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EXHIBIT 10.4
REGISTRATION RIGHTS AGREEMENT
by and among
FIRST NEW ENGLAND DENTAL CENTERS, INC.
and
THE INITIAL HOLDERS SPECIFIED ON
THE SIGNATURE PAGE HEREOF
Dated as of July 25, 1997
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TABLE OF CONTENTS
Page
1. DEFINITIONS...............................................................1
2. REGISTRATION UNDER THE SECURITIES ACT.....................................5
2.1 DEMAND REGISTRATION.............................................5
2.2 INCIDENTAL REGISTRATION.........................................8
2.3 SHELF REGISTRATION.............................................10
2.4 EXPENSES.......................................................10
2.5 UNDERWRITTEN OFFERINGS.........................................11
2.6 CONVERSIONS; EXERCISES.........................................11
2.7 POSTPONEMENTS..................................................11
3. HOLDBACK ARRANGEMENTS....................................................13
3.1 RESTRICTIONS ON SALE BY HOLDERS OF REGISTRABLE SECURITIES......13
3.2 RESTRICTIONS ON SALE BY THE COMPANY AND OTHERS.................13
4. REGISTRATION PROCEDURES..................................................13
4.1 OBLIGATIONS OF THE COMPANY.....................................13
4.2 SELLER INFORMATION.............................................18
4.3 NOTICE TO DISCONTINUE..........................................18
5. INDEMNIFICATION; CONTRIBUTION............................................19
5.1 INDEMNIFICATION BY THE COMPANY.................................19
5.2 INDEMNIFICATION BY HOLDERS.....................................19
5.3 CONDUCT OF INDEMNIFICATION PROCEEDINGS.........................20
5.4 CONTRIBUTION...................................................21
5.5 OTHER INDEMNIFICATION..........................................21
5.6 INDEMNIFICATION PAYMENTS.......................................21
6. GENERAL..................................................................22
6.1 ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES...................22
6.2 REGISTRATION RIGHTS TO OTHERS..................................22
6.3 AVAILABILITY OF INFORMATION; RULE 144; RULE 144A; OTHER
EXEMPTIONS.....................................................22
6.4 AMENDMENTS AND WAIVERS.........................................23
6.5 NOTICES........................................................23
6.6 SUCCESSORS AND ASSIGNS.........................................24
6.7 COUNTERPARTS...................................................24
6.8 DESCRIPTIVE HEADINGS, ETC......................................24
6.9 SEVERABILITY...................................................25
6.10 GOVERNING LAW..................................................25
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Page
6.11 REMEDIES; SPECIFIC PERFORMANCE.................................25
6.12 ENTIRE AGREEMENT...............................................25
6.13 NOMINEES FOR BENEFICIAL OWNERS.................................25
6.14 CONSENT TO JURISDICTION; WAIVER OF JURY........................26
6.15 FURTHER ASSURANCES.............................................26
6.16 NO INCONSISTENT AGREEMENTS.....................................26
6.17 CONSTRUCTION...................................................26
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REGISTRATION RIGHTS AGREEMENT (this or the "Agreement") dated
as of July 25, 1997, by and among First New England Dental Centers, Inc., a
Delaware corporation (the "Company"), and the Initial Holders specified on the
signature pages to this Agreement.
W I T N E S S E T H :
WHEREAS, simultaneously herewith, the Company and the Initial
Holders are entering into a Note Purchase Agreement (the "Subscription
Agreement"), pursuant to which the Company is issuing, and the Initial Holders
are purchasing, certain securities of the Company; and
WHEREAS, in order to induce the Initial Holders to enter into
the Subscription Agreement, the Company has agreed to provide certain
registration rights on the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements contained herein, and for other good and valuable
consideration the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound hereby, the parties hereto agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall have
the following meanings:
"Affiliate" shall mean (i) with respect to any Person, any
other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such Person, and (ii) with respect to any
individual, shall also mean the spouse, sibling, child, step-child, grandchild,
niece, nephew or parent of such Person, or the spouse thereof.
"Blackout Period" shall have the meaning set forth in Section
2.7.
"Common Shares" shall mean shares of common stock, par value
$.01 per share, of the Company.
