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EXHIBIT 1.1
COAST DENTAL SERVICES, INC.
2,200,000 Shares(1)
Common Stock
UNDERWRITING AGREEMENT
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________________, 1997
PRUDENTIAL SECURITIES INCORPORATED
XXXXXXX XXXXX & ASSOCIATES, INC.
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Coast Dental Services, Inc., a Delaware corporation (the "Company"),
and the selling securityholders named in Schedule 2 hereto (each a "Selling
Securityholder" and together the "Selling Securityholders") hereby confirm their
agreement with the several underwriters named in Schedule 1 hereto (the
"Underwriters"), for whom you have been duly authorized to act as
representatives (in such capacities, the "Representatives"), as set forth below.
If you are the only Underwriters, all references herein to the Representatives
shall be deemed to be to the Underwriters.
1. Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the several Underwriters
an aggregate of 2,200,000 shares (the "Firm Securities") of the Company's
Common Stock, par value $0.001 per share ("Common Stock"). The Company also
proposes to issue and sell to the several Underwriters not more than 230,000
additional shares of Common Stock and the Selling Securityholders propose to
sell to the several Underwriters not more than 100,000 additional shares of
Common Stock if requested by the Underwriters as provided in Section 3 of this
Agreement. Any and all shares of Common Stock to
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(1) Plus an option to purchase from the Company and the Selling
Securityholders up to 330,000 additional shares to cover over-allotments.
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be purchased by the Underwriters pursuant to such option are referred to herein
as the "Option Securities," and the Firm Securities and any Option Securities
are collectively referred to herein as the "Securities."
2. Representations and Warranties of the Company and the Selling
Securityholders.
(a) The Company and the Selling Securityholders, jointly and severally,
represent and warrant to, and agree with, each of the several Underwriters that:
(i) A registration statement on Form S-1 (File No. 333-13613)
with respect to the Securities, including a prospectus subject to
completion, has been filed by the Company with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended
(the "Act"), and one or more amendments to such registration statement may
have been so filed. After the execution of this Agreement, the Company
will file with the Commission either (A) if such registration statement, as
it may have been amended, has been declared by the Commission to be
effective under the Act, either (1) if the Company relies on Rule 434 under
the Act, a Term Sheet (as hereinafter defined) relating to the Securities,
that shall identify the Preliminary Prospectus (as hereinafter defined)
that it supplements containing such information as is required or permitted
by Rules 434, 430A and 424(b) under the Act or (2) if the Company does not
rely on Rule 434 under the Act, a prospectus in the form most recently
included in an amendment to such registration statement (or, if no such
amendment shall have been filed, in such registration statement), with such
changes or insertions as are required by Rule 430A under the Act or
permitted by Rule 424(b) under the Act, and in the case of either clause
(A)(1) or (A)(2) of this sentence as have been provided to and approved by
the Representatives prior to the execution of this Agreement, or (B) if
such registration statement, as it may have been amended, has not been
declared by the Commission to be effective under the Act, an amendment to
such registration statement, including a form of prospectus, a copy of
which amendment has been furnished to and approved by the Representatives
prior to the execution of this Agreement. The Company may also file a
related registration statement with the Commission pursuant to Rule 462(b)
under the Act for the purpose of registering certain additional Securities,
which registration shall be effective upon filing with the Commission. As
used in this Agreement, the term "Original Registration Statement" means
the registration statement initially filed relating to the Securities, as
amended at the time when it was or is declared effective, including (A) all
financial schedules and exhibits thereto and (B) any information omitted
therefrom pursuant to Rule 430A under the Act and included in the
Prospectus (as hereinafter defined); the term "Rule 462(b) Registration
Statement" means any registration statement filed with the Commission
pursuant to Rule 462(b) (including the Original Registration Statement and
any Preliminary Prospectus or Prospectus incorporated therein at the time
such Registration Statement becomes effective); the term "Registration
Statement" includes both the Original Registration Statement and any Rule
462(b) Registration Statement; the term "Preliminary Prospectus" means each
prospectus subject to completion filed with the Original Registration
Statement or any amendment thereto (including the prospectus subject
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to completion, if any, included in the Registration Statement or any
amendment thereto at the time it was or is declared effective); the term
"Prospectus" means:
(A) if the Company relies on Rule 434 under the Act, the
Term Sheet relating to the Securities that is first filed pursuant
to Rule 424(b)(7) under the Act, together with the Preliminary
Prospectus identified therein that such Term Sheet supplements;
(B) if the Company does not rely on Rule 434 under the
Act, the prospectus first filed with the Commission pursuant to
Rule 424(b) under the Act; or
(C) if the Company does not rely on Rule 434 under the
Act and if no prospectus is required to be filed pursuant to Rule
424(b) under the Act, the prospectus included in the Registration
Statement.
The term "Term Sheet" means any abbreviated Term Sheet that satisfies the
requirements of Rule 434 under the Act. Any reference in this Agreement to
the "date" of a Prospectus that includes a Term Sheet shall mean the date
of such Term Sheet.
(ii) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus. When any Preliminary
Prospectus was filed with the Commission it (A) contained all statements
required to be stated therein in accordance with, and complied in all
material respects with the requirements of, the Act and the rules and
regulations of the Commission thereunder, and (B) did not include any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. When the
Registration Statement or any amendment thereto was or is declared
effective, it (A) contained or will contain all statements required to be
stated therein in accordance with, and complied or will comply in all
material respects with the requirements of, the Act and the rules and
regulations of the Commission thereunder and (B) did not or will not
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading. When
the Prospectus or any Term Sheet that is a part thereof or any amendment or
supplement to the Prospectus is filed with the Commission pursuant to Rule
424(b) (or, if the Prospectus or part thereof or such amendment or
supplement is not required to be so filed, when the Registration Statement
or the amendment thereto containing such amendment or supplement to the
Prospectus was or is declared effective) and on the Firm Closing Date and
any Option Closing Date (both as hereinafter defined), the Prospectus, as
amended or supplemented at any such time, (A) contained or will contain
all statements required to be stated therein in accordance with, and
complied or will comply in all material respects with the requirements of,
the Act and the rules and regulations of the Commission thereunder and (B)
did not or will not include any untrue statement of a material fact or omit
to state any material fact necessary in order to make the
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statements therein, in the light of the circumstances under which they were
made, not misleading. The foregoing provisions of this paragraph (ii) do
not apply to statements or omissions made in any Preliminary Prospectus,
the Registration Statement or any amendment thereto or the Prospectus or
any amendment or supplement thereto in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein.
(iii) If the Company has elected to rely on Rule 462(b) and the
Rule 462(b) Registration Statement has not been declared effective (i) the
Company has filed a Rule 462(b) Registration Statement in compliance with
and that is effective upon filing pursuant to Rule 462(b) and has received
confirmation of its receipt and (ii) the Company has given irrevocable
instructions for transmission of the applicable filing fee in connection
with the filing of the Rule 462(b) Registration Statement, in compliance
with Rule 111 promulgated under the Act or the Commission has received
payment of such filing fee.
(iv) The Company and each of the dental entities with which the
Company has a services and support agreement (collectively, the "Dental
Entities") have been duly organized and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation and are duly qualified to transact business
as foreign corporations and are in good standing under the laws of all
other jurisdictions where the ownership or leasing of their respective
properties or the conduct of their respective businesses requires such
qualification, except where the failure to be so qualified does not amount
to a material liability or disability to the Company.
(v) The Company and each Dental Entity have full power
(corporate and other) to own or lease their respective properties and
conduct their respective businesses to the extent described in the
Registration Statement and the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus; and the Company has full
power (corporate and other) to enter into this Agreement and to carry out
all the terms and provisions hereof to be carried out by it.
(vi) The Company does not have any subsidiaries within the
meaning of Rule 405 of the Act.
(vii) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus. All of the issued
shares of capital stock of the Company (including but not limited to the
Option Securities) have been duly authorized and validly issued and are
fully paid and nonassessable. The Company's Firm Securities have been
duly authorized and at the Firm Closing Date, after payment therefor in
accordance herewith, will be validly issued, fully paid and nonassessable.
No holders of outstanding shares of capital stock of the Company are
entitled as such to any preemptive or other rights to subscribe for any of
the Securities, and no holder of securities of the Company has any right
which has not been fully
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exercised or waived to require the Company to register the offer or sale of
any securities owned by such holder under the Act in the public offering
contemplated by this Agreement.
(viii) The capital stock of the Company conforms in all material
respects to the description thereof contained in the Prospectus or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus.
(ix) The financial statements and schedules of the Company
included in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus)
fairly present, on the basis stated therein, the financial position of the
Company and the results of operations and cash flows as of the respective
dates and for the respective periods therein specified. Such financial
statements and schedules have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved (except as otherwise noted therein). The unaudited pro forma
financial information presented on pages F-2 through F-6 in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) and the summaries of
those unaudited pro forma financial statements contained in the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) together with the related notes thereto, included in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) include all adjustments
necessary to present fairly the pro forma financial information at the
dates and for the periods indicated, and all assumptions used in preparing
such pro forma financial data are reasonable. The selected financial data
set forth under the caption "Selected Financial Data" in the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) fairly present, on the basis stated in the Prospectus (or such
Preliminary Prospectus), the information included therein.
(x) Deloitte & Touche, LLP who has audited certain financial
statements of the Company and delivered their report with respect to the
Company's audited financial statements and schedules included in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), are, to the knowledge
of the Company and the Selling Securityholders, independent public
accountants as required by the Act and the applicable rules and regulations
thereunder.
