered as provided in the last paragraph of this
Section 7(e);
(viii) To the best of such counsel's knowledge, (i) there
are no contracts or other documents that are required to be
described or referred to in the Prospectus or to be filed as
exhibits to the Registration Statement that have not been
described or referred to therein or filed as exhibits to the
Registration Statement, (ii) the descriptions thereof or
references thereto are correct and (iii) no default exists in the
due performance or observance of any material obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument so described, referred to or filed, except for such
defaults that would not, singly or in the aggregate, have a
Material Adverse Effect;
(ix) The Company has full corporate power and authority,
and all necessary governmental authorizations, approvals, orders,
licenses, certificates, franchises and permits of and from all
governmental regulatory officials and bodies (except where the
failure so to have any such authorizations, approvals, orders,
licenses, certificates, franchises or permits would not, singly or
in the aggregate, have a Material Adverse Effect), to own its
properties and to conduct its business in the manner described in
the Prospectus;
(x) The Company's conduct of its business complies in
all material respects with the laws and governmental regulations
relating to the corporate practice of dentistry in each
jurisdiction in which it conducts its business (except where the
failure to comply would not, singly or in the aggregate, have a
Material Adverse Effect); PROVIDED that the opinion set forth in
this subparagraph may be subject to a reasoned analysis of the
prohibition against the corporate practice of dentistry in each
such jurisdiction, as set forth in an opinion of other counsel
delivered as provided in the last paragraph of this Section 7(e);
(xi) Each of the Acquisitions has been consummated
pursuant to the terms of the Acquisition Agreement related
thereto;
(xii) The PII Common Stock Repurchases have been completed
pursuant to the terms of the PII Common Stock Repurchase
Agreement, the Share Exchange has been completed pursuant to the
terms of the Share Exchange Agreement and the Repurchase and
Redemption Transactions have been completed pursuant to the terms
of the PII Preferred Stock Repurchase Agreement, the PII
Certificate of Designations and the PII Plan of Redemption;
24
(xiii) To the best of such counsel's knowledge, there are
no contracts, agreements or understandings between the Company and
any person granting such person the right to (i) require the
Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be owned by
such person, (ii) require the Company to include such securities
in the securities registered pursuant to the Registration
Statement or (iii) except as described in the Prospectus, require
that any securities be registered pursuant to any other
registration statement filed by the Company under the Act; and
(xiv) The statements contained in the Prospectus under the
captions "Risk Factors--Absence of Combined Operating History,"
"Risk Factors--Reliance on Affiliated Practices and Dentists,"
"Risk Factors--Government Regulation," "Risk Factors--Potential
Effect of Shares Eligible for Future Sale on Price of Common
Stock," "Risk Factors--Certain Anti-takeover Provisions,"
"Business--Summary of Terms of Acquisitions," "Business--Service
Agreements," "Business--Dentist Agreement," "Business--Dentist
Employment Agreements," "Business--Litigation and Insurance,"
"Business--Government Regulation," "Management--Executive
Compensation," "Management--Employment Agreements," "Management--
1997 Stock Compensation Plan," "Certain Transactions,"
"Description of Capital Stock," "Shares Eligible for Future Sale"
and "Underwriting," and in Items 14 and 15 of Part II of the
Registration Statement, insofar as such statements purport to
summarize the provisions of the documents or agreements referred
to therein or matters of law or legal conclusions, are true and
correct in all material respects and constitute a fair summary
thereof.
In rendering such opinion, such counsel may rely, to the extent
she considers such reliance appropriate, upon the opinion of other
counsel retained by her or the Company (which may include local counsel
referred to in Section 7(f)), PROVIDED that such other counsel is
satisfactory to counsel for the Underwriters, furnishes a copy of its
opinion to the Representatives and specifically addresses such opinion to
the Representatives. Such counsel shall also have furnished to the
Representatives a written statement, addressed to the Underwriters and
dated such Time of Delivery, in form and substance satisfactory to the
Representatives, to the effect that (x) she has acted as general counsel
of the Company since its inception and, as such, is familiar with the
Company, its operations and the terms and conditions of the Acquisitions
and the Service Agreements and has acted as general counsel of the
Company in connection with the preparation of the Registration Statement
and (y) based on the foregoing, no facts have come to her attention which
lead her to believe that the Registration Statement (other than the
financial statements and schedules (including the notes thereto and the
auditors' reports thereon) included therein or omitted therefrom, and it
being understood that such counsel is not, by this statement, making any
statement as to the accuracy of any statement or representation contained
in any exhibit to the Registration Statement), as of the Effective Date,
contained any untrue statement of a material fact or
25
omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, or
that the Prospectus contains any untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(f) The Representatives shall have received from local counsel
to the Company licensed to practice in each jurisdiction in which a PA
Affiliate is organized or doing business, which local counsel shall be
satisfactory to the Representatives, such opinions, dated such Time of
Delivery and expressly addressed to the Representatives, on behalf of the
Underwriters, each in substantially the form of the opinion letter set
forth in Exhibit A hereto, with such changes thereto as shall be
acceptable to the Representatives. The Representatives shall have
received from local counsel to each of the PA Affiliates licensed to
practice in each jurisdiction in which a PA Affiliate is organized or
doing business, which local counsel shall be satisfactory to the
Representatives, such opinions, dated such Time of Delivery and expressly
addressed to the Representatives, on behalf of the Underwriters, each in
substantially the form of the opinion letter set forth in Exhibit B
hereto, with such changes thereto as shall be acceptable to the
Representatives.
(g) The Representatives shall have received from Xxxxx & Xxxxx,
L.L.P., counsel for the Underwriters, such opinion or opinions, dated
such Time of Delivery, with respect to the issuance and sale of the
Shares, the Registration Statement, the Prospectus and other related
matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.
