EXHIBIT 1.1
1,800,000 SHARES/1/
XXXXXX DENTAL MANAGEMENT SERVICES, INC.
COMMON STOCK
____________________
UNDERWRITING AGREEMENT
____________________
WHEAT, FIRST SECURITIES, INC.
X.X. XXXXXXX & SONS, INC.
As Representatives of the Several
Underwriters Named in Schedule I
hereto
c/o Wheat, First Securities, Inc.
Riverfront Plaza
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000 December ___, 1997
Dear Sirs:
Xxxxxx Dental Management Services, Inc., a Colorado corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of 1,533,816 shares of common stock, without par
value, of the Company (the "Common Stock"), and the selling shareholders named
in Schedule II hereto (the "Selling Shareholders"), propose, subject to the
terms and conditions stated herein, to sell to the Underwriters an aggregate of
266,184 shares of Common Stock. At the election of the Underwriters, the
Company and certain Selling Shareholders propose, subject to the terms and
conditions stated herein, to sell to the Underwriters an aggregate of 80,000
additional shares and 190,000 additional shares, respectively, as set forth in
Schedule II. The aggregate of 1,800,000 shares to be sold by the Company and
the Selling Shareholders are herein called the "Firm Securities," and the
aggregate of 270,000 additional shares to be sold by the Company and certain
Selling Shareholders are herein called the "Optional Securities." The Firm
Securities and the Optional Securities that the Underwriters elect to purchase
pursuant to Section 2 hereof are collectively called the "Securities."
--------------------------
/1/Plus an option to purchase up to 80,000 additional shares from the Company
and up to 190,000 additional shares from certain shareholders to cover over-
allotments.
1. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to, and agrees with, the
Underwriters that:
(i) A registration statement in respect of the Securities on Form S-1
(File No. 333-36391) under the Securities Act of 1933, as amended (the
"Act"), and as a part thereof a preliminary prospectus, in respect of the
Securities has been filed with the Securities and Exchange Commission (the
"Commission") in the form heretofore delivered to you, and, excluding
exhibits thereto, for each of the other Underwriters; such registration
statement, as amended, has been declared effective by the Commission; no
other document with respect to such registration statement has heretofore
been filed with the Commission other than in accordance with Section 5(a)
of this Agreement; and no stop order suspending the effectiveness of such
registration statement has been issued and no proceeding for that purpose
has been instituted or threatened by the Commission (any preliminary
prospectus included in such registration statement or filed with the
Commission pursuant to Rule 424 of the rules and regulations of the
Commission under the Act being hereinafter called a "Preliminary
Prospectus", the various parts of such registration statement, including
all exhibits thereto, and including the information contained in the form
of final prospectus filed with the Commission pursuant to Rule 424(b) under
the Act in accordance with Section 5(a) of this Agreement and deemed by
virtue of Rule 430A under the Act to be part of the registration statement
at the time it was declared effective, together with any related
registration statement filed with the Commission for registration of a
portion of the Securities, which registration statement became effective
pursuant to Rule 462(b) under the Act, each as amended at the time such
part became effective, being herein called collectively the "Registration
Statement," and the final prospectus, in the form first filed pursuant to
Rule 424(b), being hereinafter called the "Prospectus," provided, that if
the Company elects to rely on Rule 434 under the Act, all references to the
Prospectus shall be deemed to include, without limitation, the form of
prospectus and the abbreviated term sheet, taken together, provided to the
Underwriters by the Company in reliance on Rule 434);
(ii) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder, and did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by the Underwriters through
you expressly for use therein or by the Selling Shareholders expressly for
use in the preparation of the answers therein to Item 7 of Form S-1;
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(iii) The Registration Statement conforms, and the Prospectus
and any amendments or supplements thereto will conform, in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder and do not and will not as of the applicable
effective date as to the Registration Statement and any amendment thereto
and as of the applicable filing date as to the Prospectus and any amendment
or supplement thereto contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by the Underwriters through you expressly for use therein or by any of the
Selling Shareholders expressly for use in the preparation of the answers
therein to Item 7 of Form S-1;
(iv) Subsequent to the date of the latest audited financial statements
included in the Prospectus, and except as described in or contemplated by
the Prospectus (or if the Prospectus is not in existence, the most recent
Preliminary Prospectus): (a) neither the Company nor any of its
subsidiaries, a complete and correct list of which is attached as Schedule
III (the "Subsidiaries"), nor the professional corporations which are
separate legal entities that contract with the Company or the Subsidiaries
to receive management services, a complete list of which is attached as
Schedule IV (collectively, the "P.C.s"), has incurred any liabilities or
obligations (indirect, direct or contingent) or entered into any oral or
written agreements or other transactions not in the ordinary course of
business that, individually or in the aggregate, could reasonably be
expected to be material to the Company and the Subsidiaries or P.C.s
considered as a whole or that could reasonably be expected to result in a
material reduction in the earnings of the Company and the Subsidiaries and
P.C.s considered as a whole; (b) neither the Company nor any of the
Subsidiaries or P.C.s has sustained any loss or interference with its
business or properties from strike, fire, flood, windstorm, accident or
other calamity (whether or not covered by insurance) that, singly or in the
aggregate, could reasonably be expected to be material to the Company and
the Subsidiaries and P.C.s considered as a whole; (c) there has been no
material change in the indebtedness of the Company, no change in the
capital stock of the Company (other than the exercise of stock options or
warrants or conversion of debt or other convertible instruments outstanding
as of such date) and no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock; and (d) there has
not been any material adverse change, nor any development that could,
individually or in the aggregate, result in a material adverse change in
the condition (financial or other), business, prospects or results of
operations of the Company and the Subsidiaries and P.C.s considered as a
whole, whether or not arising in the ordinary course of business;
(v) The Company, each of its Subsidiaries and each of the P.C.s have
good and marketable title in fee simple to all real property and good and
marketable title to all material items of personal property owned by them,
free and clear of all liens,
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encumbrances and defects except such as are described in the Prospectus, or
such as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such
property by the Company, the Subsidiaries and the P.C.s; and any real
property and buildings held under lease or sublease by the Company, any of
the Subsidiaries or any of the P.C.s are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material
and do not materially interfere with the use made and proposed to be made
of such property and buildings by the Company, such Subsidiaries or the
P.C.s;
(vi) The Company, each of its Subsidiaries and each of the P.C.s have
been duly incorporated and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of incorporation,
with corporate power and authority to own or lease their respective
properties and conduct their respective businesses as described in the
Prospectus, and each has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, except where the failure to
so qualify would not result in a material adverse effect on the
consolidated financial position, shareholders' equity or results of
operations of the Company, the Subsidiaries and the P.C.s taken as a whole;
(vii) The Company has an authorized capitalization as set
forth in the Prospectus under the caption "Capitalization"; all of the
issued shares of capital stock of the Company have been duly and validly
authorized and issued, are fully paid and nonassessable, have been issued
in compliance with all applicable federal and state securities laws and
regulations and conform to the description of the capital stock of the
Company contained in the Prospectus; except as described in the Prospectus,
there are no preemptive or other similar rights to subscribe for or to
purchase any securities of the Company; except as described in the
Prospectus, there are no warrants, options or other similar rights to
purchase any securities of the Company;
(viii) All of the issued and outstanding shares of capital stock of each
of the P.C.s have been duly and validly authorized and issued and are fully
paid and nonassessable; and except otherwise set forth in the Prospectus,
all outstanding shares of capital stock of each of the P.C.s are owned by
the respective individuals set forth on Schedule IV free and clear of any
perfected security interest and any other security interests, claims, liens
or encumbrances, except those in favor of the Company pursuant to
agreements between the Company and such individual shareholders;
(ix) The Securities to be sold by the Company pursuant to this Agreement
have been duly and validly authorized and, when issued and delivered
against payment therefor as provided herein, will be duly and validly
issued and fully paid and nonassessable and will conform to the description
of the Securities contained in the Prospectus;
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(x) The issue and sale of the Securities by the Company and the
performance by the Company of this Agreement and the consummation by the
Company of the other transactions herein contemplated will not conflict
with or result in a breach or violation of any terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company, any of the
Subsidiaries or any of the P.C.s is a party or by which the Company, any of
the Subsidiaries or any of the P.C.s is bound or to which any of the
property or assets of the Company, any of the Subsidiaries or any of the
P.C.s is bound or subject, nor will such action result in any violation of