"Company" shall have the meaning set forth in the preamble.
"Demand Registration" shall mean a registration required to be
effected by the Company pursuant to Section 2.1.
"Demand Registration Statement" shall mean a registration
statement of the Company which covers the Registrable Securities requested to be
included therein pursuant to the provisions of Section 2.1 and all amendments
and supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference (or deemed to be
incorporated by reference) therein.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time, and the rules and regulations thereunder, or any
similar or successor statute.
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"Holders" shall mean the Initial Holders for so long as they
own any Registrable Securities and such of its respective heirs, successors and
permitted assigns (including any permitted transferees of Registrable
Securities) who acquire or are otherwise the transferee of Registrable
Securities, directly or indirectly, from such Initial Holders (or any subsequent
Holder), for so long as such heirs, successors and permitted assigns own any
Registrable Securities. For purposes of this Agreement, a Person will be deemed
to be a Holder whenever such Person holds an option to purchase, or a security
convertible into or exercisable or exchangeable for, Registrable Securities,
whether or not such purchase, conversion, exercise or exchange has actually been
effected and disregarding any legal restrictions upon the exercise of such
rights. Registrable Securities issuable upon exercise of an option or upon
conversion, exchange or exercise of another security shall be deemed outstanding
for the purposes of this Agreement.
"Holders' Counsel" shall mean one firm of counsel (per
registration) to the Holders of Registrable Securities participating in such
registration, which counsel shall be selected (i) in the case of a Demand
Registration, by the Initiating Holders holding a majority of the Registrable
Securities for which registration was requested in the Request, and (ii) in all
other cases, by the Majority Holders participating in the Registration.
"Incidental Registration" shall mean a registration required
to be effected by the Company pursuant to Section 2.2.
"Incidental Registration Statement" shall mean a registration
statement of the Company which covers the Registrable Securities requested to be
included therein pursuant to the provisions of Section 2.2 and all amendments
and supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference (or deemed to be
incorporated by reference) therein.
"Initial Holders" shall mean the Persons specified as such on
the signature pages to this Agreement on the date hereof.
"Initial Public Offering" shall mean the first public offering
of any class of securities of the Company pursuant to a registration statement
filed with and declared effective by the SEC.
"Initiating Holders" shall mean, with respect to a particular
registration, the Holders who initiated the Request for such registration.
"Inspectors" shall have the meaning set forth in Section
4.1(g).
"Majority Holders" shall mean one or more Holders of
Registrable Securities who at such time hold a majority of the Registrable
Securities then outstanding.
"Majority Holders of the Registration" shall mean, with
respect to a particular registration, one or more Holders of Registrable
Securities who would hold a majority of the Registrable Securities to be
included in such registration.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
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"Notes" shall mean the Senior Secured Fixed Rate Notes due
July __, 1998, issued to the Initial Holders pursuant to the Subscription
Agreement.
"Person" shall mean any individual, firm, partnership,
corporation, trust, joint venture, association, joint stock company, limited
liability company, unincorporated organization or any other entity or
organization, including a government or agency or political subdivision thereof,
and shall include any successor (by merger or otherwise) of such entity.
"Prospectus" shall mean the prospectus included in a
Registration Statement (including, without limitation, any preliminary
prospectus and any prospectus that includes any information previously omitted
from a prospectus filed as part of an effective registration statement in
reliance upon Rule 430A promulgated under the Securities Act), and any such
Prospectus as amended or supplemented by any prospectus supplement, and all
other amendments and supplements to such Prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
(or deemed to be incorporated by reference) therein.