(h) At the time of execution of this Agreement, the
Representatives shall have received from Coopers & Xxxxxxx LLP a letter,
in form and substance satisfactory to the Representatives, addressed to
the Underwriters and dated the date hereof, (i) confirming that they are
independent public accountants within the meaning of the Act and are in
compliance with the applicable requirements relating to the qualification
of accountants under Rule 2-01 of Regulation S-X of the Commission, (ii)
stating, as of the date hereof (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more
than five days prior to the date hereof), the conclusions and findings of
such firm with respect to the financial information and other matters
ordinarily covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings.
(i) With respect to the letter of Coopers & Xxxxxxx LLP
referred to in the preceding paragraph and delivered to the
Representatives concurrently with the execution of this Agreement (the
"initial letter"), the Company shall have furnished to the
Representatives a letter (the "bring-down letter") of such accountants,
addressed to the
26
Underwriters and dated such Time of Delivery, (i) confirming that they
are independent public accountants within the meaning of the Act and are
in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in
the Prospectus, as of a date not more than five days prior to the date of
the bring-down letter (PROVIDED that such date shall not be prior to the
Effective Date)), the conclusions and findings of such firm with respect
to the financial information and other matters covered by the initial
letter and (iii) confirming in all material respects the conclusions and
findings set forth in the initial letter.
(j) The Company shall have furnished to the Representatives a
certificate, dated such Time of Delivery, of its Chairman of the Board or
its President and Chief Executive Officer and its Chief Financial Officer
stating that:
(i) The representations, warranties and agreements of
the Company in Section 1 are true and correct as of such Time of
Delivery; the Company has complied with all of its agreements
contained herein; and the conditions set forth herein have been
fulfilled; and
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of the
Effective Date, the Registration Statement and Prospectus did not
include any untrue statement of a material fact and did not omit
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (B)
since the Effective Date, no event has occurred which should have
been set forth in a supplement or amendment to the Registration
Statement or the Prospectus.
(k) (i) None of the Company, PII or the PA Affiliates shall
have sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus, or (ii) since the respective dates as of which information is
given in the Prospectus there shall not have been any material change in
the capital stock or short-term or long-term debt of the Company, PII or
any of the PA Affiliates or any change, or any development involving a
prospective change, in or affecting the general affairs, management,
consolidated financial position, stockholders' equity, results of
operations or prospects of the Company and PII, otherwise than as set
forth or contemplated in the Prospectus, the effect of which, in any such
case described in clause (i) or (ii), is, in the judgment of the
Representatives, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the
27
delivery of the Shares being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus.
(l) On or after the date hereof, there shall not have occurred
any of the following: (i) a suspension or material limitation in trading
in securities generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market, (ii) or a suspension or
material limitation in trading in the Company's securities, (iii) a
general moratorium on commercial banking activities declared by either
Federal or state authorities, (iv) the outbreak or escalation of
hostilities involving the United States or a declaration by the United
States of a national emergency or war or (v) such a material adverse
change in general economic, political or financial conditions (or the
effect of international conditions on the financial markets in the United
States shall be such) as to make it, in the judgment of the
Representatives or a majority in interest of the several Underwriters,
impracticable or inadvisable to proceed with the public offering or
delivery of the Shares being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus.
(m) The Shares to be sold by the Company at such Time of
Delivery, together with the shares of Common Stock issued or to be issued
in connection with the Share Exchange and the Acquisitions, shall have
been approved for listing, subject to notice of issuance, on the American
Stock Exchange.
(n) The PII Common Stock Repurchases shall have been completed
pursuant to the terms of the PII Common Stock Repurchase Agreement, the
Share Exchange shall have been completed pursuant to the terms of the
Share Exchange Agreement and the Repurchase and Redemption Transactions
shall have been completed pursuant to the terms of the PII Preferred
Stock Repurchase Agreement, the PII Certificate of Designations and the
PII Plan of Redemption.
(o) The Acquisitions shall have been consummated on the terms
set forth in the Registration Statement and the Acquisition Agreements,
without waiver or modification of any material terms or provisions of any
Acquisition Agreement, except as may be approved by the Representatives.
(p) The Company shall have obtained and delivered to the
Underwriters executed copies of the agreements to the effect set forth in
Section 5(i) from each of the persons referred to in such Section in form
and substance satisfactory to the Representatives.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
28
8. (a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; PROVIDED, HOWEVER, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through Xxxx Xxxxxxxx
Incorporated expressly for use therein (which information is identified in
subsection (b) below).
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in any Preliminary Prospectus, the Registration Statement or the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through the Representatives expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably incurred by
the Company in connection with investigating or defending any such action or
claim as such expenses are incurred. The Underwriters severally confirm that
the statements with respect to this public offering of the Shares by the
Underwriters set forth on the cover page of, the legend concerning
over-allotments on the inside front cover page of, and the concession and
reallowance figures appearing under the caption "Underwriting" in, the
Prospectus are correct, and the Underwriters and the Company agree that such
information constitutes the only information concerning any of the
Underwriters furnished in writing to the Company by or on behalf of any of
the Underwriters specifically for inclusion in the Registration Statement and
the Prospectus.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against an indemnifying
party under such subsection, notify the indemnifying party
29
in writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have
to any indemnified party otherwise than under such subsection. In case any
such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnified party), and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of
the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action
or claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) 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 from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as
is appropriate to reflect not only such relative benefits but also the
relative fault of the Company on the one hand and the Underwriters on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions 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 proportion as the total net proceeds from
the offering of the Shares (before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions received by
the Underwriters with respect to the Shares, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company on the
one hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
30
statement or omission. The Company and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this subsection (d)
were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above
in this subsection (d). The amount paid or payable by an indemnified party
as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall
be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which
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
in this subsection (d) to contribute are several in proportion to their
respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations
of the Underwriters under this Section 8 shall be in addition to any
liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of
the Company (including any person who, with his or her consent, is named in
the Registration Statement as about to become a director of the Company) and
to each person, if any, who controls the Company within the meaning of the
Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Shares which it has agreed to purchase hereunder at a Time of
Delivery, you may in your discretion arrange for you or another party or
other parties to purchase such Shares on the terms contained herein. If
within 36 hours after such default by any Underwriter you do not arrange for
the purchase of such Shares, then the Company shall be entitled to a further
period of 36 hours within which to procure another party or other parties
satisfactory to you to purchase such Shares on such terms. In the event
that, within the respective prescribed periods, you notify the Company that
you have so arranged for the purchase of such Shares, or the Company notify
you that they have so arranged for the purchase of such Shares, you or the
Company shall have the right to postpone such Time of Delivery for a period
of not more than seven days, in order to effect whatever changes may thereby
be made necessary in the Registration Statement or the Prospectus, or in any
other documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your
opinion may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under this Section with
like effect as if such person had originally been a party to this Agreement
with respect to the Shares purchased by it thereunder.