the provisions of the Articles of Incorporation or Bylaws of the Company
(each as amended or restated to date, the "Charter" and "Bylaws",
respectively) or the articles of incorporation or bylaws of any of the
Subsidiaries or any of the P.C.s or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the Company, any of the Subsidiaries or any of the P.C.s or any of
their properties or any of the Licenses (as defined below); and no consent,
approval, authorization, order, registration or qualification of or with
any such court or governmental agency or body is required for the issue and
sale of the Securities or the consummation by the Company of the
transactions contemplated by this Agreement, except such as may be required
under the Act and such as may be required under state securities or Blue
Sky laws in connection with the purchase and distribution of the Securities
by the Underwriters and the clearance of such offering with the National
Association of Securities Dealers, Inc. (the "NASD");
(xi) There are no legal or governmental proceedings pending to which
the Company, any of its Subsidiaries or any of the P.C.s is a party or of
which any property of the Company, any of its Subsidiaries or any of the
P.C.s is the subject other than as set forth or contemplated in the
Prospectus, that, if determined adversely to the Company, any of its
Subsidiaries or any of the P.C.s, would individually or in the aggregate
have a material adverse effect on the financial position, shareholders'
equity or results of operations of the Company or of the Company, the
Subsidiaries and the P.C.s taken as a whole and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or by others;
(xii) Xxxxxx Xxxxxxxx LLP, who have certified certain financial
statements and related schedules included in the Registration Statement,
are independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder;
(xiii) All employee benefit plans (as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) established, maintained or contributed to by the Company comply
in all material respects with the requirements of ERISA; no employee
pension benefit plan (as defined in Section 3(2) of ERISA) has incurred or
assumed an "accumulated funding deficiency" within the meaning of Section
302 of ERISA or has incurred or assumed any material liability (other than
for the payment of premiums) to the Pension Benefit Guaranty Corporation;
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and neither the Company nor any of its Subsidiaries have any liability
under Title IV of ERISA, nor does the Company or any of its Subsidiaries
expect that any such liability will be incurred, that if determined
adversely to the Company or any of its Subsidiaries, would individually or
in the aggregate have a material adverse effect on the financial position,
shareholders' equity or results of operations of the Company or of the
Company and the Subsidiaries taken as a whole;
(xiv) The consolidated financial statements of the Company, the
Subsidiaries and the P.C.s, together with related notes, as set forth in
the Registration Statement present fairly the financial position and the
results of operations of the Company, its consolidated Subsidiaries and
P.C.s at the indicated dates and for the indicated periods; such financial
statements have been prepared in accordance with generally accepted
accounting principles, consistently applied throughout the periods
presented except as noted in the notes thereon, and all adjustments
necessary for a fair presentation of results for such periods have been
made; and the selected financial information included in the Prospectus
presents fairly the information shown therein and has been compiled on a
basis consistent with the financial statements presented therein;
(xv) The pro forma consolidated financial data of the Company and its
consolidated subsidiaries and P.C.s and the related notes thereto included
in the Registration Statement and the Prospectus have been prepared in
accordance with the Commission's rules and guidelines with respect to pro
forma financial statements and have been properly compiled on the bases
described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect
to the transactions and circumstances referred to therein;
(xvi) The Company, each of the Subsidiaries and each of the P.C.s have
filed all federal, state and foreign income, franchise and excise tax
returns required to be filed (or has received an extension with respect
thereto), and have paid, or made adequate reserves for, all taxes indicated
by said returns and all assessments received by them to the extent that
such taxes have become due and are not being contested in good faith; to
the best knowledge of the Company there is no tax deficiency that has been
or might be asserted against the Company that could have a material adverse
effect on the business, properties, business prospects, condition
(financial or otherwise), earnings or results of operations of the Company;
and neither the Company nor any of its Subsidiaries has any liability
(other than contractually assumed liabilities) for taxes imposed on the
P.C.s that could have a material adverse effect on the business,
properties, business prospects, condition (financial or otherwise),
earnings or results of operations of the Company;
(xvii) None of the Company, any of the Subsidiaries or any of the P.C.s
is in violation of any international, federal or state law, regulation, or
treaty relating to the storage, handling, transportation, treatment or
disposal of hazardous substances (as defined in 42 U.S.C. Section 9601) or
hazardous materials (as defined by any international, federal or state law
or regulation) or other waste products, which
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violation is reasonably likely to result in a material adverse effect on
the financial condition or business operations or properties of the
Company, the Subsidiaries and the P.C.s taken as a whole, and the Company,
each of the Subsidiaries and each of the P.C.s have received all material
permits, licenses or other approvals as may be required of them under
applicable international, federal and state environmental laws and
regulations to conduct their business as described in the Prospectus; and
the Company, each of the Subsidiaries and each of the P.C.s are in
compliance in all material respects with the terms and conditions of any
such permit, license or approval; neither the Company nor any of the
Subsidiaries or any of the P.C.s has received any notices or claims that it
is a responsible party or a potentially responsible party in connection
with any claim or notice asserted pursuant to 42 U.S.C. Section 9601 et
seq. or any state superfund law; and the disposal by the Company or any
Subsidiary or P.C. of any of the Company's, each Subsidiary's and each
P.C.s' hazardous substances, hazardous materials and other waste products
has been lawful in all material respects;
(xviii) No relationship, direct or indirect, exists between or among the
Company, any of the Subsidiaries or any of the P.C.s, on the one hand, and
the directors, officers, shareholders, customers or suppliers of the
Company, any of the Subsidiaries or any of the P.C.s on the other hand,
that is required by the Act, or by the rules and regulations under such Act
to be described in the Registration Statement and the Prospectus that is
not so described;
(xix) Neither the Company nor any of the Subsidiaries or P.C.s has
taken and none of such entities will take, directly or indirectly, any
action that is designed to or that has constituted or that might reasonably
be expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of
the Securities and the Company has not distributed and will not distribute
any offering material in connection with the offering and sale of the
Shares other than a Preliminary Prospectus filed with the Commission or the
Prospectus or other materials, if any permitted by the Act;
(xx) Each of the Company, the Subsidiaries and the P.C.s owns or
possesses adequate licenses, copyrights, trademarks, service marks and
trade names (collectively, "intellectual property") necessary to carry on
its business as presently operated by it, except where the failure to own
or possess any such intellectual property would not, individually or in the
aggregate, have a material adverse effect on the Company, the Subsidiaries
and the P.C.s taken as a whole, and neither the Company nor any of the
Subsidiaries or the P.C.s has received any notice or has knowledge of any
infringement of or conflict with asserted rights of others with respect to
any intellectual property or of any facts which would render any
intellectual property invalid or inadequate to protect the interest of the
Company, any of the Subsidiaries or any of the P.C.s therein and which
infringement or conflict could have a material adverse effect on the
Company, the Subsidiaries and the P.C.s taken as a whole;
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(xxi) The Company and its Subsidiaries and P.C.s carry or are
entitled to the benefits of insurance in such amounts and covering such
risks as, to the best of the Company's knowledge after due inquiry, is
generally maintained by or on behalf of companies of established repute
engaged in the same or similar business and as required by the Management
Agreements, and all such insurance is in full force and effect;
(xxii) The Company, each of the Subsidiaries and each of the
P.C.s holds and are operating in compliance, in all material respects, with
all franchises, grants, authorizations, licenses, permits, easements,
consents, certificates and orders of any governmental or self-regulatory
body required for the conduct of their respective businesses as presently
being conducted ("Licenses") and all Licenses are valid and in full force
and effect, and the Company, each of the Subsidiaries and each of the P.C.s
are in compliance, in all material respects, with all laws, regulations,
orders and decrees applicable to them; no event has occurred that allows,
or after notice or lapse of time or both would allow, revocation,
suspension or termination of any such License or a violation of any such
laws or regulations, except where such revocation, suspension, termination
or violation would not, individually or in the aggregate, have a material
adverse effect on the financial position, shareholders' equity or results
of operations of the Company, the Subsidiaries and the P.C.s taken as
whole; neither the Company nor any Subsidiary nor P.C. has received any
notice of proceedings relating to the revocation or modification of any
such License which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material adverse
effect on the financial position, shareholders' equity or results of
operations of the Company, the Subsidiaries, and the P.C.s taken as a
whole, except as described in or contemplated by the Prospectus; no such
License contains a material restrictions on the Company or any of its
