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EXHIBIT 1.1
ORTHALLIANCE, INC.
___________ SHARES CLASS A COMMON STOCK
FORM OF UNDERWRITING AGREEMENT
July __, 1997
X.X. XXXXXXXX & CO., L.L.C.
XXXXXXXXXXX & CO., INC.
As Representative of the Several Underwriters
c/o X.X. Xxxxxxxx & Co.
X.X. Xxxxxxxx Financial Center
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
OrthAlliance, Inc., a Delaware corporation (the "Company"), proposes
to issue and sell to the underwriters named in Schedule I hereto (the
"Underwriters") for whom you are acting as the representatives (the
"Representatives") ___________ shares (collectively, the "Firm Shares"), of
Class A Common Stock, $.001 par value per share (the "Common Stock"), of the
Company. Such shares of Common Stock are to be sold to the Underwriters,
acting severally and not jointly, in such amounts as are set forth in Schedule
I hereto opposite the name of such Underwriter. The Company proposes to grant
to the Underwriters an option to purchase up to _______ additional shares of
Common Stock as provided for in Section 2 of this Agreement for the purpose of
covering over-allotments (the "Option Shares"). The Firm Shares and the Option
Shares purchased pursuant to this Agreement are herein called the "Shares."
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the Underwriters that:
(a) The Company has filed with the Securities and
Exchange Commission (the "Commission") under the Securities Act of
1933, as amended (the "Securities Act"), a registration statement on
Form S-1 (Registration No. 333-27143), including the related
preliminary prospectus relating to the Shares. Copies of such
registration statement and any amendments, including any
post-effective amendments, and all forms of the related prospectuses
contained therein and any supplements thereto, have been delivered to
you. Such registration statement, including the prospectus, Part II,
all
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financial schedules and exhibits thereto, all information deemed to be
a part of such registration statement pursuant to Rule 430A under the
Securities Act and any related registration statement filed pursuant
to Rule 462(b) under the Securities Act, at the time when they shall
become effective, are herein referred to as the "Registration
Statement," and the prospectus included as part of the Registration
Statement on file with the Commission that discloses all the
information that was omitted from the prospectus on the effective date
pursuant to Rule 430A of the Rules and Regulations (as defined below)
and in the form filed pursuant to Rule 424(b) under the Securities Act
is herein referred to as the "Final Prospectus." The prospectus
included as part of the Registration Statement on the date when the
Registration Statement became effective is referred to herein as the
"Effective Prospectus." Any prospectus included in the Registration
Statement and in any amendment thereto prior to the effective date of
the Registration Statement is referred to herein as a "Preliminary
Prospectus." For purposes of this Agreement, "Rules and Regulations"
mean the rules and regulations promulgated by the Commission under
either the Securities Act or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as applicable.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus, and each Preliminary
Prospectus, at the time of filing thereof, complied with the
requirements of the Securities Act and the Rules and Regulations, and
did not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; except that the foregoing does
not apply to statements or omissions made in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter specifically for use therein (it being understood that the
only information so provided is the information included in the last
paragraph on the cover page and in the first and third paragraphs
under the caption "Underwriting" in the Preliminary, Effective and
Final Prospectus). When the Registration Statement becomes effective
and at all times subsequent thereto up to and including the First
Closing Date (as hereinafter defined), (i) the Registration Statement,
the Effective Prospectus and Final Prospectus and any amendments or
supplements thereto will contain all statements which are required to
be stated therein in accordance with the Securities Act and the Rules
and Regulations and will comply with the requirements of the
Securities Act and the Rules and Regulations, and (ii) neither the
Registration Statement, the Effective Prospectus nor the Final
Prospectus nor any amendment or supplement thereto will include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they are made, not
misleading; except that the foregoing does not apply to statements or
omissions made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter specifically
for use therein (it being understood that the only information so
provided is the information included in the last paragraph on the
cover page and in the first and third paragraphs under the caption
"Underwriting" in the Final Prospectus).
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(c) The Company, each subsidiary of the Company (as used
herein, the term "subsidiary" includes any corporation, joint venture
or partnership in which the Company or any subsidiary of the Company
has a direct or indirect ownership interest) and each Founding
Practice (as defined herein and as listed on Schedule II hereto) is
duly organized and validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization with
full power and authority to own its properties and conduct its
business as now conducted and is duly qualified or authorized to do
business and is in good standing in all jurisdictions wherein the
nature of its business or the character of property owned or leased
may require it to be authorized or qualified to do business. The
Company, each subsidiary and each Founding Practice holds all
licenses, consents and approvals, and has satisfied all eligibility
and other similar requirements imposed by federal, state and local
regulatory bodies, administrative agencies or other governmental
bodies, agencies or officials, in each case as required for the
conduct of the business in which it is engaged and is contemplated to
be engaged as set forth in the Effective Prospectus and the Final
Prospectus.
(d) The capitalization of the Company as of March 31,
1997 is as set forth under the caption "Capitalization" in the
Effective Prospectus and the Final Prospectus, and the Company's
capital stock conforms to the description thereof contained under the
caption "Description of Capital Stock" in the Effective Prospectus and
the Final Prospectus. All the issued shares of capital stock of the
Company, including Common Stock and Class B Common Stock, par value
$.001 per share ("Class B Common Stock"), have been duly authorized
and validly issued, are fully paid and nonassessable. None of the
issued shares of capital stock of the Company have been issued in
violation of any preemptive or similar rights. The Shares to be sold
by the Company hereunder have been duly and validly authorized and,
upon issuance and delivery and payment therefor in the manner herein
described, will be validly issued, fully paid and nonassessable.
Except as set forth in the Effective Prospectus and the Final
Prospectus, (i) the Company does not have outstanding any options to
purchase, or any rights or warrants to subscribe for, or any
securities or obligations convertible into, or any contracts or
commitments to issue or sell, any shares of capital stock and (ii)
there are no preemptive rights or other rights to subscribe for or to
purchase, or any restriction upon the transfer of, any shares of
capital stock pursuant to the Company's certificate of incorporation,
bylaws or any agreement or other instrument to which the Company is a
party or by which it may be bound. Neither the filing of the
Registration Statement nor the offer or sale of the Shares as
contemplated by this Agreement gives rise to any rights, other than
those which have been waived or satisfied, for or relating to the
registration of any shares of Common Stock or any other securities of
the Company. The Underwriters will receive good and marketable title
to the Shares to be issued and delivered hereunder, free and clear of
all liens, encumbrances, claims, security interests, restrictions,
shareholders' agreements and voting trusts whatsoever.
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(e) The form of stock certificate to be used to evidence
the Common Stock and the Class B Common Stock will be in due and
proper form and will comply with all applicable legal requirements.
(f) All offers and sales by the Company of the Company's
securities prior to the date hereof, including the offer and sale of
the shares of a Common Stock in connection with the Acquisitions and
(b) Common Stock and Class B Common Stock in connection with the
Merger (as defined in the Effective Prospectus) were at all relevant
times duly registered or the subject of an available exemption from
the registration requirements of the Securities Act, and were duly
registered or the subject of an available exemption from the
registration requirements of the applicable state securities or Blue
Sky laws, and any private placement memoranda delivered in connection
with offers and sales of the Company's Securities prior to the date
hereof did not include any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein not misleading.