31
(b) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the Company
as provided in subsection (a) above, the aggregate number of such Shares
which remains unpurchased does not exceed one-eleventh of the aggregate
number of all the Shares to be purchased at such Time of Delivery, then the
Company shall have the right to require each non-defaulting Underwriter to
purchase the number of Shares which such Underwriter agreed to purchase
hereunder at such Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the
number of Shares which such Underwriter agreed to purchase hereunder) of the
Shares of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the Company
as provided in subsection (a) above, the aggregate number of such Shares
which remains unpurchased exceeds one-eleventh of the aggregate number of all
the Shares to be purchased at such Time of Delivery, or if the Company shall
not exercise the right described in subsection (b) above to require
non-defaulting Underwriters to purchase Shares of a defaulting Underwriter or
Underwriters, then this Agreement or, with respect to the Second Time of
Delivery, the obligations of the Underwriters to purchase and of the Company
to sell the Optional Shares shall thereupon terminate, without liability on
the part of any non-defaulting Underwriter or the Company, except for the
expenses to be borne by the Company and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters,
as set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless
of any investigation (or any statement as to the results thereof) made by or
on behalf of any Underwriter or any controlling person of any Underwriter, or
the Company, or any officer or director or controlling person of the Company,
and shall survive delivery of and payment for the Shares.
11. The obligations of the Underwriters hereunder may be terminated
by you by notice given to and received by the Company prior to delivery of
and payment for the Firm Shares if, prior to that time, any of the events
described in Sections 7(k) or 7(l), shall have occurred or if the
Underwriters shall decline to purchase the Shares for any reason permitted
under this Agreement.
12. If the Company shall fail to tender the Shares for delivery to
the Underwriters 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 Underwriters' obligations hereunder
required to be fulfilled by the Company is not fulfilled, the Company will
reimburse the Underwriters for all reasonable out-of-pocket expenses
(including fees and disbursements of
32
counsel) incurred by the Underwriters in connection with this Agreement
and the proposed purchase of the Shares and, upon demand, the Company shall
pay the full amount thereof to you. If this Agreement is terminated pursuant
to Section 9 by reason of the default of one or more Underwriters, the
Company shall not be obligated to reimburse any defaulting Underwriter on
account of those expenses.
13. In all dealings hereunder, you shall act on behalf of each of
the Underwriters, and the parties hereto shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of any Underwriter
made or given by you jointly or by Xxxx Xxxxxxxx Incorporated on behalf of
you as the Representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to you in care of Xxxx Xxxxxxxx Incorporated at
Cityplace, 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000-0000,
Attention: Corporate Syndicate Department; and if to the Company shall be
delivered or sent by mail, telex or facsimile transmission to Pentegra Dental
Group, Inc., 0000 X. 00xx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000,
facsimile number (000) 000-0000, Attention: President; PROVIDED, HOWEVER,
that any notice to an Underwriter pursuant to Section 8(d) hereof shall be
delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire or
telex constituting such Questionnaire, which address will be supplied to the
Company by you upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
14. Time shall be of the essence in the performance of this
Agreement. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters and the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. No
purchaser of any of the Shares from any Underwriter shall be deemed a
successor or assign by reason merely of such purchase.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS.
16. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together constitute one
and the same instrument.
17. The headings herein are inserted for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
33
If the foregoing is in accordance with your understanding, please sign
and return to us one for the Company and for each of you plus one for each
counsel counterparts hereof, and upon the acceptance hereof by you, on behalf
of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement among each of the Underwriters and the
Company. It is understood that your acceptance of this letter on behalf of
each of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination, upon request, but without warranty on your part as
to the authority of the signers thereof.
Very truly yours,
PENTEGRA DENTAL GROUP, INC.
By:
-----------------------------------------
Xxxx X. Xxxxxxx
President and Chief Executive Officer
Accepted as of the date hereof:
XXXX XXXXXXXX INCORPORATED
EVEREN SECURITIES, INC.
By XXXX XXXXXXXX INCORPORATED
By: ---------------------------------------
On behalf of each of the Underwriters
34
SCHEDULE I
Number of
Underwriters Shares
------------ ---------
Xxxx Xxxxxxxx Incorporated......................
EVEREN Securities, Inc. ........................
---------
Total.................................... 2,500,000
---------
---------
I-1
SCHEDULE II
PA AFFILIATES
Xxxxx X. Xxxxx, D.D.S.
Xxxxxx X. Xxxxxxxx, D.D.S., Xxxxxx X. Xxxxxxx, D.D.S., Xxxxxxx X. Xxxxxxx,
D.D.S., Xxxxxxx X. Xxxxx, D.D.S. and Xxxxxx X. Xxxxxxxx, D.D.S., Inc., dba
Xxxxxxxx Dental Group
Xxxxxx Xxxxxxx, D.D.S., Inc.