Subsidiaries or P.C.s that is not adequately disclosed in the Registration
Statement and the Prospectus;
(xxiii) The Securities have been approved for quotation on The Nasdaq
National Market, subject to notice of issuance;
(xxiv) This Agreement has been duly authorized, executed and delivered
by the Company;
(xxv) 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 authorization;
(b) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (c) access to assets
is permitted only in accordance with management's general or specific
authorization; and (d) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences;
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(xxvi) There are no statutes, regulations, documents or contracts of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement which
is not described or filed as required. All such contracts to which the
Company, a Subsidiary or a P.C. is a party constitute valid and binding
agreements of such party and are in full force and effect, and neither the
Company nor any of its Subsidiaries or P.C.s, nor to the best knowledge of
the Company, any other party is in breach of or default under any such
contracts, except for such defaults or breaches that would not individually
or in the aggregate have a material adverse effect on the Company, the
Subsidiaries and the P.C.s taken as a whole;
(xxvii) No labor dispute with the employees of the Company or any of
the Subsidiaries or P.C.s exists or, to the best of the Company's knowledge
after due inquiry, is imminent;
(xxviii) Except as set forth in the Registration Statement and
Prospectus, no holders of Common Stock or other securities of the Company
have registration rights with respect to securities of the Company; and
neither the filing of the Registration Statement nor the offering or sale
of the Securities as contemplated by this Agreement gives rise to any
rights for or relating to the registration of any securities of the Company
with respect to such filing, offering or sale, other than rights which have
been waived or satisfied or have expired.;
(xxix) The business conducted by the Company and the Subsidiaries and
P.C.s and the contractual relationships between (A) the Company or any of
the Subsidiaries or P.C.s and the health care payors with which they
contract and (B) the Company or any of the Subsidiaries or P.C.s and the
health care providers with which they contract, to the best knowledge of
the Company after due inquiry (including the advice of counsel), do not
violate any federal or state health care laws and regulations, or any
federal or state patient confidentiality laws and regulations or any
federal or state insurance laws and regulations (including but not limited
to those governing health maintenance organizations and preferred provider
organizations) in such jurisdictions in which the Company and any of the
Subsidiaries or P.C.s are operating that are applicable to such business
and such relationships, including those laws governing insurance risk and
risk allocation, corporate practice of medicine or dentistry, medical
practices, professional corporations, fee splitting, fraud and abuse and
self-referral, except for violations that would not have a material adverse
effect on the Company, the Subsidiaries and the P.C.s taken as a whole and
except as disclosed in the Prospectus;
(xxx) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens
granted or issued by the Company or any of the Subsidiaries or P.C.s
relating to or entitling any person to purchase or otherwise to acquire any
shares of the capital stock of the Company or any of the Subsidiaries or
P.C.s, except as otherwise disclosed in the Registration Statement and the
Prospectus;
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(xxxi) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters pursuant to
this Agreement shall be deemed to be a representation and warranty by the
Company to the Underwriters as to the matters covered thereby;
(xxxii) Each officer and director of the Company, each Selling
Shareholder and the holders of certain convertible debentures of the
Company, which debentures will be converted into Common Stock effective
upon the consummation of the offering of the Securities, has agreed in
writing (the "Lock-up Agreements") that such person will not, for a period
of 180 days from the date that the Registration Statement is declared
effective by the Commission (the "Lock-up Period"), offer to sell, contract
to sell, or otherwise sell, dispose of, loan, pledge or grant any rights
with respect to (collectively, a "Disposition") any shares of Common Stock,
any options or warrants to purchase any shares of Common Stock or any
securities convertible into or exchangeable for shares of Common Stock
(collectively, "Locked-up Securities") now owned or hereafter acquired
directly by such person or with respect to which such person has or
hereafter acquires the power of disposition, otherwise than (a) as a bona
fide gift or gifts, provided the donee or donees thereof agree in writing
to be bound by this restriction, (b) if such person is an individual, to a
member or members of his or her immediate family or to a trust the
beneficiaries of which are exclusively the person and/or a member or
members of his or her immediate family, provided that the transferees
thereof agree in writing to be bound by the terms of this restriction, (c)
with the prior written consent of Wheat, First Securities, Inc., or (d) in
the case of Xxxxx Xxxxxx approximately 77,025 shares of Common Stock owned
by him are not covered by his Lock-up Agreement; the foregoing restriction
has been expressly agreed to preclude the holder of the Locked-up
Securities from engaging in any hedging or other transaction which is
designed to or reasonably expected to lead to or result in a Disposition of
Locked-up Securities during the Lock-up Period, even if such Locked-up
Securities would be disposed of by someone other than such holder; such
prohibited hedging or other transactions would include, without limitation,
any short sale (whether or not against the box) or any purchase, sale or
grant of any right (including, without limitation, any put or call option)
with respect to any Locked-up Securities or with respect to any security
(other than a broad-based market basket or index) that includes, relates to
or derives any significant part of its value from Locked-up Securities;
such person has agreed and consented to the entry of stop transfer
instructions with the Company's transfer agent against the transfer of the
Locked-up Securities held by such person except in compliance with this
restriction; the Company has provided to counsel for the Underwriters a
complete and accurate list of all securityholders of the Company and the
number and type of securities held by each securityholder; and the Company
has provided to counsel for the Underwriters true, accurate and complete
copies of all of the Lock-up Agreements presently in effect or effected
hereby; and
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(xxxiii) Neither the Company nor any of the Subsidiaries employ or
supervises any of the dentists or dental hygienists who provide dental care
to patients through P.C.s.
(b) Each of the Selling Shareholders, severally and not jointly,
represents and warrants to, and agrees with, the Underwriters and the Company,
solely with respect to such Selling Shareholder, that:
(i) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
transactions contemplated by this Agreement, the Custody Agreement signed
by or on behalf of such Selling Shareholder and American Securities
Transfer & Trust, Inc., as Custodian, relating to the deposit of the Shares
to be sold by such Selling Shareholder (the "Custody Agreement") or the
Power of Attorney of such Selling Shareholder appointing certain
individuals as such Selling Shareholder's attorneys-in-fact (the
"Attorneys") to the extent set forth therein, relating to the transactions
contemplated hereby and by the Registration Statement and the Custody
Agreement (the "Power of Attorney") in connection with the execution and
delivery by or on behalf of such Selling Shareholder of this Agreement, the
Custody Agreement and the Power of Attorney and for the sale and delivery
of the Securities to be sold by such Selling Shareholder hereunder, except
such as may be required under the Act or state securities or Blue Sky laws
in connection with the purchase and distribution of the Securities by the
Underwriters and the clearance of such offering with the NASD; and such
Selling Shareholder has full right, power and authority to enter into this
Agreement, the Custody Agreement and the Power of Attorney and to sell,
assign, transfer and deliver the Securities to be sold by such Selling
Shareholder hereunder;
(ii) The sale of the Securities to be sold by such Selling
Shareholder hereunder and the performance of this Agreement and the
consummation by such Selling Shareholder of the transactions herein
contemplated will not conflict with or result in a breach or violation of
any terms or provisions of, or constitute a default under, any statute,
indenture, mortgage, deed of trust, voting trust agreement, shareholders'
agreement, loan agreement, guarantee or other agreement or instrument to
which such Selling Shareholder is a party or by which such Selling
Shareholder is subject, or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over such Selling
Shareholder or the property of such Selling Shareholders;
(iii) Such Selling Shareholder does not have, or has waived prior to
the date hereof, any preemptive right, co-sale right or right of first
refusal or other similar right to purchase any of the Shares that are to be
sold by the Company or any of the other Selling Shareholders to the
Underwriters pursuant to this Agreement; such Selling Shareholder does not
have, or has waived prior to the date hereof, any registration right or
other similar right to participate in the offering made by the Prospectus,
other than such rights of participation as have been satisfied by the
participation of such Selling
-11-
Shareholder in the transactions to which this Agreement relates in
accordance with the terms of this Agreement; such Selling Shareholder does
not own any warrants, options or similar rights to acquire, and does not
have any right or arrangement to acquire, any capital stock, rights,
warrants, options or other securities from the Company, other than those
described in the Registration Statement and the Prospectus; and such
Selling Shareholder is not party to any outstanding option, warrant, right
or other arrangement or arrangements requiring the Selling Shareholder at
any time to transfer any shares to be sold under this Agreement by the
Selling Shareholder, other than those described in the Registration
Statement and the Prospectus;
(iv) At such Delivery Date (as hereinafter defined) such Selling
Shareholder will have good and valid title to the Securities to be sold by