(g) At the Closing Date, each of the agreements to which
the Company or its predecessor corporations, US Orthodontic Care, Inc.
and Premier Orthodontic Group, Inc. (collectively, the "Predecessor
Corporations"), are parties in connection with the acquisition of
certain assets or capital stock of 58 separate orthodontic practices
(collectively, the "Founding Practices") or to which the Founding
Practices are parties, including Management Agreements, Purchase and
Sale Agreements, Agreements and Plans of Reorganization, Purchase and
Sale of Stock Agreements, and Employment Agreements with Allied
Orthodontists and the Agreement and Plan of Merger between the Company
and the Predecessor Corporations (each as such may be defined in the
Effective Prospectus), and the employment agreements with each of
Messrs. Westover, Hethcox, Xxxxxxx and Xxxxxx (collectively, the
"Employment Agreements") will have been duly and validly authorized,
executed and delivered by the Company and each of the other parties
thereto and will be valid and binding agreements of the Company and
each of the other parties thereto enforceable in accordance with their
respective terms. Each of the Company, the Predecessor Corporations
and the Founding Practices has the power and authority to enter into
the Operative Documents (as defined below). At the Closing Date, the
agreements pursuant to which certain persons have agreed not to sell
their Common Stock for a specified period of time (the "Lockup
Agreements") will have been duly and validly authorized, executed and
delivered by the parties thereto and will be valid and binding
agreements, enforceable in accordance with their terms. The
Management Agreements, Purchase and Sale Agreements, Agreements and
Plans of Reorganization, Purchase and Sale of Stock Agreements,
Employment Agreements with Allied Orthodontists, the Agreement and
Plan of Merger between the Company and the Predecessor Corporations,
the Employment Agreements and the Lockup Agreements are sometimes
hereinafter called the "Operative Documents." The execution, delivery
and performance of the Operative Documents and the consummation of the
transactions contemplated therein and compliance by the Company and
the Founding Practices with their respective obligations thereunder
have been duly authorized by all necessary action and will not
contravene any provision of applicable law or the certificate of
incorporation or by-laws or other organizational instrument (as
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applicable) of the Company or any Founding Practice or any agreement
or other instrument binding upon any of them, or any judgment, order
or decree of any governmental body, agency or court having
jurisdiction over them, and no consent, approval, authorization or
order of or qualification with any governmental body or agency is
required for the performance by any of them of their obligations under
the Operative Documents, except such as may be required by the federal
securities laws or the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Shares.
(h) The Company has full legal right, power and authority
to enter into this Agreement and to sell and deliver the Shares to be
sold by it to the several Underwriters as provided herein, and this
Agreement has been duly authorized, executed and delivered by the
Company and constitutes a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms. No
consent, approval, authorization or order of any court or governmental
agency or body or third party is required for the performance of this
Agreement by the Company, any subsidiary or any of the Founding
Practices or the consummation by the Company, any subsidiary or any of
the Founding Practices of the transactions contemplated hereby, except
such as have been obtained and such as may be required by the National
Association of Securities Dealers, Inc. ("NASD") or under the
Securities Act or state securities or Blue Sky laws in connection with
the purchase and distribution of the Shares by the several
Underwriters. The issue and sale of the Shares by the Company, the
Company's performance of this Agreement and the consummation of the
transactions contemplated hereby and by the Operative Documents will
not result in a breach or violation of, or conflict with, any of the
terms and provisions of, or constitute a default by the Company, any
subsidiary or any of the Founding Practices under, any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which the Company, any subsidiary or any of the Founding
Practices is a party or to which the Company, any subsidiary or any
of the Founding Practices or any of their respective properties is
subject, the certificate of incorporation, bylaws or other governing
instruments of the Company, any subsidiary or any of the Founding
Practices or any statute or any judgment, decree, order, rule or
regulation of any court or governmental agency or body applicable to
the Company, any subsidiary or any of the Founding Practices or any of
their respective properties. Neither the Company, any subsidiary, nor
any of the Founding Practices is in violation of its certificate of
incorporation, bylaws or other governing instruments or any law,
administrative rule or regulation or arbitrators' or administrative or
court decree, judgment or order or in violation or default (there
being no existing state of facts which with notice or lapse of time or
both would constitute a default) in the performance or observance of
any material obligation, agreement, covenant or condition contained in
any contract, indenture, deed of trust, mortgage, loan agreement,
note, lease, agreement or other instrument or permit to which it is a
party or by which it or any of its properties is or may be bound.
(i) The historical and pro forma financial statements,
together with the related schedules and notes, of the Company and the
Founding Practices (together, the
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"Combined Companies"), included in the Registration Statement, the
Effective Prospectus and the Final Prospectus, conform to the
requirements of the Securities Act and the Rules and Regulations.
Such historical financial statements fairly present the financial
position of the Combined Companies at the respective dates indicated
in accordance with generally accepted accounting principles applied on
a consistent basis for the periods indicated. Such pro forma
financial statements have been prepared on a basis consistent with
such historical statements, except for the pro forma adjustments
specified therein, and give effect to assumptions made on a reasonable
basis and present fairly the transactions reflected thereby as
indicated in the Prospectus. The financial and statistical data set
forth in the Effective Prospectus and the Final Prospectus fairly
present the information set forth therein on the basis stated in the
Effective Prospectus and the Final Prospectus. Xxxxxx Xxxxxxxx LLP,
whose reports are included in the Effective Prospectus and the Final
Prospectus, are independent accountants as required by the Securities
Act and the Rules and Regulations.
(j) Subsequent to Xxxxx 00, 0000, xxxx of the Company,
any subsidiary or any Founding Practice has sustained any material
loss or interference with its business or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, which is not disclosed in the Effective Prospectus
and the Final Prospectus; and subsequent to the respective dates as of
which information is given in the Registration Statement, the
Effective Prospectus and the Final Prospectus, (i) neither the
Company, any subsidiary, nor any Founding Practice has incurred any
material liabilities or obligations, direct or contingent, or entered
into any transactions not in the ordinary course of business, and (ii)
there has not been any issuance of options, warrants or rights to
purchase interests or the capital stock of the Company, or any adverse
change, or any development involving a prospective adverse change, in
the general affairs, management, business, prospects, financial
position, net worth or results of operations of the Company or any
Founding Practice, except in each case as described in the Effective
Prospectus and the Final Prospectus.
(k) Except as described in the Effective Prospectus and
the Final Prospectus, there is not pending, or to the knowledge of the
Company threatened, any legal or governmental action, suit,
proceeding, inquiry or investigation, to which the Company, any of its
subsidiaries, any Founding Practice or any of their respective
officers or directors is a party, or to which their respective
property is subject, before or brought by any court or governmental
agency or body, wherein an unfavorable decision, ruling or finding
could prevent or materially hinder the consummation of this Agreement
or the Operative Documents or result in a material adverse change in
the business condition (financial or other), prospects, financial
position, net worth or results of operations of the Company, any of
its subsidiaries or any Founding Practice.
(l) __________ shares of Common Stock, including the
Shares, have been approved for listing on the Nasdaq Stock Market's
National Market ("Nasdaq"), subject to official notice of issuance.
The Company has filed a registration statement pursuant to Section
12(g) of the Exchange Act to register the Common Stock.
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(m) Neither the Company nor any of its directors,
officers or controlling persons, has taken or will take, directly or
indirectly, any action resulting in a violation of Regulation M under
the Exchange Act, or designed to cause or result under the Exchange
Act or otherwise in, or which has constituted or which reasonably
might be expected to constitute, the stabilization or manipulation of
the price of any securities of the Company or facilitation of the sale
or resale of the Shares.
(n) There are no contracts or other documents required by
the Securities Act or by the Rules and Regulations to be described in
the Registration Statement, the Effective Prospectus or the Final
Prospectus or to be filed as exhibits to the Registration Statement
which have not been described or filed as required. All such
contracts to which the Company or any of its subsidiaries is a party
have been duly authorized, executed and delivered by the Company or
such subsidiary, constitute valid and binding agreements of the
Company or such subsidiary and are enforceable against the Company or
such subsidiary in accordance with the terms thereof. The Company or
such subsidiary has performed all obligations required to be performed
by it, and is neither in default nor has it received notice of any
default or dispute under, any such contract or other material
instrument to which it is a party or by which its property is bound or
affected. To the best knowledge of the Company, no other party under
any such contract or other material instrument to which it or any of
its subsidiaries is a party is in default in any material respect
thereunder.
(o) Except as described in the Effective Prospectus and
the Final Prospectus or such are not material to the business,
prospectus, properties, operations, conditions (financial or
otherwise) or results of operations of the Company, any subsidiary or
a Founding Practice, the Company, each of its subsidiaries and each
Founding Practice has good and marketable title to all real and
material personal property owned by it, free and clear of all liens,
charges, encumbrances or defects, except those reflected in the
financial statements hereinabove described. The real and personal
property and buildings referred to in the Effective Prospectus and the
Final Prospectus which are leased from others by the Company, its
subsidiaries or any Founding Practice are held under valid, subsisting
enforceable leases. The Company, its subsidiaries or any Founding
Practice owns or leases all such properties as are necessary to their
respective operations as now conducted.