Xxxxxx X. Xxxxxxx, D.D.S., P.C.
Xxxxxx X. Xxxxxxxxx, D.D.S., A Professional Corporation
Xxxxx X. Xxxxxx, Xx., D.D.S., Inc.
Xxxxx Xxxxxxx, D.D.S.
Xxxxxx X. Xxxxxxxxx, Xx., D.D.S., P.A.
Family Dental Centers, P.A.
Xxxxxxx X. Xxxxxx, D.D.S.
Xxxx X. Xxxxxxxx, D.D.S., P.C.
Xxxxxxx X. Xxxxxxxxxxx, D.D.S., P.C.
Xxxx X. Xxxxxx, D.D.S., P.C.
Xxxxxxxxx X. Xxxxxxxxx, D.D.S.
Xxxx X. Xxxxxxxx, D.D.S., P.C.
Xxxxx X. Xxxxxxxxx, D.D.S.
Xxxxxxx Xxxxx, D.D.S.
Xxxxxxx Dental Partnership
II-1
Xxxxx X. Xxxxxx, D.D.S.
Xxxxx Xxxxx Xxx, D.D.S., P.A.
Xxxxxxx X. Xxxxx, D.D.S., P.C.
Xxxxx X. Xxxxx, D.D.S., P.C.
Lakeview Dental, P.C.
Xxxxxx X. Xxxxxxx, D.D.S.
Xxxxx X. Little, D.D.S.
Xxxxx X. Xxxxxx, D.D.S., P.C.
Xxxxxxx X. Xxxxx, Xx., D.M.D., P.C.
Xxxxx X. XxXxxxxxx, D.D.S.
Xxxxx X. Xxxxxxx, D.D.S., P.A.
Xxxxx Xxxxx Xxxxxxx, D.D.S., M.S., P.C.
Xxxx X. Xxxxxxx, D.D.S., P.C.
T.L. Xxxxxxxx, D.D.S., Inc.
Xxxxx X. Xxxxxxx, D.D.S., Inc.
Xxxxx X'Xxxxx, D.D.S., Inc.
Xxxxxxxx X. X'Xxxxx, D.D.S.
Xxxxxx X. Pebbles, D.D.S., P.C.
Xxxxx X. Xxxxxx, D.D.S.
Xxxx X. Xxxx, D.D.S., Ltd.
Xxxxxxx Xxxxxxx, D.D.S., P.C.
II-2
Xxxx Xxxxxxxx, D.D.S.
Xxxxxxx X. Xxxxx, DMD, P.C.
Xxxx X. Xxxxxxxxxx, D.D.S.
Xxxx Xxxxxxxx, D.D.S.
Y. Xxxx Suzuki, D.D.S., P.S.
Xxxxxx X. Xxxxxxxxxx, D.D.S.
Xxxxxx Xxxxxx, D.D.S.
Xxxxx X. Xxxxxxxx, D.D.S., P.S.
S. Xxxxxx Xxxxxxxxxx, D.D.S.
Xxxxx Xxx Xxxxx, D.D.S.
Xxxxxx X. Xxxxx, D.D.S., P.C.
Xxxxx X. Xxxxx, D.D.S., P.C.
Xxxxxx X. Xxxxxxxx, D.D.S., P.C.
Family Dental Center, P.A.
Xxxxxx X. Xxxxxxx, D.D.S., Inc.
Xxxxxx X. Xxxxxxx, Xx., D.D.S., P.C.
Xxxxxx X. Xxxxxxxxx, D.D.S., Ltd.
________________________
Xxxxx X. Xxxxxxx, D.D.S., P.C.
Xxxxxxxxx Dental Corporation, P.A.
Xxxxxx Dental Corporation, P.A.
II-3
Xxxxxx Dental Corporation, P.A.
Xxxxxx Dental Corporation, P.A.
Xxxx X. Gerbohlz, D.D.S., P.C.
Front Range Dental Group, P.C.
M.G., D.D.S., P.C.
Xxxxxxxxx X. Xxxxxxxxx, D.D.S., P.C.
Xxxx Xxxxxxxx, D.D.S., P.C.
________________________
________________________
Xxxxxxx Dental Partnership
Xxxxxx Dental Group, P.A.
Xxxxx Xxxxx Xxx, D.D.S., P.C.
Xxxxx Dental Care of Marquette, P.C.
Kniff Dental Corporation, P.A.
Xxxxxx X. Xxxxxxx, D.D.S., P.C.
Xxxxx X. Little, D.D.S., P.C.
Xxxxx X. Xxxxxx, D.D.S., P.C.
Xxxxxxx X. Xxxxx, Xx., D.M.D., P.C.
Xxxxx X. XxXxxxxxx, D.D.S., P.C.
Xxxxx X. Xxxxxxx, D.D.S., P.A.
Northwest Periodontics, Inc.
II-4
Northwest Dental Management, Inc.
Xxxxxxxx Dental Corporation
Xxxxx X. Xxxxxxx, D.D.S.
Xxxxx X. X'Xxxxx, D.D.S., Inc.
Xxxxxxxx X. X'Xxxxx, D.D.S., P.C.
Xxxxxx X. Xxxxxxx, Xx., D.D.S., P.S.
Xxxxx X. Xxxxxx, D.D.S., P.C.
Concord Dental, Ltd.
Xxxxxxx Dental Services, Inc.
______________________
Xxxxx Dental Corporation, P.C.
Xxxx X. Xxxxxxxxxx, D.D.S., S.C.
Xxxx Xxxxxxxx, D.D.S., P.C.
Y. Xxxx Suzuki, D.D.S., P.S.
Xxxxxx X. Xxxxxxxxxx, D.D.S., P.C.