such Selling Shareholder hereunder, free and clear of all liens,
encumbrances, restrictions on transfer, community property rights, equities
or claims (other than those imposed by the Act or under this Agreement);
and, upon delivery of such Securities and payment therefor pursuant hereto,
good and valid title to all of such Securities, free and clear of all
liens, encumbrances, restrictions on transfer, community property rights,
equities or claims, will be transferred to the Underwriters;
(v) Each Selling Shareholder will not, for the Lock-up Period effect
a Disposition of any Locked-up Securities now owned or hereafter acquired
directly by such person or with respect to which such person has or
hereafter acquires the power of disposition, otherwise than (a) as a bona
fide gift or gifts, provided the donee or donees thereof agree in writing
to be bound by this restriction, (b) if such person is an individual, to a
member or members of his or her immediate family or to a trust the
beneficiaries of which are exclusively the person and/or a member or
members of his or her immediate family, provided that the transferees
thereof agree in writing to be bound by the terms of this restriction, (c)
with the prior written consent of Wheat, First Securities, Inc., or (d) in
the case of Xxxxx Xxxxxx approximately 77,025 shares of Common Stock owned
by him are not covered by his Lock-up Agreement; the foregoing restriction
has been expressly agreed to preclude the holder of the Locked-up
Securities from engaging in any hedging or other transaction which is
designed to or reasonably expected to lead to or result in a Disposition of
Locked-up Securities during the Lock-up Period, even if such Locked-up
Securities would be disposed of by someone other than such holder; such
prohibited hedging or other transactions would include, without limitation,
any short sale (whether or not against the box) or any purchase, sale or
grant of any right (including, without limitation, any put or call option)
with respect to any Locked-up Securities or with respect to any security
(other than a broad-based market basket or index) that includes, relates to
or derives any significant part of its value from Locked-up Securities;
such person agrees and consents to the entry of stop transfer instructions
with the Company's transfer agent against the transfer of the Locked-up
Securities held by such person except in compliance with this restriction;
the Company has provided to counsel for the Underwriters a complete and
accurate list of all securityholders of the Company and the number and type
of securities held by each securityholder; and the Company has provided to
counsel for
-12-
the Underwriters true, accurate and complete copies of all of the Lock-up
Agreements presently in effect or effected hereby;
(vi) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities;
(vii) All information furnished by or on behalf of such Selling
Shareholder relating to such Selling Shareholder and the Selling
Shareholder Shares for use in connection with the preparation of the
Registration Statement or set forth in the Registration Statement or the
Prospectus is, and at the time the Registration Statement became or
becomes, as the case may be, effective and at all times subsequent thereto
up to and on the Delivery Date was or will be, true, correct and complete,
and does not, and at the time the Registration Statement became or becomes,
as the case may be, effective and at all times subsequent thereto up to and
on the Delivery Date will not, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make such information not misleading; without taking any
action to verify independently the statements made in any Preliminary
Prospectus, the Registration Statement or the Prospectus, and without
assuming responsibility for the accuracy, completeness or fairness of such
statements, the Prospectus and any supplements thereto (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus)
will not contain any untrue statement of a material fact regarding the
Selling Shareholder or omit to state a material fact regarding the Selling
Shareholder required to be stated therein or necessary in order to make the
statements therein regarding the Selling Shareholder, in light of the
circumstances under which they were made, not misleading; and the Selling
Shareholder is not aware of any material misstatement in or omission from
the Registration Statement or the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus) or of any material
adverse information regarding the business or operations of the Company or
its subsidiaries which is not set forth in the Registration Statement and
the Prospectus (or, if the Prospectus is not then in existence, in the most
recent Preliminary Prospectus)
(viii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982, as amended, with respect to the transactions
herein contemplated, such Selling Shareholder agrees to deliver to you
prior to or at the First Delivery Date (as hereinafter defined) a properly
completed and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department regulations
in lieu thereof);
(ix) Such Selling Shareholder specifically agrees that the
Securities are subject to the interests of the Underwriters hereunder; such
Selling Shareholder agrees that its obligations hereunder shall not be
terminated by operation of law, whether by
-13-
death or incapacity, liquidation or dissolution, or by the occurrence of
any other event that is not by the terms of this Agreement a condition to
such Selling Shareholder's obligations hereunder;
(x) This Agreement has been duly executed and delivered by or on
behalf of each Selling Shareholder;
(xi) The Custody Agreement of such Selling Shareholder has been duly
authorized, executed and delivered by or on behalf of such Selling
Shareholder and is a valid and binding agreement of such Selling
Shareholder, enforceable in accordance with its terms and certificates in
negotiable form for all Shares to be sold by such Selling Shareholder under
this Agreement, together with a stock power or powers duly endorsed in
blank by such Selling Shareholder, have been placed in custody with the
Custodian for the purpose of effecting delivery hereunder;
(xii) The Power of Attorney of such Selling Shareholder has been duly
authorized, executed and delivered by such Selling Shareholder and is a
valid and binding instrument of such Selling Shareholder, enforceable in
accordance with its terms, and, pursuant to such Power of Attorney, such
Selling Shareholder has, among other things, authorized the Attorneys, or
any one of them, to execute and deliver on such Selling Shareholder's
behalf this Agreement, the Custody Agreement and any other document that
they, or any one of them, may deem necessary or desirable in connection
with transactions contemplated hereby and thereby and to deliver the Shares
to be sold by such Selling Shareholder pursuant to this Agreement;
(xiii) Such Selling Shareholder does not believe that any of the
representations and warranties of the Company contained in Section 1(a)
hereof are not true and correct in all material respects;
(xiv) Each certificate signed by or on behalf of such Selling
Shareholder and delivered to the Underwriters or counsel for the
Underwriters shall be deemed to be a representation and warranty by such
Selling Shareholder to the Underwriters as to the matters covered thereby;
(xv) Any information furnished to Xxxxxx & Bird LLP, counsel to the
Underwriters, by or on behalf of such Selling Shareholder in order to
obtain the clearance of the Offering with the National Association of
Securities Dealers, Inc. is true, correct and complete; and
(xvi) Such Selling Shareholder will immediately notify the Attorneys-
in-Fact of the occurrence of any event which shall cause the
representations, warranties and agreements herein contained not to be true
and correct and in full force and effect at the effective date of the
Registration Statement or on a Delivery Date as appropriate.
2. PURCHASE AND SALE.
-14-
Subject to the terms and conditions herein set forth, (a) the Company and
each of the Selling Shareholders, severally and not jointly, agree to sell to
the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company and each of the Selling Shareholders, at a
purchase price per share of $_____, the number of Firm Securities to be
purchased by such Underwriter as set forth opposite the name of such Underwriter
in Schedule I hereto and (b) in the event and to the extent that the
Underwriters shall exercise the election to purchase Optional Securities as
provided below, the Company and certain of the Selling Shareholders agree,
severally and not jointly, as set forth in Schedule II hereto, to sell to each
of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company and certain of the Selling Shareholders,
at the purchase price set forth in clause (a) of this Section 2, that portion of
the number of Optional Securities as to which such election shall have been
exercised (to be adjusted by you so as to eliminate fractional securities)
determined by multiplying such number of Optional Securities by a fraction, the
numerator of which is the maximum number of Optional Securities that such
Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto, and the denominator of which is the maximum
number of the Optional Securities that all of the Underwriters are entitled to
purchase.
The Company and certain of the Selling Shareholders, as and to the extent
indicated in Schedule II hereto, hereby grants, severally and not jointly, to
the Underwriters an option to purchase at their election up to _______ Optional
Securities, as more particularly set forth in Schedule II hereto, at the
purchase price per share set forth in the paragraph above, for the sole purpose
of covering over-allotments in the sale of the Firm Securities. Any such
election to purchase Optional Securities shall be made in proportion to the
maximum number of Optional Securities to be sold by the Company and the Selling
Shareholders as set forth in Schedule II hereto. Any such election to purchase
Optional Securities may be exercised no more than once by written notice from
you to the Company and the Selling Shareholders, given within a period of 30
days after the date of this Agreement, setting forth the aggregate amount of
Optional Securities to be purchased and the date on which such Optional
Securities are to be delivered and payment therefor is to be made, as determined
by you but in no event earlier than the First Delivery Date (as defined in
Section 4 hereof) or, unless you otherwise agree in writing, earlier than two or
later than 10 business days after the date of such notice; provided that if such
notice is delivered after noon, Richmond, Virginia time, the date for delivery
of the Optional Securities and payment therefor shall be no earlier than three
business days after the date of such notice.