(xi) The execution and delivery of this Agreement have been duly
authorized by the Company, and this Agreement has been duly executed and
delivered by the Company and is the valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms. The
Option Agreement has been duly executed and delivered by Xx. Xxxx Xxxxxx,
D.D.S. and is the valid and binding agreement of Xx. Xxxx Xxxxxx, D.D.S.,
enforceable against Xx. Xxxx Xxxxxx, D.D.S. in accordance with its terms.
(xii) No legal or governmental proceedings are pending to which
the Company or any of the Dental Entities is a party or to which the
property of the Company or any of the
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Dental Entities is subject that are required to be described in the
Registration Statement or the Prospectus and are not described therein (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus) and, to the knowledge of the Company and the Selling
Securityholders, no such proceedings have been threatened against the
Company or any of the Dental Entities or with respect to any of their
respective properties; no contract or other document is required to be
described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement that is not described therein (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus) or filed as required; after due inquiry, management of the
Company does not know of any legal or governmental proceedings pending
against any dentist practicing in any Dental Entity (an "Affiliated
Dentist"), which could reasonably be expected to result in a material
adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company.
(xiii) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by
the Company with the other provisions of this Agreement and the
consummation of the other transactions herein contemplated do not (A)
require the consent, approval, authorization, registration or qualification
of or with any governmental authority, except such as have been obtained,
such as may be required under state securities or blue sky laws and, if the
registration statement filed with respect to the Securities (as amended) is
not effective under the Act as of the time of the execution hereof, such as
may be required (and shall be obtained as provided in this Agreement) under
the Act, or (B) conflict with or result in a breach or violation of any
material terms and provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, lease or other agreement or instrument
to which the Company is a party or by which the Company or any of its
properties are bound, or the charter documents or bylaws of the Company, or
any statute or any judgment, decree, order, rule or regulation of any court
or other governmental authority or any arbitrator applicable to the
Company.
(xiv) The Company has not, directly or indirectly, (A) taken any
action designed to cause or to result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities or (B) since the filing of the
Registration Statement (I) sold, bid for, purchased, or paid anyone any
compensation for soliciting purchases of, the Securities or (II) paid or
agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company.
(xv) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus),
(A) neither the Company nor any of the Dental Entities has sustained any
material loss or interference with their respective businesses or
properties from fire, flood, hurricane, accident or other calamity, whether
or not covered by insurance, or from any labor dispute or any legal or
governmental proceeding and there has not been any
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material adverse change, or, to the knowledge of the Company and the
Selling Securityholders, any development involving a prospective material
adverse change, in the condition (financial or otherwise), management,
business prospects, net worth, or results of operations of the Company; (B)
the Company has not incurred any material liability or obligation, direct
or contingent, nor entered into any material transaction not in the
ordinary course of business; (C) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock; and (D) there
has not been any material change in the capital stock, short- term debt or
long-term debt of the Company, except in each case as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus).
(xvi) The Company and the Coast Florida P.A. have good and
marketable title in fee simple to all items or real property and marketable
title to all tangible personal property owned by each of them, in each case
free and clear of any security interests, liens, encumbrances, equities,
claims and other defects, except such as do not materially and adversely
affect the value of such property and do not interfere with the use made or
proposed to be made of such property by the Company or the Coast Florida
P.A., and any real property and buildings held under lease by the Company
or the Coast Florida P.A. are held under valid, subsisting and enforceable
leases, with such exceptions as are not material and do not interfere with
the use made or proposed to be made of such property and buildings by the
Company or the Coast Florida P.A., in each case except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus).
(xvii) No labor dispute with the employees of the Company or any
Dental Entity exists or is threatened or imminent that could result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company, except as
described in or contemplated by the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus).
(xviii) The Company and the Dental Entities own or possess, or can
acquire on reasonable terms, all material patents, patent applications,
trademarks, service marks, trade names, licenses, copyrights and
proprietary or other confidential information currently employed by them in
connection with their respective businesses, and neither the Company nor
any Dental Entity has received any notice of, or has any reasonable belief
that its use constitutes, a material infringement of or conflict with
asserted rights of any third party with respect to any of the foregoing
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a material adverse change in
the condition (financial or otherwise), business prospects, net worth or
results of operations of the Company, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus).
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(xix) The Company and each Dental Entity is insured by insurers
of recognized financial responsibility against such losses and risks and in
such amounts as are ordinary and customary in the business in which it is
engaged; neither the Company nor any Dental Entity has been refused any
insurance coverage sought or applied for; and neither the Company nor any
Dental Entity has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not materially and adversely
affect the condition (financial or otherwise), business prospects, net
worth, or results of operations of the Company, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus).
(xx) The Company and the Dental Entities possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses, and neither the Company nor any Dental Entity has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a material adverse change in the condition
(financial or otherwise), business prospects, net worth or results of
operations of the Company, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(xxi) The Company will conduct its operations in a manner that
will not subject it to registration as an investment company under the
Investment Company Act of 1940, as amended, and this transaction will not
cause the Company to become an investment company subject to registration
under such Act.
(xxii) The Company has filed all foreign, federal, state and local
tax returns that are required to be filed or has requested extensions
thereof (except in any case in which the failure so to file would not have
a material adverse effect on the Company) and has paid all taxes required
to be paid by it and any other assessment, fine or penalty levied against
it, to the extent that any of the foregoing is due and payable, except for
any such assessment, fine or penalty that is currently being contested in
good faith or as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(xxiii) Neither the Company nor any of the Dental Entities is in
violation of any federal or state law or regulation relating to (i) the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants or to the storage, handling or transportation of hazardous or
toxic material ("Environmental Laws") or (ii) occupational safety and
health and the Company and the Dental Entities have received all permits,
licenses or other approvals required of them under applicable federal and
state occupational safety and health and Environmental Laws and regulations
to conduct their respective businesses, and the
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Company and each Dental Entity is in compliance with all terms and
conditions of any such permit, license or approval, except any such
violation of law or regulation, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals which would not, singly
or in the aggregate, result in a material adverse change in the condition
(financial or otherwise), business prospects, net worth or results of
operations of the Company or any of the Dental Entities, except as
described in or contemplated by the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus). Neither the
Company nor any of the Dental Entities have any pending or threatened
Environmental Law or occupational safety and health claims against it nor
are there circumstances with respect to any property or operations of the
Company or any of the Dental Entities that could reasonably be anticipated
to form the basis of an Environmental Law or occupational safety and health
claim against the Company or any Dental Entity which, singly or in the
aggregate, result in a material adverse change in the condition (financial
or otherwise), business prospects, net worth or results of operations of
the Company or any of the Dental Entities, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus).
(xxiv) In the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on the
business, operations and properties of the Company, in the course of which
it identifies and evaluates 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 reasonably concluded that such associated
costs and liabilities would not, singly or in the aggregate, have a
material adverse effect on the Company.
(xxv) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters pursuant
to this Agreement shall be deemed to be a representation and warranty by
the Company to each Underwriter as to the matters covered thereby.
(xxvi) The Company does not own any shares of stock or any other
equity securities of any corporation or have any equity interest in any
firm, partnership, association or other entity, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus).
(xxvii) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (A) transactions
are executed in accordance with management's general or specific
authorizations; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (C) access to
assets is permitted
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only in accordance with management's general or specific authorization; and
(D) the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect
to any differences.
(xxviii) No default exists on the part of the Company or any Dental
Entity, and no event has occurred which, with notice or lapse of time or
both, would constitute a default on the part of the Company or any Dental
Entity in the due performance and observance of any material term, covenant
or condition of any indenture, mortgage, deed of trust, lease, services and
support agreement or other agreement or instrument to which the Company or
any Dental Entity is a party or by which the Company or any Dental Entity
or any of their respective properties are bound or may be affected in any
material adverse respect with regard to the property, business or
operations of the Company.
(xxix) Subject to the qualifications relating to the uncertainty
of the interpretation of governmental regulations relating to the corporate
practice of dentistry described in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus), the Company and
each Dental Entity and their respective operations comply in all material
respects with all applicable laws and regulations, including, without
limitation, those relating to the practice of dentistry (including the
management or operation of dental offices), the splitting of professional
fees with non-dentists, the ownership or control of the assets of a dental
practice, the employment of dentists or other personnel, the content of
advertising, the making of payments in consideration for referrals of
patients, limitations on tasks that may be delegated by a dentist to other
staff members, the business of insurance and reimbursement by governmental
agencies. The Company has not been made aware of, or been put on notice
that, any Affiliated Dentist is not practicing in material compliance with
all such laws and regulations.
(xxx) All offers and sales of the Company's capital stock prior
to the date hereof, were at all relevant times exempt from the registration
requirements of the Act and were the subject of an available exemption from
the registration requirements of all applicable state securities or blue
sky laws.
(xxxi) Each of the agreements providing for a transaction that is
part of the Recent Acquisitions (as defined in the Registration Statement)
has been duly authorized, executed and delivered by the Company and, to the
knowledge of the Company and the Selling Securityholders, constitutes the
valid and legally binding obligation of each of the other parties thereto,
and is enforceable in accordance with its terms; there are no statutory or
contractual rights of dissent or appraisal with respect to the transfer of
any of the properties in the Recent Acquisitions; and the Recent
Acquisitions conformed, in all material respects, to the description
thereof contained in the Registration Statement.