Xxxxxx Xxxxxx, D.D.S., P.C.
Xxxxxxxx Dental Clinic, P.C.
S. Xxxxxx Xxxxxxxxxx, D.D.S., P.C.
Xxxxx Xxx Xxxxx, D.D.S., P.C.
Aspenwood Dental Associates, P.C.
II-5
EXHIBIT A
FORM OF OPINION OF LOCAL COUNSEL FOR THE COMPANY
A-1
Pentegra Dental Group, Inc. [DATE OF CLOSING]
0000 X. 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Xxxx Xxxxxxxx Incorporated
0000 X. Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
EVEREN Securities, Inc.
00 Xxxx Xxxxxx Xxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: [Contribution Agreement] [Agreement and Plan of Reorganization]
dated ________________; Service Agreement dated _________________;
Dentist Agreement dated __________________; Employment Agreement
dated _________________.
Ladies and Gentlemen:
We have acted as special counsel in the State of [______________] to
Pentegra Dental Group, Inc., a Delaware corporation ("Pentegra"), in connection
with that certain [Contribution Agreement] [Agreement and Plan or
Reorganization] dated ___________________, (the "Acquisition Agreement") by and
among Pentegra and __________________ ("Practice"), that certain Service
Agreement dated ___________________ (the "Service Agreement"), by and among
Pentegra and the Practice, that certain Dentist Agreement dated
__________________ (the "Dentist Agreement"), by and among ________________
("Dentist") and Pentegra and that certain Employment Agreement dated
_______________ (the "Employment Agreement"), by and among Practice and Dentist
(collectively, the "Agreements"). This opinion is delivered to you pursuant to
Section 7 of the Underwriting Agreement by and between Pentegra and Xxxx
Xxxxxxxx Incorporated and EVEREN Securities, Inc., individually and as
representatives of the several underwriters named in Schedule I thereto (the
"Underwriters").
Pentegra Dental Group, Inc. -2- March ___, 1998
Xxxx Xxxxxxxx Incorporated
EVEREN Securities, Inc.
We understand that (i) pursuant to the terms of the Acquisition
Agreement, Pentegra will acquire substantially all of the Practice's
equipment, personnel and goodwill associated therewith in exchange for cash,
Pentegra common stock ("Pentegra Shares"), or a combination thereof; (ii)
with respect to an Agreement and Plan of Reorganization, the separate
corporate existence of the Practice shall cease; (iii) with respect to an
Agreement and Plan of Reorganization, prior to the statutory merger of the
Practice into Pentegra, the dentists and patient records, if any, of the
Practice will be transferred to a newly organized professional entity (the
"New PC") which will become bound by the Service Agreement; and (iv) Pentegra
and the Practice, in the case of a Contribution Agreement, or New PC in the
case of an Agreement and Plan of Reorganization, will enter into the Service
Agreement, pursuant to which Pentegra will provide facilities, equipment and
business and administrative management services necessary for the operation
of the New PC or the Practice, as applicable.
In rendering such opinions we have assumed that the signatures on all
documents examined are genuine, that all documents submitted to us as
originals are accurate and complete, and that all documents submitted to us
as copies are true, correct and complete copies of the originals thereof.
Without limiting the foregoing, we have examined originals or copies
otherwise identified to our satisfaction as being true and correct copies of
the following documents of Pentegra, the Practice and the Dentist:
(a) The Acquisition Agreement [and related Exhibits and
Schedules];
(b) The Service Agreement [and related Exhibits and Schedules];
(c) The Dentist Agreement; and
(d) The Employment Agreement.
Based solely upon the foregoing, subject to the comments and
exceptions stated herein, and limited in all respects to the laws of the
State of [______________], we are of the opinion that, except as further
discussed below:
1. The Service Agreement, the Acquisition Agreement, the Dentist
Agreement and the Employment Agreement constitute the valid and binding
obligations of each party thereto enforceable in accordance with their
respective terms, except as may be limited by future determinations, rulings or
opinions pursuant to any healthcare related law, rule, statute, ordinance or
regulation of the state of [________________]. Specifically, the transactions
and arrangements contemplated under the Acquisition Agreement, the Service
Agreement, the Dentist Agreement and
Pentegra Dental Group, Inc. -3- March ___, 1998
Xxxx Xxxxxxxx Incorporated
EVEREN Securities, Inc.
the Employment Agreement do not violate any [State] statute, regulation,
judicial or regulatory interpretation (collectively, "State Law")
prohibiting, regulating or restricting:
(a) the corporate practice of dentistry;
(b) sharing or dividing fees by or among dentists or other
health care providers, often referred to as fee splitting laws;
(c) referrals by dentists to entities providing health care
services or goods with which the dentist has an ownership interest or
compensation arrangement, often referred to as self-referral laws; or
(d) payments to or from dentists or other health care providers
as inducements for referrals of patients or purchases of health care
goods or services, often referred to as illegal remuneration or anti-
kickback laws.
A. CORPORATE PRACTICE OF DENTISTRY
[INSERT NECESSARY DISCUSSION]
B. FEE SPLITTING
[INSERT NECESSARY DISCUSSION]
C. SELF REFERRALS
[INSERT NECESSARY DISCUSSION]
D. ANTI-KICKBACK
[INSERT NECESSARY DISCUSSION]
We further are of the opinion that:
2. No consent, license, approval or authorization of, or
registration or declaration with, any state or local governmental body,
authority, bureau, agency, or court is required in connection with the
execution and delivery of the Agreements or other agreements contemplated
thereby, or the consummation of the transactions contemplated thereby, on the
part of Pentegra.
Pentegra Dental Group, Inc. -4- March ___, 1998
Xxxx Xxxxxxxx Incorporated
EVEREN Securities, Inc.