3. OFFERING BY THE UNDERWRITERS.
Upon the authorization by you of the release of the Firm Securities, the
several Underwriters propose to offer the Firm Securities for sale upon the
terms and conditions set forth in the Prospectus.
-15-
4. DELIVERY AND PAYMENT.
Certificates in definitive form for the Securities to be purchased by each
Underwriter hereunder, and in such denominations and registered in such names as
Wheat, First Securities, Inc. may request upon at least two business days' prior
notice to the Company or any Selling Shareholder, as applicable, shall be
delivered by or on behalf of the Company or such Selling Shareholder, as
applicable, to Wheat, First Securities, Inc., for the account of each
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor. Payment of the purchase price for the Securities shall
be made by wire transfer of immediately available funds to an account designated
by the Company and to an account designated by the Selling Shareholders all at
the offices of Wheat, First Securities, Inc., Riverfront Plaza, 000 Xxxx Xxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxx. The time and date of such delivery and payment shall
be, with respect to the Firm Securities, 10:00 a.m., Richmond, Virginia time, on
______________ or at such other time and date as you and the Company may agree
upon in writing, and, with respect to the Optional Securities, 10:00 a.m.,
Richmond, Virginia time, on the date specified by you in the written notice
given by you (consistent with Section 2 hereof) of the Underwriters' election to
purchase such Optional Securities, or at such other time and date as you, the
Company and the Selling Shareholders may agree upon in writing. Such time and
date for delivery of the Firm Securities is herein called the "First Delivery
Date," such time and date for delivery of the Optional Securities, if not the
First Delivery Date, is herein called the "Second Delivery Date," and each such
time and date for delivery is herein called a "Delivery Date." Such certificates
will be made available for checking and packaging at least 24 hours prior to
each Delivery Date at the offices of Wheat, First Securities, Inc. at the
address set forth above or such other location designated by the Underwriters to
the Company and the Selling Shareholders.
5. AGREEMENTS OF THE COMPANY.
The Company agrees with the Underwriters:
(a) To prepare the Prospectus in a form reasonably approved by you and to
file such Prospectus (or a term sheet as permitted by Rule 434(c)) pursuant to
Rule 424(b) under the Act not later than the Commission's close of business on
the second business day following the execution and delivery of this Agreement
or, if applicable, such earlier time as may be required by Rule 430A(a)(3) under
the Act; to make no amendment or supplement to the Registration Statement or
Prospectus prior to any Delivery Date which shall be reasonably disapproved by
you promptly after reasonable notice thereof; to advise you, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish you with
copies thereof; to advise you, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus, of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, of any request by the Commission for the amending or supplementing of
the Registration Statement or Prospectus or
-16-
for additional information and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending any such qualification, to use
promptly its reasonable best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such actions as you may
reasonably request to qualify the Securities for offering and sale under
the securities laws of such jurisdictions as you may request and to comply
with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete
the distribution of the Securities, provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Registration
Statement and the Prospectus in such quantities as you may from time to
time reasonably request during such period following the date hereof that a
prospectus is required to be delivered in connection with offers or sales
of Securities, and, if the delivery of a prospectus is required during this
period and if at such time any event shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary during
such period to amend or supplement the Prospectus to comply with the Act,
to notify you and upon your request to file such document and to prepare
and furnish without charge to you and to any dealer in securities as many
copies as you may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance;
(d) As soon as practicable, to make generally available to its
shareholders (within the meaning of Rule 158 under the Act) and to deliver
to you, an earnings statement of the Company, conforming with the
requirements of Section 11(a) of the Act and Rule 158 under the Act,
covering a period of at least 12 months beginning after the effective date
of the Registration Statement;
(e) For a period of 180 days from the date of the Prospectus, not
to offer, sell, contract to sell or otherwise dispose of any securities of
the Company without the prior written consent of Wheat, First Securities,
Inc. (other than (i) 1,000,000 shares of Common Stock to be used as
consideration in connection with the acquisition of practices if the
recipients of such shares agree to be bound by the provisions of this
Section 5(e) until 180 days after the date hereof, and (ii) the Securities
to be sold by the Company hereunder or pursuant to employee stock option
plans or pursuant to options, warrants or rights outstanding on the date of
this Agreement or granted hereafter pursuant to the Xxxxxx Dental
Management Services, Inc. 1995 Employee Stock Option Plan or the Xxxxxx
Dental Management Services, Inc. 1995 Stock Option Plan for Managed Dental
Centers so long as such options are not exercisable within 180 days after
the date hereof);
-17-
(f) During a period of five (5) years after the date hereof, to
furnish to you and, upon request, to each of the other several Underwriters
hereunder, (i) copies of all reports or other communications (financial or
other) furnished to shareholders, (ii) as soon as they are available,
copies of any reports and financial statements furnished to or filed with
the Commission, any securities exchange or the NASD, and (iii) such
additional publicly available information concerning the business and
financial condition of the Company, if any, as you may reasonably request;
(g) To apply the net proceeds from the sale of the Securities for
the purposes set forth in the Prospectus; and
(h) To file Form SR in conformity with the requirements of the Act
and the Rules and Regulations.
6. PAYMENT OF EXPENSES.
The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's and the Selling Shareholders'
counsel and accountants in connection with the registration of the Securities
under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
reproducing any Agreement Among Underwriters, this Agreement, the Blue Sky
Survey and any other documents in connection with the offering, purchase, sale
and delivery of the Securities; (iii) all expenses in connection with the
qualification of the Securities for offering and sale under state securities
laws as provided in Section 5(b) hereof, including the fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky Survey, provided that such aggregate expenses, fees
and disbursements shall not exceed $15,000; (iv) the filing fees incident to
securing any required review by the NASD of the terms of the sale of the
Securities; (v) the cost of preparing stock certificates; (vi) the costs or
expenses of any transfer agent or registrar; and (vii) all other costs and
expenses incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section. It is understood, however,
that except as provided in this Section 6, Section 8 and Section 11 hereof, the
Underwriters will pay all their own costs and expenses, including the fees of
their counsel, stock transfer taxes on resale of any of the Securities by them
and any advertising expenses connected with any offers they may make.
7. CONDITIONS TO OBLIGATIONS OF UNDERWRITERS.
The obligations of the Underwriters hereunder, as to the Securities to
be delivered at each Delivery Date, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and each of the Selling Shareholders herein are, at and as of such
Delivery Date, true and correct, the condition that
-18-
the Company and each of the Selling Shareholders shall have performed all of
their respective obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) under the Act within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 5(a) of this Agreement; no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and all requests for additional information on the part of the
Commission shall have been complied with to your reasonable satisfaction;
(b) Xxxxxx & Bird LLP, counsel for the Underwriters, shall have furnished
to you such opinion or opinions, dated such Delivery Date, with respect to
the incorporation of the Company, the validity of the Securities being
issued at such Delivery Date, the Registration Statement, the Prospectus,
and other related matters as you may reasonably request, and such counsel
shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Holland & Xxxx LLP, counsel for the Company, shall have furnished to
you their written opinion, dated such Delivery Date, in form reasonably
satisfactory to you, to the effect set forth in Exhibit A attached hereto.
---------
Such opinion may be furnished subject to such stated assumptions,
limitations and qualifications as shall be reasonably acceptable to Xxxxxx &
Bird LLP, counsel for the Underwriters.
(d) _________________, counsel for the Selling Shareholders, shall have
furnished to you its written opinion, dated such Delivery Date, in form and
substance reasonably satisfactory to you, to the effect set forth in
Exhibit B.
---------
Such opinion may be furnished subject to such stated assumptions,
limitations and qualifications as shall be reasonably acceptable to Xxxxxx &
Bird LLP, counsel for the Underwriters.
