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EXHIBIT 1.1
COAST DENTAL SERVICES, INC.
2,000,000 Shares(1)
Common Stock
UNDERWRITING AGREEMENT
September __, 1997
PRUDENTIAL SECURITIES INCORPORATED
XXXXX XXXXXX INC.
XXXXXX X. XXXXX & CO. INCORPORATED
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Coast Dental Services, Inc., a Delaware corporation (the "Company"),
and the selling securityholders named in Schedule 2 hereto (each a "Selling
Securityholder" and together the "Selling Securityholders") hereby confirm
their agreement with the several underwriters named in Schedule 1 hereto (the
"Underwriters"), for whom you have been duly authorized to act as
representatives (in such capacities, the "Representatives"), as set forth
below. If you are the only Underwriters, all references herein to the
Representatives shall be deemed to be to the Underwriters.
1. Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the several Underwriters
an aggregate of 1,600,000 shares and the Selling Securityholders propose to
sell to the several Underwriters an aggregate of 400,000 shares (collectively,
the "Firm Securities") of the Company's Common Stock, par value $0.001 per
share ("Common Stock"). The Company also proposes to issue and sell to the
several Underwriters not more than 300,000 additional shares of Common Stock if
requested by the Underwriters as provided
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(1) Plus an option to purchase from the Company up to 300,000 additional
shares to cover over-allotments.
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in Section 3 of this Agreement. Any and all shares of Common Stock to be
purchased by the Underwriters pursuant to such option are referred to herein as
the "Option Securities," and the Firm Securities and any Option Securities are
collectively referred to herein as the "Securities."
2. Representations and Warranties of the Company and the Selling
Securityholders.
(a) The Company and the Selling Securityholders, jointly and
severally, represent and warrant to, and agree with, each of the several
Underwriters that:
(i) A registration statement on Form S-1
(File No. 333-34385) with respect to the Securities, including a
prospectus subject to completion, has been filed by the Company with
the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (the "Act"), and one or more amendments to such
registration statement may have been so filed. After the execution of
this Agreement, the Company will file with the Commission either (A)
if such registration statement, as it may have been amended, has been
declared by the Commission to be effective under the Act, either (1)
if the Company relies on Rule 434 under the Act, a Term Sheet (as
hereinafter defined) relating to the Securities, that shall identify
the Preliminary Prospectus (as hereinafter defined) that it
supplements containing such information as is required or permitted by
Rules 434, 430A and 424(b) under the Act or (2) if the Company does
not rely on Rule 434 under the Act, a prospectus in the form most
recently included in an amendment to such registration statement (or,
if no such amendment shall have been filed, in such registration
statement), with such changes or insertions as are required by Rule
430A under the Act or permitted by Rule 424(b) under the Act, and in
the case of either clause (A)(1) or (A)(2) of this sentence as have
been provided to and approved by the Representatives prior to the
execution of this Agreement, or (B) if such registration statement, as
it may have been amended, has not been declared by the Commission to
be effective under the Act, an amendment to such registration
statement, including a form of prospectus, a copy of which amendment
has been furnished to and approved by the Representatives prior to the
execution of this Agreement. The Company may also file a related
registration statement with the Commission pursuant to Rule 462(b)
under the Act for the purpose of registering certain additional
Securities, which registration shall be effective upon filing with the
Commission. As used in this Agreement, the term "Original Registration
Statement" means the registration statement initially filed relating
to the Securities, as amended at the time when it was or is declared
effective, including (A) all financial schedules and exhibits thereto,
(B) all documents incorporated by reference therein filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and
(C) any information omitted therefrom pursuant to Rule 430A under the
Act and included in the Prospectus (as hereinafter defined); the term
"Rule 462(b) Registration Statement" means any registration statement
filed with the Commission pursuant to Rule 462(b) (including the
Original Registration Statement and any Preliminary Prospectus or
Prospectus incorporated therein at the time such Registration
Statement becomes effective); the term "Registration Statement"
includes both the Original Registration Statement and any Rule 462(b)
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Registration Statement; the term "Preliminary Prospectus" means
each prospectus subject to completion filed with the Original
Registration Statement or any amendment thereto (including the
prospectus subject to completion, if any, included in the Registration
Statement or any amendment thereto at the time it was or is declared
effective), including all documents incorporated by referenced therein
filed under the Exchange Act; the term "Prospectus" means:
(A) if the Company relies on Rule 434
under the Act, the Term Sheet relating to the Securities
that is first filed pursuant to Rule 424(b)(7) under the Act,
together with the Preliminary Prospectus identified therein
that such Term Sheet supplements;
(B) if the Company does not rely on Rule
434 under the Act, the prospectus first filed with the
Commission pursuant to Rule 424(b) under the Act; or
(C) if the Company does not rely on Rule
434 under the Act and if no prospectus is required to
be filed pursuant to Rule 424(b) under the Act, the prospectus
included in the Registration Statement,
including, in the case of the immediately foregoing clause (A), (B) or
(C) of this sentence, all documents incorporated by reference therein
filed under the Exchange Act. The term "Term Sheet" means any
abbreviated Term Sheet that satisfies the requirements of Rule 434
under the Act. Any reference in this Agreement to an "amendment or
supplement" to any Preliminary Prospectus or the Prospectus or an
"amendment" to any registration statement (including the Registration
Statement) shall be deemed to include any document incorporated by
reference therein that is filed with the Commission under the Exchange
Act after the date of such Preliminary Prospectus, Prospectus or
registration statement, as the case may be; any reference herein to
the "date" of a Prospectus that includes a Term Sheet shall mean the
date of such Term Sheet. For purposes of the preceding sentence, any
reference to the "effective date" of an amendment to a registration
statement shall, if such amendment is effected by means of the filing
with the Commission under the Exchange Act of a document incorporated
by reference in such registration statement, be deemed to refer to the
date on which such document was filed with the Commission.
(ii) The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus. When
any Preliminary Prospectus was filed with the Commission it (A)
contained all statements required to be stated therein in accordance
with, and complied in all material respects with the requirements of,
the Act and the rules and regulations of the Commission thereunder, and
(B) did not include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. When the Registration Statement or any amendment
thereto was or is declared effective, it (A)
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contained or will contain all statements required to be stated therein
in accordance with, and complied or will comply in all material
respects with the requirements of, the Act and the rules and
regulations of the Commission thereunder and (B) did not or will
not include any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein not
misleading. When the Prospectus or any Term Sheet that is a part
thereof or any amendment or supplement to the Prospectus is filed with
the Commission pursuant to Rule 424(b) (or, if the Prospectus or part
thereof or such amendment or supplement is not required to be so
filed, when the Registration Statement or the amendment thereto
containing such amendment or supplement to the Prospectus was or is
declared effective) and on the Firm Closing Date and any Option
Closing Date (both as hereinafter defined), the Prospectus, as amended
or supplemented at any such time, (A) contained or will contain all
statements required to be stated therein in accordance with, and
complied or will comply in all material respects with the requirements
of, the Act and the rules and regulations of the Commission thereunder
and (B) did not or will not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. The foregoing provisions of this paragraph
(ii) do not apply to statements or omissions made in any Preliminary
Prospectus, the Registration Statement or any amendment thereto or the
Prospectus or any amendment or supplement thereto in reliance upon and
in conformity with written information furnished to the Company by any
Underwriter through the Representatives specifically for use therein.
(iii) If the Company has elected to rely on
Rule 462(b) and the Rule 462(b) Registration Statement has not been
declared effective (i) the Company has filed a Rule 462(b)
Registration Statement in compliance with and that is effective upon
filing pursuant to Rule 462(b) and has received confirmation of its
receipt and (ii) the Company has given irrevocable instructions for
transmission of the applicable filing fee in connection with the
filing of the Rule 462(b) Registration Statement, in compliance with
Rule 111 promulgated under the Act or the Commission has received
payment of such filing fee.
(iv) The Company and each of the dental
entities with which the Company has a services and support
agreement (collectively, the "Dental Entities") have been duly
organized and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation and
are duly qualified to transact business as foreign corporations and
are in good standing under the laws of all other jurisdictions where
the ownership or leasing of their respective properties or the conduct
of their respective businesses requires such qualification, except
where the failure to be so qualified does not amount to a material
liability or disability to the Company.
(v) The Company and each Dental Entity
have full power (corporate and other) to own or lease their respective
properties and conduct their respective businesses to the extent
described in the Registration Statement and the Prospectus or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus; and the Company has full power
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(corporate and other) to enter into this Agreement and to carry out
all the terms and provisions hereof to be carried out by it.
(vi) The Company does not have any
subsidiaries within the meaning of Rule 405 of the Act.
(vii) The Company has an authorized, issued
and outstanding capitalization as set forth in the Prospectus or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus. All of the issued shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable. The Company's Firm Securities and Option Securities
have been duly authorized and at the Firm Closing Date and the Option
Closing Date, respectively, after payment therefor in accordance
herewith, will be validly issued, fully paid and nonassessable. No
holders of outstanding shares of capital stock of the Company are
entitled as such to any preemptive or other rights to subscribe for
any of the Securities, and no holder of securities of the Company has
any right which has not been fully exercised or waived to require the
Company to register the offer or sale of any securities owned by such
holder under the Act in the public offering contemplated by this
Agreement.
(viii) The capital stock of the Company
conforms in all material respects to the description thereof
contained in the Prospectus or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus.
(ix) The financial statements and schedules
of the Company included in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly present, on the basis stated therein,
the financial position of the Company and the results of operations
and cash flows as of the respective dates and for the respective
periods therein specified. Such financial statements and schedules
have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved
(except as otherwise noted therein). The unaudited pro forma
financial information in the Registration Statement and the Prospectus
(or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) and the summaries of those unaudited pro forma
financial statements contained in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus) together with the related notes thereto, included in the
Registration Statement and the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) include all
adjustments necessary to present fairly the pro forma financial
information at the dates and for the periods indicated, and all
assumptions used in preparing such pro forma financial data are
reasonable. The selected financial data set forth under the caption
"Selected Financial Data" in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) fairly
present, on the basis stated in the Prospectus (or such Preliminary
Prospectus), the information included therein.