3. To our knowledge, there is no pending legislation or proposed
regulations, guidelines or instructions, or pending or threatened action,
suit or proceeding before any court or governmental agency, authority or
arbitrator to require licensure, certificate of need or other health planning
approval, accreditation or any other regulatory approval for the operation of
a dental practice management company which would have a material adverse
effect on Pentegra or the Practice.
This opinion is furnished by us and is solely for your benefit and the
benefit of all the Underwriters and their counsel, and you and they are
justified in relying thereon, and such reliance is reasonable under the
circumstances. No other use or distribution of this opinion may be made
without our prior written consent, except in response to a valid subpoena or
other lawful process.
Sincerely,
[FIRM]
By:
---------------------------
[Attorney]
EXHIBIT B
FORM OF OPINION OF LOCAL COUNSEL FOR THE PA AFFILIATES
OPINION OF COUNSEL TO THE COMPANY AND THE STOCKHOLDERS
(FOR CONTRIBUTION AGREEMENT)
March __, 1998
To: Pentegra Dental Group, Inc.
0000 X. 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Xxxx Xxxxxxxx Incorporated
0000 X. Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
EVEREN Securities, Inc.
00 Xxxx Xxxxxx Xxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
(a) The Company
(i) is a [professional] [association] [corporation] duly
organized, validly existing and in good standing under the laws of the
state of its organization,
(ii) is duly qualified and has all necessary licenses, permits,
approvals, consents, qualifications, authorizations and accreditations of
any governmental agency or authority and under all applicable laws or
regulations to own and operate its assets and properties as now owned or
operated and to carry on its business as now conducted (the "Approvals"),
and the continuation, validity and effectiveness of all the Approvals
will not be adversely affected by the transactions and arrangements
contemplated by the Agreement, the Service Agreement and the transactions
contemplated thereby, and
(iii) is duly qualified as a foreign [professional] [association]
[corporation] to do business and is in good standing in every
jurisdiction in which the failure to so qualify would have a material
adverse effect upon its business.
(b) Each Stockholder has all necessary licenses, permits, approvals,
consents, qualifications, authorizations and accreditations of any agency or
authority and under all applicable laws or regulations to practice dentistry in
the state of ______________ and to provide dental services as now provided (the
"Stockholder Approvals"), and the continuation, validity and
Pentegra Dental Group, Inc. -2- March __, 1998
Xxxx Xxxxxxxx Incorporated
EVEREN Securities, Inc.
effectiveness of all the Stockholder Approvals will not be adversely affected
by the transactions contemplated by the Agreement, the Service Agreement and
the other transactions contemplated thereby.
(c) To the best of such counsel's knowledge, there is no pending
legislation, or proposed regulations, guidelines or instructions, or pending
or threatened action, investigation, suit or proceeding before any court or
governmental agency, authority or arbitrator to require licensure,
certificate of need or other health planning approval, accreditation or any
other regulatory approval for the operation of a dental practice or the
provision of dental services which would result in a material adverse effect
with respect to the Company.
(d) To the best of such counsel's knowledge, (i) no condition
exists, and no event has occurred, which, with the giving of notice, the
passage of time or both, would result in the suspension, revocation,
impairment, forfeiture or nonrenewal of any of the Approvals or the
Stockholder Approvals, and (ii) there is no claim pending challenging the
validity of any of the Approvals or the Stockholder Approvals.
(e) The Stockholders own all of the issued and outstanding shares
of capital stock of the Company, and to the best of such counsel's knowledge,
such stock is owned free and clear of any lien or adverse claim. None of
those shares were issued in violation of any preemptive or other similar
rights. All of those shares have been duly authorized and validly issued and
are fully paid and nonassessable. To the best knowledge of such counsel,
there are no existing options, warrants, subscriptions or other rights to
purchase, or securities convertible into or exchangeable for, the capital
stock of the Company. To the best knowledge of such counsel, except for the
Agreement, neither the Company nor any Stockholder is a party to or bound by
any agreement, instrument, contract, obligation, commitment or understanding
of any character, whether written or oral, express or implied, relating to
the sale, assignment, conveyance, encumbrance, transfer or delivery of any
capital stock of the Company or substantially all of the assets of the
Company.
(f) The Company has all requisite corporate power and authority to
execute, deliver and perform the Agreement, the Service Agreement, the
Security Agreement, the Employment Agreements and the other agreements to
which it is a party contemplated thereby (the "Agreements"). The execution,
delivery and performance by the Company of the Agreements and the other
agreements to which the Company is a party contemplated thereby have been
duly authorized by all necessary corporate action on the part of the Company,
and the Agreements and the other agreements to which it is a party
contemplated thereby have been duly executed and delivered by the Company and
constitute valid and binding obligations of the Company, enforceable against
the Company in accordance with their respective terms, except as may be
limited by
Pentegra Dental Group, Inc. -3- March __, 1998
Xxxx Xxxxxxxx Incorporated
EVEREN Securities, Inc.
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
generally or the availability of equitable remedies.
(g) The Agreements and the other agreements to which any
Stockholder is a party contemplated thereby have been duly executed and
delivered by the Stockholders and constitute valid and binding obligations of
the applicable Stockholder, enforceable against such Stockholder in
accordance with their respective terms, except as may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
generally or the availability of equitable remedies.
(h) To the best knowledge of such counsel, except as disclosed in
the Schedules, there is no action, investigation, suit or proceeding at law
or in equity or by or before any governmental instrumentality or other agency
now pending or threatened against the Company or any Stockholder, or
affecting the assets or the business of the Company or questioning the
validity of any of the Agreements.