(e) At 10:00 a.m., Richmond, Virginia, time, on the date of this Agreement
and the effective date of the most recently filed post-effective amendment
to the Registration Statement and also at each Delivery Date, Xxxxxx
Xxxxxxxx LLP shall have furnished to you a letter or letters, dated the
respective date of delivery thereof, in form and substance reasonably
satisfactory to you, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information
relating to the Company and its Subsidiaries contained in the Registration
Statement and the Prospectus;
(f) (i) Neither the Company nor any of the Subsidiaries or the P.C.s
shall have sustained, since the date of the latest audited financial
statements included in the Prospectus,
-19-
any loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as
set forth or contemplated in the Prospectus, and (ii) since the respective
dates as of which information is given in the Prospectus there shall not
have been any change in the outstanding capital stock (other than the
exercise of stock options or warrants or conversion of debt or other
convertible instruments outstanding as of such date) or long-term debt of
the Company or any of the Subsidiaries or the P.C.s or any change, or any
development involving a prospective change, in or affecting the general
affairs, management, financial position, shareholders' equity or results of
operations of the Company or any of the Subsidiaries or the P.C.s otherwise
than as set forth or contemplated in the Prospectus, the effect of which,
in any such case described in clause (i) or (ii) is in your reasonable
judgment so material and adverse as to make it impracticable or inadvisable
to proceed with the public offering or the delivery of the Securities being
delivered at such Delivery Date on the terms and in the manner contemplated
by the Prospectus;
(g) There shall not have occurred any of the following: (i) a
suspension or material limitation in trading of any of the securities of
the Company on the Nasdaq National Market; (ii) any United States federal
or state statute, regulation, rule or order of any court, legislative body,
agency or other governmental authority shall have been enacted, published,
decreed or promulgated or any proceeding or investigation shall have been
commenced which, in your reasonable judgment, materially and adversely
affects the business or operations of the Company; (iii) the outbreak or
escalation of hostilities involving the United States or the declaration by
the United States of a national emergency or war, if any such event
specified in this clause (iii) would have such a materially adverse effect,
in your reasonable judgment, as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Securities being
delivered at such Delivery Date on the terms and in the manner contemplated
in the Prospectus; or (v) such a material adverse change in general
economic, political, financial or international conditions affecting
financial markets in the United States having a material adverse impact on
trading prices of securities in general, as, in your reasonable judgment,
makes it inadvisable to proceed with the payment for and delivery of the
Securities;
(h) The Company shall have furnished to you copies of Lock-up
Agreements in form and content reasonably satisfactory to you; and
(i) The Company and each of the Selling Shareholders shall have
furnished or caused to be furnished to you at such Delivery Date
certificates of officers of the Company and each of the Selling
Shareholders reasonably satisfactory to you as to the accuracy of the
respective representations and warranties of the Company and each of the
Selling Shareholders herein at and as of such Delivery Date, as to the
performance by the Company and each of the Selling Shareholders of all of
their obligations hereunder to be performed at or prior to such Delivery
Date, as to the matters set forth in subsections (a) and (f) of this
Section and as to such other matters as you may reasonably request.
-20-
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company will indemnify and hold harmless each Underwriter, each of
its officers and directors and affiliates and each person, if any, who controls
such Underwriter within the meaning of Section 15 of the Act or Section 20 of
the Securities and Exchange Act of 1934, as amended (the "Exchange Act"),
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will promptly reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating, preparing to defend or defending, or appearing as a third-
party witness in connection with, any such action or claim; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by the Underwriters through you expressly
for use therein; provided, further, that the foregoing indemnity agreement with
respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased Securities, or any person controlling such Underwriter, if
a copy of the Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Securities to such person, and if the Prospectus (as so amended or supplemented)
would have cured the defect giving rise to such losses, claims, damages or
liabilities.
(b) Subject to subsection (f) of this Section, each of the Selling
Shareholders severally and not jointly will indemnify and hold harmless each
Underwriter, each of its officers and directors and affiliates and each person,
if any, who controls such Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act against any losses, claims, damages or
liabilities, joint or several, to which the Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
promptly reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating, preparing to
defend or defending, or appearing as a third-party witness in connection with,
any such action or claim; provided, however, that a
-21-
Selling Shareholder will only be liable for information furnished in
writing by or on behalf of such Selling Shareholder expressly for use in
any Preliminary Prospectus, the Registration Statement, the Prospectus or
any amendment or supplement thereto; provided, further, that none of the
Selling Shareholders shall be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement or
the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by the
Underwriters through you expressly for use therein; provided, further, that
the foregoing indemnity agreement with respect to any Preliminary
Prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Securities, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to
have been delivered, at or prior to the written confirmation of the sale of
the Securities to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses,
claims, damages or liabilities.
(c) Each Underwriter will indemnify and hold harmless the Company,
each of its directors, each of its officers who signed the Registration
Statement, each Selling Shareholder and each person, if any, who controls
the Company or any Selling Shareholder 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, any Selling Shareholder or any such controlling person of
the Company or such Selling Shareholder may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and
in conformity with written information furnished to the Company by such
Underwriter through you expressly for use therein; and will reimburse the
Company and any Selling Shareholder for any legal or other expenses
reasonably incurred by the Company and the Selling Shareholder in
connection with investigating, preparing to defend or defending, or
appearing as a third-party witness in connection with, any such action or
claim. The Company and each of the Selling Shareholders acknowledge that
the statements set forth in the last paragraph immediately preceding your
names on the cover page, the last paragraph on the inside front cover page
and the first, second, third, seventh and ninth paragraphs under the
heading "Underwriting" in the Preliminary Prospectus and the Prospectus
constitute the only information furnished in writing by or on behalf of the
several Underwriters
-22-
for inclusion in the Preliminary Prospectus or the Prospectus, and you, as
the Representatives, confirm that such statements are correct.
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party; 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 been
advised by counsel that representation of such indemnified party and the
indemnifying party may be inappropriate under applicable standards of
professional conduct due to actual or potential differing interests between
them, the indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party
or parties. It is understood that the indemnifying party shall, in
connection with any such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and
expenses of only one separate firm of attorneys together with appropriate
local counsel at any time for all indemnified parties unless such firm of
attorneys shall have reasonably concluded that one or more indemnified
parties has actual differing interests with other indemnified parties. Upon
receipt of notice from the indemnifying party to such indemnified party of
its election so to appoint counsel to defend such action and approval by
the indemnified party of such counsel, the indemnifying party will not be
liable to such indemnified party under this Section 8 for any legal or
other expenses 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, (ii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of
the action or (iii) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party;
and except that, if clause (i) or (iii) is applicable, such liability shall
be only in respect of the counsel referred to in such clause (i) or (iii).
The indemnifying party shall not be liable for any settlement entered into
without its written consent (which consent will not be unreasonably
withheld).
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) in
such proportion as is appropriate to reflect the
-23-
relative benefits received by the Company and each of the Selling
Shareholders on the one hand and the Underwriters on the other from the
offering of the Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (d)
above, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company and each of the Selling Shareholders on the one hand and the
Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and each of
the Selling Shareholders on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds from
the offering (after deducting the total underwriting discount, but before
deducting expenses) received by the Company and each of the Selling
Shareholders bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or any Selling
Shareholder on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company, each of the
Selling Shareholders and the Underwriters agree that it would not be just
and equitable if contributions pursuant to this subsection (e) were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which
does not take into account the equitable considerations referred to above
in this subsection (e). Except in the event that the indemnified party
failed to give the notice required under subsection (d) above, the amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions or proceedings in respect thereof)
referred to above in this subsection (e) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (e), no Underwriter shall
be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of damages which
such Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations under this subsection (e) are several in proportion to their
respective underwriting obligations and not joint.
(f) The liability of each of the Selling Shareholders under this
Section 8 shall be limited to an amount equal to the initial public
offering price less the underwriting discount of the Securities sold by
such Selling Shareholder to the Underwriters.
-24-
(g) The obligations of the Company and each of the Selling Shareholders
under this Section 8 shall be in addition to any liability which the Company and
such Selling Shareholder may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 8 shall be in addition to any liability which the Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company and to each person, if any, who controls the
Company within the meaning of the Act.
9. DEFAULT OF UNDERWRITERS.
(a) If any Underwriter shall default in its obligation to purchase the
Securities that it has agreed to purchase hereunder at a Delivery Date, you may
in your discretion arrange for you or another party or other parties to purchase
such Securities on the terms contained herein. If within 36 hours after such
default by any Underwriter you do not arrange for the purchase of such
Securities, then the Company and the Selling Shareholders shall be entitled to a
further period of 36 hours within which to procure another party or other
parties satisfactory to you to purchase such Securities on such terms. In the
event that, within the respective prescribed periods, you notify the Company and
the Selling Shareholders that you have so arranged for the purchase of such
Securities, or the Company and the Selling Shareholders notify you that they
have so arranged for the purchase of such Securities, you or the Company and the
Selling Shareholders shall have the right to postpone such Delivery Date for a
period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus, or in
any other documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your
opinion, exercised in consultation with Xxxxxx & Bird LLP, may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and the Company
and the Selling Shareholders as provided in subsection (a) above, the aggregate
number of such Securities that remains unpurchased does not exceed one-eleventh
of the aggregate number of all the Securities to be purchased at such Delivery
Date, then the Company and the Selling Shareholders shall have the right to
require each non-defaulting Underwriter to purchase the number of Securities
that such Underwriter agreed to purchase hereunder at such Delivery Date and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Securities that such Underwriter agreed to
purchase hereunder at such Delivery Date) of the share of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and the Company
and the Selling Shareholders
-25-
as provided in subsection (a) above, the aggregate number of such Securities
that remains unpurchased exceeds one-eleventh of the aggregate number of all the
Securities to be purchased at such Delivery Date, or if the Company and the
Selling Shareholders shall not exercise the right described in subsection (b)
above to require non-defaulting Underwriters to purchase Securities of a
defaulting Underwriter or Underwriters, then this Agreement (or, with respect to
the Second Delivery Date, the obligation of the Underwriters to purchase and of
the Selling Shareholders to sell the Optional Securities) shall thereupon
terminate, without liability on the part of any non-defaulting Underwriters or
the Company and the Selling Shareholders, except for the expenses to be borne by
the Company and the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Section 8 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE.