"Registrable Securities" shall mean (i) any Warrant Shares
issued or issuable upon exercise of the Warrants issued to the Initial Holders
pursuant to the Subscription Agreement, (ii) securities of the Company acquired
by the Initial Holders or their assignees in any transaction contemplated by the
Subscription Agreement, and (iii) any other securities of the Company (or any
successor or assign of the Company, whether by merger, consolidation, sale of
assets or otherwise) which may be issued or issuable with respect to, in
exchange for, or in substitution of, Registrable Securities referenced in
clauses (i) or (ii) above by reason of any dividend or stock split, combination
of shares, merger, consolidation, recapitalization, reclassification,
reorganization, sale of assets or similar transaction. As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities
when (A) a registration statement with respect to the sale of such securities
shall have been declared effective under the Securities Act and such securities
shall have been disposed of in accordance with such registration statement, (B)
such securities are sold pursuant to Rule 144 (or any similar provisions then in
force) under the Securities Act, (C) such securities have been otherwise
transferred, a new certificate or other evidence of ownership for them not
bearing the legend restricting further transfer shall have been delivered by the
Company and subsequent public distribution of them shall not require
registration under the Securities Act, or (D) such securities shall have ceased
to be outstanding; provided, however, that clauses (A) and (C) shall not apply
if the Holder may be deemed to be an affiliate of the Company.
"Registration Expenses" shall mean any and all expenses
incident to performance of or compliance with this Agreement by the Company and
its subsidiaries, including, without limitation (i) all SEC, stock exchange,
NASD and other registration, listing and filing fees, (ii) all fees and expenses
incurred in connection with compliance with state securities or blue sky laws
and compliance with the rules of any stock exchange (including fees and
disbursements of counsel in connection with such compliance and the preparation
of a blue sky memorandum and legal investment survey), (iii) all expenses of any
Persons in preparing or assisting in preparing, word processing, printing,
distributing, mailing and delivering any Registration Statement, any Prospectus,
any underwriting agreements, transmittal letters, securities sales agreements,
securities
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certificates and other documents relating to the performance of or compliance
with this Agreement, (iv) the fees and disbursements of counsel for the Company,
(v) the fees and disbursements of Holders' Counsel, (vi) the fees and
disbursements of all independent public accountants (including the expenses of
any audit and/or "cold comfort" letters) and the fees and expenses of other
Persons, including experts, retained by the Company, (vii) the expenses incurred
in connection with making road show presentations and holding meetings with
potential investors to facilitate the distribution and sale of Registrable
Securities which are customarily borne by the issuer, (viii) any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities, and (ix) premiums and other costs of policies of insurance against
liabilities arising out of the public offering of the Registrable Securities
being registered; provided, however, Registration Expenses shall not include
discounts and commissions payable to underwriters, selling brokers, dealer
managers or other similar Persons engaged in the distribution of any of the
Registrable Securities; and provided further, that in any case where
Registration Expenses are not to be borne by the Company, such expenses shall
not include salaries of Company personnel or general overhead expenses of the
Company, auditing fees, premiums or other expenses relating to liability
insurance required by underwriters of the Company or other expenses for the
preparation of financial statements or other data normally prepared by the
Company in the ordinary course of its business or which the Company would have
incurred in any event; and provided, further, that in the event the Company
shall, in accordance with Section 2.2 or Section 2.6 hereof, not register any
securities with respect to which it had given written notice of its intention to
register to Holders, notwithstanding anything to the contrary in the foregoing,
all of the costs incurred by the Holders in connection with such registration
shall be deemed to be Registration Expenses.
"Registration Statement" shall mean any registration statement
of the Company which covers any Registrable Securities and all amendments and
supplements to any such Registration Statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference (or deemed to be
incorporated by reference) therein.
"Request" shall have the meaning set forth in Section 2.1(a).
"SEC" shall mean the Securities and Exchange Commission, or
any successor agency having jurisdiction to enforce the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as
amended from time to time, and the rules and regulations thereunder, or any
similar or successor statute.
"Shelf Registration" shall have the meaning set forth in
Section 2.1(a).
"Subscription Agreement" shall have the meaning set forth in
the preamble.
"Underwriters" shall mean the underwriters, if any, of the
offering being registered under the Securities Act.
"Underwritten Offering" shall mean a sale of securities of the
Company to an Underwriter or Underwriters for reoffering to the public.
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"Warrant Shares" shall mean the Common Shares or other equity
securities issued or issuable upon the exercise of the Warrants.
"Warrants" shall mean the warrants issued to the Initial
Holders pursuant to the Subscription Agreement, together with any additional
warrants issued in accordance with the terms thereof.
"Withdrawn Demand Registration" shall have the meaning set
forth in Section 2.1(a).
"Withdrawn Request" shall have the meaning set forth in
Section 2.1(a).