(i) To the best knowledge of such counsel, except as disclosed in
the Schedules, (i) the Company is not in violation of any provision of its
[Certificate] [Articles] of [Incorporation] [Association] or Bylaws, and (ii)
neither the Company nor any Stockholder, is in default with respect to any
judgment, writ, injunction or decree of any court or governmental
instrumentality or agency or in the performance, observance or fulfillment of
any obligation, covenant or agreement to which it or he is bound or to which
any of the assets of the Company is subject.
(j) Neither the execution, delivery and performance of the
Agreements and the other agreements to which the Company is a party
contemplated thereby nor the consummation of the transactions contemplated
thereby will conflict with, or result in a breach of the terms, conditions
and provisions of, or constitute a default under, the [Certificate] [Articles]
of [Incorporation][Association] or Bylaws of the Company or, to the best
knowledge of such counsel, any agreement, indenture or other instrument to
which the Company or any Stockholder is bound or to which any assets of the
Company are subject, or result in the creation or imposition of any security
interest, lien, charge or encumbrance upon any of the assets of the Company.
(k) No consent of any person, corporation, association, company,
partnership or other entity, and no consent, license, approval or
authorization of, or registration or declaration with, any governmental body,
authority, bureau or agency or federal, state or local court is required in
connection with the execution and delivery of the Agreements and the other
agreements contemplated thereby, or the consummation of the transactions
contemplated thereby, on the part
Pentegra Dental Group, Inc. -4- March __, 1998
Xxxx Xxxxxxxx Incorporated
EVEREN Securities, Inc.
of the Company or the Stockholders, or to the extent that any such consent or
other action may be required, it has been validly procured or taken.
For purposes of this opinion, "knowledge" of counsel shall mean (with
respect to matters of fact) that after an examination of documents made
available to counsel by the Company and the Stockholders and after inquiry of
the Stockholders and officers of the Company, but without any judgment or
litigation searches or any other independent factual investigation, counsel
has no reason to believe that statements made to such counsel's "knowledge"
are factually incorrect. "Knowledge" shall furthermore refer only to then
current actual knowledge of members of counsel's firm who have worked on
matters for the Company.
OPINION OF COUNSEL TO THE COMPANY, THE PRACTICE AND THE STOCKHOLDERS
(For use for Reorganizations and Sole Proprietor Contributions)
March __, 1998
To: Pentegra Dental Group, Inc.
0000 X. 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Xxxx Xxxxxxxx Incorporated
0000 X. Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
EVEREN Securities, Inc.
00 Xxxx Xxxxxx Xxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
(a) Each of the Company and the Practice
(i) is a [professional] [association] [corporation] duly
organized, validly existing and in good standing under the laws of the
state of its organization,
(ii) is duly qualified and has all necessary licenses, permits,
approvals, consents, qualifications, authorizations and accreditations of
any governmental agency or authority and under all applicable laws or
regulations to own and operate its assets and properties as now owned or
operated and to carry on its business as now conducted, or with respect
to the Practice, as proposed to be conducted (the "Approvals"), and the
continuation, validity and effectiveness of all the Approvals will not be
adversely affected by the transactions and arrangements contemplated by
the Agreement, the Service Agreement and the transactions contemplated
thereby, and
(iii) is duly qualified as a foreign [professional] [association]
[corporation] to do business and is in good standing in every
jurisdiction in which the failure to so qualify would have a material
adverse effect upon its business.
(b) Each Stockholder has all necessary licenses, permits,
approvals, consents, qualifications, authorizations and accreditations of any
agency or authority and under all applicable laws or regulations to practice
dentistry in the state of _______________ and to provide dental services as
now provided (the "Stockholder Approvals"), and the continuation, validity
and effectiveness of all the Stockholder Approvals will not be adversely
affected by the transactions
Pentegra Dental Group, Inc. -2- March __, 1998
Xxxx Xxxxxxxx Incorporated
EVEREN Securities, Inc.
contemplated by the Agreement, the Service Agreement and the other
transactions contemplated thereby.
(c) To the best of such counsel's knowledge, there is no pending
legislation, or proposed regulations, guidelines or instructions, or pending
or threatened action, investigation, suit or proceeding before any court or
governmental agency, authority or arbitrator to require licensure,
certificate of need or other health planning approval, accreditation or any
other regulatory approval for the operation of a dental practice or the
provision of dental services which would result in a material adverse effect
with respect to the Company or the Practice.
(d) To the best of such counsel's knowledge, (i) no condition
exists, and no event has occurred, which, with the giving of notice, the
passage of time or both, would result in the suspension, relocation,
impairment, forfeiture or nonrenewal of any of the Approvals or the
Stockholder Approvals, and (ii) there is no claim pending challenging the
validity of any of the Approvals or the Stockholder Approvals.
(e) Immediately prior to the Closing, the authorized capital stock
of the Company consists of (i) ________________ shares of common stock, par
value $____ per share, of which _____________ shares are issued and
outstanding, and no such shares of capital stock are held in the treasury of
the Company. The authorized capital stock of the Practice consists of (i)
____________ shares of common stock, par value $_____ per share, of which
____________ shares are issued and outstanding, and no such shares of capital
stock are held in the treasury of the Practice. All of the outstanding
shares of capital stock of the Company and the Practice are duly authorized,
validly issued pursuant to applicable laws, fully paid and nonassessable, and
none of those shares were issued in violation of any preemptive or other
similar rights.
(f) The Stockholders own all of the issued and outstanding shares
of capital stock of the Company and the Practice, and to the best of such
counsel's knowledge, such stock is owned free and clear of any lien or
adverse claim. The Stockholders have full power and authority to sell,
transfer and deliver all of the issued and outstanding shares of Company
Common Stock in accordance with the terms of the Agreement. To the best
knowledge of such counsel, there are no existing options, warrants,
subscriptions or other rights to purchase, or securities convertible into or
exchangeable for, the capital stock of the Company or the Practice. To the
best knowledge of such counsel, except for the Agreement, neither the
Company, the Practice nor any Stockholder is a party to or bound by any
agreement, instrument, contract, obligation, commitment or understanding of
any character, whether written or oral, express or implied, relating to the
sale, assignment, conveyance, encumbrance, transfer or delivery of any
capital stock of the Company or the Practice or substantially all of the
assets of the Company or the Practice.