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(x) Deloitte & Touche, LLP who has audited
certain financial statements of the Company and delivered their report
with respect to the Company's audited financial statements and
schedules included in the Registration Statement and the Prospectus
(or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), are, to the knowledge of the Company and the
Selling Securityholders, independent public accountants as required by
the Act and the applicable rules and regulations thereunder.
(xi) The execution and delivery of this
Agreement have been duly authorized by the Company, and this Agreement
has been duly executed and delivered by the Company and is the
valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms. The Option Agreement has been
duly executed and delivered by Xx. Xxxx Xxxxxx, D.D.S. and is the
valid and binding agreement of Xx. Xxxx Xxxxxx, D.D.S., enforceable
against Xx. Xxxx Xxxxxx, D.D.S. in accordance with its terms.
(xii) No legal or governmental proceedings
are pending to which the Company or any of the Dental Entities is a
party or to which the property of the Company or any of the Dental
Entities is subject that are required to be described in the
Registration Statement or the Prospectus and are not described therein
(or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) and, to the knowledge of the Company and the
Selling Securityholders, no such proceedings have been threatened
against the Company or any of the Dental Entities or with respect to
any of their respective properties; no contract or other document is
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
that is not described therein (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) or filed as
required; after due inquiry, management of the Company does not know
of any legal or governmental proceedings pending against any dentist
practicing in any Dental Entity (an "Affiliated Dentist"), which could
reasonably be expected to result in a material adverse change in the
condition (financial or otherwise), business prospects, net worth or
results of operations of the Company.
(xiii) The issuance, offering and sale of the
Securities to the Underwriters by the Company pursuant to this
Agreement, the compliance by the Company with the other
provisions of this Agreement and the consummation of the other
transactions herein contemplated do not (A) require the consent,
approval, authorization, registration or qualification of or with any
governmental authority, except such as have been obtained, such as may
be required under state securities or blue sky laws and, if the
registration statement filed with respect to the Securities (as
amended) is not effective under the Act as of the time of the
execution hereof, such as may be required (and shall be obtained as
provided in this Agreement) under the Act, or (B) conflict with or
result in a breach or violation of any material terms and provisions
of, or constitute a default under, any indenture, mortgage, deed of
trust, lease or other agreement or instrument to which the Company is
a party or by which the Company or any of its properties are bound, or
the charter documents or bylaws of the
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Company, or any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or any
arbitrator applicable to the Company.
(xiv) The Company has not, directly or
indirectly, (A) taken any action designed to cause or to result in, or
that has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities or (B) since the filing of the Registration Statement (I)
sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, the Securities or (II) paid or agreed to pay
to any person any compensation for soliciting another to purchase any
other securities of the Company.
(xv) Subsequent to the respective dates as
of which information is given in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), (A) neither the Company nor any of the
Dental Entities has sustained any material loss or interference with
their respective businesses or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding and
there has not been any material adverse change, or, to the knowledge
of the Company and the Selling Securityholders, any development
involving a prospective material adverse change, in the condition
(financial or otherwise), management, business prospects, net worth,
or results of operations of the Company; (B) the Company has not
incurred any material liability or obligation, direct or contingent,
nor entered into any material transaction not in the ordinary course
of business; (C) the Company has not purchased any of its outstanding
capital stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock; and (D) there has not
been any material change in the capital stock, short-term debt or
long-term debt of the Company, except in each case as described in or
contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(xvi) The Company and the Coast Florida P.A.
have good and marketable title to all tangible personal
property owned by each of them, in each case free and clear of any
security interests, liens, encumbrances, equities, claims and other
defects, except which do not materially and adversely affect the value
of such property and do not interfere with the use made or proposed to
be made of such property by the Company or the Coast Florida P.A., and
any real property and buildings held under lease by the Company or the
Coast Florida P.A. are held under valid, subsisting and enforceable
leases, with such exceptions as are not material and do not interfere
with the use made or proposed to be made of such property and
buildings by the Company or the Coast Florida P.A., in each case
except as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus).
(xvii) No labor dispute with the employees of
the Company or any Dental Entity exists or is threatened or
imminent that could result in a material adverse change in the
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condition (financial or otherwise), business prospects, net worth or
results of operations of the Company, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(xviii) The Company and the Dental Entities
own or possess, or can acquire on reasonable terms, all material
patents, patent applications, trademarks, service marks, trade
names, licenses, copyrights and proprietary or other confidential
information currently employed by them in connection with their
respective businesses, and neither the Company nor any Dental Entity
has received any notice of, or has any reasonable belief that its use
constitutes, a material infringement of or conflict with asserted
rights of any third party with respect to any of the foregoing which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a material adverse change in the
condition (financial or otherwise), business prospects, net worth or
results of operations of the Company, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(xix) The Company and each Dental Entity is
insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are ordinary and
customary in the business in which it is engaged; neither the
Company nor any Dental Entity has been refused any insurance coverage
sought or applied for; and neither the Company nor any Dental Entity
has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not materially and
adversely affect the condition (financial or otherwise), business
prospects, net worth, or results of operations of the Company, except
as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus).
(xx) The Company and the Dental Entities
possess all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory
authorities necessary to conduct their respective businesses, and
neither the Company nor any Dental Entity has received any notice of
proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a material adverse change in the condition
(financial or otherwise), business prospects, net worth or results of
operations of the Company, except as described in or contemplated by
the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus).
(xxi) The Company will conduct its
operations in a manner that will not subject it to registration
as an investment company under the Investment Company Act of 1940, as
amended, and this transaction will not cause the Company to become an
investment company subject to registration under such Act.
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(xxii) The Company has filed all foreign,
federal, state and local tax returns that are required to be filed or
has requested extensions thereof (except in any not have a material
adverse effect on the Company) and has paid all taxes required to be
paid by it and any other assessment, fine or penalty levied against
it, to the extent that any of the foregoing is due and payable, except
for any such assessment, fine or penalty that is currently being
contested in good faith or as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(xxiii) Neither the Company nor any of the
Dental Entities is in violation of any federal or state law or
regulation relating to (i) the environment or hazardous or toxic
substances or wastes, pollutants or contaminants or to the storage,
handling or transportation of hazardous or toxic material
("Environmental Laws") or (ii) occupational safety and health and the
Company and the Dental Entities have received all permits, licenses or
other approvals required of them under applicable federal and state
occupational safety and health and Environmental Laws and regulations
to conduct their respective businesses, and the Company and each
Dental Entity is in compliance with all terms and conditions of any
such permit, license or approval, except any such violation of law or
regulation, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals which would not, singly or in the
aggregate, result in a material adverse change in the condition
(financial or otherwise), business prospects, net worth or results of
operations of the Company or any of the Dental Entities, except as
described in or contemplated by the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus). Neither
the Company nor any of the Dental Entities have any pending or
threatened Environmental Law or occupational safety and health claims
against it nor are there circumstances with respect to any property or
operations of the Company or any of the Dental Entities that could
reasonably be anticipated to form the basis of an Environmental Law or
occupational safety and health claim against the Company or any Dental
Entity which, singly or in the aggregate, result in a material adverse
change in the condition (financial or otherwise), business prospects,
net worth or results of operations of the Company or any of the Dental
Entities, except as described in or contemplated by the Prospectus
(or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(xxiv) In the ordinary course of its
business, the Company conducts a periodic review of the effect of
Environmental Laws on the business, operations and properties of the
Company, in the course of which it identifies and evaluates associated
costs and liabilities (including, without limitation, any capital
or operating expenditures required for clean-up, closure of properties
or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such review,
the Company has reasonably concluded that such associated costs and
liabilities would not, singly or in the aggregate, have a material
adverse effect on the Company.
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(xxv) Each certificate signed by any officer
of the Company and delivered to the Representatives or counsel for the
Underwriters pursuant to this Agreement shall be deemed to be a
representation and warranty by the Company to each Underwriter as to
the matters covered thereby.
(xxvi) The Company does not own any shares of
stock or any other equity securities of any corporation or have
any equity interest in any firm, partnership, association or other
entity, except as described in or contemplated by the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(xxvii) The Company maintains a system of
internal accounting controls sufficient to provide reasonable
assurance that (A) transactions are executed in accordance with
management's general or specific authorizations; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (C) access to assets is permitted only
in accordance with management's general or specific authorization; and
(D) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(xxviii) No default exists on the part
of the Company or any Dental Entity, and no event has occurred which,
with notice or lapse of time or both, would constitute a default on
the part of the Company or any Dental Entity in the due performance
and observance of any material term, covenant or condition of any
indenture, mortgage, deed of trust, lease, services and support
agreement or other agreement or instrument to which the Company or any
Dental Entity is a party or by which the Company or any Dental Entity
or any of their respective properties are bound or may be affected in
any material adverse respect with regard to the property, business or
operations of the Company.
(xxix) Subject to the qualifications relating
to the uncertainty of the interpretation of governmental regulations
relating to the corporate practice of dentistry described in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), the Company and each Dental Entity and
their respective operations comply in all material respects with all
applicable laws and regulations, including, without limitation, those
relating to the practice of dentistry (including the management or
operation of dental offices), the splitting of professional fees with
non-dentists, the ownership or control of the assets of a dental
practice, the employment of dentists or other personnel, the content
of advertising, the making of payments in consideration for referrals
of patients, limitations on tasks that may be delegated by a dentist
to other staff members, the business of insurance and reimbursement by
governmental agencies. The Company has not been made aware of, or been
put on notice that, any Affiliated Dentist, since the date of his
affiliation, is not practicing in material compliance with all such
laws and regulations.
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(xxx) Other than the 2,530,000 shares of
Common Stock sold in the initial public offering on February 10, 1997
(the "IPO"), all offers and sales of the Company's capital stock
prior to the date hereof, were at all relevant times exempt from the
registration requirements of the Act and were the subject of an
available exemption from the registration requirements of all
applicable state securities or blue sky laws.