2. REGISTRATION UNDER THE SECURITIES ACT.
2.1 Demand Registration.
(a) Right to Demand Registration. Subject to Section 2.1(c),
at any time or from time to time the Majority Holders shall have the right to
request in writing that the Company register all or part of such Holders'
Registrable Securities (a "Request") (which Request shall specify the amount of
Registrable Securities intended to be disposed of by such Holders and the
intended method of disposition thereof) by filing with the SEC a Demand
Registration Statement. As promptly as practicable, but no later than 10 days
after receipt of a Request, the Company shall give written notice of such
requested registration to all Holders of Registrable Securities. Subject to
Section 2.1(b), the Company shall include in a Demand Registration (i) the
Registrable Securities intended to be disposed of by the Initiating Holders and
(ii) the Registrable Securities intended to be disposed of by any other Holder
which shall have made a written request (which request shall specify the amount
of Registrable Securities to be registered and the intended method of
disposition thereof) to the Company for inclusion thereof in such registration
within 20 days after the receipt of such written notice from the Company. The
Company shall, as expeditiously as possible following a Request, use its best
efforts to cause to be filed with the SEC a Demand Registration Statement
providing for the registration under the Securities Act of the Registrable
Securities which the Company has been so requested to register by all such
Holders, to the extent necessary to permit the disposition of such Registrable
Securities so to be registered in accordance with the intended methods of
disposition thereof specified in such Request or further requests (including,
without limitation, by means of a shelf registration pursuant to Rule 415 under
the Securities Act (a "Shelf Registration") if so requested and if the Company
is then eligible to use such a registration). The Company shall use its best
efforts to have such Demand Registration Statement declared effective by the SEC
as soon as practicable thereafter and to keep such Demand Registration Statement
continuously effective for the period specified in Section 4.1(b).
A Request may be withdrawn prior to the filing of the Demand
Registration Statement by the Majority Holders of the Registration (a "Withdrawn
Request") and a Demand Registration Statement may be withdrawn prior to the
effectiveness thereof by the Majority Holders of the Registration (a "Withdrawn
Demand Registration"), and such withdrawals shall be treated as a Demand
Registration which shall have been effected pursuant to this Section 2.1, unless
the Holders of Registrable Securities to be included in such Registration
Statement reimburse the Company for its
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reasonable out-of-pocket Registration Expenses relating to the preparation and
filing of such Demand Registration Statement (to the extent actually incurred);
provided; however, that if a Withdrawn Request or Withdrawn Registration
Statement is made (A) because of a material adverse change in the business,
financial condition or prospects of the Company, or (B) because the sole or lead
managing Underwriter advises that the amount of Registrable Securities to be
sold in such offering be reduced pursuant to Section 2.1(b) by more than 10% of
the Registrable Securities to be included in such Registration Statement, or (C)
because of a postponement of such registration pursuant to Section 2.7, then
such withdrawal shall not be treated as a Demand Registration effected pursuant
to this Section 2.1 (and shall not be counted toward the number of Demand
Registrations), and the Company shall pay all Registration Expenses in
connection therewith. Any Holder requesting inclusion in a Demand Registration
may, at any time prior to the effective date of the Demand Registration
Statement (and for any reason) revoke such request by delivering written notice
to the Company revoking such requested inclusion.
The registration rights granted pursuant to the provisions of
this Section 2.1 shall be in addition to the registration rights granted
pursuant to the other provisions of Section 2 hereof.
(b) Priority in Demand Registrations. If a Demand Registration
involves an Underwritten Offering, and the sole or lead managing Underwriter, as
the case may be, of such Underwritten Offering shall advise the Company in
writing (with a copy to each Holder requesting registration) on or before the
date five days prior to the date then scheduled for such offering that, in its
opinion, the amount of Registrable Securities requested to be included in such
Demand Registration exceeds the number which can be sold in such offering within
a price range acceptable to the Majority Holders of the Registration (such
writing to state the basis of such opinion and the approximate number of
Registrable Securities which may be included in such offering), the Company
shall include in such Demand Registration, to the extent of the number which the
Company is so advised may be included in such offering, the Registrable
Securities requested to be included in the Demand Registration by the Holders
allocated pro rata in proportion to the number of Registrable Securities
requested to be included in such Demand Registration by each of them. In the
event the Company shall not, by virtue of this Section 2.1(b), include in any
Demand Registration all of the Registrable Securities of any Holder requesting
to be included in such Demand Registration, such Holder may, upon written notice
to the Company given within five days of the time such Holder first is notified
of such matter, reduce the amount of Registrable Securities it desires to have
included in such Demand Registration, whereupon only the Registrable Securities,
if any, it desires to have included will be so included and the Holders not so
reducing shall be entitled to a corresponding increase in the amount of
Registrable Securities to be included in such Demand Registration.