(xxxii) Except as disclosed in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus),
there are no outstanding (A) securities
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or obligations of the Company convertible into or exchangeable for any
capital stock of the Company, (B) warrants, rights or options to subscribe
for or purchase from the Company any such capital stock or any such
convertible or exchangeable securities or obligations, or (C) obligations
of the Company to issue any shares of capital stock, any such convertible
or exchangeable securities or obligations, or any such warrants, rights or
options.
(xxxiii) The Company has not distributed and, prior to the later of
(A) the Firm Closing Date and (B) the completion of the distribution of the
Securities, will not distribute any offering material in connection with
the offering and sale of the Securities other than the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any supplement or amendment thereto, or any materials, if any
permitted by the Act.
(b) Each Selling Securityholder severally represents and warrants to,
and agrees with, each of the several Underwriters that:
(i) Such Selling Securityholder has full power (partnership,
trust and other) to enter into this Agreement and to sell, assign, transfer
and deliver to the Underwriters the Securities to be sold by such Selling
Securityholder hereunder in accordance with the terms of this Agreement;
the execution and delivery of this Agreement have been duly authorized by
all necessary actions of such Selling Securityholder (partnership, trust or
other, as applicable); and this Agreement has been duly executed and
delivered by such Selling Securityholder.
(ii) Such Selling Securityholder has duly executed and
delivered a power of attorney and custody agreement (with respect to such
Selling Securityholder, the "Power of Attorney" and the "Custody
Agreement," respectively), each in the form heretofore delivered to the
Representatives, appointing _________________ as such Selling
Securityholder's attorney-in-fact (the "Attorney-in-Fact") with authority
to execute, deliver and perform this Agreement on behalf of such Selling
Securityholder and appointing ______________________, as custodian
thereunder (the "Custodian"). Certificates in negotiable form, endorsed
in blank or accompanied by blank stock powers duly executed, with
signatures appropriately guaranteed, representing the Securities to be sold
by such Selling Securityholder hereunder have been deposited with the
Custodian pursuant to the Custody Agreement for the purpose of delivery
pursuant to this Agreement. Such Selling Securityholder has full power
(partnership, trust or other, as applicable) to enter into the Custody
Agreement and the Power of Attorney and to perform his obligations under
the Custody Agreement. The Custody Agreement and the Power of Attorney
have been duly executed and delivered by such Selling Securityholder and,
assuming due authorization, execution and delivery by the Custodian, are
the legal, valid, binding and enforceable instruments of such Selling
Securityholder. Such Selling Securityholder agrees that each of the
Securities represented by the certificates on deposit with the Custodian is
subject to the interests of the Underwriters hereunder, that the
arrangements made for such custody, the
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appointment of the Attorney-in-Fact and the right, power and authority of
the Attorney-in-Fact to execute and deliver this Agreement, to agree on the
price at which the Securities (including such Selling Securityholder's
Securities) are to be sold to the Underwriters, and to carry out the terms
of this Agreement, are to that extent irrevocable and that the obligations
of such Selling Securityholder hereunder shall not be terminated, except as
provided in this Agreement or the Custody Agreement, by any act of such
Selling Securityholder, by operation of law or otherwise, whether in the
case of any individual Selling Securityholder by the death or incapacity of
such Selling Securityholder, in the case of a trust or estate by the death
of the trustee or trustees or the executor or executors or the termination
of such trust or estate, or in the case of a partnership Selling
Securityholder by its liquidation or dissolution or by the occurrence of
any other event. If any individual Selling Securityholder, trustee or
executor should die or become incapacitated or any such trust should be
terminated, or if any corporate or partnership Selling Securityholder shall
liquidate or dissolve, or if any other event should occur, before the
delivery of such Securities hereunder, the certificates for such Securities
deposited with the Custodian shall be delivered by the Custodian in
accordance with the respective terms and conditions of this Agreement as if
such death, incapacity, termination, liquidation or dissolution or other
event had not occurred, regardless of whether or not the Custodian or the
Attorney-in-Fact shall have received notice thereof.
(iii) Such Selling Securityholder is the lawful owner of the
Securities to be sold by such Selling Securityholder hereunder and upon
sale and delivery of, and payment for, such Securities, as provided herein,
such Selling Securityholder will convey good and marketable title to such
Securities, free and clear of any security interests, liens, encumbrances,
equities, claims or other defects.
(iv) Such Selling Securityholder has not, directly or indirectly,
(A) taken any action designed to cause or result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities or (B) since the filing
of the Registration Statement (I) sold, bid for, purchased, or paid anyone
any compensation for soliciting purchases of, the Securities or (II) paid
or agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company (except for the sale of
Securities by the Selling Securityholders under this Agreement).
(v) Such Selling Securityholder has reviewed the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus) and the Registration Statement, and the information regarding
such Selling Securityholder set forth therein under the captions
"Management," "Business - Services and Support Agreement," "Principal and
Selling Stockholders" and "Certain Transactions" is complete and accurate
in all material respects.
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(vi) The Selling Securityholders have not distributed and, prior
to the later of (A) the Firm Closing Date and (B) the completion of the
distribution of the Securities, will not distribute any offering material
in connection with the offering and sale of the Securities other than the
Registration Statement or any amendment thereto, any Preliminary Prospectus
or the Prospectus or any supplement or amendment thereto, or any materials,
if any permitted by the Act.
(vii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Internal Revenue Code of 1986,
as amended, with respect to the transactions herein contemplated, such
Selling Securityholder agrees to deliver to the Representatives prior to or
on the Firm Closing Date a properly completed and executed United States
Treasury Department Form W-8 or W-9 (or other applicable form or statement
specified by the Treasury Department regulations in lieu thereof).
(viii) The sale by such Selling Securityholder of Securities
pursuant hereto is not prompted by any adverse information concerning the
Company that is not set forth in the Registration Statement or the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(ix) The sale of the Securities to the Underwriters by such
Selling Securityholder pursuant to this Agreement, the compliance by such
Selling Securityholder with the other provisions of this Agreement and the
Custody Agreement and the consummation of the other transactions herein
contemplated do not (A) require the consent, approval, authorization,
registration or qualification of or with any governmental authority, except
such as has been obtained, such as the registration under state securities
or blue sky laws and, if the registration statement filed with respect to
the Securities (as amended) is not effective under the Act as of the time
of execution hereof, such as may be required (and shall be obtained as
provided in this Agreement) under the Act and the Exchange Act, or (B)
conflict with or result in a breach or violation of any of the material
terms and provisions of, or constitute a default under any indenture,
mortgage, deed of trust, lease or other agreement or instrument to which
such Selling Securityholder is a party or by which such Selling
Securityholder or any of such Selling Securityholder's properties are
bound, or any statute or any judgment, decree, order, rule or regulation of
any court or other governmental authority or any arbitrator applicable to
such Selling Securityholder.
3. Purchase, Sale and Delivery of the Securities.
(a) On the basis of the representations, warranties, agreements and
covenants herein contained and subject to the terms and conditions herein set
forth, the Company agrees to issue and sell to each of the Underwriters, and
each of the Underwriters, severally and not jointly, agrees to purchase from the
Company at a purchase price of $______ per share, the number of Firm Securities
set forth opposite the name of such Underwriter in Schedule 1 hereto. The Firm
Securities shall consist of 2,200,000 shares of Common Stock. The number of
Firm Securities to be purchased by
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each Underwriter from the Company shall be as nearly as practicable in the same
proportion to the total number of Firm Securities being sold by the Company as
the total number of Firm Securities to be purchased by such Underwriter bears
to the total number of Firm Securities to be purchased by the Underwriters
hereunder. One or more certificates in definitive form for the Firm Securities
that the several Underwriters have agreed to purchase hereunder, and in such
denomination or denominations and registered in such name or names as the
Representatives request upon notice to the Company at least 48 hours prior to
the Firm Closing Date, shall be delivered by or on behalf of the Company to the
Representatives for the respective accounts of the Underwriters, against
payment by or on behalf of the Underwriters of the purchase price therefor by
wire transfer in same-day funds (the "Purchase Funds") to the order of the
Company and the Selling Securityholders, as their interests may appear. Such
delivery of and payment for the Firm Securities shall be made at the offices of
King & Spalding, 000 Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx, 00000 at 9:30 A.M.,
New York City time, on _______, 1997; or at such other place, time or date as
the Representatives and the Company may agree upon or as the Representatives
may determine pursuant to Section 9 hereof, such time and date of delivery
against payment being herein referred to as the "Firm Closing Date." The
Company and the Selling Securityholders will make such certificate or
certificates for the Firm Securities and the Option Securities, as the case may
be, available for checking and packaging by the Representatives at the offices
in New York, New York of the Company's transfer agent or registrar or of
Prudential Securities Incorporated at least 24 hours prior to the Firm Closing
Date or the Option Closing Date, as the case may be.