(p) The Company's system of internal accounting controls
is sufficient to meet the broad objectives of internal accounting
controls insofar as those objectives pertain to the prevention or
detection of errors or irregularities in amounts that would be
material in relation to the Company's financial statements.
(q) The Company, each of its subsidiaries and each
Founding Practice has filed all foreign, federal, state and local
income and franchise tax returns required to be filed through the date
hereof and has paid all taxes shown as due therefrom to the extent
such taxes have become due and are not being contested in good faith;
and there is no tax deficiency that has been, nor does the Company
have knowledge of any tax deficiency which is likely to be, asserted
against the Company, any of its
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subsidiaries or any Founding Practice, which if determined adversely
could materially and adversely affect the earnings, assets, affairs,
business prospects or condition (financial or other) of the Company,
any of its subsidiaries or any Founding Practice.
(r) The Company, each of its subsidiaries, and each
Founding Practice operates its business in conformity with all
applicable statutes, common laws, ordinances, decrees, orders, rules
and regulations of governmental bodies including, without limitation,
those relating to the practice of orthodontics, the ownership of the
assets of an orthodontic practice, the employment of orthodontists or
other personnel, the content of advertising, the making of payments in
consideration for referrals of patients, limitations on tasks that may
be delegated by an orthodontist to other staff members, the business
of insurance and reimbursement by governmental agencies. The Company
is not aware of any existing or imminent matter which may materially
adversely impact its, any of its subsidiaries' or any of the Founding
Practices' operations or business prospects other than as specifically
disclosed in the Effective Prospectus and the Final Prospectus. Each
of the (i) orthodontists and (ii) other professionals involved in
providing orthodontic care to patients (each, an "Orthodontic
Professional") who is employed by or affiliated with a Founding
Practice has such permits under laws and related governmental
regulations (including, as applicable, state and local licenses to
practice orthodontics and federal Drug Enforcement Agency Controlled
Substances Registration Certificates) as are necessary to provide
orthodontic care in such jurisdictions as are contemplated by the
Service Agreement or Consulting Agreement (as defined in the
Registration Statement) to be entered into between the Founding
Practice and the Company on or prior to the Closing Date; each of such
Orthodontic Professionals has fulfilled and performed all of his or
her material obligations with respect to such permits, and no event
has occurred which allows, or after notice or lapse of time (or both)
would allow, revocation or termination thereof or would result in any
other material impairment of the rights of the holder of such permit;
and, except as described in the Effective Prospectus, no such permit
contains any restrictions that are materially burdensome to the holder
thereof or the Founding Practice with which that holder is affiliated
or employed. The Company's and the Founding Practice's business
practices do not violate any foreign, federal or state laws regarding
orthodontist ownership of (or financial relationship with), and
referral to, entities providing orthodontics-related goods or
services, or laws respecting financial interests held by orthodontists
in entities to which they may refer patients for the provision of
orthodontics-related goods or services. None of the Founding
Practices (or any of their respective predecessors) has billed or
accepted payment from any Medicare, Medicaid or CHAMPUS program during
the two years preceding the date of this Agreement.
(s) Neither the Company, any of its subsidiaries, nor any
of the Founding Practices is in violation of any federal, state, local
or foreign law or regulation relating to occupational safety and
health or to the storage, handling or transportation of hazardous or
toxic materials, and the Company, each of its subsidiaries and each
Founding Practice has received all permits, licenses or other
approvals required of it under applicable federal, state and foreign
occupational safety and health and
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environmental laws and regulations to conduct its respective
businesses, and the Company, each of its subsidiaries and each
Founding Practice is in compliance with all terms and conditions of
any such permit, license or approval, except any such violation of law
or regulation, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals which would not result in a material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or prospects of the Company or any of its
subsidiaries.
(t) None of the Company, any of its subsidiaries, nor any
Founding Practice has failed to file with the applicable regulatory
authorities any statements, reports, information or forms required by
all applicable laws, regulations or orders, the failure of which would
result in a material adverse effect upon the Company and its
subsidiaries taken as a whole, or the Founding Practice; all such
filings or submissions were in material compliance with applicable
laws when filed, and no material deficiencies have been asserted by
any regulatory commission, agency or authority with respect to such
filings or submissions. None of the Company, any of its
subsidiaries, nor any Founding Practice has failed to maintain in full
force and effect any licenses, registrations or permits necessary or
proper for the conduct of its business, or received any notification
that any revocation or limitation thereof is threatened or pending,
and there is not to the knowledge of the Company pending any change
under any law, regulation, license or permit which could materially
adversely affect the business, operations, property or business
prospects of the Company. Neither the Company, any of its
subsidiaries, nor any Founding Practice has received any notice of
violation of or been threatened with a charge of violating or is under
investigation with respect to a possible violation of any provision of
any law, regulation or order.
(u) No labor dispute exists or is imminent with any of
the employees of the Company, any of its subsidiaries, nor any
Founding Practice or otherwise which could materially adversely affect
the Company or any of its subsidiaries. The Company is not aware of
any existing or imminent labor disturbance by employees of the
Company, any of its subsidiaries or any Founding Practice which could
be expected to materially adversely affect the condition (financial or
otherwise), results of operations, properties, affairs, management,
business affairs or business prospects of the Company or its
subsidiaries.
(v) The Company, each of its subsidiaries and each
Founding Practice owns all licenses, copyrights, trademarks, service
marks and trade names presently employed by it in connection with the
businesses proposed to be operated by it, and none of the Company, any
of its subsidiaries nor any of the Founding Practices has received any
notice of infringement of or conflict with asserted rights of others
with respect to any of the foregoing which, alone or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, could
result in any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects
of the Company or any of its subsidiaries.
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(w) The Company, each of its subsidiaries and each
Founding Practice is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as
are prudent and customary in the businesses in which it is engaged and
in which it proposes to engage; and none of the Company, any of its
subsidiaries, nor any Founding Practice has any reason to believe that
it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a comparable
cost.
(x) Neither the Company, any of its subsidiaries, any
Founding Practice, nor to the knowledge of the Company, any director,
officer, agent, employee or other person acting on behalf of the
Company or any of its subsidiaries has (i) used, or authorized the use
of, any corporate or other funds for unlawful payments, contributions,
gifts or entertainment, (ii) made unlawful expenditures relating to
political activity to government officials or others, or (iii)
established or maintained any unlawful or unrecorded funds in
violation of any federal, state, local or foreign law or regulation,
including Section 30A of the Exchange Act. Neither the Company nor,
to the knowledge of the Company, any director, officer, agent,
employee or other person acting on behalf of the Company or any of its
subsidiaries has accepted or received any unlawful contributions,
payments, gifts or expenditures.
(y) The Company is not, will not become as a result of
the transactions contemplated hereby, and does not intend to conduct
its business in a manner that would cause it to become, an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940.
(z) Except as disclosed in the Registration Statement and
the Effective Prospectus, there are no business relationships or
related party transactions required to be disclosed therein by Item
404 of Regulation S-K of the Commission.
2. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties,
agreements and covenants herein contained and subject to the terms and
conditions herein set forth, the Company agrees to sell to the several
Underwriters the Firm Shares, and each of the Underwriters, severally
and not jointly, agrees to purchase at a purchase price of $______ per
share, the number of Firm Shares set forth opposite such Underwriter's
name in Schedule I hereto.
(b) The Company hereby grants to the Underwriters an
option to purchase, solely for the purpose of covering over-allotments
in the sale of Firm Shares, all or any portion of the Option Shares at
the purchase price per share set forth above. The option granted
hereby may be exercised as to all or any part of the Option Shares at
any time within 30 days after the date of the Final Prospectus. The
Underwriters shall not be under any obligation to purchase any Option
Shares prior to the exercise of such option. The option granted
hereby may be exercised by the Underwriters by X.X.