(c) Limitations on Registrations. The rights of Holders of
Registrable Securities to request Demand Registrations pursuant to Section
2.1(a) are subject to the following limitations: (i) in no event shall the
Company be required to effect a Demand Registration until after the earlier of
(A) nine months following an Initial Public Offering, and (B) the one year
anniversary of the date hereof, and (ii) in no event shall the Company be
required to pay Registration Expenses of more than two Demand Registrations if
the number of Warrant Shares has not been doubled under Section 2.9(b)
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of the Warrant and three Demand Registrations if they have been so doubled;
provided, however, that such number shall be increased to the extent the Company
does not include in what would otherwise be the final registration for which the
Company is required to pay Registration Expenses the number of Registrable
Securities requested to be registered by the Holders by reason of Section
2.1(b); and provided, further, that the Registration Expenses in connection with
each other Demand Registration shall be allocated pro rata among all Persons on
whose behalf securities of the Company are included in such registration, on the
basis of the respective amounts of the securities then being registered on their
behalf.
(d) Underwriting; Selection of Underwriters. Notwithstanding
anything to the contrary contained in Section 2.1(a), if the Initiating Holders
holding a majority of the Registrable Securities for which registration was
requested in the Request so elect, the Company shall use its best efforts to
ensure that the offering of such Registrable Securities pursuant to such Demand
Registration shall be in the form of a firm commitment Underwritten Offering;
and such Initiating Holders may require that all Persons (including other
Holders) participating in such registration sell their Registrable Securities to
the Underwriters at the same price and on the same terms of underwriting
applicable to the Initiating Holders. If any Demand Registration involves an
Underwritten Offering, the sole or managing Underwriters and any additional
investment bankers and managers to be used in connection with such registration
shall be selected by the Initiating Holders holding a majority of the
Registrable Securities for which registration was requested in the Request,
subject to the approval of the Company (such approval not to be unreasonably
withheld).
(e) Registration of Other Securities. Whenever the Company
shall effect a Demand Registration, no securities other than the Registrable
Securities shall be covered by such registration unless the Majority Holders of
the Registration shall have consented in writing to the inclusion of such other
securities, such consent not to be unreasonably withheld.
(f) Effective Registration Statement; Suspension. A Demand
Registration Statement shall not be deemed to have become effective (and the
related registration will not be deemed to have been effected) (i) unless it has
been declared effective by the SEC and remains effective in compliance with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such Demand Registration Statement for the
time period specified in Section 4.1(b), (ii) if the offering of any Registrable
Securities pursuant to such Demand Registration Statement is interfered with by
any stop order, injunction or other order or requirement of the SEC or any other
governmental agency or court, or (iii) if, in the case of an Underwritten
Offering, the conditions to closing specified in an underwriting agreement to
which the Company is a party are not satisfied other than by the sole reason of
any breach or failure by the Holders of Registrable Securities or are not
otherwise waived.
(g) Other Registrations. During the period (i) beginning on
the date of a Request and (ii) ending on the date that is 90 days after the date
that a Demand Registration Statement filed pursuant to such Request has been
declared effective by the SEC or, if the Holders shall withdraw such Request or
such Demand Registration Statement, on the date of such Withdrawn Request or
such Withdrawn Registration
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Statement, the Company shall not, without the consent of the Majority Holders of
the Registration, file a registration statement pertaining to any other
securities of the Company.