(xxxi) Each of the agreements providing for a
transaction that is part of the Recent Acquisitions (as defined
in the Registration Statement) has been duly authorized, executed and
delivered by the Company and, to the knowledge of the Company and the
Selling Securityholders, constitutes the valid and legally binding
obligation of each of the other parties thereto, and is enforceable in
accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and
subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity
or at law); there are no statutory or contractual rights of dissent or
appraisal with respect to the transfer of any of the properties in the
Recent Acquisitions; and the Recent Acquisitions conformed, in all
material respects, to the description thereof contained in the
Registration Statement.
(xxxii) Except as disclosed in the Prospectus
(or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), there are no outstanding (A) securities or
obligations of the Company convertible into or exchangeable for any
capital stock of the Company, (B) warrants, rights or options to
subscribe for or purchase from the Company any such capital stock or
any such convertible or exchangeable securities or obligations, or (C)
obligations of the Company to issue any shares of capital stock, any
such convertible or exchangeable securities or obligations, or any
such warrants, rights or options.
(xxxiii) The Company has not distributed and,
prior to the later of (A) the Firm Closing Date and (B) the completion
of the distribution of the Securities, will not distribute any offering
material in connection with the offering and sale of the Securities
other than the Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectus or any supplement or amendment
thereto, or any materials, if any permitted by the Act.
(b) Each Selling Securityholder severally represents and
warrants to, and agrees with, each of the several Underwriters that:
(i) Such Selling Securityholder has full
power (partnership, trust and other) to enter into this Agreement and
to sell, assign, transfer and deliver to the Underwriters the
Securities to be sold by such Selling Securityholder hereunder in
accordance with the terms of this Agreement; the execution and
delivery of this Agreement have been duly authorized by all necessary
actions of such Selling Securityholder (partnership, trust or other,
as applicable); and this Agreement has been duly executed and
delivered by such Selling Securityholder.
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(ii) Such Selling Securityholder has duly executed and
delivered a power of attorney and custody agreement (with respect to
such Selling Securityholder, the "Power of Attorney" and the "Custody
Agreement," respectively), each in the form heretofore delivered to
the Representatives, appointing Xxxxx Xxxxxx as such Selling
Securityholder's attorney-in-fact (the "Attorney-in-Fact") with
authority to execute, deliver and perform this Agreement on behalf of
such Selling Securityholder and appointing Xxxxxxxx, Loop & Xxxxxxxx,
as custodian thereunder (the "Custodian"). Certificates in
negotiable form, endorsed in blank or accompanied by blank stock
powers duly executed, with signatures appropriately guaranteed,
representing the Securities to be sold by such Selling Securityholder
hereunder have been deposited with the Custodian pursuant to the
Custody Agreement for the purpose of delivery pursuant to this
Agreement. Such Selling Securityholder has full power (partnership,
trust or other, as applicable) to enter into the Custody Agreement and
the Power of Attorney and to perform his obligations under the Custody
Agreement. The Custody Agreement and the Power of Attorney have been
duly executed and delivered by such Selling Securityholder and,
assuming due authorization, execution and delivery by the Custodian,
are the legal, valid, binding and enforceable instruments of such
Selling Securityholder. Such Selling Securityholder agrees that each
of the Securities represented by the certificates on deposit with the
Custodian is subject to the interests of the Underwriters hereunder,
that the arrangements made for such custody, the appointment of the
Attorney-in-Fact and the right, power and authority of the
Attorney-in-Fact to execute and deliver this Agreement, to agree on
the price at which the Securities (including such Selling
Securityholder's Securities) are to be sold to the Underwriters, and
to carry out the terms of this Agreement, are to that extent
irrevocable and that the obligations of such Selling Securityholder
hereunder shall not be terminated, except as provided in this
Agreement or the Custody Agreement, by any act of such Selling
Securityholder, by operation of law or otherwise, whether in the case
of any individual Selling Securityholder by the death or incapacity of
such Selling Securityholder, in the case of a trust or estate by the
death of the trustee or trustees or the executor or executors or the
termination of such trust or estate, or in the case of a partnership
Selling Securityholder by its liquidation or dissolution or by the
occurrence of any other event. If any individual Selling
Securityholder, trustee or executor should die or become incapacitated
or any such trust should be terminated, or if any corporate or
partnership Selling Securityholder shall liquidate or dissolve, or if
any other event should occur, before the delivery of such Securities
hereunder, the certificates for such Securities deposited with the
Custodian shall be delivered by the Custodian in accordance with the
respective terms and conditions of this Agreement as if such death,
incapacity, termination, liquidation or dissolution or other event had
not occurred, regardless of whether or not the Custodian or the
Attorney-in-Fact shall have received notice thereof.
(iii) Such Selling Securityholder is the lawful owner of
the Securities to be sold by such Selling Securityholder hereunder and
upon sale and delivery of, and payment for, such Securities, as
provided herein, such Selling Securityholder will convey good and
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marketable title to such Securities, free and clear of any security
interests, liens, encumbrances, equities, claims or other defects.
(iv) Such Selling Securityholder has not, directly or
indirectly, (A) taken any action designed to cause or result in, or
that has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities or (B) since the filing of the Registration Statement (I)
sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, the Securities or (II) paid or agreed to pay
to any person any compensation for soliciting another to purchase any
other securities of the Company (except for the sale of Securities by
the Selling Securityholders under this Agreement).
(v) Such Selling Securityholder has reviewed the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) and the Registration Statement, and the
information regarding such Selling Securityholder set forth therein
under the captions "Management," "Business - Services and Support
Agreement," "Principal and Selling Stockholders" and "Certain
Transactions" is complete and accurate in all material respects.
(vi) The Selling Securityholders have not distributed
and, prior to the later of (A) the Firm Closing Date and (B) the
completion of the distribution of the Securities, will not distribute
any offering material in connection with the offering and sale of the
Securities other than the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Prospectus or any
supplement or amendment thereto, or any materials, if any permitted by
the Act.
(vii) In order to document the Underwriters' compliance
with the reporting and withholding provisions of the Internal Revenue
Code of 1986, as amended, with respect to the transactions herein
contemplated, such Selling Securityholder agrees to deliver to the
Representatives prior to or on the Firm Closing Date a properly
completed and executed United States Treasury Department Form W-8 or
W-9 (or other applicable form or statement specified by the Treasury
Department regulations in lieu thereof).
(viii) The sale by such Selling Securityholder of
Securities pursuant hereto is not prompted by any adverse information
concerning the Company that is not set forth in the Registration
Statement or the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(ix) The sale of the Securities to the Underwriters by
such Selling Securityholder pursuant to this Agreement, the compliance
by such Selling Securityholder with the other provisions of this
Agreement and the Custody Agreement and the consummation of the other
transactions herein contemplated do not (A) require the consent,
approval, authorization, registration or qualification of or with any
governmental authority, except such as has been
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obtained, such as the registration under state securities or blue sky
laws and, if the registration statement filed with respect to the
Securities (as amended) is not effective under the Act as of the time
of execution hereof, such as may be required (and shall be obtained as
provided in this Agreement) under the Act and the Exchange Act, or (B)
conflict with or result in a breach or violation of any of the
material terms and provisions of, or constitute a default under any
indenture, mortgage, deed of trust, lease or other agreement or
instrument to which such Selling Securityholder is a party or by which
such Selling Securityholder or any of such Selling Securityholder's
properties are bound, or any statute or any judgment, decree, order,
rule or regulation of any court or other governmental authority or any
arbitrator applicable to such Selling Securityholder.
3. Purchase, Sale and Delivery of the Securities.
(a) On the basis of the representations,
warranties, agreements and covenants herein contained and subject to the terms
and conditions herein set forth, the Company agrees to issue and sell and the
Selling Securityholders agree to sell to each of the Underwriters, and each of
the Underwriters, severally and not jointly, agrees to purchase from the
Company and the Selling Securityholders at a purchase price of $_____ per
share, the number of Firm Securities set forth opposite the name of such
Underwriter in Schedule 1 hereto. The Firm Securities shall consist of
2,000,000 shares of Common Stock. The number of Firm Securities to be
purchased by each Underwriter from the Company and the Selling Securityholders
shall be as nearly as practicable in the same proportion to the total number of
Firm Securities being sold by the Company and the Selling Securityholders as
the total number of Firm Securities to be purchased by such Underwriter bears
to the total number of Firm Securities to be purchased by the Underwriters
hereunder. One or more certificates in definitive form for the Firm Securities
that the several Underwriters have agreed to purchase hereunder, and in such
denomination or denominations and registered in such name or names as the
Representatives request upon notice to the Company at least 48 hours prior to
the Firm Closing Date, shall be delivered by or on behalf of the Company and
the Selling Securityholders to the Representatives for the respective accounts
of the Underwriters, against payment by or on behalf of the Underwriters of the
purchase price therefor by wire transfer in same-day funds (the "Purchase
Funds") to the order of the Company and the Selling Securityholders, as their
interests may appear. Such delivery of and payment for the Firm Securities
shall be made at the offices of King & Spalding, 000 Xxxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxx, 00000 at 9:30 A.M., New York City time, on __________, 1997; or at
such other place, time or date as the Representatives and the Company may agree
upon or as the Representatives may determine pursuant to Section 9 hereof, such
time and date of delivery against payment being herein referred to as the "Firm
Closing Date." The Company and the Selling Securityholders will make such
certificate or certificates for the Firm Securities and the Option Securities,
as the case may be, available for checking and packaging by the Representatives
at the offices in New York, New York of the Company's transfer agent or
registrar or of Prudential Securities Incorporated at least 24 hours prior to
the Firm Closing Date or the Option Closing Date, as the case may be.