(b) The Company and each of the Selling Securityholders hereby
acknowledge that the wire transfer by or on behalf of the Underwriters of the
purchase price for any Securities does not constitute closing of a purchase and
sales of the Securities. Only execution and delivery of a receipt for
Securities by the Underwriters indicates completion of the closing of a purchase
of the Securities from the Company and the Selling Securityholders. Furthermore,
in the event that the Underwriters wire funds to the Company and the Selling
Securityholders prior to the completion of the closing of a purchase of the
Securities, the Company and the Selling Securityholders hereby acknowledge that
until the Underwriters execute and deliver a receipt for the Securities, by
facsimile or otherwise, the Company and the Selling Securityholders will not be
entitled to the Purchase Funds and shall return the Purchase Funds to the
Underwriters as soon as practicable (by wire transfer of same-day funds) upon
demand. In the event that the closing of a purchase of the Securities is not
completed and the Purchase Funds are not returned by the Company and the Selling
Securityholders to the Underwriters on the same day the Purchase Funds were
received by the Company and the Selling Securityholders, the Company and each of
the Selling Securityholders agree to reimburse the Underwriters for each day the
Purchase Funds are not returned, in same-day funds, interest on the amount of
Purchase Funds in an amount equal to each day's interest, based on an annual
interest rate, simple interest, representing the Underwriters' cost of financing
as reasonably determined by Prudential Securities Incorporated. Upon
satisfactory receipt of the Securities by the Underwriters in accordance with
all the terms of this Agreement and the compliance by the Company and the
Selling Securityholders with all the terms of this Agreement to be performed on
or before the Closing Date, the Underwriters shall execute the receipt described
above for the Securities.
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(c) For the purpose of covering any over-allotments in connection with
the distribution and sale of the Firm Securities as contemplated by the
Prospectus, the Company and the Selling Securityholders hereby grant to the
several Underwriters an option to purchase, severally and not jointly, the
Option Securities. The purchase price to be paid for any Option Securities
shall be the same price per share as the price per share for the Firm Securities
set forth above in paragraph (a) of this Section 3. The option granted hereby
may be exercised as to all or any part of the Option Securities from time to
time within thirty days after the date of the Prospectus (or, if such 30th day
shall be a Saturday or Sunday or a holiday, on the next business day thereafter
when the New York Stock Exchange is open for trading). The Underwriters shall
not be under any obligation to purchase any of the Option Securities prior to
the exercise of such option. The Representatives may from time to time exercise
the option granted hereby by giving notice in writing or by telephone (confirmed
in writing) to the Company setting forth the aggregate number of Option
Securities as to which the several Underwriters are then exercising the option
and the date and time for delivery of and payment for such Option Securities.
Any such date of delivery shall be determined by the Representatives but shall
not be earlier than two business days or later than five business days after
such exercise of the option and, in any event, shall not be earlier than the
Firm Closing Date. The time and date set forth in such notice, or such other
time on such other date as the Representatives and the Company may agree upon or
as the Representatives may determine pursuant to Section 9 hereof, is herein
called the "Option Closing Date" with respect to such Option Securities. Upon
exercise of the option as provided herein, the Company and the Selling
Securityholders shall become obligated to sell to each of the several
Underwriters, and, subject to the terms and conditions herein set forth, each of
the Underwriters (severally and not jointly) shall become obligated to purchase
from the Selling Securityholders, the same percentage of the total number of the
Option Securities as to which the several Underwriters are then exercising the
option as such Underwriter is obligated to purchase of the aggregate number of
Firm Securities, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional shares. If the option is exercised as to all or
any portion of the Option Securities, one or more certificates in definitive
form for such Option Securities, and payment therefor, shall be delivered on the
related Option Closing Date in the manner, and upon the terms and conditions,
set forth in paragraph (a) of this Section 3 with respect to the sale of the
Firm Securities, except that reference therein to the Firm Securities and the
Firm Closing Date shall be deemed, for purposes of this paragraph (b), to refer
to such Option Securities and Option Closing Date, respectively.
(d) It is understood that either of you, individually and not as one of
the Representatives, may (but shall not be obligated to) make payment on behalf
of any Underwriter or Underwriters for any of the Securities to be purchased by
such Underwriter or Underwriters. No such payment shall relieve such
Underwriter or Underwriters from any of its or their obligations hereunder.
4. Offering by the Underwriters. Upon your authorization of the
release of the Firm Securities, the several Underwriters propose to offer the
Firm Securities for sale to the public upon the terms set forth in the
Prospectus.
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5. Covenants of the Company and the Selling Securityholders.
(a) The Company covenants and agrees with each of the Underwriters
that:
(i) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution of this
Agreement, and any amendments thereto to become effective as promptly as
possible. If required, the Company will file the Prospectus or any Term
Sheet that constitutes a part thereof and any amendment or supplement
thereto with the Commission in the manner and within the time period
required by Rules 434 and 424(b) under the Act. During any time when a
prospectus relating to the Securities is required to be delivered under the
Act, the Company (A) will comply with all requirements imposed upon it by
the Act and the rules and regulations of the Commission thereunder to the
extent necessary to permit the continuance of sales of or dealings in the
Securities in accordance with the provisions hereof and of the Prospectus,
as then amended or supplemented, and (B) will not file with the Commission
the Prospectus, Term Sheet or the amendment referred to in the second
sentence of Section 2(a)(i) hereof, any amendment or supplement to such
Prospectus, Term Sheet or any amendment to the Registration Statement or
any Rule 462(b) Registration Statement of which the Representatives shall
not previously have been advised and furnished with a copy for a reasonable
period of time prior to the proposed filing and as to which filing the
Representatives shall not have given their consent, such consent not to be
unreasonably withheld. The Company will prepare and file with the
Commission, in accordance with the rules and regulations of the Commission,
promptly upon request by the Representatives or counsel for the
Underwriters, any amendments to the Registration Statement or any Rule
462(b) Registration Statement or amendments or supplements to the
Prospectus that may be necessary or advisable in connection with the
distribution of the Securities by the several Underwriters, and will use
its best efforts to cause any such amendment to the Registration Statement
to be declared effective by the Commission as promptly as possible. The
Company will advise the Representatives, promptly after receiving notice
thereof, of the time when the Registration Statement or any amendment
thereto has been filed or declared effective or the Prospectus or any
amendment or supplement thereto has been filed and will provide evidence
satisfactory to the Representatives of each such filing or effectiveness.
(ii) The Company will advise the Representatives, promptly after
receiving notice or obtaining knowledge thereof, of (A) the issuance by the
Commission of any stop order suspending the effectiveness of the Original
Registration Statement or any 462(b) Registration Statement or any
amendment thereto or any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, (B) the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, (C) the institution, threatening or
contemplation of any proceeding for any such purpose or (D) any request
made by the Commission for amending the Original Registration Statement or
any Rule 462(b) Registration Statement, for amending or supplementing the
Prospectus or for additional information. The Company will use its best
efforts to prevent
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the issuance of any such stop order and, if any such stop order is issued,
to obtain the withdrawal thereof as promptly as possible.
(iii) The Company will arrange for the qualification of the
Securities for offering and sale under the securities or blue sky laws of
such jurisdictions as the Representatives may designate and will continue
such qualifications in effect for as long as may be necessary to complete
the distribution of the Securities, provided, however, that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction.
(iv) If, at any time prior to the later of (A) the final date
when a prospectus relating to the Securities is required to be delivered
under the Act or (B) the Option Closing Date, any event occurs as a result
of which the Prospectus, as then amended or supplemented, would include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if for any
other reason it is necessary at any time to amend or supplement the
Prospectus to comply with the Act or the rules or regulations of the
Commission thereunder, the Company will promptly notify the Representatives
thereof and, subject to Section 5(a) hereof, will prepare and file with the
Commission, at the Company's expense, an amendment to the Registration
Statement or an amendment or supplement to the Prospectus that corrects
such statement or omission or effects such compliance.
(v) The Company will, without charge, provide (A) to the
Representatives and to counsel for the Underwriters as many signed copies
of the registration statement originally filed with respect to the
Securities and each amendment thereto and any Rule 462(b) Registration
Statement (in each case including exhibits thereto) as the Representatives
and counsel to the Underwriters may reasonably request, (B) to each other
Underwriter, a conformed copy of such Registration Statement and any Rule
462(b) Registration Statement and each amendment thereto (in each case
without exhibits thereto) and (C) so long as a prospectus relating to the
Securities is required to be delivered under the Act, as many copies of
each Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto as the Representatives may reasonably request; without
limiting the application of clause (C) of this sentence, the Company, not
later than (1) 6:00 PM, New York City time, on the date of determination of
the public offering price, if such determination occurred at or prior to
10:00 AM, New York City time, on such date or (2) 2:00 PM, New York City
time, on the business day following the date of determination of the public
offering price, if such determination occurred after 10:00 AM, New York
City time, on such date, will deliver to the Underwriters, without charge,
as many copies of the Prospectus and any amendment or supplement thereto as
the Representatives may reasonably request for purposes of confirming
orders that are expected to settle on the Firm Closing Date.
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(vi) The Company, as soon as practicable, will make generally
available to its securityholders and to the Representatives an earnings
statement of the Company that satisfies the provisions of Section 11(a) of
the Act and Rule 158 thereunder.
(vii) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Prospectus.
(viii) The Company will not, directly or indirectly, without the
prior written consent of Prudential Securities Incorporated, on behalf of
the Underwriters, offer, sell, offer to sell, contract to sell, pledge,
grant any option to purchase or otherwise sell or dispose (or announce any
offer, sale, offer of sale, contract of sale, pledge, grant of any option
to purchase or other sale or disposition) of any shares of Common Stock or
any securities convertible into, or exchangeable or exercisable for, Common
Stock or other stock of the Company, or any right to purchase or acquire
Common Stock or other capital stock of the Company for a period of 180 days
after the date hereof, except that the Company may (i) issue up to 25,000
shares of Common Stock to be used as consideration in connection with the
acquisition of a dental practice if the recipient of such shares agrees to
be bound by the provisions of this Section 5(a)(viii) until the earlier of
(A) 180 days after the date hereof or (B) 90 days after receipt of such
shares and (ii) issue more than 25,000 shares of Common Stock to be used as
consideration in connection with the acquisition of a dental practice if
the recipient of such shares agrees to be bound by the provisions of this
Section 5(a)(viii) until 180 days after the date hereof, and except as
otherwise pursuant to this Agreement, and except for issuances pursuant to
the exercise of employee stock options outstanding on the date hereof and
issuances pursuant to the exercise of employee stock options granted
hereafter so long as such options are not exercisable within 180 days after
the date hereof.