(h) Registration Statement Form. Registrations under this
Section 2.1 shall be on such appropriate registration form of the SEC (i) as
shall be selected by the Initiating Holders holding a majority of the
Registrable Securities for which registration was requested in the Request, and
(ii) which shall be available for the sale of Registrable Securities in
accordance with the intended method or methods of disposition specified in the
requests for registration; provided, however, that the Company shall not be
required to use a long-form registration statement if the Company is legally
permitted to use a short-form registration statement for the requested purpose.
The Company agrees to include in any such Registration Statement all information
which any selling Holder, upon advice of counsel, shall reasonably request.
2.2 Incidental Registration.
(a) Right to Include Registrable Securities. If the Company at
any time or from time to time proposes to register any of its securities under
the Securities Act (other than in a registration on Form S-4 or S-8 or any
successor form to such forms and other than pursuant to Section 2.1 or 2.3)
whether or not pursuant to registration rights granted to other holders of its
securities and whether or not for sale for its own account, the Company shall
deliver prompt written notice (which notice shall be given at least 30 days
prior to such proposed registration) to all Holders of Registrable Securities of
its intention to undertake such registration, describing in reasonable detail
the proposed registration and distribution (including the anticipated range of
the proposed offering price, the class and number of securities proposed to be
registered and the distribution arrangements) and of such Holders' right to
participate in such registration under this Section 2.2 as hereinafter provided.
Subject to the other provisions of this paragraph (a) and Section 2.2(b), upon
the written request of any Holder made within 20 days after the receipt of such
written notice (which request shall specify the amount of Registrable Securities
to be registered and the intended method of disposition thereof), the Company
shall effect the registration under the Securities Act of all Registrable
Securities requested by Holders to be so registered (an "Incidental
Registration"), to the extent requisite to permit the disposition (in accordance
with the intended methods thereof as aforesaid) of the Registrable Securities so
to be registered, by inclusion of such Registrable Securities in the
Registration Statement which covers the securities which the Company proposes to
register and shall cause such Registration Statement to become and remain
effective with respect to such Registrable Securities in accordance with the
registration procedures set forth in Section 4. If an Incidental Registration
involves an Underwritten Offering, immediately upon notification to the Company
from the Underwriter of the price at which such securities are to be sold, the
Company shall so advise each participating Holder. The Holders requesting
inclusion in an Incidental Registration may, at any time prior to the effective
date of the Incidental Registration Statement (and for any reason), revoke such
request by delivering written notice to the Company revoking such requested
inclusion.
If at any time after giving written notice of its intention to
register any securities and prior to the effective date of the Incidental
Registration Statement filed in
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connection with such registration, the Company shall determine for any reason
not to register or to delay registration of such securities, the Company may, at
its election, give written notice of such determination to each Holder of
Registrable Securities and, thereupon, (A) in the case of a determination not to
register, the Company shall be relieved of its obligation to register any
Registrable Securities in connection with such registration (but not from its
obligation to pay the Registration Expenses incurred in connection therewith),
without prejudice, however, to the rights of Holders to cause such registration
to be effected as a registration under Section 2.1, and (B) in the case of a
determination to delay such registration, the Company shall be permitted to
delay the registration of such Registrable Securities for the same period as the
delay in registering such other securities; provided, however, that if such
delay shall extend beyond 120 days from the date the Company received a request
to include Registrable Securities in such Incidental Registration, then the
Company shall again give all Holders the opportunity to participate therein and
shall follow the notification procedures set forth in the preceding paragraph.
There is no limitation on the number of such Incidental Registrations pursuant
to this Section 2.2 which the Company is obligated to effect.
The registration rights granted pursuant to the provisions of
this Section 2.2 shall be in addition to the registration rights granted
pursuant to the other provisions of Section 2 hereof.