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Xxxxxxxx & Xx. ("Xxxxxxxx") giving written notice to the Company
setting forth the number of Option Shares to be purchased and the date
and time for delivery of and payment for such Option Shares and
stating that the Option Shares referred to therein are to be used for
the purpose of covering over-allotments in connection with the
distribution and sale of the Firm Shares. If such notice is given
prior to the First Closing Date (as defined herein), the date set
forth therein for such delivery and payment shall not be earlier than
two full business days thereafter or the First Closing Date, whichever
occurs later. If such notice is given on or after the First Closing
Date, the date set forth therein for such delivery and payment shall
not be earlier than three full business days thereafter. In either
event, the date so set forth shall not be more than four full business
days after the date of such notice. The date and time set forth in
such notice is herein called the "Option Closing Date." Upon exercise
of the option, the Company shall become obligated to sell to the
Underwriters, and, subject to the terms and conditions herein set
forth, the Underwriters shall become obligated to purchase, for the
account of each Underwriter, from the Company, severally and not
jointly, the number of Option Shares specified in such notice. Option
Shares shall be purchased for the accounts of the Underwriters in
proportion to the number of Firm Shares set forth opposite such
Underwriter's name in Schedule I hereto, except that the respective
purchase obligations of each Underwriter shall be adjusted so that no
Underwriter shall be obligated to purchase fractional Option Shares.
(c) Certificates in definitive form for the Firm Shares
which each Underwriter has agreed to purchase hereunder shall be
delivered by or on behalf of the Company to the Underwriters for the
account of such Underwriter against payment by such Underwriter or on
its behalf of the purchase price therefor by wire transfer of
immediately available funds to the order of the Company, at the
offices of Bradford, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000,
or at such other place as may be agreed upon by Bradford and the
Company, at 10:00 A.M., Nashville time, on the third full business day
after this Agreement becomes effective, or, at the election of the
Representatives, on the fourth full business day after this Agreement
becomes effective, if it becomes effective after 4:30 P.M. Eastern
time, or at such other time not later than the seventh full business
day thereafter as the Representatives and the Company may determine,
such time of delivery against payment being herein referred to as the
"First Closing Date." The First Closing Date and the Option Closing
Date are herein individually referred to as the "Closing Date" and
collectively referred to as the "Closing Dates." Certificates in
definitive form for the Option Shares which each Underwriter shall
have agreed to purchase hereunder shall be similarly delivered by or
on behalf of the Company on the Option Closing Date. The certificates
in definitive form for the Shares to be delivered will be in good
delivery form and in such denominations and registered in such names
as Xxxxxxxx xxx request not less than 48 hours prior to the First
Closing Date or the Option Closing Date, as the case may be. Such
certificates will be made available for checking and packaging at a
location in New York, New York as may be designated by Bradford, at
least 24 hours prior to the First Closing Date or the Option Closing
Date, as the case may be. It is understood that Xxxxxxxx xxx (but
shall not be obligated to) make payment on behalf of any Underwriter
or Underwriters for the Shares to be purchased by such
- 11 -
12
Underwriter or Underwriters. No such payment shall relieve such
Underwriter or Underwriters from any of its or their obligations
hereunder.
3. Offering by the Underwriters. After the Registration
Statement becomes effective, the several Underwriters propose to offer for sale
to the public the Firm Shares and any Option Shares which may be sold at the
price and upon the terms set forth in the Final Prospectus.
4. Covenants of the Company. The Company covenants and agrees
with each of the Underwriters that:
(a) The Company shall comply with the provisions of and
make all requisite filings with the Commission pursuant to Rules 424
and 430A of the Rules and Regulations and shall notify the
Representatives promptly (in writing, if requested) of all such
filings. The Company shall notify the Representatives promptly of any
request by the Commission for any amendment of or supplement to the
Registration Statement, the Effective Prospectus or the Final
Prospectus or for additional information; the Company shall prepare
and file with the Commission, promptly upon the Representatives'
request, any amendments of or supplements to the Registration
Statement, the Effective Prospectus or the Final Prospectus which, in
the Representatives' opinion, may be necessary or advisable in
connection with the distribution of the Shares; and the Company shall
not file any amendment of or supplement to the Registration Statement,
the Effective Prospectus or the Final Prospectus which is not approved
by the Representatives after reasonable notice thereof. The Company
shall advise the Representatives promptly of the issuance by the
Commission or any jurisdiction or other regulatory body of any stop
order or other order suspending the effectiveness of the Registration
Statement, suspending or preventing the use of any Preliminary
Prospectus, the Effective Prospectus or the Final Prospectus or
suspending the qualification of the Shares for offering or sale in any
jurisdiction, or of the institution of any proceedings for any such
purpose; and the Company shall use its best efforts to prevent the
issuance of any stop order or other such order and, should a stop
order or other such order be issued, to obtain as soon as possible the
lifting thereof.
(b) The Company will take or cause to be taken all
necessary action and furnish to whomever the Representatives direct
such information as may be reasonably required in qualifying the
Shares for offer and sale under the securities or Blue Sky laws of
such jurisdictions as the Underwriters may designate and will continue
such qualifications in effect for as long as may be reasonably
necessary to complete the distribution of the Shares.
(c) Within the time during which a Final Prospectus
relating to the Shares is required to be delivered under the
Securities Act, the Company shall comply with all requirements imposed
upon it by the Securities Act, as now and hereafter amended, and by
the Rules and Regulations, as from time to time in force, so far as is
necessary to permit the continuance of sales of or dealings in the
Shares as contemplated by the
- 12 -
13
provisions hereof and the Final Prospectus. If during such period any
event occurs as a result of which the Final Prospectus as then amended
or supplemented would include an untrue statement of a material fact
or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances then existing, not
misleading, or if during such period it is necessary to amend the
Registration Statement or supplement the Final Prospectus to comply
with the Securities Act, the Company shall promptly notify the
Representatives and shall amend the Registration Statement or
supplement the Final Prospectus (at the expense of the Company) so as
to correct such statement or omission or effect such compliance.
(d) The Company will furnish without charge to the
Representatives and make available to the Underwriters copies of the
Registration Statement (four of which shall be signed and shall be
accompanied by all exhibits, each Preliminary Prospectus, the
Effective Prospectus and the Final Prospectus, and all amendments and
supplements thereto, including any prospectus or supplement prepared
after the effective date of the Registration Statement, in each case
as soon as available and in such quantities as the Underwriters may
reasonably request.
(e) The Company will (A) deliver to the Representatives
at such office or offices as the Representatives may designate as many
copies of the Preliminary Prospectus and Final Prospectus as the
Representatives may reasonably request, (B) for a period of not more
than nine months after the Registration Statement becomes effective,
send to the Underwriters as many additional copies of the Final
Prospectus and any supplement thereto as the Representatives may
reasonably request, and (C) following nine months after the
Registration Statement becomes effective, send to the Underwriters at
their expense as many additional copies of the Final Prospectus and
any supplement thereto as the representatives may reasonably request.
(f) The Company shall make generally available to its
security holders, in the manner contemplated by Rule 158(b) under the
Securities Act as promptly as practicable and in any event no later
than 45 days after the end of its fiscal quarter in which the first
anniversary of the effective date of the Registration Statement
occurs, an earnings statement satisfying the provisions of Section
11(a) of the Securities Act covering a period of at least 12
consecutive months beginning after the effective date of the
Registration Statement.
(g) The Company will apply the net proceeds from the sale
of the Shares to be sold by it as set forth under the caption "Use of
Proceeds" in the Final Prospectus and will timely file reports on Form
SR with the Commission in accordance with Rule 463 of the Securities
Act or any successor provision.
(h) During a period of five years from the effective date
of the Registration Statement or such longer period as the
Representatives may reasonably request, the Company will furnish to
the Representatives copies of all reports and other communications
(financial or other) furnished by the Company to its shareholders and,
as soon as available, copies of any reports or financial statements
furnished or filed
- 13 -
14
by the Company to or with the Commission or any national securities
exchange on which any class of securities of the Company may be
listed.