(ix) The Company will not, directly or indirectly, (A) take any
action designed to cause or to result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities or (B) (I) sell, bid for, purchase, or pay
anyone any compensation for soliciting purchases of, the Securities or (II)
pay or agree to pay to any person any compensation for soliciting another
to purchase any other securities of the Company.
(x) The Company, during the period when the Prospectus is
required to be delivered under the Act or the Exchange Act, will file all
documents required to be filed with the Commission pursuant to Section 13,
14 or 15 of the Exchange Act within the time periods required by the
Exchange Act and the rules and regulations thereunder.
(xi) The Company will cause the Securities to be duly included
for quotation on The Nasdaq Stock Market's National Market (the "Nasdaq
Stock Market") prior to the Firm Closing Date. The Company will use it best
efforts to ensure that the Securities remain included for quotation on the
Nasdaq Stock Market following the Firm Closing Date.
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(xii) During a period of five years from the effective date of the
Registration Statement, the Company will furnish to you and, upon request,
to each of the other Underwriters, without charge, (A) copies of all
reports or other communications (financial or other) furnished to
securityholders, (B) 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, and (C) such additional publicly available
information concerning the business and financial condition of the Company,
if any, as you may reasonably request.
(xiii) If at any time during the 25-day period after the
Registration Statement becomes effective or the period prior to the Option
Closing Date, any rumor, publication or event relating to or affecting the
Company shall occur as a result of which in your opinion the market price
of the Common Stock has been or is likely to be materially affected
(regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after
written notice from you advising the Company to the effect set forth above,
to the extent consistent with the Act and the rules and regulations
thereunder, prepare, consult with you concerning the substance of, and
disseminate a press release or other public statement, reasonably
satisfactory to you, responding to or commenting on such rumor, publication
or event.
(xiv) If the Company elects to rely on Rule 462(b), the Company
shall both file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with
Rule 111 promulgated under the Act by the earlier of (i) 10:00 P.M. New
York City time on the date of this Agreement and (ii) the time
confirmations are sent or given, as specified by Rule 462(b)(2).
(xv) The Company will obtain the agreements described in Section
7(h) hereof prior to the Firm Closing Date.
(b) Each Selling Securityholder covenants and agrees with each of the
Underwriters that:
(i) Such Selling Securityholder will not, directly or
indirectly, (A) take any action designed to cause or to result in, or that
has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities or (B) (I) sell, bid
for, purchase, or pay anyone any compensation for soliciting purchases of,
the Securities or (II) pay or agree to pay to any person any compensation
for soliciting another to purchase any other securities of the Company
(except for the sale of Securities by the Selling Securityholder under this
Agreement).
(ii) Such Selling Securityholder will not, directly or
indirectly, without the prior written consent of Prudential Securities
Incorporated, on behalf of the Underwriters, offer, sell, offer to sell,
contract to sell, grant any option to purchase or otherwise sell or dispose
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(or announce any offer, sale, offer of sale, contract of sale, grant of any
option to purchase or other sale or disposition) of any shares of Common
Stock or any securities convertible into, or exchangeable or exercisable
for, Common Stock or other stock of the Company, or any right to purchase
or acquire Common Stock or other capital stock of the Company for a period
of 180 days after the date hereof, except pursuant to this Agreement;
provided, however, that the such Selling Securityholders may make bona fide
gifts to donees who agree to be bound by the restrictions described in this
paragraph 5(b)(ii).
6. Expenses. The Company will pay all costs and expenses
incident to the performance of the obligations of the Company and the Selling
Securityholders under this Agreement, whether or not the transactions
contemplated herein are consummated or this Agreement is terminated pursuant to
Section 12 hereof, including all costs and expenses incident to (a) the
printing or other production of documents with respect to the transactions,
including any costs of printing the registration statement originally filed
with respect to the Securities and any amendment thereto, any Rule 462(b)
Registration Statement, any Preliminary Prospectus and the Prospectus and any
amendment or supplement thereto, this Agreement and any blue sky memoranda, (b)
all arrangements relating to the delivery to the Underwriters of copies of the
foregoing documents, (c) the fees and disbursements of the counsel, the
accountants and any other experts or advisors retained by the Company, (d)
preparation, issuance and delivery to the Underwriters of any certificates
evidencing the Securities, including transfer agent's and registrar's fees and
the Custodian's fees, (e) the qualification of the Securities under state
securities and blue sky laws, including filing fees and fees and disbursements
of counsel for the Underwriters relating thereto, (f) the filing fees of the
Commission and the National Association of Securities Dealers, Inc. relating to
the Securities, (g) any quotation of the Securities on the Nasdaq Stock Market
and (h) the expenses of the Company in connection with any meetings with
prospective investors in the Securities. To the extent, if at all, that any of
the Selling Securityholders engage special legal counsel to represent them in
connection with this offering, other than counsel to the Company, the fees and
expenses of such counsel shall be borne by such Selling Securityholders. Any
transfer taxes imposed on the sale of the Securities to the several
Underwriters will be paid by the Company and the Selling Securityholders pro
rata. If the sale of the Securities provided for herein is not consummated
because any condition to the obligations of the Underwriters set forth in
Section 7 hereof is not satisfied, because this Agreement is terminated
pursuant to Section 12(a)(i) and (a)(ii) hereof or because of any failure,
refusal or inability on the part of the Company or any Selling Securityholder
to perform all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder other than by reason of a default by any of
the Underwriters, the Company will reimburse the Underwriters severally upon
demand for all out-of-pocket expenses (including counsel fees and
disbursements) that shall have been incurred by them in connection with the
proposed purchase and sale of the Securities. The Company shall not in any
event be liable to any of the Underwriters for the loss of anticipated profits
from the transactions covered by this Agreement.
7. Conditions of the Underwriters' Obligations. The obligations
of the several Underwriters to purchase and pay for the Firm Securities shall
be subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company and the Selling
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Securityholders contained herein as of the date hereof and as of the Firm
Closing Date, as if made on and as of the Firm Closing Date, to the accuracy of
the statements of the Company's officers and the Selling Securityholders made
pursuant to the provisions hereof, to the performance by the Company and the
Selling Securityholders of their respective covenants and agreements hereunder
and to the following additional conditions:
(a) If the Original Registration Statement or any amendment thereto
filed prior to the Firm Closing Date has not been declared effective as of the
time of execution hereof, the Original Registration Statement or such amendment
and, if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have been declared effective not later than the
earlier of (i) 11:00 A.M., New York City time, on the date on which the
amendment to the registration statement originally filed with respect to the
Securities or to the Registration Statement, as the case may be, containing
information regarding the initial public offering price of the Securities has
been filed with the Commission and (ii) the time confirmations are sent or given
as specified by Rule 462(b)(2) or, with respect to the Original Registration
Statement, such later time and date as shall have been consented to by the
Representatives; if required, the Prospectus or any Term Sheet that constitutes
a part thereof and any amendment or supplement thereto shall have been filed
with the Commission in the manner and within the time period required by Rules
434 and 424(b) under the Act; no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto shall have been issued, and no
proceedings for that purpose shall have been instituted or threatened or, to the
knowledge of the Company or the Representatives, shall be contemplated by the
Commission; and the Company shall have complied with any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise).
(b) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Xxxxxxxx, Loop & Xxxxxxxx, counsel for the Company, to the
effect that:
(i) the Company and each Dental Entity have been duly organized
and are validly existing as corporations in good standing under the laws of
their respective jurisdictions of incorporation and are duly qualified to
transact business as foreign corporations and are in good standing under
the laws of all other jurisdictions where the ownership or leasing of their
respective properties or the conduct of their respective businesses
requires such qualification, except where the failure to be so qualified
does not amount to a material liability or disability to the Company;
(ii) the Company and each Dental Entity have corporate power to
own or lease their respective properties and conduct their respective
businesses as described in the Registration Statement and the Prospectus,
and the Company has corporate power to enter into this Agreement and to
carry out all the terms and provisions hereof to be carried out by it;
(iii) the Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus; all of the issued shares of
capital stock of the Company have been
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duly authorized and validly issued and are fully paid and nonassessable and
were not issued in violation of or subject to any preemptive rights or, to
the best knowledge of such counsel, other rights to subscribe for or
purchase securities; the Firm Securities have been duly authorized by all
necessary corporate action of the Company and, when issued and delivered to
and paid for by the Underwriters pursuant to this Agreement, will be
validly issued, fully paid and nonassessable; the Firm Securities have been
duly included for quotation on the Nasdaq National Market; no holders of
outstanding shares of capital stock of the Company are entitled as such to
any preemptive or, to the best knowledge of such counsel, to other rights
to subscribe for any of the Securities; and, to the best knowledge of such
counsel, no holders of securities of the Company are entitled to have such
securities registered under the Registration Statement;
(iv) the statements set forth under the heading "Description of
Capital Stock" in the Prospectus, insofar as such statements purport to
summarize the material provisions of the capital stock of the Company,
provide a summary of such material provisions to the extent required by the
Act, and the statements set forth under the headings "Business - Services
and Support Agreement," "Business -Government and State Regulations" and
"Certain Transactions" in the Prospectus, insofar as such statements
constitute a summary of the agreements and matters referred to therein,
provide a summary of such agreements and matters to the extent required by
the Act;
(v) the execution and delivery of this Agreement have been duly
authorized by all necessary corporate action of the Company and this
Agreement has been duly executed and delivered by the Company; The Option
Agreement has been duly executed and delivered by this Coast Florida P.A.
and is the valid and binding agreement of the Coast Florida P.A.,
enforceable against the Coat Florida P.A. in accordance with its terms.