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(b) The Company and each of the Selling
Securityholders hereby acknowledge that the wire transfer by or on behalf of
the Underwriters of the purchase price for any Securities does not constitute
closing of a purchase and sales of the Securities. Only execution and delivery
of a receipt for Securities by the Underwriters indicates completion of the
closing of a purchase of the Securities from the Company and the Selling
Securityholders. Furthermore, in the event that the Underwriters wire funds to
the Company and the Selling Securityholders prior to the completion of the
closing of a purchase of the Securities, the Company and the Selling
Securityholders hereby acknowledge that until the Underwriters execute and
deliver a receipt for the Securities, by facsimile or otherwise, the Company
and the Selling Securityholders will not be entitled to the Purchase Funds and
shall return the Purchase Funds to the Underwriters as soon as practicable (by
wire transfer of same-day funds) upon demand. In the event that the closing of
a purchase of the Securities is not completed and the Purchase Funds are not
returned by the Company and the Selling Securityholders to the Underwriters on
the same day the Purchase Funds were received by the Company and the Selling
Securityholders, the Company and each of the Selling Securityholders agree to
reimburse the Underwriters for each day the Purchase Funds are not returned, in
same-day funds, interest on the amount of Purchase Funds in an amount equal to
each day's interest, based on an annual interest rate, simple interest,
representing the Underwriters' cost of financing as reasonably determined by
Prudential Securities Incorporated. Upon satisfactory receipt of the
Securities by the Underwriters in accordance with all the terms of this
Agreement and the compliance by the Company and the Selling Securityholders
with all the terms of this Agreement to be performed on or before the Closing
Date, the Underwriters shall execute the receipt described above for the
Securities.
(c) For the purpose of covering any
over-allotments in connection with the distribution and sale of the Firm
Securities as contemplated by the Prospectus, the Company hereby grants to the
several Underwriters an option to purchase, severally and not jointly, the
Option Securities. The purchase price to be paid for any Option Securities
shall be the same price per share as the price per share for the Firm
Securities set forth above in paragraph (a) of this Section 3. The option
granted hereby may be exercised as to all or any part of the Option Securities
from time to time within thirty days after the date of the Prospectus (or, if
such 30th day shall be a Saturday or Sunday or a holiday, on the next business
day thereafter when the New York Stock Exchange is open for trading). The
Underwriters shall not be under any obligation to purchase any of the Option
Securities prior to the exercise of such option. The Representatives may from
time to time exercise the option granted hereby by giving notice in writing or
by telephone (confirmed in writing) to the Company setting forth the aggregate
number of Option Securities as to which the several Underwriters are then
exercising the option and the date and time for delivery of and payment for
such Option Securities. Any such date of delivery shall be determined by the
Representatives but shall not be earlier than two business days or later than
five business days after such exercise of the option and, in any event, shall
not be earlier than the Firm Closing Date. The time and date set forth in such
notice, or such other time on such other date as the Representatives and the
Company may agree upon or as the Representatives may determine pursuant to
Section 9 hereof, is herein called the "Option Closing Date" with respect to
such Option Securities. Upon exercise of the option as provided herein, the
Company shall become obligated to issue and sell to each of the several
Underwriters, and, subject to the terms and conditions herein set forth, each
of the Underwriters (severally and not jointly) shall
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become obligated to purchase from the Company, the same percentage of the total
number of the Option Securities as to which the several Underwriters are then
exercising the option as such Underwriter is obligated to purchase of the
aggregate number of Firm Securities, as adjusted by the Representatives in such
manner as they deem advisable to avoid fractional shares. If the option is
exercised as to all or any portion of the Option Securities, one or more
certificates in definitive form for such Option Securities, and payment
therefor, shall be delivered on the related Option Closing Date in the manner,
and upon the terms and conditions, set forth in paragraph (a) of this Section 3
with respect to the sale of the Firm Securities, except that reference therein
to the Firm Securities and the Firm Closing Date shall be deemed, for purposes
of this paragraph (b), to refer to such Option Securities and Option Closing
Date, respectively.
(d) It is understood that any of you,
individually and not as one of the Representatives, may (but shall not be
obligated to) make payment on behalf of any Underwriter or Underwriters for any
of the Securities to be purchased by such Underwriter or Underwriters. No such
payment shall relieve such Underwriter or Underwriters from any of its or their
obligations hereunder.
4. Offering by the Underwriters. Upon your authorization of the
release of the Firm Securities, the several Underwriters propose to offer the
Firm Securities for sale to the public upon the terms set forth in the
Prospectus.
5. Covenants of the Company and the Selling Securityholders.
(a) The Company covenants and agrees with each of
the Underwriters that:
(i) The Company will use its best efforts
to cause the Registration Statement, if not effective at the time of
execution of this Agreement, and any amendments thereto to become
effective as promptly as possible. If required, the Company will
file the Prospectus or any Term Sheet that constitutes a part thereof
and any amendment or supplement thereto with the Commission in the
manner and within the time period required by Rules 434 and 424(b)
under the Act. During any time when a prospectus relating to the
Securities is required to be delivered under the Act, the Company (A)
will comply with all requirements imposed upon it by the Act and the
rules and regulations of the Commission thereunder to the extent
necessary to permit the continuance of sales of or dealings in the
Securities in accordance with the provisions hereof and of the
Prospectus, as then amended or supplemented, and (B) will not file
with the Commission the Prospectus, Term Sheet or the amendment
referred to in the second sentence of Section 2(a)(i) hereof, any
amendment or supplement to such Prospectus, Term Sheet or any
amendment to the Registration Statement or any Rule 462(b)
Registration Statement of which the Representatives shall not
previously have been advised and furnished with a copy for a
reasonable period of time prior to the proposed filing and as to which
filing the Representatives shall not have given their consent, such
consent not to be unreasonably withheld. The Company will prepare and
file with the Commission, in accordance with the rules and regulations
of the Commission, promptly upon request by the Representatives or
counsel for the Underwriters, any amendments to the
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Registration Statement or any Rule 462(b) Registration Statement or
amendments or supplements to the Prospectus that may be necessary or
advisable in connection with the distribution of the Securities by the
several Underwriters, and will use its best efforts to cause any such
amendment to the Registration Statement to be declared effective by
the Commission as promptly as possible. The Company will advise the
Representatives, promptly after receiving notice thereof, of the time
when the Registration Statement or any amendment thereto has been
filed or declared effective or the Prospectus or any amendment or
supplement thereto has been filed and will provide evidence
satisfactory to the Representatives of each such filing or
effectiveness.
(ii) The Company will advise the
Representatives, promptly after receiving notice or obtaining
knowledge thereof, of (A) the issuance by the Commission of any stop
order suspending the effectiveness of the Original Registration
Statement or any 462(b) Registration Statement or any amendment
thereto or any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, (B) the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, (C) the
institution, threatening or contemplation of any proceeding for any
such purpose or (D) any request made by the Commission for amending
the Original Registration Statement or any Rule 462(b) Registration
Statement, for amending or supplementing the Prospectus or for
additional information. The Company will use its best efforts to
prevent the issuance of any such stop order and, if any such stop
order is issued, to obtain the withdrawal thereof as promptly as
possible.
(iii) The Company will arrange for the
qualification of the Securities for offering and sale under the
securities or blue sky laws of such jurisdictions as the
Representatives may designate and will continue such qualifications in
effect for as long as may be necessary to complete the distribution of
the Securities, provided, however, that in connection therewith the
Company shall not be required to qualify as a foreign corporation or
to execute a general consent to service of process in any
jurisdiction.
(iv) If, at any time prior to the later of
(A) the final date when a prospectus relating to the Securities
is required to be delivered under the Act or (B) the Option Closing
Date, any event occurs as a result of which the Prospectus, as then
amended or supplemented, would include any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if for any other reason it is
necessary at any time to amend or supplement the Prospectus to comply
with the Act or the rules or regulations of the Commission thereunder,
the Company will promptly notify the Representatives thereof and,
subject to Section 5(a) hereof, will prepare and file with the
Commission, at the Company's expense, an amendment to the Registration
Statement or an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance.
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(v) The Company will, without charge,
provide (A) to the Representatives and to counsel for the Underwriters
as many signed copies of the registration statement originally filed
with respect to the Securities and each amendment thereto and any
Rule 462(b) Registration Statement (in each case including exhibits
thereto) as the Representatives and counsel to the Underwriters may
reasonably request, (B) to each other Underwriter, a conformed copy of
such Registration Statement and any Rule 462(b) Registration Statement
and each amendment thereto (in each case without exhibits thereto) and
(C) so long as a prospectus relating to the Securities is required to
be delivered under the Act, as many copies of each Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto as
the Representatives may reasonably request; without limiting the
application of clause (C) of this sentence, the Company, not later
than (1) 6:00 PM, New York City time, on the date of determination of
the public offering price, if such determination occurred at or prior
to 10:00 AM, New York City time, on such date or (2) 2:00 PM, New York
City time, on the business day following the date of determination of
the public offering price, if such determination occurred after 10:00
AM, New York City time, on such date, will deliver to the
Underwriters, without charge, as many copies of the Prospectus and any
amendment or supplement thereto as the Representatives may reasonably
request for purposes of confirming orders that are expected to settle
on the Firm Closing Date.
(vi) The Company, as soon as practicable,
will make generally available to its securityholders and to the
Representatives an earnings statement of the Company that
satisfies the provisions of Section 11(a) of the Act and Rule 158
thereunder.
(vii) The Company will apply the net
proceeds from the sale of the Securities as set forth under "Use of
Proceeds" in the Prospectus.
(viii) The Company will not, directly or
indirectly, without the prior written consent of Prudential Securities
Incorporated, on behalf of the Underwriters, offer, sell, offer to
sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer of sale,
contract of sale, pledge, grant of any option to purchase or other
sale or disposition) of any shares of Common Stock or any securities
convertible into, or exchangeable or exercisable for, Common Stock or
other stock of the Company, or any right to purchase or acquire Common
Stock or other capital stock of the Company for a period of 180 days
after the date hereof, except (i) that the Company may issue shares of
Common Stock in connection with acquisitions by the Company, provided
that any Common Stock so issued shall not be transferrable by the
recipient thereof for a period of 180 days after the date hereof, (ii)
as otherwise pursuant to this Agreement, (iii) for issuances pursuant
to the exercise of employee and affiliated professional stock options
outstanding on the date hereof and issuances pursuant to the exercise
of stock options granted hereafter pursuant to the Incentive Plan and
the Professionals Plan (each as defined in the Registration Statement)
so long as such options are not exercisable within 180 days after the
date hereof and (iv) that the Company may file registration statements
at any time after the date hereof related to the resale of such shares
of the Company's common stock issued pursuant to the Company's
affiliated professional stock option plan.