(i) The Company will, from time to time, after the
effective date of the Registration Statement file with the Commission
such reports as are required by the Securities Act, the Exchange Act
and the Rules and Regulations, and shall also file with foreign, state
and other governmental securities commissions in jurisdictions where
the Shares have been sold by the Underwriters (as the Representatives
shall have advised the Company in writing) such reports as are
required to be filed by the securities acts and the regulations of
those states.
(j) Except pursuant to this Agreement or with the
Representatives' written consent, for a period of 365 days from the
effective date of the Registration Statement, the Company will not,
and the Company has provided agreements executed by each of its
officers, directors and 5% or greater stockholders and Founding
Practices providing that for a period of 365 days from the effective
date of the Registration Statement, such person will not, offer for
sale, sell (other than the issuance by the Company of shares of Common
Stock pursuant to the exercise of options granted pursuant to existing
employee benefit plans and agreements), grant any options (other than
pursuant to existing employee benefit plans and agreements), rights or
warrants with respect to any shares of Common Stock, securities
convertible into shares of Common Stock or any other capital stock of
the Company, or otherwise dispose of, directly or indirectly, any
shares of Common Stock or such other securities or capital stock.
(k) Neither the Company nor any of its officers,
directors or affiliates will take, directly or indirectly, any action
designed to cause or result in, or which might constitute or be
expected to constitute, stabilization or manipulation of the price of
the Common Stock.
(l) The Company will either conduct its business and
operations as described in the Final Prospectus or, if the Company
makes any material change to its business or operations as so
conducted, promptly disclose such change generally to the Company's
securityholders.
(m) If at any time during the 25 day period after the
Registration Statement is declared effective, any rumor, publication
or event relating to or affecting the Company shall occur as a result
of which, in the Representatives' opinion, the market price for the
Shares has been or is likely to be materially affected (regardless of
whether such rumor, publication or event necessitates a supplement to
or amendment of the Final Prospectus), the Company will, after written
notice from the Representatives advising it as to the effect set forth
above, prepare, consult with the Representatives concerning the
substance of and, subject to the Rules and Regulations, disseminate a
press release or other public statement, reasonably satisfactory to
the Representatives, responding to or commenting on such rumor,
publication or event.
- 14 -
15
(n) The Company will use its best efforts to effect the
listing of the Common Stock, subject to notice of issuance, on the
Nasdaq on or before the effective date of the Registration Statement.
(o) Subject to the terms thereof, the Company will do and
perform its obligations under each of the Operative Documents to which
it is a party to the extent required to consummate the transactions
set forth therein and all things required to be done or performed
prior to the Closing Date pursuant to this Agreement.
5. Expenses. The Company agrees with the Underwriters that (a)
whether or not the transactions contemplated by this Agreement are consummated
or this Agreement becomes effective or is terminated, the Company will pay all
fees and expenses incident to the performance of the obligations of the Company
hereunder, including, but not limited to, (i) the Commission's registration
fee, (ii) the expenses of printing (or reproduction) and distributing the
Registration Statement (including the financial statements therein and all
amendments and exhibits thereto), each Preliminary Prospectus, the Effective
Prospectus, the Final Prospectus, any amendments or supplements thereto, any
Marketing Materials (as defined herein) and this Agreement and other
underwriting documents, including Underwriter's Questionnaires, Underwriter's
Powers of Attorney, Blue Sky Memoranda, Agreements Among Underwriters and
Selected Dealer Agreements, (iii) fees and expenses of accountants and counsel
for the Company, (iv) expenses of registration or qualification of the Shares
under state Blue Sky and securities laws, including the fees and disbursements
of counsel to the Underwriters in connection therewith, (v) filing fees paid or
incurred by the Underwriters in connection with filings with the NASD, (vi)
expenses of listing the outstanding Common Stock on the Nasdaq, (vii) all
travel, lodging and reasonable living expenses incurred by the Company in
connection with marketing, dealer and other meetings attended by the Company
and the Underwriters in marketing the Shares, (viii) the costs and charges of
the Company's transfer agent and registrar and the cost of preparing the
certificates for the Shares, and (ix) all other costs and expenses incident to
the performance of its obligations hereunder not otherwise provided for in this
Section; and (b) all out-of-pocket expenses, including counsel fees,
disbursements and expenses, incurred by the Underwriters in connection with
investigating, preparing to market and marketing the Shares and proposing to
purchase and purchasing the Shares under this Agreement, will be borne and paid
by the Company if the sale of the Shares provided for herein is not consummated
(i) by reason of the termination of this Agreement by the Company pursuant to
Section 12(a)(i), or (ii) by reason of the termination of this Agreement by the
Representatives pursuant to Section 12(b)(ii), (iii), (iv) or (v) of this
Agreement.
6. Conditions of the Underwriters' Obligations. The respective
obligations of the Underwriters to purchase and pay for the Firm Shares shall
be subject to the accuracy of the representations and warranties of the Company
herein as of the date hereof and as of the Closing Date as if made on and as of
the Closing Date, to the accuracy of the statements of the Company's officers
made pursuant to the provisions hereof, to the performance by the Company of
all of their respective covenants and agreements hereunder and to the following
additional conditions:
- 15 -
16
(a) The Registration Statement and all post-effective
amendments thereto shall have become effective not later than 5:30
P.M., Washington, D.C. time, on the day following the date of this
Agreement, or such later time and date as shall have been consented to
by the Representatives and all filings required by Rule 424 and Rule
430A of the Rules and Regulations shall have been made; no stop order
suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been
instituted or threatened or, to the knowledge of the Company or the
Underwriters, shall be contemplated by the Commission; any request of
the Commission for additional information (to be included in the
Registration Statement or the Final Prospectus or otherwise) shall
have been complied with to the Representatives' satisfaction; and the
NASD, upon review of the terms of the public offering of the Shares,
shall not have objected to such offering, such terms or the
Underwriters' participation in the same.
(b) No Representative shall have advised the Company that
the Registration Statement, Preliminary Prospectus, the Effective
Prospectus or Final Prospectus, or any amendment or any supplement
thereto, contains an untrue statement of fact which, in the
Representatives' reasonable judgment, is material, or omits to state a
fact which, in the Representatives' reasonable judgment, is material
and is required to be stated therein or necessary to make the
statements therein not misleading and the Company shall not have cured
such unsure statement of fact or stated a statement of fact required
to be stated therein.
(c) The Representatives shall have received an opinion,
dated the Closing Date, from Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx,
L.L.P., counsel for the Company, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation under the laws of the State
of Delaware, with corporate power and authority to own its
properties and conduct its business as now conducted, and is
duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions where the failure to so
qualify would have a material adverse effect upon the Company
or any of its subsidiaries. The Company holds all licenses,
certificates, permits, franchises and authorizations from
governmental authorities necessary for the conduct of its
business.
(ii) Each of the Company's subsidiaries is validly
existing and in good standing under the laws of the state or
jurisdiction of its incorporation or organization, as the case
may be, with power and authority to own its properties and
conduct its business as now conducted, and is duly qualified
or authorized to do business and is in good standing in all
other jurisdictions where the failure to so qualify would have
a material adverse effect upon the business of the Company and
its subsidiaries. The outstanding stock of each of the
Company's corporate subsidiaries is duly authorized, validly
issued, fully paid and nonassessable. The Company owns all of
the outstanding stock of each of the Company's corporate
subsidiaries, free and clear of all liens,
- 16 -
17
encumbrances, equities and claims. Neither the Company nor any
subsidiary has any interest in any partnership or joint
venture. The Company's subsidiaries do not have outstanding
any options to purchase, or any rights or warrants to
subscribe for, or any securities or obligations convertible
into, or any contracts or commitments to issue or sell any
shares of capital stock or an ownership interest of such
subsidiary and there are no preemptive rights or other rights
to subscribe for or purchase any shares of the capital stock
or any ownership interest of the Company's subsidiaries. Each
of the Company's subsidiaries holds all licenses,
certificates, permits, franchises and authorizations from
governmental authorities necessary for the conduct of its
business.