The respective indemnities, agreements, representations, warranties and
other statements of the Company, each of the Selling Shareholders and the
several Underwriters, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement or any
investigation (or any statement as to the results thereof) made by or on behalf
of the Underwriters or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company or each
of the Selling Shareholders, and shall survive delivery of and payment for the
Securities.
11. TERMINATION AND PAYMENT OF EXPENSES.
If this Agreement shall be terminated pursuant to Section 9 hereof, neither
the Company nor any of the Selling Shareholders shall then be under any
liability to any Underwriter except as provided in Section 6 and Section 8
hereof; but if for any other reason any Securities are not delivered by or on
behalf of the Company or any of the Selling Shareholders as provided herein, the
Company will reimburse the Underwriters through you for all out-of-pocket
expenses, including fees and disbursements of counsel, reasonably incurred by
the Underwriters in making preparations for the purchase, sale and delivery of
the Securities not so delivered, but neither the Company nor any of the Selling
Shareholders shall then be under further liability to any Underwriter except as
provided in Section 6 and Section 8 hereof.
12. NOTICES.
In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you.
All statements, requests, notices and agreements hereunder shall be in
writing or by telegram if promptly confirmed in writing, and if to the
Underwriters shall be sufficient in all respects if delivered or sent by
reliable courier, first-class mail, telex or facsimile transmission
-26-
to Wheat, First Securities, Inc., at Riverfront Plaza, 000 Xxxx Xxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Finance Department (telecopier
number (000) 000-0000); if to any of the Selling Shareholders or the Company
shall be sufficient in all respects if delivered or sent by reliable courier,
first-class mail, telex, or facsimile transmission to the address of the Company
set forth in the Registration Statement, Attention: _____________ (telecopier
number ____________, with a copy (which shall not constitute notice) to Holland
& Xxxx LLP, 000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, Attention:
Xxxxxx X. Xxxxxxx, Esq. (telecopier number (000) 000-0000); provided, however,
that any notice to any Underwriter pursuant to Section 8 hereof shall be
delivered or sent by reliable courier, first-class mail, telex or facsimile
transmission to such Underwriter at its address set forth in the Underwriters'
Questionnaire, which address will be supplied to the Company or the Selling
Shareholders by you upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. SUCCESSORS.
This Agreement shall be binding upon, and inure solely to the benefit of,
the Underwriters, each of the Selling Shareholders and the Company and, to the
extent provided in Sections 8 and 10 hereof, the officers and directors of the
Company and each of the Selling Shareholders and each person who controls the
Company or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Securities from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
14. TIME OF THE ESSENCE.
Time shall be of the essence in this Agreement.
15. BUSINESS DAY.
As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
16. APPLICABLE LAW.
This Agreement shall be construed in accordance with the laws of the State
of New York.
17. CAPTIONS.
The captions included in this Agreement are included solely for convenience
of reference and shall not be deemed to be a part of this Agreement.
-27-
18. COUNTERPARTS.
This Agreement may be executed by any one or more of the parties in any
number of counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same instrument.
-28-
If the foregoing is in accordance with your understanding, please sign and
return to us four counterparts hereof, and upon the acceptance hereof by you,
this letter and such acceptance hereof shall constitute a binding agreement
among each of the Underwriters and the Company. It is understood that your
acceptance of this Agreement on behalf of each of the Underwriters is pursuant
to the authority set forth in a form of Agreement Among Underwriters, the form
of which will be submitted to the Company and each of the Selling Shareholders
for examination, upon request, but without warranty on your part as to the
authority of the signers thereof.
Very truly yours,
XXXXXX DENTAL MANAGEMENT SERVICES, INC.
By:_________________________________________________
Xxxxxxxx X.X. Xxxxxx
Chairman of the Board and Chief Executive Officer
SELLING SHAREHOLDERS
By:_________________________________________________
Attorney-in-Fact for the Selling Shareholders
named in Schedule II hereto
Accepted as of the date hereof
at Richmond, Virginia:
WHEAT, FIRST SECURITIES, INC.
X.X. XXXXXXX & SONS, INC.
Representatives of the Underwriters
By: WHEAT, FIRST SECURITIES, INC.
By: _____________________________
Name:________________________
Title:_______________________
-29-
EXHIBIT A
---------
Opinion of Counsel to the Company
---------------------------------
1. The Company, each of its Subsidiaries and each of the P.C.s have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation, with
corporate power and authority to own or lease their respective properties
and conduct their respective businesses as described in the Prospectus;
2. The Company, each of its Subsidiaries and each of the P.C.s have been duly
qualified as foreign corporations for the transaction of business and are
in good standing under the laws of every other jurisdiction in the United
States in which they own or lease properties, or conduct any business, so
as to require such qualification, except where the failure to so qualify
will not result in a material adverse effect on the consolidated financial
position, shareholders' equity or results of operations of the Company, the
Subsidiaries and the P.C.s taken as a whole (such opinion may be based
solely upon certificates of authority or qualification issued in such
jurisdictions to such effect);
3. The Company has an authorized capitalization as set forth in the Prospectus
under the caption "Capitalization," and all of the outstanding shares of
capital stock of the Company have been duly and validly authorized and
issued, are fully paid and nonassessable and conform to the description of
the capital stock contained in the Prospectus; except as described in the
Prospectus, there are no preemptive or other similar rights to subscribe
for or to purchase any securities of the Company pursuant to the Company's
Articles of Incorporation or Bylaws or Colorado law, and to such counsel's
knowledge, the Company has not granted any preemptive or other similar
rights to subscribe for or to purchase any securities of the Company that
have not been waived; except as described in the Prospectus, there are no
warrants, options or similar rights to purchase any securities of the
Company;
4. The Securities have been duly and validly authorized, and the Securities
being issued as of such Delivery Date, when issued and delivered against
payment therefor in accordance with this Agreement, will be duly and
validly issued, and fully paid and nonassessable and will conform to the
description of the Securities contained in the Prospectus as amended or
supplemented;
5. To such counsel's knowledge, there are no legal or governmental proceedings
pending to which the Company or any of the Subsidiaries or any of the P.C.s
is a party or of which any property of the Company or any of the
Subsidiaries or the P.C.s is the subject, other than as set forth or
contemplated in the Prospectus, that, if determined adversely to the
Company or any of its Subsidiaries or the P.C.s, would individually or in
the aggregate have a material adverse effect on the financial position,
shareholders' equity or results of operations of the Company, the
Subsidiaries and P.C.s taken as a whole, and, to such counsel's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
6. The issue and sale of the Securities being issued at such Delivery Date by
the Company and the performance of this Agreement by the Company and the
consummation by the Company of the other transactions herein contemplated
will not conflict with or result in a breach or violation of any terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement, note, lease or other agreement or instrument
listed on Exhibit A thereto (such list to include only those material
contracts or documents filed as exhibits to the Registration Statement) nor
will such action result in any violation of the provisions of the Charter
or Bylaws of the Company or the articles of incorporation or the bylaws of
any of the Subsidiaries or the P.C.s or of any statute or any order, rule
or regulation known to such counsel of any court or governmental agency or
body having jurisdiction over the Company, any of the Subsidiaries or the
P.C.s or any of their properties; provided, however, that such opinion need
not address state securities or Blue Sky laws or, except to the extent of
matters discussed elsewhere in this opinion, the federal securities laws;
7. No consent, approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is required for
the issue and sale of the Securities by the Company or the consummation by
the Company of the other transactions contemplated by this Agreement,
except such as have been obtained under the Act and such as may be required
under state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters and the clearance of
such offering with the National Association of Securities Dealers, Inc.;
8. The Registration Statement, as of its effective date, and the Prospectus
and any further amendments and supplements thereto made by the Company
prior to such Delivery Date, as of the date thereof, (other than the
financial statements and notes thereto, related schedules and other
statistical and financial information contained therein, as to which such