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(ix) The Company will not, directly or
indirectly, (A) take any action designed to cause or to result in, or
that has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities or (B) (I) sell, bid for, purchase, or pay anyone any
compensation for soliciting purchases of, the Securities or (II) pay
or agree to pay to any person any compensation for soliciting another
to purchase any other securities of the Company.
(x) The Company, during the period when
the Prospectus is required to be delivered under the Act or the
Exchange Act, will file all documents required to be filed with
the Commission pursuant to Section 13, 14 or 15 of the Exchange Act
within the time periods required by the Exchange Act and the rules and
regulations thereunder.
(xi) The Company will cause the Securities
to be duly included for quotation on The Nasdaq Stock Market's
National Market (the "Nasdaq Stock Market") prior to the Firm Closing
Date. The Company will use it best efforts to ensure that the
Securities remain included for quotation on the Nasdaq Stock Market
following the Firm Closing Date.
(xii) During a period of five years from the
effective date of the Registration Statement, the Company will furnish
to you and, upon request, to each of the other Underwriters, without
charge, (A) copies of all reports or other communications (financial
or other) furnished to securityholders, (B) as soon as they are
available, copies of any reports and financial statements furnished to
or filed with the Commission or any national securities exchange, and
(C) such additional publicly available information concerning the
business and financial condition of the Company, if any, as you may
reasonably request.
(xiii) If at any time during the 25-day
period after the Registration Statement becomes effective or the
period prior to the Option Closing Date, any rumor, publication or
event relating to or affecting the Company shall occur as a result of
which in your opinion the market price of the Common Stock has been or
is likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the
Prospectus), the Company will, after written notice from you advising
the Company to the effect set forth above, to the extent consistent
with the Act and the rules and regulations thereunder, prepare,
consult with you concerning the substance of, and disseminate a press
release or other public statement (unless counsel for the Company
provides a written opinion that such press release or public statement
is inconsistent with the Act) reasonably satisfactory to you,
responding to or commenting on such rumor, publication or event.
(xiv) If the Company elects to rely on Rule
462(b), the Company shall both file a Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b) and pay
the applicable fees in accordance with Rule 111 promulgated under the
Act by the
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earlier of (i) 10:00 P.M. New York City time on the date of this
Agreement and (ii) the time confirmations are sent or given, as
specified by Rule 462(b)(2).
(xv) The Company will obtain the agreements
described in Section 7(h) hereof prior to the Firm Closing Date.
(b) Each Selling Securityholder covenants and
agrees with each of the Underwriters that:
(i) Such Selling Securityholder will not,
directly or indirectly, (A) take any action designed to cause or to
result in, or that has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the
Securities or (B) (I) sell, bid for, purchase, or pay anyone any
compensation for soliciting purchases of, the Securities or (II) pay
or agree to pay to any person any compensation for soliciting another
to purchase any other securities of the Company (except for the sale
of Securities by the Selling Securityholder under this Agreement).
(ii) Such Selling Securityholder will not,
directly or indirectly, without the prior written consent of
Prudential Securities Incorporated, on behalf of the Underwriters,
offer, sell, offer to sell, contract to sell, grant any option to
purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, grant of any option to purchase or
other sale or disposition) of any shares of Common Stock or any
securities convertible into, or exchangeable or exercisable for,
Common Stock or other stock of the Company, or any right to purchase
or acquire Common Stock or other capital stock of the Company for a
period of 180 days after the date hereof, except pursuant to this
Agreement; provided, however, that the such Selling Securityholders
may make bona fide gifts to donees who agree to be bound by the
restrictions described in this paragraph 5(b)(ii).
6. Expenses. The Company will pay all costs and expenses
incident to the performance of the obligations of the Company and the Selling
Securityholders under this Agreement, whether or not the transactions
contemplated herein are consummated or this Agreement is terminated pursuant to
Section 12 hereof, including all costs and expenses incident to (a) the
printing or other production of documents with respect to the transactions,
including any costs of printing the registration statement originally filed
with respect to the Securities and any amendment thereto, any Rule 462(b)
Registration Statement, any Preliminary Prospectus and the Prospectus and any
amendment or supplement thereto, this Agreement and any blue sky memoranda, (b)
all arrangements relating to the delivery to the Underwriters of copies of the
foregoing documents, (c) the fees and disbursements of the counsel, the
accountants and any other experts or advisors retained by the Company, (d)
preparation, issuance and delivery to the Underwriters of any certificates
evidencing the Securities, including transfer agent's and registrar's fees and
the Custodian's fees, (e) the qualification of the Securities under state
securities and blue sky laws, including filing fees and fees and disbursements
of counsel for the Underwriters relating thereto, (f) the filing fees of the
Commission and the National Association of Securities Dealers, Inc. relating
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to the Securities, (g) any quotation of the Securities on the Nasdaq Stock
Market and (h) the expenses of the Company in connection with any meetings with
prospective investors in the Securities. To the extent, if at all, that any of
the Selling Securityholders engage special legal counsel to represent them in
connection with this offering, other than counsel to the Company, the fees and
expenses of such counsel shall be borne by such Selling Securityholders. Any
transfer taxes imposed on the sale of the Securities to the several
Underwriters will be paid by the Company and the Selling Securityholders pro
rata. If the sale of the Securities provided for herein is not consummated
because any condition to the obligations of the Underwriters set forth in
Section 7 hereof is not satisfied, because this Agreement is terminated
pursuant to Section 12(a)(i) and (a)(ii) hereof or because of any failure,
refusal or inability on the part of the Company or any Selling Securityholder
to perform all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder other than by reason of a default by any of
the Underwriters, the Company will reimburse the Underwriters severally upon
demand for all out-of-pocket expenses (including counsel fees and
disbursements) that shall have been incurred by them in connection with the
proposed purchase and sale of the Securities. The Company shall not in any
event be liable to any of the Underwriters for the loss of anticipated profits
from the transactions covered by this Agreement.
7. Conditions of the Underwriters' Obligations. The obligations
of the several Underwriters to purchase and pay for the Firm Securities shall
be subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company and the Selling Securityholders
contained herein as of the date hereof and as of the Firm Closing Date, as if
made on and as of the Firm Closing Date, to the accuracy of the statements of
the Company's officers and the Selling Securityholders made pursuant to the
provisions hereof, to the performance by the Company and the Selling
Securityholders of their respective covenants and agreements hereunder and to
the following additional conditions:
(a) If the Original Registration Statement or any
amendment thereto filed prior to the Firm Closing Date has not been declared
effective as of the time of execution hereof, the Original Registration
Statement or such amendment and, if the Company has elected to rely upon Rule
462(b), the Rule 462(b) Registration Statement shall have been declared
effective not later than the earlier of (i) 11:00 A.M., New York City time, on
the date on which the amendment to the registration statement originally filed
with respect to the Securities or to the Registration Statement, as the case
may be, containing information regarding the public offering price of the
Securities has been filed with the Commission and (ii) the time confirmations
are sent or given as specified by Rule 462(b)(2) or, with respect to the
Original Registration Statement, such later time and date as shall have been
consented to by the Representatives; if required, the Prospectus or any Term
Sheet that constitutes a part thereof and any amendment or supplement thereto
shall have been filed with the Commission in the manner and within the time
period required by Rules 434 and 424(b) under the Act; no stop order suspending
the effectiveness of the Registration Statement or any amendment thereto shall
have been issued, and no proceedings for that purpose shall have been
instituted or threatened or, to the knowledge of the Company or the
Representatives, shall be contemplated by the Commission; and the Company shall
have complied with any request of the Commission for additional information (to
be included in the Registration Statement or the Prospectus or otherwise).
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(b) The Representatives shall have received an
opinion, dated the Firm Closing Date, of Xxxxxxxx, Loop & Xxxxxxxx, counsel for
the Company, to the effect that:
(i) the Company and each Dental Entity
have been duly organized and are validly existing as corporations in
good standing under the laws of their respective jurisdictions of
incorporation and are duly qualified to transact business as foreign
corporations and are in good standing under the laws of all other
jurisdictions where the ownership or leasing of their respective
properties or the conduct of their respective businesses requires such
qualification, except where the failure to be so qualified does not
amount to a material liability or disability to the Company;
(ii) the Company and each Dental Entity
have corporate power to own or lease their respective properties and
conduct their respective businesses as described in the
Registration Statement and the Prospectus, and the Company has
corporate power to enter into this Agreement and to carry out all the
terms and provisions hereof to be carried out by it;
(iii) the Company has an authorized, issued
and outstanding capitalization as set forth in the Prospectus; all of
the issued shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable and
were not issued in violation of or subject to any preemptive rights
or, to the best knowledge of such counsel, other rights to subscribe
for or purchase securities; the Firm Securities have been duly
authorized by all necessary corporate action of the Company and, when
issued and delivered to and paid for by the Underwriters pursuant to
this Agreement, will be validly issued, fully paid and nonassessable;
the Firm Securities have been duly included for quotation on the
Nasdaq National Market; no holders of outstanding shares of capital
stock of the Company are entitled as such to any preemptive or, to the
best knowledge of such counsel, to other rights to subscribe for any
of the Securities; and, to the best knowledge of such counsel, no
holders of securities of the Company are entitled to have such
securities registered under the Registration Statement;
(iv) the statements set forth under the
heading "Description of Capital Stock" in the Prospectus, insofar as
such statements purport to summarize the material provisions of
the capital stock of the Company, provide a summary of such material
provisions to the extent required by the Act, and the statements set
forth under the headings "Business - Services and Support Agreement,"
"Business - Governmental and State Regulations" and "Certain
Transactions" in the Prospectus, insofar as such statements constitute
a summary of the agreements and matters referred to therein, provide a
summary of such agreements and matters to the extent required by the
Act;
(v) the execution and delivery of this
Agreement have been duly authorized by all necessary corporate action
of the Company and this Agreement has been duly executed
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and delivered by the Company; The Option Agreement has been duly
executed and delivered by Xx. Xxxx Xxxxxx, D.D.S. and is the valid and
binding agreement of Xx. Xxxx Xxxxxx, D.D.S., enforceable against Xx.