(iii) As of the dates specified therein, the
Company had authorized and issued capital stock as set forth
under the caption "Capitalization" in the Final Prospectus.
All of the outstanding shares of Common Stock have been duly
authorized and are validly issued, fully paid and
nonassessable, and the Shares to be sold by the Company have
been duly authorized, and upon issuance thereof and payment
therefor as provided herein, will be validly issued, fully
paid and nonassessable; none of the issued shares have been
issued in violation of or subject to any preemptive rights
provided for by law, agreement or the Company's certificate of
incorporation. The Company does not have outstanding any
options to purchase, or any rights or warrants to subscribe
for, or any securities or obligations convertible into, or any
contracts or commitments to issue or sell any shares of
capital stock, and there are no preemptive rights or other
rights to subscribe for or purchase any shares of the capital
stock of the Company, or any restriction upon the transfer of,
the Shares pursuant to the Company's certificate of
incorporation or bylaws or any agreement or other instrument
to which the Company is a party or by which it may be bound,
except as described in the Effective Prospectus and Final
Prospectus. Neither the filing of the Registration Statement
nor the offer or sale of the Shares as contemplated by this
Agreement gives rise to any rights, other than those which
have been waived or satisfied, for or relating to the
registration of any Common Stock or any other securities of
the Company. The Underwriters will receive good and
marketable title to the Shares to be issued and delivered by
the Company pursuant to this Agreement, free and clear of all
liens, encumbrances, claims, security interests, restrictions,
shareholders agreements and voting trusts whatsoever. The
capital stock of the Company and the Shares conform to the
description thereof contained in the Final Prospectus. All
offers and sales of the Company's interests and securities
prior to the date hereof were at all relevant times duly
registered or exempt from the registration requirements of the
Securities Act and were duly registered or the subject of an
exemption from the registration requirements of applicable
state securities or Blue Sky laws.
(iv) The form of stock certificate to be used to
evidence the Common Stock will be in due and proper form and
will comply with all applicable legal requirements under the
Delaware General Corporation Law.
- 17 -
18
(v) No consent, approval, authorization or order
of any court or governmental agency or body or third party is
required for the performance of this Agreement by the Company
or the consummation by the Company of the transactions
contemplated hereby, except such as have been obtained under
the Securities Act and such as may be required by the NASD and
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the several
Underwriters, as to which such counsel need not express an
opinion. The performance of this Agreement by the Company and
the consummation by the Company of the transactions
contemplated hereby will not conflict with or result in a
breach or violation by the Company of any of the terms or
provisions of, or constitute a default by the Company under,
any material indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument known to
such counsel to which the Company is a party or to which the
Company or any of its subsidiaries or their respective
properties is subject, the certificate of incorporation or
bylaws of the Company or any of its subsidiaries, any statute,
or any judgment, decree, order, rule or regulation of any
court or governmental agency or body known to such counsel to
be applicable to the Company or any of its subsidiaries or
their respective properties.
(vi) The Company has full legal right, power and
authority to enter into this Agreement and to issue, sell and
deliver the Shares to be sold by it to the Underwriters as
provided herein, and this Agreement has been duly authorized,
executed and delivered by the Company and constitutes the
valid and legally binding obligation of the Company
enforceable against the Company in accordance with its terms.
(vii) No consent, approval, authorization or order
of any court or governmental agency or body or third party is
required for the performance of the Operative Documents by the
Company or the consummation by the Company of the transactions
contemplated thereby, except such as have been obtained under
the Securities Act and such as may be required and under state
securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the several Underwriters.
The performance of the Operative Documents by the Company and
the consummation by the Company of the transactions
contemplated thereby will not conflict with or result in a
breach or violation by the Company of any of the terms or
provisions of, or constitute a default by the Company under,
any material indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument known to
such counsel to which the Company or any of its subsidiaries
is a party or to which the Company or any of its subsidiaries
or their respective properties is subject, the certificate of
incorporation or bylaws of the Company or any of its
subsidiaries, any statute, or any judgment, decree, order,
rule or regulation of any court or governmental agency or body
known to such counsel to be applicable to the Company or any
of its subsidiaries or their respective properties.
- 18 -
19
(viii) The Company has full legal right, power and
authority to enter into each of the Operative Documents to
which it is a party, and each of the Operative Documents to
which it is a party has been duly authorized, executed and
delivered by the Company and constitutes the valid and legally
binding obligation of the Company enforceable against the
Company in accordance with its terms.
(ix) Except as described in the Final Prospectus,
there is not pending or, to the knowledge of such counsel,
threatened, any action, suit, proceeding, inquiry or
investigation, to which the Company or any of its subsidiaries
is a party, or to which the property of the Company or any of
its subsidiaries is subject, before or brought by any court or
governmental agency or body, which, if determined adversely to
the Company or any of its subsidiaries, could result in any
material adverse change in the business, financial position,
net worth or results of operations, or could materially
adversely affect the properties or assets, of the Company or
any of its subsidiaries.
(x) No default exists, and no event has occurred
which with notice or after the lapse of time to cure or both,
would constitute a default, in the due performance and
observance of any term, covenant or condition of any material
indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument known to such counsel to which
the Company or any of its subsidiaries is a party or to which
their respective properties are subject, or of the certificate
of incorporation or bylaws of the Company.
(xi) Neither the Company nor any of its
subsidiaries is in violation of any law, ordinance,
administrative or governmental rule or regulation applicable
to the Company or any decree of any court or governmental
agency or body having jurisdiction over the Company or any of
its subsidiaries which would have a material adverse effect on
the Company or any of its subsidiaries.
(xii) There are no contracts or documents of the
Company which are required to be filed as exhibits to the
Registration Statement by the Securities Act or by the Rules
and Regulations which have not been so filed.
(xiii) The Company is not an "investment company" or
an entity "controlled" by an "investment company," as such
terms are defined in the Investment Company Act of 1940, as
amended.
(xiv) The Company's conduct of its business
complies in all material respects with the laws and
governmental regulations relating to the corporate practice of
orthodontics in each jurisdiction in which it conducts its
business (except where the failure to comply would not have a
material adverse effect on the business, prospects,
properties, operations, condition (financial or otherwise) or
results of operation of the Company and its subsidiaries,
taken as a whole.
- 19 -
20
(xv) The Registration Statement and all
post-effective amendments thereto have become effective under
the Securities Act, and, to the knowledge of such counsel, no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been instituted or are threatened, pending or
contemplated by the Commission. All filings required by Rule
424 and Rule 430A of the Rules and Regulations have been made;
the Registration Statement, the Effective Prospectus and Final
Prospectus, and any amendments or supplements thereto, as of
their respective effective or issue dates, complied as to form
in all material respects with the requirements of the
Securities Act and the Rules and Regulations; the descriptions
in the Registration Statement, the Effective Prospectus and
the Final Prospectus of statutes, regulations, legal and
governmental proceedings, and contracts and other documents
are accurate in all material respects and present fairly in
all material respects the information required to be stated;
and such counsel does not know of any pending or threatened
legal or governmental proceedings, statutes or regulations
required to be described in the Final Prospectus which are not
described as required nor of any contracts or documents of a
character required to be described in the Registration
Statement or the Final Prospectus or to be filed as exhibits
to the Registration Statement which are not described and
filed as required.
In addition to the matters set forth above, such opinion shall also
include a statement to the effect that nothing has come to the attention of
such counsel which leads them to believe that the Registration Statement, the
Effective Prospectus and the Final Prospectus or any amendment or supplement
thereto 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 in light of the circumstances under which they were made
(except that such counsel need express no view as to financial statements,
schedules and other financial or statistical information included therein).
The opinion to be rendered pursuant to this paragraph (c) may be
limited to federal law, and as to foreign and state law matters, to the laws of
the states or jurisdictions in which such counsel is admitted to practice and
the law of the State of Delaware. Such counsel may rely upon opinions of other
counsel in rendering such opinions provided that such counsel shall state that
they believe that both the Representatives and they are justified in relying
upon such opinions and that such counsel is reasonably satisfactory to you.