counsel need not express any opinion) comply as to form in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder. In addition, while such counsel need not check
the accuracy and completeness of, or otherwise verify or pass upon or
assume any responsibility for the accuracy or completeness of, the
statements contained in the Registration Statement, the Prospectus or any
amendment or supplement thereto, such counsel shall state that (a) in the
course of its review and discussion of the contents of the Registration
Statement and the Prospectus with certain directors, officers and employees
of the Company, representatives of the independent public accountants for
the Company, representatives of the Underwriters and representatives of
counsel for the Underwriters, nothing has come to its attention that has
caused it to believe (i) that the Registration Statement, as of its
effective date, any further amendment to the Registration Statement made by
the Company prior to such Delivery Date, as of the date thereof, the
Prospectus, as of the date thereof, and any further amendment or supplement
to the Prospectus made by the Company prior to such Delivery date, as of
the date thereof (in each case other than the financial statements and
notes thereto, related schedules and other statistical and financial
information contained therein, as to which such counsel did not express any
opinion), contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading and (ii) that the Registration
Statement and the Prospectus, as amended and supplemented prior to such
Delivery Date, as of such Delivery Date (other than the financial
statements and notes thereto, related schedules and other statistical and
financial information contained therein, as to which such counsel need not
express any opinion), contains an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, and (b) such counsel does
not know of any legal or governmental proceedings or of any contracts or
other documents of a character required to be described in the Registration
Statement or the Prospectus required to be filed as an exhibit to the
Registration Statement that are not filed or described as required;
9. The descriptions in the Registration Statement and Prospectus under the
captions "Risk Factors - Government Regulation," "Risk Factors - Risks of
Becoming Subject to Licensure," "Risk Factors - Risks Associated with Non-
Competition Covenants and Other Arrangements with Managing Dentists," "Risk
Factors - Shares Eligible for Future Sale; Fluctuations in Market Price,"
"Business - Government Regulation," "Shares Eligible for Future Sale" and
"Item 14. Indemnification of Officers and Directors" of statutes and
contracts and other documents are accurate and fairly present the
information required to be shown;
10. This Agreement has been duly authorized, executed and delivered by the
Company;
11. The Registration Statement has become effective under the Act and, to the
best of the knowledge of such counsel, no stop order suspending the
effectiveness thereof has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under the Act;
12. The Common Stock has been approved for listing on the Nasdaq National
Market;
13. As of the Closing Date, to the best knowledge of such counsel, the business
conducted by the Company (as described in the Prospectus), the Subsidiaries
and the P.C.s and the material contractual relationships between (A) the
Company, any of its Subsidiaries or the P.C.s and the health care payors
with which it contracts and between (B) the Company, any of the
Subsidiaries or the P.C.s and the health care providers with which it
contracts do not violate any federal or state health care laws and
regulations in such jurisdictions in which the Company, any of the
Subsidiaries are doing business that are applicable to such business and
such relationships, including those laws governing insurance risk, risk
allocation, corporate practice of medicine or dentistry, professional
corporations, fee splitting, client confidentiality fraud and abuse and
self-referral except for violations that would not have a material adverse
effect on the Company, the Subsidiaries and the P.C.s taken as a whole;
14. To such counsel's knowledge after due inquiry, the Company, the
Subsidiaries, and the P.C.s possess all certificates, authorizations,
licenses and permits issued by the
appropriate federal, state or foreign regulatory authorities necessary to
conduct their respective businesses, except for the certificates,
authorizations, licenses and permits the failure to so possess would not
singly or in the aggregate have a material adverse effect on the financial
position Shareholders' equity or results of operations of the Company, the
Subsidiaries, and the P.C.s taken as a whole and, to such counsel's best
knowledge neither the Company nor any such Subsidiary or P.C. has received
any notice of proceedings relating to the revocation or modification of any
such certificate, authorization, license or permit which, individually or
in the aggregate, if the subject or an unfavorable decision, ruling or
finding, would result in a material adverse effect, except as described in
or contemplated by the Prospectus;
15. The information in the Prospectus under the caption "Description of Capital
Stock," to the extent that it constitutes matters of law or legal
conclusions, has been reviewed by such counsel and is a fair summary of
such matters and conclusions; and the forms of certificates evidencing the
Common Stock and filed as exhibits to the Registration Statement comply
with Colorado law; and
16. To such counsel's knowledge, except as set forth in the Registration
Statement and Prospectus, no holders of Common Stock or other securities of
the Company have registration rights with respect to securities of the
Company; and neither the filing of the Registration Statement nor the
offering or sale of the Securities as contemplated by this Agreement gives
rise to any rights for or relating to the registration of any securities of
the Company with respect to such filing, offering or sale, other than
rights which have been waived or satisfied or have expired.
EXHIBIT B
---------
Opinion of Counsel to the Selling Shareholders
----------------------------------------------
1. This Agreement has been duly executed and delivered by or on behalf of each
Selling Shareholder;
2. The sale of the Securities to be sold by each Selling Shareholder hereunder
and the performance of this Agreement and the consummation of the
transactions herein contemplated will not conflict with or result in a
breach or violation of any terms or provisions of, or constitute a default
under, any statute or agreement to which such Selling Shareholder is a
party or by which such Selling Shareholder is bound, or any statute, order,
rule or regulation known to such counsel of any court or governmental
agency or body having jurisdiction over such Selling Shareholder or such
Selling Shareholder's property; provided, however, that such opinion need
not address state securities or Blue Sky laws or, to the extent of matters
discussed in paragraph 9 of Exhibit A above, the federal securities laws;
3. No consent, approval, authorization or order of any court or governmental
agency or body is required for the sale of securities by the Selling
Shareholders and the consummation by the Selling Shareholders of the
transactions contemplated by this Agreement, except such as have been
obtained under the Act and such as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of such
Securities by the Underwriters and the clearance of such offering with the
National Association of Securities Dealers, Inc.;
4. Upon delivery of and payment for the Securities to be sold by the Selling
Shareholders as contemplated by the Agreement, each of the Underwriters
that has acquired any of such Securities from the Selling Shareholders in
good faith and without notice of any adverse claim within the meaning of
the Colorado Uniform Commercial Code will acquire such Securities on such
Delivery Date free of any adverse claim;
5. Each Selling Shareholder which is not a natural person has full right,
power and authority to enter into and to perform its obligations under the
Power of Attorney and Custody Agreement to be executed and delivered by it
in connection with the transactions contemplated herein; the Power of
Attorney and Custody Agreement of each Selling Shareholder that is not a
natural person has been duly authorized by such Selling Shareholder; the
Power of Attorney and Custody Agreement of each Selling Shareholder has
been duly executed and delivered by or on behalf of such Selling
Shareholder; and the Power of Attorney and Custody Agreement of each
Selling Shareholder constitutes the valid and binding agreement of such
Selling Shareholder, enforceable in accordance with its terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles;
6. Each of the Selling Shareholders has full right, power and authority to
enter into and to perform its obligations under this Agreement and to sell,
transfer, assign and deliver the Shares to be sold by such Selling
Shareholder hereunder; and
7. This Agreement has been duly authorized by each Selling Shareholder that is
not a natural person and has been duly executed and delivered by or on
behalf of each Selling Shareholder.
SCHEDULE I
Optional Securities
to be Purchased if
Firm Securities Maximum Option
Underwriter to be Purchased Exercised
----------- --------------- -------------------
Wheat, First Securities, Inc...........
X.X. Xxxxxxx & Sons, Inc...............
Total...................
SCHEDULE II
Number of Optional
Total Number of Securities to be
Firm Securities Sold if Maximum
to be Sold Option Exercised
--------------- ------------------
The Company.......................
The Selling Shareholders:
Total............
SCHEDULE III
SUBSIDIARIES OF XXXXXX DENTAL MANAGEMENT SERVICES INC.
------------------------------------------------------
State or Country
NAME OF SUBSIDIARY of Incorporation
------------------ ----------------
SCHEDULE IV
PROFESSIONAL CORPORATIONS
-------------------------
NAME OWNER
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