Xxxx Xxxxxx, D.D.S. in accordance with its terms.
(vi) (A) to the best knowledge of such
counsel, no legal or governmental proceedings are pending to which the
Company or any of the Dental Entities is a party or to which the
property of the Company or any of the Dental Entities is subject that
are required to be described in the Registration Statement or the
Prospectus and are not described therein, and, to the best knowledge
of such counsel, no such proceedings have been threatened against the
Company or any of the Dental Entities or with respect to any of their
respective properties and (B) such counsel does not know of any
contract or other document of a character that is required to be
described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement that is not
described therein or filed as required;
(vii) the issuance, offering and sale of the
Securities to the Underwriters by the Company pursuant to this
Agreement, the compliance by the Company with the other provisions of
this Agreement and the consummation of the other transactions
herein contemplated do not (A) require the consent, approval,
authorization, registration or qualification of or with any
governmental authority, except such as have been obtained and such as
may be required under state securities or blue sky laws, or (B)
conflict with or result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, lease or other agreement or instrument known
to such counsel to which the Company is a party or by which the
Company or any of its properties are bound, or the charter documents
or by-laws of the Company, or any statute or any judgment, decree,
order, rule or regulation of any court or other governmental authority
or any arbitrator known to such counsel and applicable to the Company,
subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law);
(viii) the Registration Statement is
effective under the Act; any required filing of the Prospectus or any
Term Sheet that constitutes a part thereof pursuant to Rules 434 and
424(b) has been made in the manner and within the time period required
by Rules 434 and 424(b); and, to the best knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement or any amendment thereto has been issued, and no proceedings
for that purpose have been instituted or threatened or are
contemplated by the Commission;
(ix) The Original Registration Statement
filed with respect to the Securities and each subsequent amendment
thereto and the Prospectus (in each case, other than the financial
statements and other financial information and schedules contained
therein, as to which such counsel need express no opinion) comply as
to form in all material respects with the
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applicable requirements of the Act and the rules and regulations of
the Commission thereunder;
(x) to the best knowledge of such counsel,
the Company and the Dental Entities possess all certificates,
authorizations and permits issued by the appropriate federal, state or
foreign regulatory authorities necessary to conduct their
respective businesses, and, to the best knowledge of such counsel, the
Company has not received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material
adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company, except
as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus);
(xi) the Company is not an "investment
company" under the Investment Company Act of 1940, as amended, and
consummation of the transactions herein contemplated will not cause
the Company to become an investment company subject to registration
under such Act;
(xii) to the best knowledge of such counsel,
the Company does not own any shares of stock or any other equity
securities of any corporation or have any equity interest in any
firm, partnership, association or other entity, except as described in
or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus);
(xiii) to the best knowledge of such counsel,
other than the shares of Common Stock sold in the IPO, all offers
and sales of the Company's capital stock prior to the date hereof were
at all relevant times exempt from the registration requirements of the
Act, and were the subject of an available exemption from the
registration requirements of all applicable state securities or blue
sky laws;
(xiv) each of the agreements providing for a
transaction that is part of the Recent Acquisitions has been duly
authorized, executed and delivered by the Company and, to the
best knowledge of such counsel, constitutes the valid and legally
binding obligation of each of the other parties thereto; there are no
statutory or contractual rights of dissent or appraisal with respect
to the transfer of any of the properties in the Recent Acquisitions;
and the Recent Acquisitions conformed in all material respects to the
extent required by the Act to the description thereof contained in the
Registration Statement; and
(xv) to the best knowledge of such counsel,
except as disclosed in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), there are no
outstanding (A) securities or obligations of the Company convertible
into or exchangeable for any capital stock of the Company, (B)
warrants, rights or options to subscribe for or purchase from the
Company any such capital stock or any such convertible or exchangeable
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securities or obligations, or (C) obligations of the Company to issue
any shares of capital stock, any such convertible or exchangeable
securities or obligations, or any such warrants, rights or options.
Such counsel shall also state that (other than as to the
financial statements and information and related schedules therein, as
to which such counsel shall express no opinion) they have no reason to
believe (A) that the Registration Statement, as of its effective date,
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading and (B) that the Prospectus, as
of its date or the date of such opinion, included or includes any
untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. Such counsel shall also state that no facts have come to
their attention that cause them to believe that the Company and the
Dental Entities are not conducting their respective business in
material compliance with the laws, rules and regulations applicable
thereto, including, without limitation, those relating to the practice
of dentistry (including the management or operation of dental
offices), the splitting of professional fees with non-dentists, the
ownership or control of the assets of a dental practice, the
employment of dentists or other personnel, the content of advertising,
limitations on tasks that may be delegated by any dentist to other
staff members, the business of insurance and reimbursement by
governmental agencies; and nothing has come to their attention that
causes them to believe that the provisions of the service, consulting
and management agreements and other business arrangements entered into
by the Company described in the Prospectus, or the operations of the
Company in accordance with the terms thereof, are not in material
compliance with applicable laws and governmental regulations.
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Company and public
officials.
References to the Registration Statement and the Prospectus in
this paragraph (b) shall include any amendment or supplement thereto
at the date of such opinion.
(c) The Representatives shall have received an
opinion, dated the Firm Closing Date of counsel for the Selling
Securityholders, to the effect that:
(i) each Selling Securityholder has full
power (partnership, trust or other) to enter into this Agreement, the
Custody Agreement and the Power of Attorney and to sell,
assign, transfer and deliver to the Underwriters the Securities to be
sold by such Selling Securityholder hereunder in accordance with the
terms of this Agreement, and to perform his or its obligations under
the Custody Agreement; the execution and delivery of this Agreement,
the Custody Agreement and the Power of Attorney have been duly
authorized by all necessary action (partnership, trust or other) of
each Selling Securityholder; this
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Agreement, the Custody Agreement and the Power of Attorney have been
executed and delivered by such Selling Securityholder; this Agreement
and, assuming due authorization, execution and delivery by the
Custodian, the Custody Agreement and the Power of Attorney, are the
legal, valid, binding and enforceable instruments of such Selling
Securityholder, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law);
(ii) the delivery by such Selling
Securityholder to the Underwriters of certificates for the
Securities being sold hereunder by such Selling Securityholder against
payment therefor as provided herein, will convey good and marketable
title to such Securities to the several Underwriters, free and clear
of any security interests, liens, encumbrances, equities, claims or
other defects; and
(iii) The sale of the Securities to the
Underwriters by such Selling Securityholder pursuant to this
Agreement, the compliance by such Selling Securityholder with the
other provisions of this Agreement and the Custody Agreement and the
consummation of the other transactions herein contemplated do not (A)
require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as
has been obtained, and except such as may be required for registration
under state securities or blue sky laws and, if the registration
statement filed with respect to the Securities (as amended) is not
effective under the Act as of the time of execution hereof, such as
may be required (and shall be obtained as provided in this Agreement)
under the Act and the Exchange Act, or (B) conflict with or result in
a breach or violation of any of the terms and provisions of, or
constitute a default under any indenture, mortgage, deed of trust,
lease or other agreement or instrument to which such Selling
Securityholder is a party or by which such Selling Securityholder or
any of such Selling Securityholder's properties are bound, or any
statute or any judgment, decree, order, rule or regulation known to
such counsel of any court or other governmental authority or any
arbitrator applicable to such Selling Securityholder.
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Company and public
officials.
References to the Registration Statement and the Prospectus in
this paragraph (c) shall include any amendment or supplement thereto
at the date of such opinion.
(d) The Representatives shall have received an
opinion, dated the Firm Closing Date, of King & Spalding, counsel for the
Underwriters, with respect to the issuance and sale of the Firm Securities, the
Registration Statement and the Prospectus, and such other related matters as
the Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters.
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(e) The Representatives shall have received from Deloitte
& Touche, LLP a letter or letters dated, respectively, the date hereof and the
Firm Closing Date, in form and substance satisfactory to the Representatives,
to the effect that:
(i) they are independent accountants with respect
to the Company within the meaning of the Act and the applicable rules
and regulations thereunder;
(ii) in their opinion, the audited financial
statements and schedules of the Company included in the Registration
Statement and the Prospectus comply in form in all material respects
with the applicable accounting requirements of the Act and the related
published rules and regulations;
(iii) on the basis of their limited review in
accordance with standards established by the American Institute of
Certified Public Accountants of any interim unaudited financial
statements of the Company included in the Registration Statement and
the Prospectus, carrying out certain specified procedures (which do
not constitute an examination made in accordance with generally
accepted auditing standards) that would not necessarily reveal matters
of significance with respect to the comments set forth in this
paragraph (iii), a reading of the minute books of the stockholders,
the board of directors and any committees thereof of the Company,
officials of the Company, and inquiries of certain officials of the
Company who have responsibility for financial and accounting matters,
nothing came to their attention that caused them to believe that:
(A) the unaudited financial statements of
the Company included in the Registration Statement and the
Prospectus do not comply in form in all material respects with
the applicable accounting requirements of the Act and the
related published rules and regulations thereunder or are not
in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the
audited financial statements included in the Registration
Statement and the Prospectus;
(B) at a specific date not more than five
business days prior to the date of such letter, there was any
change in long-term debt of the Company or any decreases in net
current assets or stockholders' equity of the Company, in each
case compared with amounts shown on the June 30, 1997 unaudited
balance sheet included in the Registration Statement and the
Prospectus, or for the period from June 30, 1997 to such
specified date there were any decreases, as compared with the
prior comparable period, in net revenues, income before income
taxes or net income of the Company, except in all instances for
changes, decreases or increases set forth in such letter;
(iv) they have carried out
certain specified procedures (as requested by the
Representatives), not constituting an audit, with
respect to certain amounts, percentages and
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financial information that are derived from the general accounting
records of the Company and are included in the Registration Statement
and the Prospectus, and have compared such amounts, percentages and
financial information with such records of the Company or with
information derived from such records and have found them to be in
agreement, excluding any questions of legal interpretation; and
(v) on the basis of a reading of the unaudited pro
forma financial data included in the Registration Statement and the
Prospectus, carrying out certain specified procedures that would not
necessarily reveal matters of significance with respect to the
comments set forth in this paragraph (v), inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters and proving the arithmetic accuracy of the
application of the pro forma adjustments to the historical amounts in
the unaudited pro forma financial data, nothing came to their
attention that caused them to believe that the unaudited pro forma
financial data do not comply in form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X or
that the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of such data.