(vi) (A) to the best knowledge of such counsel, no legal or
governmental proceedings are pending to which the Company or any of the
Dental Entities is a party or to which the property of the Company or any
of the Dental Entities is subject that are required to be described in the
Registration Statement or the Prospectus and are not described therein,
and, to the best knowledge of such counsel, no such proceedings have been
threatened against the Company or any of the Dental Entities or with
respect to any of their respective properties and (B) such counsel does not
know of any contract or other document of a character that is required to
be described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration Statement that is not described therein
or filed as required;
(vii) the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by
the Company with the other provisions of this Agreement and the
consummation of the other transactions herein contemplated do not (A)
require the consent, approval, authorization, registration or qualification
of or with any governmental authority, except such as have been obtained
and
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such as may be required under state securities or blue sky laws, or (B)
conflict with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, lease or other agreement or instrument known to such counsel to
which the Company is a party or by which the Company or any of its
properties are bound, or the charter documents or by-laws of the Company,
or any statute or any judgment, decree, order, rule or regulation of any
court or other governmental authority or any arbitrator known to such
counsel and applicable to the Company;
(viii) the Registration Statement is effective under the Act; any
required filing of the Prospectus or any Term Sheet that constitutes a part
thereof pursuant to Rules 434 and 424(b) has been made in the manner and
within the time period required by Rules 434 and 424(b); and, to the best
knowledge of such counsel, no stop order suspending the effectiveness of
the Registration Statement or any amendment thereto has been issued, and no
proceedings for that purpose have been instituted or threatened or are
contemplated by the Commission;
(ix) Amendment No. 3 to the Registration Statement filed with
respect to the Securities and each subsequent amendment thereto and the
Prospectus (in each case, other than the financial statements and other
financial information and schedules contained therein, as to which such
counsel need express no opinion) comply as to form in all material respects
with the applicable requirements of the Act and the rules and regulations
of the Commission thereunder;
(x) to the best knowledge of such counsel, the Company and the
Dental Entities possess all certificates, authorizations and permits issued
by the appropriate federal, state or foreign regulatory authorities
necessary to conduct their respective businesses, and, to the best
knowledge of such counsel, the Company has not received any notice of
proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would result in
a material adverse change in the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company,
except as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus);
(xi) the Company is not an "investment company" under the
Investment Company Act of 1940, as amended, and consummation of the
transactions herein contemplated will not cause the Company to become an
investment company subject to registration under such Act;
(xii) to the best knowledge of such counsel, the Company does not
own any shares of stock or any other equity securities of any corporation
or have any equity interest in any firm, partnership, association or other
entity, except as described in or contemplated by the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus);
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(xiii) to the best knowledge of such counsel, all offers and sales
of the Company's capital stock prior to the date hereof were at all
relevant times exempt from the registration requirements of the Act, and
were the subject of an available exemption from the registration
requirements of all applicable state securities or blue sky laws;
(xiv) each of the agreements providing for a transaction that is
part of the Recent Acquisitions has been duly authorized, executed and
delivered by the Company and, to the best knowledge of such counsel,
constitutes the valid and legally binding obligation of each of the other
parties thereto; there are no statutory or contractual rights of dissent or
appraisal with respect to the transfer of any of the properties in the
Recent Acquisitions; and the Recent Acquisitions conformed in all material
respects to the extent required by the Act to the description thereof
contained in the Registration Statement; and
(xv) to the best knowledge of such counsel, except as disclosed
in the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), there are no outstanding (A) securities or
obligations of the Company convertible into or exchangeable for any capital
stock of the Company, (B) warrants, rights or options to subscribe for or
purchase from the Company any such capital stock or any such convertible or
exchangeable securities or obligations, or (C) obligations of the Company
to issue any shares of capital stock, any such convertible or exchangeable
securities or obligations, or any such warrants, rights or options.
Such counsel shall also state that they have no reason to believe
(A) that the Registration Statement, as of its effective date, contained
any untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading and (B) that the Prospectus, as of its date or the
date of such opinion, included or includes any untrue statement of a
material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Such counsel shall also state
that no facts have come to their attention that cause them to believe that
the Company and the Dental Entities are not conducting their respective
business in material compliance with the laws, rules and regulations
applicable thereto, including, without limitation, those relating to the
practice of dental (including the management or operation of dental
offices), the splitting of professional fees with non-dentists, the
ownership or control of the assets of a dental practice, the employment of
dentists or other personnel, the content of advertising, limitations on
tasks that may be delegated by any dentist to other staff members, the
business of insurance and reimbursement by governmental agencies; and
nothing has come to their attention that causes them to believe that the
provisions of the service, consulting and management agreements and other
business arrangements entered into by the Company described in the
Prospectus, or the operations of the Company in accordance with the terms
thereof, are not in material compliance with applicable laws and
governmental regulations.
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In rendering any such opinion, such counsel may rely, as to matters
of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and public officials.
References to the Registration Statement and the Prospectus in this
paragraph (b) shall include any amendment or supplement thereto at the date
of such opinion.
(c) The Representatives shall have received an opinion, dated the Firm
Closing Date of counsel for the Selling Securityholders, to the effect that:
(i) each Selling Securityholder has full power (partnership,
trust or other) to enter into this Agreement, the Custody Agreement and the
Power of Attorney and to sell, assign, transfer and deliver to the
Underwriters the Securities to be sold by such Selling Securityholder
hereunder in accordance with the terms of this Agreement, and to perform
his or its obligations under the Custody Agreement; the execution and
delivery of this Agreement, the Custody Agreement and the Power of
Attorney have been duly authorized by all necessary action (partnership,
trust or other) of each Selling Securityholder; this Agreement, the Custody
Agreement and the Power of Attorney have been executed and delivered by
such Selling Securityholder; this Agreement and, assuming due
authorization, execution and delivery by the Custodian, the Custody
Agreement and the Power of Attorney, are the legal, valid, binding and
enforceable instruments of such Selling Securityholder, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally and subject, as to enforceability, to general principles
of equity (regardless of whether enforcement is sought in a proceeding in
equity or at law);
(ii) the delivery by such Selling Securityholder to the
Underwriters of certificates for the Securities being sold hereunder by
such Selling Securityholder against payment therefor as provided herein,
will convey good and marketable title to such Securities to the several
Underwriters, free and clear of any security interests, liens,
encumbrances, equities, claims or other defects; and
(iii) The sale of the Securities to the Underwriters by such
Selling Securityholder pursuant to this Agreement, the compliance by such
Selling Securityholder with the other provisions of this Agreement and the
Custody Agreement and the consummation of the other transactions herein
contemplated do not (A) require the consent, approval, authorization,
registration or qualification of or with any governmental authority, except
such as has been obtained, and except such as may be required for
registration under state securities or blue sky laws and, if the
registration statement filed with respect to the Securities (as amended) is
not effective under the Act as of the time of execution hereof, such as may
be required (and shall be obtained as provided in this Agreement) under the
Act and the Exchange Act, or (B) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a default
under any indenture, mortgage, deed of trust, lease or other agreement or
instrument to which such Selling Securityholder is a party or by which such
Selling
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Securityholder or any of such Selling Securityholder's properties are
bound, or any statute or any judgment, decree, order, rule or regulation
known to such counsel of any court or other governmental authority or any
arbitrator applicable to such Selling Securityholder.
In rendering any such opinion, such counsel may rely, as to matters
of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and public officials.
References to the Registration Statement and the Prospectus in this
paragraph (c) shall include any amendment or supplement thereto at the date
of such opinion.
(d) The Representatives shall have received an opinion, dated the Firm
Closing Date, of King & Spalding, counsel for the Underwriters, with respect to
the issuance and sale of the Firm Securities, the Registration Statement and the
Prospectus, and such other related matters as the Representatives may reasonably
require, and the Company shall have furnished to such counsel such documents as
they may reasonably request for the purpose of enabling them to pass upon such
matters.