Pentegra Dental Group, Inc. -3- March __, 1998
Xxxx Xxxxxxxx Incorporated
EVEREN Securities, Inc.
(g) The Company has all requisite corporate power and authority to
execute, deliver and perform the Agreement and the other agreements to which
it is a party contemplated thereby. The execution, delivery and performance
by the Company of the Agreement and the other agreements to which the Company
is a party contemplated thereby have been duly authorized by all necessary
corporate action on the part of the Company, and the Agreement and the other
agreements to which it is a party contemplated thereby have been duly
executed and delivered by the Company and constitute valid and binding
obligations of the Company, enforceable against the Company in accordance
with their respective terms, except as may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally
or the availability of equitable remedies.
(h) The Practice has the requisite corporate power and authority to
execute, deliver and perform the Service Agreement, the Security Agreement
and the Employment Agreements (collectively, the "Practice Agreements") and
the other agreements to which it is a party contemplated thereby. The
execution, delivery and performance of the Practice Agreements and the other
agreements to which the Practice is a party contemplated thereby by the
Practice have been duly authorized by all necessary corporate action on the
part of the Practice, and the Practice Agreements and the other agreements to
which it is a party contemplated thereby have been duly executed and
delivered by the Practice and constitute valid and binding obligations of the
Practice, enforceable against the Practice in accordance with their
respective terms, except as may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally or the
availability of equitable remedies.
(i) The Agreement, the Stockholder's Release, the Dentist
Agreement, the Employment Agreement and the other agreements to which any
Stockholder is a party contemplated thereby have been duly executed and
delivered by the Stockholders and constitute valid and binding obligations of
the applicable Stockholder, enforceable against such Stockholder in
accordance with their respective terms, except as may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
generally or the availability of equitable remedies.
(j) To the best knowledge of such counsel, except as disclosed in
the Schedules, there is no action, investigation, suit or proceeding at law
or in equity or by or before any governmental instrumentality or other agency
now pending or threatened against the Company, the Practice or any
Stockholder, or affecting the assets or the business of the Company or the
Practice or questioning the validity of any of the Agreements.
(k) To the best knowledge of such counsel, except as disclosed in
the Schedules, (i) the Company nor the Practice is in violation of any
provision of its [Certificate] [Articles] of [Incorporation] [Association] or
Bylaws, and (ii) neither the Company, the Practice nor any
Pentegra Dental Group, Inc. -4- March __, 1998
Xxxx Xxxxxxxx Incorporated
EVEREN Securities, Inc.
Stockholder is in default with respect to any judgment, writ, injunction or
decree of any court or governmental instrumentality or agency or in the
performance, observance or fulfillment of any obligation, covenant or
agreement to which it or he is bound or to which any of the assets of the
Company or the Practice is subject.
(l) Neither the execution, delivery and performance of the
Agreement and the other agreements to which the Company is a party
contemplated thereby nor the consummation of the transactions contemplated
thereby will conflict with, or result in a breach of the terms, conditions
and provisions of, or constitute a default under, the [Certificate] [Articles]
of [Incorporation][Association] or Bylaws of the Company or, to the best
knowledge of such counsel, any agreement, indenture or other instrument to
which the Company or any Stockholder is bound or to which any assets of the
Company are subject, or result in the creation or imposition of any security
interest, lien, charge or encumbrance upon any of the assets of the Company.
(m) Neither the execution, delivery and performance of the Practice
Agreements and the other agreements to which the Practice is a party
contemplated thereby nor the consummation of the transactions contemplated
thereby will conflict with, or result in a breach of the terms, conditions
and provisions of, or constitute a default under, the [Certificate] [Articles]
of [Incorporation] [Association] or Bylaws of the Practice or, to the best
knowledge of such counsel, any agreement, indenture or other instrument to
which the Practice or any Stockholder is bound or to which any assets of the
Practice are subject, or result in the creation or imposition of any security
interest, lien, charge or encumbrance upon any of the assets of the Practice
(except as contemplated in the Security Agreement).
(n) No consent of any person, corporation, association, company,
partnership or other entity, and no consent, license, approval or
authorization of, or registration or declaration with, any governmental body,
authority, bureau or agency or federal, state or local court is required in
connection with the execution and delivery of the Agreement, the Practice
Agreements and the other agreements contemplated thereby, or the consummation
of the transactions contemplated thereby, on the part of the Company, the
Practice or the Stockholders, or to the extent that any such consent or other
action may be required, it has been validly procured or taken.
[(o) The Certificate of Merger complies with the applicable law of the
[State] [Commonwealth] of ______________ and, following the filing thereof by
the Surviving Corporation with the [Secretary of State] of the [State]
[Commonwealth] of and the payment of all applicable filing fees with respect
thereto, the Merger will be effective on the [Closing Date] [date the
Certificate is filed with the Secretary of State].]
Pentegra Dental Group, Inc. -5- March __, 1998
Xxxx Xxxxxxxx Incorporated
EVEREN Securities, Inc.
For purposes of this opinion, "knowledge" of counsel shall mean (with
respect to matters of fact) that after an examination of documents made
available to counsel by the Company, the Practice and the Stockholders and
after inquiry of the Stockholders and officers of the Company and the
Practice, but without any judgment or litigation searches or any other
independent factual investigation, counsel has no reason to believe that
statements made to such counsel's "knowledge" are factually incorrect.
"Knowledge" shall furthermore refer only to then current actual knowledge of
members of counsel's firm who have worked on matters for the Company.