In the event that the letters referred to above set forth any
such changes, decreases or increases, it shall be a further condition
to the obligations of the Underwriters that (A) such letters shall be
accompanied by a written explanation from the Company as to the
significance thereof, unless the Representatives deem such explanation
unnecessary, and (B) such changes, decreases or increases do not, in
the sole judgment of the Representatives, make it impractical or
inadvisable to proceed with the purchase and delivery of the
Securities as contemplated by the Registration Statement, as amended
as of the date hereof.
References to the Registration Statement and the Prospectus in
this paragraph (f) with respect to either letter referred to above
shall include any amendment or supplement thereto at the date of such
letter.
(f) The Representatives shall have received a
certificate, dated the Firm Closing Date, of the principal executive officer and
the principal financial or accounting officer of the Company to the effect that:
(i) the representations and warranties of the
Company in this Agreement are true and correct as if made on and as of
the Firm Closing Date; the Registration Statement, as amended as of
the Firm Closing Date, does not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading, and the Prospectus, as amended or
supplemented as of the Firm Closing Date, does not include any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and the
Company has performed all covenants and agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the
Firm Closing Date;
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(ii) no stop order suspending the effectiveness of
the Registration Statement or any amendment thereto has been issued,
and no proceedings for that purpose have been instituted or threatened
or, to the best of the Company's knowledge, are contemplated by the
Commission; and
(iii) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
the Company has not sustained any material loss or interference with
its businesses or properties from fire, flood, hurricane, accident or
other calamity, whether or not covered by insurance, or from any labor
dispute or any legal or governmental proceeding, and there has not
been any material adverse change, or any development involving a
prospective material adverse change, in the condition (financial or
otherwise), management, business prospects, net worth or results of
operations of the Company, except as described in or contemplated by
the Prospectus (exclusive of any amendment or supplement thereto).
(g) The Underwriters shall have received a certificate
from each Selling Securityholder, dated the Firm Closing Date, to the effect
that:
(i) the representations and warranties of such
Selling Securityholder in this Agreement are true and correct as if
made on and as of the Firm Closing Date;
(ii) the Registration Statement, as amended as of
the Firm Closing Date, does not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading, and the Prospectus, as amended or
supplemented as of the Firm Closing Date, does not include any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statement therein, in the light of the
circumstances under which they were made, not misleading; and
(iii) such Selling Securityholder has performed all
covenants and agreements on his or its part to be performed or
satisfied at or prior to the Firm Closing Date.
(h) The Representatives shall have received from (i) each
person who is a director or officer of the Company and (ii) each Selling
Securityholder an agreement to the effect that such person or entity will not,
directly or indirectly, without the prior written consent of Prudential
Securities Incorporated, on behalf of the Underwriters, offer, sell, offer to
sell, contract to sell, pledge, grant any option to purchase or otherwise sell
or dispose (or announce any offer, sale, pledge, offer of sale, contract of
sale, grant of an option to purchase or other sale or disposition) of any shares
of Common Stock or any securities convertible into, or exchangeable or
exercisable for, shares of Common Stock or other capital stock of the Company,
or any right to purchase or acquire Common Stock or other capital stock of the
Company for a period of 180 days after the date of this Agreement, except for
bona fide gifts or transfers effected by such stockholders other than on any
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securities exchange or in the over-the-counter market to donees or transferees
that agree to be bound by similar agreements.
(i) On or before the Firm Closing Date, the
Representatives and counsel for the Underwriters shall have received such
further certificates, documents or other information as they may have reasonably
requested from the Company.
(j) Prior to the commencement of the offering of the
Securities, the Securities shall have been included for trading on the Nasdaq
Stock Market.
All opinions, certificates, letters and documents delivered pursuant
to this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to purchase and
pay for any Option Securities shall be subject, in their discretion, to each of
the foregoing conditions to purchase the Firm Securities, except that all
references to the Firm Securities and the Firm Closing Date shall be deemed to
refer to such Option Securities and the related Option Closing Date,
respectively.
8. Indemnification and Contribution.
(a) The Company and each Selling Securityholder jointly
and severally agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter or such controlling
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon:
(i) any untrue statement or alleged untrue
statement made by the Company or such Selling Securityholder in
Section 2 of this Agreement,
(ii) any untrue statement or alleged untrue
statement of any material fact contained in (A) the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto or (B) any
application or other document, or any amendment or supplement thereto,
executed by the Company or such Selling Securityholder or based upon
written information furnished by or on behalf of the Company or any
Selling Securityholder filed in any jurisdiction in order to qualify
the Securities under the securities or blue sky laws thereof or filed
with the Commission or any securities association or securities
exchange (each an "Application"),
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(iii) the omission or alleged omission to state in
the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto,
or any Application a material fact required to be stated therein or
necessary to make the statements therein not misleading, or
(iv) any untrue statement or alleged untrue
statement of any material fact contained in any audio or visual
materials derived solely from information supplied by the Company to
be used in connection with the marketing of the Securities, including
without limitations, slides, videos, films and tape recordings,
and will reimburse, as incurred, each Underwriter and each such
controlling person for any legal or other expenses reasonably incurred
by such Underwriter or such controlling person in connection with
investigating, defending against or appearing as a third-party witness
in connection with any such loss, claim, damage, liability or action;
provided, however, that the Company and such Selling Securityholders
will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission
made in such registration statement or any amendment thereto, any
Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto or any Application in reliance upon and in conformity with
written information furnished to the Company by such Underwriter
through the Representatives specifically for use therein; and
provided, further, that the Company and such Selling Securityholders
will not be liable to any Underwriter or any person controlling such
Underwriter with respect to any such untrue statement or omission made
in any Preliminary Prospectus that is corrected in the Prospectus (or
any amendment or supplement thereto) if the person asserting any such
loss, claim, damage or liability purchased Securities from such
Underwriter but was not sent or given a copy of the Prospectus (as
amended or supplemented) at or prior to the written confirmation of
the sale of such Securities to such person in any case where such
delivery of the Prospectus (as amended or supplemented) is required by
the Act, unless such failure to deliver the Prospectus (as amended or
supplemented) was a result of noncompliance by the Company with
Section 5(d) of this Agreement. This indemnity agreement will be in
addition to any liability which the Company and such Selling
Securityholders may otherwise have. Neither the Company nor such
Selling Securityholders will, without the prior written consent of the
Underwriter or Underwriters purchasing, in the aggregate, more than
fifty percent (50%) of the Securities, settle or compromise or consent
to the entry of any judgment in any pending or threatened claim,
action, suit or proceeding in respect of which indemnification may be
sought hereunder (whether or not any such Underwriter or any person
who controls any such Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act is a party to such claim,
action, suit or proceeding), unless such settlement, compromise or
consent includes an unconditional release of all of the Underwriters
and such controlling persons from all liability arising out of such
claim, action, suit or proceeding.
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(b) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement, each Selling Securityholder and
each person, if any, who controls the Company or any Selling Securityholder
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
against any losses, claims, damages or liabilities to which the Company, any
such director or officer of the Company, such Selling Securityholder or any such
controlling person of the Company or such Selling Securityholder may become
subject under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or any
Application or (ii) the omission or the alleged omission to state therein a
material fact required to be stated in the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto, or any Application necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
specifically for use therein; and, subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any legal or
other expenses reasonably incurred by the Company or any such director, officer
or controlling person or such Selling Securityholder in connection with
investigating or defending any such loss, claim, damage, liability or any action
in respect thereof. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under this Section 8. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party; provided, however, that if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be one or more
legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnifying party shall not have the right to direct the defense of such action
on behalf of such indemnified party or parties and such indemnified party or
parties shall have the right to select separate counsel to defend such action on
behalf of such indemnified party or parties. After notice from the indemnifying
party to such indemnified party of its election so to assume the defense thereof
and approval by such indemnified party of counsel appointed to defend such
action, the indemnifying party will not be liable to such indemnified party
under this Section 8 for any legal or other expenses, other than reasonable
costs of investigation, subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i)
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the indemnified party shall have employed separate counsel in accordance with
the proviso to the next preceding sentence (it being understood, however, that
in connection with such action the indemnifying party shall not be liable for
the expenses of more than one separate counsel (in addition to local counsel)
in any one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
designated by the Representatives in the case of paragraph (a) of this Section
8, representing the indemnified parties under such paragraph (a) who are
parties to such action or actions) or (ii) the indemnifying party does not
promptly retain counsel satisfactory to the indemnified party or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. After such notice from the
indemnifying party to such indemnified party, the indemnifying party will not
be liable for the costs and expenses of any settlement of such action effected
by such indemnified party without the consent of the indemnifying party.