(e) The Representatives shall have received from Deloitte & Touche, LLP
a letter or letters dated, respectively, the date hereof and the Firm Closing
Date, in form and substance satisfactory to the Representatives, to the effect
that:
(i) they are independent accountants with respect to the Company
within the meaning of the Act and the applicable rules and regulations
thereunder;
(ii) in their opinion, the audited financial statements and
schedules of the Company included in the Registration Statement and the
Prospectus comply in form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations;
(iii) on the basis of their limited review in accordance with
standards established by the American Institute of Certified Public
Accountants of any interim unaudited financial statements of the Company
included in the Registration Statement and the Prospectus, carrying out
certain specified procedures (which do not constitute an examination made
in accordance with generally accepted auditing standards) that would not
necessarily reveal matters of significance with respect to the comments set
forth in this paragraph (iii), a reading of the minute books of the
stockholders, the board of directors and any committees thereof of the
Company, officials of the Company, and inquiries of certain officials of
the Company who have responsibility for financial and accounting matters,
nothing came to their attention that caused them to believe that:
(A) the unaudited financial statements of the Company
included in the Registration Statement and the Prospectus do not
comply in form in all material
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respects with the applicable accounting requirements of the Act and
the related published rules and regulations thereunder or are not
in conformity with generally accepted accounting principles applied
on a basis substantially consistent with that of the audited
financial statements included in the Registration Statement and the
Prospectus;
(B) at a specific date not more than five business days
prior to the date of such letter, there was any change in long-term
debt of the Company or any decreases in net current assets or
stockholders' equity of the Company, in each case compared with
amounts shown on the June 30, 1996 unaudited consolidated balance
sheet included in the Registration Statement and the Prospectus, or
for the period from June 30, 1996 to such specified date there were
any decreases, as compared with the prior comparable period, in net
revenues, income before income taxes or net income of the Company,
except in all instances for changes, decreases or increases set
forth in such letter;
(iv) they have carried out certain specified procedures (as
requested by the Representatives), not constituting an audit, with respect
to certain amounts, percentages and financial information that are derived
from the general accounting records of the Company and are included in the
Registration Statement and the Prospectus, and have compared such amounts,
percentages and financial information with such records of the Company or
with information derived from such records and have found them to be in
agreement, excluding any questions of legal interpretation; and
(v) on the basis of a reading of the unaudited pro forma
financial data included in the Registration Statement and the Prospectus,
carrying out certain specified procedures that would not necessarily reveal
matters of significance with respect to the comments set forth in this
paragraph (v), inquiries of certain officials of the Company who have
responsibility for financial and accounting matters and proving the
arithmetic accuracy of the application of the pro forma adjustments to the
historical amounts in the unaudited pro forma financial data, nothing came
to their attention that caused them to believe that the unaudited pro
forma financial data do not comply in form in all material respects with
the applicable accounting requirements of Rule 11-02 of Regulation S-X or
that the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of such data.
In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied
by a written explanation from the Company as to the significance thereof,
unless the Representatives deem such explanation unnecessary, and (B) such
changes, decreases or increases do not, in the sole judgment of the
Representatives, make it impractical or inadvisable to proceed with the
purchase and delivery of the Securities as contemplated by the Registration
Statement, as amended as of the date hereof.
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References to the Registration Statement and the Prospectus in
this paragraph (f) with respect to either letter referred to above
shall include any amendment or supplement thereto at the date of such
letter.
(f) The Representatives shall have received a certificate, dated
the Firm Closing Date, of the principal executive officer and the principal
financial or accounting officer of the Company to the effect that:
(i) the representations and warranties of the Company in
this Agreement are true and correct as if made on and as of the Firm
Closing Date; the Registration Statement, as amended as of the Firm
Closing Date, does not include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein not misleading, and the Prospectus, as amended or supplemented
as of the Firm Closing Date, does not include any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; and the Company has performed all
covenants and agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Firm Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued, and no
proceedings for that purpose have been instituted or threatened or, to
the best of the Company's knowledge, are contemplated by the
Commission; and
(iii) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
the Company has not sustained any material loss or interference with
its businesses or properties from fire, flood, hurricane, accident or
other calamity, whether or not covered by insurance, or from any labor
dispute or any legal or governmental proceeding, and there has not been
any material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or otherwise),
management, business prospects, net worth or results of operations of
the Company, except as described in or contemplated by the Prospectus
(exclusive of any amendment or supplement thereto).
(g) The Underwriters shall have received a certificate from each
Selling Securityholder, dated the Firm Closing Date, to the effect that:
(i) the representations and warranties of such Selling
Securityholder in this Agreement are true and correct as if made on
and as of the Firm Closing Date;
(ii) the Registration Statement, as amended as of the Firm
Closing Date, does not include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein not misleading, and the Prospectus, as amended or
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supplemented as of the Firm Closing Date, does not include any
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statement therein, in the light
of the circumstances under which they were made, not misleading;
and
(iii) such Selling Securityholder has performed all
covenants and agreements on his or its part to be performed or
satisfied at or prior to the Firm Closing Date.
(h) The Representatives shall have received from (i) each person
who is a director or officer of the Company and (ii) each Selling Securityholder
an agreement to the effect that such person or entity will not, directly or
indirectly, without the prior written consent of Prudential Securities
Incorporated, on behalf of the Underwriters, offer, sell, offer to sell,
contract to sell, pledge, grant any option to purchase or otherwise sell or
dispose (or announce any offer, sale, pledge, offer of sale, contract of sale,
grant of an option to purchase or other sale or disposition) of any shares of
Common Stock or any securities convertible into, or exchangeable or exercisable
for, shares of Common Stock or other capital stock of the Company, or any right
to purchase or acquire Common Stock or other capital stock of the Company for a
period of 180 days after the date of this Agreement, except for bona fide gifts
or transfers effected by such stockholders other than on any securities exchange
or in the over-the-counter market to donees or transferees that agree to be
bound by similar agreements.
(i) On or before the Firm Closing Date, the Representatives and
counsel for the Underwriters shall have received such further certificates,
documents or other information as they may have reasonably requested from the
Company.
(j) Prior to the commencement of the offering of the Securities,
the Securities shall have been included for trading on the Nasdaq Stock Market.
All opinions, certificates, letters and documents delivered pursuant
to this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to purchase and
pay for any Option Securities shall be subject, in their discretion, to each of
the foregoing conditions to purchase the Firm Securities, except that all
references to the Firm Securities and the Firm Closing Date shall be deemed to
refer to such Option Securities and the related Option Closing Date,
respectively.
8. Indemnification and Contribution.
(a) The Company and each Selling Securityholder jointly and severally
agree to indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, against
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any losses, claims, damages or liabilities, joint or several, to which such
Underwriter or such controlling person 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:
(i) any untrue statement or alleged untrue statement made by the
Company or such Selling Securityholder in Section 2 of this Agreement,
(ii) any untrue statement or alleged untrue statement of any
material fact contained in (A) the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto or (B) any application or other document, or any
amendment or supplement thereto, executed by the Company or such Selling
Securityholder or based upon written information furnished by or on behalf
of the Company or any Selling Securityholder filed in any jurisdiction in
order to qualify the Securities under the securities or blue sky laws
thereof or filed with the Commission or any securities association or
securities exchange (each an "Application"),
(iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary Prospectus
or the Prospectus or any amendment or supplement thereto, or any
Application a material fact required to be stated therein or necessary to
make the statements therein not misleading, or
(iv) any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials derived solely
from information supplied by the Company to be used in connection with the
marketing of the Securities, including without limitations, slides, videos,
films and tape recordings,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with
any such loss, claim, damage, liability or action; provided, however, that
the Company and such Selling Securityholders will 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 any untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement or any
amendment thereto, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto or any Application in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through the Representatives specifically for use therein; and
provided, further, that the Company and such Selling Securityholders will
not be liable to any Underwriter or any person controlling such Underwriter
with respect to any such untrue statement or omission made in any
Preliminary Prospectus that is corrected in the Prospectus (or any
amendment or supplement thereto) if the person asserting any such loss,
claim, damage or liability purchased Securities from such Underwriter but
was not sent or given a copy of the Prospectus (as amended or supplemented)
at or prior to the written confirmation of the sale of such Securities to
such
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person in any case where such delivery of the Prospectus (as amended or
supplemented) is required by the Act, unless such failure to deliver the
Prospectus (as amended or supplemented) was a result of noncompliance by
the Company with Section 5(d) of this Agreement. This indemnity agreement
will be in addition to any liability which the Company and such Selling
Securityholders may otherwise have. Neither the Company nor such Selling
Securityholders will, without the prior written consent of the Underwriter
or Underwriters purchasing, in the aggregate, more than fifty percent (50%)
of the Securities, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not
any such Underwriter or any person who controls any such Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act is a
party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of all of the
Underwriters and such controlling persons from all liability arising out of
such claim, action, suit or proceeding.
(b) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement, each Selling Securityholder and each person,
if any, who controls the Company or any Selling Securityholder within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act against any
losses, claims, damages or liabilities to which the Company, any such director
or officer of the Company, such Selling Securityholder or any such controlling
person of the Company or such Selling Securityholder 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 (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement or any amendment thereto, any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, or any Application or
(ii) the omission or the alleged omission to state therein a material fact
required to be stated in the Registration Statement or any amendment thereto,
any Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, or any Application 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 reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives specifically for use
therein; and, subject to the limitation set forth immediately preceding this
clause, will reimburse, as incurred, any legal or other expenses reasonably
incurred by the Company or any such director, officer or controlling person or
such Selling Securityholder in connection with investigating or defending any
such loss, claim, damage, liability or any action in respect thereof. This
indemnity agreement will be in addition to any liability which such Underwriter
may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 8. In case
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any such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided,
however, that if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be one or more legal defenses available to
it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not
have the right to direct the defense of such action on behalf of such
indemnified party or parties and such indemnified party or parties shall have
the right to select separate counsel to defend such action on behalf of such
indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and approval
by such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that in connection with such action the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to local counsel) in any one action or separate
but substantially similar actions in the same jurisdiction arising out of the
same general allegations or circumstances, designated by the Representatives in
the case of paragraph (a) of this Section 8, representing the indemnified
parties under such paragraph (a) who are parties to such action or actions) or
(ii) the indemnifying party does not promptly retain counsel satisfactory to
the indemnified party or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs and
expenses of any settlement of such action effected by such indemnified party
without the consent of the indemnifying party.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 8 is unavailable or insufficient, for
any reason, to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
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 (i) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Securities or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Securityholders on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total proceeds from the offering
(before deducting expenses) received by
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the Company and the Selling Securityholders bear to the total underwriting
discounts and commissions received by the Underwriters. The relative fault of
the parties 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, the Selling Securityholders or the Underwriters, the parties'
relative intents, knowledge, access to information and opportunity to correct
or prevent such statement or omission, and any other equitable considerations
appropriate in the circumstances. The Company, the Selling Securityholders and
the Underwriters agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take into account the equitable
considerations referred to above in this paragraph (d). Notwithstanding any
other provision of this paragraph (d), no Underwriter shall be obligated to
make contributions hereunder that in the aggregate exceed the total public
offering price of the Securities purchased by such Underwriter under this
Agreement, less the aggregate amount of any damages that such Underwriter has
otherwise been required to pay in respect of the same or any substantially
similar claim, and no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute hereunder are several in proportion to
their respective underwriting obligations and not joint, and contributions
among Underwriters shall be governed by the provisions of the Prudential
Securities Incorporated Master Agreement Among Underwriters. For purposes of
this paragraph (d), each person, if any, who controls an Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement and
each person, if any, who controls the Company or any Selling Securityholder
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
shall have the same rights to contribution as the Company or such Selling
Securityholder, as the case may be.