(d) The Underwriters shall have received an opinion or
opinions, dated the Closing Date, of Bass, Xxxxx & Xxxx PLC, counsel
for the Underwriters, with respect to the Registration Statement and
the Final Prospectus, and such other related matters as the
Underwriters may require, and the Company shall have furnished to such
counsel such documents as they may reasonably request for the purpose
of enabling them to pass upon such matters.
(e) The Representatives shall have received from Xxxxxx
Xxxxxxxx LLP, a letter dated the date hereof and, at the Closing Date,
a second letter dated the Closing
- 20 -
21
Date, in form and substance satisfactory to the Representatives,
stating that they are independent public accountants with respect to
the Company and its subsidiaries within the meaning of the Securities
Act and the applicable Rules and Regulations, and 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 of the Company
contained in the Registration Statement and the Prospectus.
In the event that the letters to be delivered referred to above set
forth any such changes, decreases or increases, it shall be a further condition
to the obligations of the Underwriters that the Underwriters shall have
determined, after discussions with officers of Company responsible for
financial and accounting matters and with Xxxxxx Xxxxxxxx LLP, that such
changes, decreases or increases as are set forth in such letters do not reflect
a material adverse change in the total assets, stockholders' equity or
long-term debt of Company as compared with the amounts shown in the latest
balance sheets of Company included in the Final Prospectus, or a material
adverse change in revenues or net income of Company, in each case as compared
with the corresponding period of the prior year.
(f) There shall have been furnished to the
Representatives a certificate, dated the Closing Date and addressed to
you, signed by the Chief Executive Officer and Chief Financial Officer
of the Company, to the effect that:
(i) the representations and warranties of the
Company in Section 1 of this Agreement are true and correct,
as if made at and as of the Closing Date, and the Company has
complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or
prior to the Closing Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued, and no proceedings
for that purpose have been initiated or are pending, or to
their knowledge, threatened under the Securities Act;
(iii) all filings required by Rule 424 and Rule
430A of the Rules and Regulations have been made;
(iv) they have carefully examined the Registration
Statement, the Effective Prospectus and the Final Prospectus,
and any amendments or supplements thereto, and such documents
do not include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in
light of the circumstances under which they were made; and
(v) since the effective date of the Registration
Statement, there has occurred no event required to be set
forth in an amendment or supplement to
- 21 -
22
the Registration Statement, the Effective Prospectus or the Final
Prospectus which has not been so set forth.
(g) The Acquisitions (as defined in the Prospectus) shall
have been effected in accordance with all the terms and conditions set
forth in the Operative Documents, subject only to the transfer of
funds related thereto.
(h) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Final
Prospectus, and except as stated therein, the Company has not
sustained any material loss or interference with its business or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or any
court or governmental action, order or decree, or become a party to or
the subject of any litigation which is material to the Company, nor
shall there have been any material adverse change, or any development
involving a prospective material adverse change, in the business,
properties, key personnel, capitalization, prospects, net worth,
results of operations or condition (financial or other) of the
Company, which loss, interference, litigation or change, in the
Representatives' reasonable judgment shall render it unadvisable to
commence or continue the offering of the Shares at the offering price
to the public set forth on the cover page of the Prospectus or to
proceed with the delivery of the Shares.
(i) The Shares shall be listed on the Nasdaq.
(j) The Representatives shall have received the Lockup
Agreements.
(k) Local counsel opinions relating to the Acquisitions.
All such opinions, certificates, letters and documents delivered
pursuant to this Agreement will comply with the provisions hereof only if they
are reasonably satisfactory to the Representatives and their counsel. The
Company shall furnish to the Representatives such conformed copies of such
opinions, certificates, letters and documents in such quantities as the
Representatives shall reasonably request.
The respective obligations of the Underwriters to purchase and pay for
the Option Shares shall be subject, in their discretion, to the conditions of
this Section 6, except that all references to the "Closing Date" shall be
deemed to refer to the Option Closing Date, if it shall be a date other than
the Closing Date.
7. Condition of the Company's Obligations. The obligations
hereunder of the Company are subject to the condition set forth in Section 6(a)
hereof.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless
each Underwriter, and each person, if any, who controls any
Underwriter within the meaning of the
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23
Securities Act, against any losses, claims, damages or liabilities to
which such Underwriter or controlling person may become subject under
the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based in whole or in part upon: (i) any inaccuracy in the
representations and warranties of the Company contained herein; (ii)
any failure of the Company to perform its obligations hereunder or
under law; (iii) any untrue statement or alleged untrue statement of
any material fact contained in (A) the Registration Statement, any
Preliminary Prospectus, the Effective Prospectus or Final Prospectus,
or any amendment or supplement thereto, (B) any audio or visual
materials supplied by the Company expressly for use in connection with
the marketing of the Shares, including without limitation, slides,
videos, films and tape recordings (the "Marketing Materials") or (C)
in any Blue Sky application or other written information furnished by
the Company filed in any state or other jurisdiction in order to
qualify any or all of the Shares under the securities laws thereof (a
"Blue Sky Application"); (iv) the omission or alleged omission to
state in the Registration Statement, any Preliminary Prospectus, the
Effective Prospectus or Final Prospectus or any amendment or
supplement thereto, any Marketing Materials or Blue Sky Application a
material fact required to be stated therein or necessary to make the
statements therein not misleading; or (v) any act or failure to act or
any alleged act or failure to act by any Underwriter in connection
with, or relating in any manner to, the Shares or the offering
contemplated hereby, and which is included as part of or referred to
in any loss, claim, damage, liability or action arising out of or
based upon matters covered by clause (i), (ii), (iii), or (iv) above
(provided that the Company shall not be liable under this clause (v)
to the extent that it is determined in a final judgment by a court of
competent jurisdiction that such loss, claim, damage, liability or
action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through its
gross negligence or willful misconduct); and will reimburse each
Underwriter and each such controlling person for any legal or other
expenses reasonably incurred by such Underwriter or such controlling
person in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage, or liability
arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration
Statement, the Preliminary Prospectus, the Effective Prospectus or
Final Prospectus, or any amendment or supplement thereto, or any
Marketing Materials or Blue Sky Application in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter specifically for use therein (it being understood that the
only information so provided is the information included in the last
paragraph on the cover page and in the first and third paragraphs
under the caption "Underwriting" in any Preliminary Prospectus and the
Final Prospectus and the Effective Prospectus).
(b) Each Underwriter will indemnify and hold harmless the
Company, each of its directors, each of the Company's officers who
signed the Registration Statement and each person, if any, who
controls the Company within the meaning of the Securities Act against
any losses, claims, damages or liabilities to which the Company
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24
or any such director, officer or controlling person may become
subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Effective Prospectus or
Final Prospectus, or any amendment or supplement thereto, any
Marketing Materials or any Blue Sky Application, or arise out of or
are based upon the omission or the alleged omission to state in the
Registration Statement, any Preliminary Prospectus, the Effective
Prospectus or Final Prospectus, or any amendment or supplement
thereto, any Marketing Materials or any Blue Sky Application 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 reliance upon
and in conformity with written information furnished to the Company by
any Underwriter specifically for use therein (it being understood that
the only information so provided is the information included in the
last paragraph on the cover page and in the first and third paragraphs
under the caption "Underwriting" in any Preliminary Prospectus and in
the Effective Prospectus and the Final Prospectus).
(c) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action, including
governmental proceedings, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under
this Section 8 notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified
party hereunder unless the indemnifying party has been materially
prejudiced thereby and in any event shall not relieve it from
liability otherwise than under this Section 8. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein, and to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such
indemnified party; and after notice from the indemnifying party to
such indemnified party of its election so to assume the defense
thereof, 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 other than reasonable costs of investigation except
that the indemnified party shall have the right to employ separate
counsel if, in the indemnified party's reasonable judgment, it is
advisable for the indemnified party to be represented by separate
counsel, and in that event the fees and expenses of separate counsel
shall be paid by the indemnifying party.