(d) In circumstances in which the indemnity agreement
provided for in the preceding paragraphs of this Section 8 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect (i) the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party on the other from the offering of the Securities or
(ii) if the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Securityholders on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total proceeds from the offering
(before deducting expenses) received by the Company and the Selling
Securityholders bear to the total underwriting discounts and commissions
received by the Underwriters. The relative fault of the parties shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, the Selling
Securityholders or the Underwriters, the parties' relative intents, knowledge,
access to information and opportunity to correct or prevent such statement or
omission, and any other equitable considerations appropriate in the
circumstances. The Company, the Selling Securityholders and the Underwriters
agree that it would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take into account the equitable considerations referred to above
in this paragraph (d). Notwithstanding any other provision of this paragraph
(d), no Underwriter shall be obligated to make contributions hereunder that in
the aggregate exceed the total public offering price of the Securities purchased
by such Underwriter under this Agreement, less the aggregate amount of any
damages that such Underwriter has otherwise been required to pay in respect of
the same or any substantially similar
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claim, and no person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute hereunder are several in proportion to their
respective underwriting obligations and not joint, and contributions among
Underwriters shall be governed by the provisions of the Prudential Securities
Incorporated Master Agreement Among Underwriters. For purposes of this
paragraph (d), each person, if any, who controls an Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement and
each person, if any, who controls the Company or any Selling Securityholder
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
shall have the same rights to contribution as the Company or such Selling
Securityholder, as the case may be.
(e) The liability of each Selling Securityholder under
the representations and warranties contained in Sections 2 and 3 hereof and
under the indemnity and contribution agreements contained in the provisions of
this Section 8 shall be limited to an amount equal to the public offering price
of the Securities to be sold by such Selling Securityholder to the Underwriters
minus the amount of the underwriting discount paid thereon to the Underwriters
by such Selling Securityholder; provided however, that no Selling Securityholder
shall be required to provide payment under the indemnity agreements contained in
the provisions of this Section 8 until the Underwriter or controlling person
seeking indemnification shall have first made a demand for payment on the
Company with respect to any such loss, claim, damage, liability or expense and
the Company shall have failed to make such requested payment within 30 days
after receipt thereof. The Company and such Selling Securityholder may agree,
as among themselves and without limiting the rights of the Underwriters under
this Agreement, as to the respective amounts of such liability for which they
each shall be responsible.
9. Default of Underwriters. If one or more Underwriters default
in their obligations to purchase Firm Securities or Option Securities hereunder
and the aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Securities or
Option Securities that such defaulting Underwriter or Underwriters agreed but
failed to purchase. If one or more Underwriters so default with respect to an
aggregate number of Securities that is more than ten percent of the aggregate
number of Firm Securities or Option Securities, as the case may be, to be
purchased by all of the Underwriters at such time hereunder, and if
arrangements satisfactory to the Representatives are not made within 36 hours
after such default for the purchase by other persons (who may include one or
more of the non-defaulting Underwriters, including the Representatives) of the
Securities with respect to which
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such default occurs, this Agreement will terminate without liability on the
part of any non-defaulting Underwriter or the Company other than as provided in
Section 10 hereof if the default is with respect to the Firm Closing Date and
without liability for the Option Shares if such default is with respect to the
Option Closing Date. In the event of any default by one or more Underwriters
as described in this Section 9, the Representatives shall have the right to
postpone the Firm Closing Date or the Option Closing Date, as the case may be,
established as provided in Section 3 hereof for not more than seven business
days in order that any necessary changes may be made in the arrangements or
documents for the purchase and delivery of the Firm Securities or Option
Securities, as the case may be. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 9. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
10. Default by Selling Securityholders. If on the Firm Closing
Date any Selling Securityholder fails to sell the Securities, which such
Selling Securityholder has agreed to sell on such date as set forth herein, the
Company agrees that it will sell that number of shares of Common Stock to the
Underwriters which represents the Securities which such Selling Securityholder
has failed to so sell, or such lesser number as may be requested by you.
11. Survival. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company and its
officers, the Selling Securityholders and the several Underwriters set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, any of its officers or
directors, any Selling Securityholders, any Underwriter or any controlling
person referred to in Section 8 hereof and (ii) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 6 and 8 hereof shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.
12. Termination.
(a) This Agreement may be terminated with respect to the
Firm Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company or the Selling Securityholders given
prior to the Firm Closing Date or the related Option Closing Date, respectively,
in the event that the Company or the Selling Securityholder shall have failed,
refused or been unable to perform all obligations and satisfy all conditions on
its part to be performed or satisfied hereunder at or prior thereto or, if at or
prior to the Firm Closing Date or such Option Closing Date, respectively,
(i) the Company shall have, in the sole judgment
of the Representatives, sustained any material loss or interference
with its business or properties from fire, flood, hurricane, accident
or other calamity, whether or not covered by insurance, or from any
labor dispute or any legal or governmental proceeding or there shall
have been any material adverse change, or any development involving a
prospective material adverse change
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(including without limitation a change in management or control of the
Company), in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company, except
as described in or contemplated by the Prospectus (exclusive of any
amendment or supplement thereto);
(ii) trading in the Common Stock shall have been
suspended by the Commission or the Nasdaq Stock Market;
(iii) trading in securities generally on the New
York Stock Exchange or the Nasdaq Stock Market shall have been
suspended or minimum or maximum prices shall have been established on
any such exchange or market system;
(iv) a banking moratorium shall have been declared
by New York or United States authorities; or
(v) there shall have been (A) an outbreak or
escalation of hostilities between the United States and any foreign
power, (B) an outbreak or escalation of any other insurrection or
armed conflict involving the United States or (C) any other calamity
or crisis or material adverse change in general economic, political or
financial conditions having an effect on the United States financial
markets that, in the sole judgment of the Representatives, makes it
impractical or inadvisable to proceed with the public offering or the
delivery of the Securities as contemplated by the Registration
Statement, as amended as of the date hereof.
(b) Termination of this Agreement pursuant to this
Section 12 shall be without liability of any party to any other party except as
provided in Section 11 hereof.
13. Information Supplied by Underwriters. The statements set
forth in the last paragraph on the front cover page and in the first, third,
seventh and eighth paragraphs under the heading "Underwriting" in any
Preliminary Prospectus or the Prospectus (to the extent such statements relate
to the Underwriters) constitute the only information furnished by any
Underwriter through the Representatives to the Company for the purposes of
Sections 2(a)(ii) and 8 hereof. The Underwriters confirm that such statements
(to such extent) are correct.
14. Notices. All communications hereunder shall be in writing
and, if sent to any of the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission and confirmed in writing to Prudential
Securities Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Equity Transactions Group; if sent to the Company, shall be
delivered or sent by mail, telex or facsimile transmission and confirmed in
writing to the Company at 0000 Xxxxxxxx Xxxxxxx Xxxxxxxx, Xxxxx 000, Xxxxx,
Xxxxxxx 00000, Attention: Xxxxx Xxxxxx, with a copy to Xxxxxxxx, Loop &
Xxxxxxxx, 000 X. Xxxxxxx Xxxxxxxxx, Xxxxxxx Xxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx
00000, Attention: Xxxxxxx X. Xxxxx, Esq.; if sent to the Selling
Securityholders shall be delivered or sent by mail, telex or facsimile
transmission and confirmed in writing to Xxxxx Xxxxxx, as Attorney-in-Fact c/o
the Company at 0000 Xxxxxxxx Xxxxxxx Xxxxxxxx, Xxxxx 000, Xxxxx, Xxxxxxx 00000,
with a
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copy to Xxxxxxxx, Loop & Xxxxxxxx, 000 X. Xxxxxxx Xxxxxxxxx, Xxxxxxx Xxxxx,
Xxxxx 0000, Xxxxx, Xxxxxxx 00000, Attention: Xxxxxxx X. Xxxxx, Esq..
15. Successors. This Agreement shall inure to the benefit of and
shall be binding upon the several Underwriters, the Company, the Selling
Securityholders and their respective successors and legal representatives, and
nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person any legal or equitable right, remedy or
claim under or in respect of this Agreement, or any provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person except that (i) the indemnities of the
Company and the Selling Securityholders contained in Section 8 of this
Agreement shall also be for the benefit of any person or persons who control
any Underwriter within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act and (ii) the indemnities of the Underwriters contained in
Section 8 of this Agreement shall also be for the benefit of the directors of
the Company, the officers of the Company who have signed the Registration
Statement and any person or persons who control the Company or the Selling
Securityholders within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act. No purchaser of Securities from any Underwriter shall be
deemed a successor because of such purchase.
16. Applicable Law. The validity and interpretation of this
Agreement, and the terms and conditions set forth herein, shall be governed by
and construed in accordance with the laws of the State of New York, without
giving effect to any provisions relating to conflicts of laws.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company, each
Selling Securityholder and each of the several Underwriters.
Very truly yours,
COAST DENTAL SERVICES, INC.
By:_____________________________________
Xxxxx Xxxxxx
Chief Executive Officer
SELLING SECURITYHOLDERS
By:_____________________________________
Xxxxx Xxxxxx, as attorney-in-fact
for the Selling Securityholders listed
in Schedule 2 attached hereto
The foregoing Agreement
is hereby confirmed and
accepted as of the date
first above written.
PRUDENTIAL SECURITIES INCORPORATED
XXXXX XXXXXX INC.
XXXXXX X. XXXXX & CO. INCORPORATED
By: PRUDENTIAL SECURITIES INCORPORATED
By: ____________________________________
Xxxx-Xxxxxx Canfin
Managing Director
For itself and on behalf of the Representatives.
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SCHEDULE 1
UNDERWRITERS
Number of Firm
Securities to
Underwriter be Purchased
------------
Prudential Securities Incorporated . . . . . . . . . . . . . . . . . . . . . .
Xxxxx Xxxxxx Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Xxxxxx X. Xxxxx & Co. Incorporated . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000
==========
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SCHEDULE 2
SELLING SECURITYHOLDERS
Number of Firm
Securities to
Selling Securityholder be Purchased
------------
Diasti Nevada Family Limited Partnership . . . . . . . . . . . . . . . . . . . 370,000
Xxxxxx X. Xxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000
-------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400,000
=======