(e) The liability of each Selling Securityholder under the
representations and warranties contained in Sections 2 and 3 hereof and under
the indemnity and contribution agreements contained in the provisions of this
Section 8 shall be limited to an amount equal to the public offering price of
the Securities to be sold by such Selling Securityholder to the Underwriters
minus the amount of the underwriting discount paid thereon to the Underwriters
by such Selling Securityholder; provided however, that no Selling Securityholder
shall be required to provide payment under the indemnity agreements contained in
the provisions of this Section 8 until the Underwriter or controlling person
seeking indemnification shall have first made a demand for payment on the
Company with respect to any such loss, claim, damage, liability or expense and
the Company shall have failed to make such requested payment within 30 days
after receipt thereof. The Company and such Selling Securityholder may agree,
as among themselves and without limiting the rights of the Underwriters under
this Agreement, as to the respective amounts of such liability for which they
each shall be responsible.
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9. Default of Underwriters. If one or more Underwriters default in
their obligations to purchase Firm Securities or Option Securities hereunder and
the aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Securities or Option
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase. If one or more Underwriters so default with respect to an aggregate
number of Securities that is more than ten percent of the aggregate number of
Firm Securities or Option Securities, as the case may be, to be purchased by all
of the Underwriters at such time hereunder, and if arrangements satisfactory to
the Representatives are not made within 36 hours after such default for the
purchase by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives) of the Securities with respect to
which such default occurs, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter or the Company other than as provided
in Section 10 hereof if the default is with respect to the Firm Closing Date and
without liability for the Option Shares if such default is with respect to the
Option Closing Date. In the event of any default by one or more Underwriters as
described in this Section 9, the Representatives shall have the right to
postpone the Firm Closing Date or the Option Closing Date, as the case may be,
established as provided in Section 3 hereof for not more than seven business
days in order that any necessary changes may be made in the arrangements or
documents for the purchase and delivery of the Firm Securities or Option
Securities, as the case may be. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 9. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
10. Default by Selling Securityholders. If on the Option Closing Date
any Selling Securityholder fails to sell the Option Securities, which such
Selling Securityholder has agreed to sell on such date as set forth herein, the
Company agrees that it will sell that number of shares of Common Stock to the
Underwriters which represents the Option Securities which such Selling
Securityholder has failed to so sell, or such lesser number as may be requested
by you.
11. Survival. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company and its officers, the
Selling Securityholders and the several Underwriters 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 (i) any investigation made by or
on behalf of the Company, any of its officers or directors, any Selling
Securityholders, any Underwriter or any controlling person referred to in
Section 8 hereof and (ii) delivery of and payment for the Securities. The
respective agreements, covenants, indemnities and other statements set forth in
Sections 6 and 8 hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement.
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12. Termination.
(a) This Agreement may be terminated with respect to the Firm
Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company or the Selling Securityholders given
prior to the Firm Closing Date or the related Option Closing Date, respectively,
in the event that the Company or the Selling Securityholder shall have failed,
refused or been unable to perform all obligations and satisfy all conditions on
its part to be performed or satisfied hereunder at or prior thereto or, if at or
prior to the Firm Closing Date or such Option Closing Date, respectively,
(i) the Company shall have, in the sole judgment of the
Representatives, sustained any material loss or interference with its
business or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute or
any legal or governmental proceeding or there shall have been any material
adverse change, or any development involving a prospective material adverse
change (including without limitation a change in management or control of
the Company), in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company, except as
described in or contemplated by the Prospectus (exclusive of any amendment
or supplement thereto);
(ii) trading in the Common Stock shall have been suspended by the
Commission or the Nasdaq Stock Market;
(iii) trading in securities generally on the New York Stock
Exchange or the Nasdaq Stock Market shall have been suspended or minimum or
maximum prices shall have been established on any such exchange or market
system;
(iv) a banking moratorium shall have been declared by New York or
United States authorities; or
(v) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or material
adverse change in general economic, political or financial conditions
having an effect on the United States financial markets that, in the sole
judgment of the Representatives, makes it impractical or inadvisable to
proceed with the public offering or the delivery of the Securities as
contemplated by the Registration Statement, as amended as of the date
hereof.
(b) Termination of this Agreement pursuant to this Section 12 shall be
without liability of any party to any other party except as provided in Section
11 hereof.
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13. Information Supplied by Underwriters. The statements set forth in
the last paragraph on the front cover page and in the first and third paragraphs
under the heading "Underwriting" in any Preliminary Prospectus or the Prospectus
(to the extent such statements relate to the Underwriters) constitute the only
information furnished by any Underwriter through the Representatives to the
Company for the purposes of Sections 2(a)(ii) and 8 hereof. The Underwriters
confirm that such statements (to such extent) are correct.
14. Notices. All communications hereunder shall be in writing and, if
sent to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Prudential Securities
Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity
Transactions Group; if sent to the Company, shall be delivered or sent by mail,
telex or facsimile transmission and confirmed in writing to the Company at 00000
X.X. Xxxxxxx 00, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000, Attention: Xxxxx Xxxxxx,
with a copy to Xxxxxxxx, Loop & Xxxxxxxx, 000 X. Xxxxxxx Xxxxxxxxx, Xxxxxxx
Xxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx 00000, Attention: Xxxxxxx X. Xxxxx, Esq.; if
sent to the Selling Securityholders shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to _______________, as
Attorney-in-Fact at ___________________________________, with a copy to
Xxxxxxxx, Loop & Xxxxxxxx, 000 X. Xxxxxxx Xxxxxxxxx, Xxxxxxx Xxxxx, Xxxxx 0000,
Xxxxx, Xxxxxxx 00000, Attention: Xxxxxxx X. Xxxxx, Esq..
15. Successors. This Agreement shall inure to the benefit of and shall
be binding upon the several Underwriters, the Company, the Selling
Securityholders and their respective successors and legal representatives, and
nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person any legal or equitable right, remedy or claim
under or in respect of this Agreement, or any provisions herein contained, this
Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of such persons and for the benefit of
no other person except that (i) the indemnities of the Company and the Selling
Securityholders contained in Section 8 of this Agreement shall also be for the
benefit of any person or persons who control any Underwriter within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act and (ii) the
indemnities of the Underwriters contained in Section 8 of this Agreement shall
also be for the benefit of the directors of the Company, the officers of the
Company who have signed the Registration Statement and any person or persons who
control the Company or the Selling Securityholders within the meaning of Section
15 of the Act or Section 20 of the Exchange Act. No purchaser of Securities
from any Underwriter shall be deemed a successor because of such purchase.
16. Applicable Law. The validity and interpretation of this Agreement,
and the terms and conditions set forth herein, shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to any provisions relating to conflicts of laws.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute an agreement binding the Company, each Selling
Securityholder and each of the several Underwriters.
Very truly yours,
COAST DENTAL SERVICES, INC.
By:
-------------------------------------
Xxxxx Xxxxxx
Chief Executive Officer
SELLING SECURITYHOLDERS
By:
------------------------------------
______________, as attorney-in-fact
for the Selling Securityholders listed
in Schedule 2 attached hereto
The foregoing Agreement
is hereby confirmed and
accepted as of the date
first above written.
PRUDENTIAL SECURITIES INCORPORATED
XXXXXXX XXXXX & ASSOCIATES, INC.
By: PRUDENTIAL SECURITIES INCORPORATED
By:
----------------------------------
Name:
---------------------
Title:
--------------------
For itself and on behalf of the Representatives.
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SCHEDULE 1
UNDERWRITERS
Number of Firm
Securities to
Underwriter be Purchased
----------- -----------
Prudential Securities Incorporated . . . . . . . . . . . . . .
Xxxxxxx Xxxxx & Associates, Inc. . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . 2,200,000
=============
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SCHEDULE 2
SELLING SECURITYHOLDERS
Number of Firm
Securities to
Selling Securityholder be Purchased
---------------------- --------------
Xxxx Xxxxxx 33,333
Xxxxx Xxxxxx 33,333
Xxx Xxxxxx 33,334
-------
Total . . . . . . . . . . . . . . . . . . . . 100,000
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