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement
provided for in the preceding part of this Section 8 is for any reason
held to be unavailable to the Underwriters or the Company or is
insufficient to hold harmless an indemnified party, then the Company
shall contribute to the damages paid by the Underwriters, and the
Underwriters shall contribute to the
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25
damages paid by the Company; provided, however, that no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
amount of such contribution shall (i) be in such proportion as shall
be appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other from the
offering of the Shares and the consummation of the Combination
Transactions or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, be in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company on the one
hand and the Underwriters on the other with respect to the statements
or omissions which resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other with respect to such
offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Shares purchased under this
Agreement (before deducting expenses) received by the Company, in the
case of the Company, and the total underwriting discounts and
commissions received by the Underwriters with respect to the Shares
purchased under this Agreement, in the case of the Underwriters, bear
to the total gross proceeds from the offering of the Shares under this
Agreement, in each case as set forth in the Prospectus. The relative
fault shall be determined by reference to whether the untrue or
alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by
the Company or the Underwriters, the intent of the parties and their
relative knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company and the
Underwriters agree that it would not be equitable if the amount of
such contribution were determined by pro rata or per capita allocation
(even if the Underwriters were treated as one entity for such
purpose). Notwithstanding the foregoing, no Underwriter or person
controlling such Underwriter shall be obligated to make contribution
hereunder which in the aggregate exceeds the underwriting discount
applicable to the Shares purchased by such Underwriter under this
Agreement, less the aggregate amount of any damages which such
Underwriter and its controlling persons have otherwise been required
to pay in respect of the same or any similar claim. The Underwriters'
obligations to contribute hereunder are several in proportion to their
respective obligations and not joint. For purposes of this Section,
each person, if any, who controls an Underwriter within the meaning of
Section 15 of the Securities Act shall have the same rights to
contribution as such Underwriter, and each director of the Company,
each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act, shall have the same rights to
contribution as the Company.
(e) No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any
pending or threatened action, suit or proceeding in respect of which
any indemnified party is a party or is (or would be, if a claim were
to be made against such indemnified party) entitled to indemnity
hereunder, unless such settlement includes an unconditional release of
such indemnified
- 25 -
26
party from all liability on claims that are the subject matter of such
action, suit or proceeding.
9. Default of Underwriters. If any Underwriter defaults in its
obligation to purchase Shares hereunder and if the total number of Shares which
such defaulting Underwriter agreed but failed to purchase is ten percent or
less of the total number of Shares to be sold hereunder, the non-defaulting
Underwriters shall be obligated severally to purchase (in the respective
proportions which the number of Shares set forth opposite the name of each
non-defaulting Underwriter in Schedule I hereto bears to the total number of
Shares set forth opposite the names of all the non-defaulting Underwriters),
the Shares which such defaulting Underwriter or Underwriters agreed but failed
to purchase. If any Underwriter so defaults and the total number of Shares
with respect to which such default or defaults occur is more than ten percent
of the total number of Shares to be sold hereunder, and arrangements
satisfactory to the other Underwriters and the Company for the purchase of such
Shares by other persons (who may include the non-defaulting Underwriters) are
not made within 36 hours after such default, this Agreement, insofar as it
relates to the sale of the Shares, will terminate without liability on the part
of the non-defaulting Underwriters or the Company except for (i) the provisions
of Section 8 hereof, and (ii) the expenses to be paid or reimbursed by the
Company pursuant to Section 5. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 9. Nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company or its
officers and the Underwriters set forth in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement shall remain in full
force and effect, regardless of (a) any investigation made by or on behalf of
the Company, any of its officers or its directors, any Underwriter or any
controlling person, (b) any termination of this Agreement and (c) delivery of
and payment for the Shares.
11. Effective Date. This Agreement shall become effective at
whichever of the following times shall first occur: (i) at 11:30 A.M.,
Washington, D.C. time, on the next full business day following the date on
which the Registration Statement becomes effective or (ii) at such time after
the Registration Statement has become effective as the Representatives shall
release the Firm Shares for sale to the public; provided, however, that the
provisions of Sections 5, 8, 10 and 11 hereof shall at all times be effective.
For purposes of this Section 11, the Firm Shares shall be deemed to have been
so released upon the release by the Representatives for publication, at any
time after the Registration Statement has become effective, of any newspaper
advertisement relating to the Firm Shares or upon the release by the
Representatives of telegrams offering the Firm Shares for sale to securities
dealers, whichever may occur first.
12. Termination.
(a) The Company's obligations under this Agreement may be
terminated by the Company by notice to the Representatives (i) at any
time before it becomes
- 26 -
27
effective in accordance with Section 11 hereof, or (ii) in the event
that the condition set forth in Section 8 shall not have been
satisfied at or prior to the First Closing Date.
(b) This Agreement may be terminated by the
Representatives by notice to the Company (i) at any time before it
becomes effective in accordance with Section 11 hereof; (ii) in the
event that at or prior to the First Closing Date the Company shall
have failed, refused or been unable to perform any agreement on the
part of the Company to be performed hereunder or any other condition
to the obligations of the Underwriters hereunder is not fulfilled;
(iii) if at or prior to the Closing Date trading in securities on
Nasdaq, the American Stock Exchange or the over-the-counter market
shall have been suspended or materially limited or minimum or maximum
prices shall have been established on either of such exchanges or such
market, or a banking moratorium shall have been declared by Federal or
state authorities; (iv) if at or prior to the Closing Date trading in
securities of the Company shall have been suspended; or (v) if there
shall have been such a material adverse change in general economic,
political or financial conditions or if the effect of international
conditions on the financial markets in the United States shall be such
as, in your reasonable judgment, makes it inadvisable to commence or
continue the offering of the Shares at the offering price to the
public set forth on the cover page of the Prospectus or to proceed
with the delivery of the Shares.
(c) Termination of this Agreement pursuant to this
Section 12 shall be without liability of any party to any other party
other than as provided in Sections 5 and 8 hereof.
13. Notices. All communications hereunder shall be in writing
and, if sent to any of the Underwriters, shall be mailed or delivered or
telegraphed and confirmed in writing to the Representatives in care of X. X.
Xxxxxxxx & Co., X. X. Xxxxxxxx Financial Center, 000 Xxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxx, XX, or if sent to the
Company shall be mailed, delivered or telegraphed and confirmed in writing to
the Company at 00000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxx Xxxxxxxxxx 00000,
Attention Xxx Xxxxxxxx.
14. Miscellaneous. This Agreement shall inure to the benefit of
and be binding upon the several Underwriters, the Company and its successors
and legal representatives. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any other person any legal or equitable
right, remedy or claim under or in respect of this Agreement. This Agreement
and all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Company and the several Underwriters and for the
benefit of no other person except that (a) the representations and warranties
and indemnities of the Company contained in this Agreement shall also be for
the benefit of any person or persons who control any Underwriter within the
meaning of Section 15 of the Securities Act, and (b) the indemnities by the
Underwriters shall also be for the benefit of the directors of the Company,
officers of the Company who have signed the Registration Statement and any
person or persons who control the Company within the meaning of Section 15 of
the
- 27 -
28
Securities Act. No purchaser of Shares from any Underwriter will be deemed a
successor because of such purchase. The validity and interpretation of this
Agreement shall be governed by the laws of the State of Tennessee. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. Bradford hereby represents and warrants to the Company that it
has authority to act hereunder on behalf of the several Representatives and
Underwriters, and any action hereunder taken by the Representatives will be
binding upon all the Underwriters.
If the foregoing is in accordance with your understanding of our
agreement, please indicate your acceptance thereof in the space provided below
for that purpose, whereupon this letter shall constitute a binding agreement
among the Company and each of the several Underwriters.
Very truly yours,
ORTHALLIANCE, INC.
By:
------------------------------------
Title:
---------------------------------
Confirmed and accepted as of the
date first above written.
X.X. XXXXXXXX & CO., L.L.C.
XXXXXXXXXXX & CO. INC.
For themselves and as
Representatives of the Several
Underwriters
By:
---------------------------------
Partner
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29
SCHEDULE I
UNDERWRITERS
Number of
Firm Shares to
Underwriter be Purchased
----------- ------------
------------
Total
============
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30
SCHEDULE II
FOUNDING PRACTICES
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