(b) Priority in Incidental Registration. If an Incidental
Registration involves an Underwritten Offering (on a firm commitment basis), and
the sole or the lead managing Underwriter, as the case may be, of such
Underwritten Offering shall advise the Company in writing (with a copy to each
Holder requesting registration) on or before the date five days prior to the
date then scheduled for such offering that, in its opinion, the amount of
securities (including Registrable Securities) requested to be included in such
registration exceeds the amount which can be sold in such offering without
materially interfering with the successful marketing of the securities being
offered (such writing to state the basis of such opinion and the approximate
number of such securities which may be included in such offering without such
effect), the Company shall include in such registration, to the extent of the
number which the Company is so advised may be included in such offering without
such effect, (i) in the case of a registration initiated by the Company, (A)
first, the securities that the Company proposes to register for its own account,
(B) second, the Registrable Securities requested to be included in such
registration by the Holders and the securities requested to be included in such
registration pursuant to an agreement set forth on Schedule 6.2 hereto,
allocated pro rata in proportion to the number of securities requested to be
included in such registration by each of them, and (C) third, other securities
of the Company to be registered on behalf of any other Person, and (ii) in the
case of a registration initiated by a Person other than the Company, (A) first,
securities of the Company requested to be included by such Persons initiating
such registration, (B) second, the Registrable Securities requested to be
included in such registration by the Holders and any securities requested to be
included in such registration pursuant to an agreement set forth on Schedule 6.2
hereto, allocated pro rata in proportion to the number of securities requested
to be included in such registration by each of them, (C) third, the securities
that the Company proposes to register for its own account, and (D) fourth, other
securities of the Company to be registered on behalf of any other Person;
provided, however, that in the event the Company will not, by virtue of this
Section 2.2(b), include in any such registration all of the Registrable
Securities of any
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Holder requested to be included in such registration, such Holder may, upon
written notice to the Company given within three days of the time such Holder
first is notified of such matter, reduce the amount of Registrable Securities it
desires to have included in such registration, whereupon only the Registrable
Securities, if any, it desires to have included will be so included and the
Holders not so reducing shall be entitled to a corresponding increase in the
amount of Registrable Securities to be included in such registration.
(c) Selection of Underwriters. If any Incidental Registration
involves an Underwritten Offering, the sole or managing Underwriter(s) and any
additional investment bankers and managers to be used in connection with such
registration shall be subject to the approval of the Majority Holders of the
Registration (such approval not to be unreasonably withheld).
2.3 Shelf Registration. If a request made pursuant to Section 2.1
is for a Shelf Registration, the Company shall use its best efforts to keep the
Shelf Registration continuously effective through the date on which all of the
Registrable Securities covered by such Shelf Registration may be sold pursuant
to Rule 144(k) under the Securities Act (or any successor provision having
similar effect); provided, however, that prior to the termination of such Shelf
Registration, the Company shall first furnish to each Holder of Registrable
Securities participating in such Shelf Registration (i) an opinion, in form and
substance reasonably satisfactory to the Majority Holders of the Registration,
of counsel for the Company reasonably satisfactory to the Majority Holders of
the Registration stating that such Registrable Securities are freely saleable
pursuant to Rule 144(k) under the Securities Act (or any successor provision
having similar effect) or (ii) a "No-Action Letter" from the staff of the SEC
stating that the SEC would not recommend enforcement action if the Registrable
Securities included in such Shelf Registration were sold in a public sale other
than pursuant to an effective registration statement.
2.4 Expenses. The Company shall pay all Registration Expenses in
connection with any Demand Registration, Incidental Registration or Shelf
Registration, whether or not such registration shall become effective and
whether or not all Registrable Securities originally requested to be included in
such registration are withdrawn or otherwise ultimately not included in such
registration, except as otherwise provided with respect to a Withdrawn Request
and a Withdrawn Demand Registration in Section 2.1(a). Each Holder shall pay all
discounts and commissions payable to underwriters, selling brokers, managers or
other similar Persons engaged in the distribution of such Holder's Registrable
Securities pursuant to any registration pursuant to this Section 2.
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2.5 Underwritten Offerings.
(a) Demand Underwritten Offerings. If requested by the sole or
lead managing Underwriter for any Underwritten Offering effected pursuant to a
Demand Registration, the Company shall enter into a customary underwriting
agreement with the Underwriters for such offering, such agreement to be
reasonably satisfactory in substance and form to each Holder of Registrable
Securities participating in such offering and to contain such representations
and warranties by the Company and such other terms as are generally prevailing
in agreements of that type, including, without limitation, indemnification and
contribution to the effect and to the extent provided in Section 5.
(b) Holders of Registrable Securities to be Parties to
Underwriting Agreement. The Holders of Registrable Securities to be distributed
by Underwriters in an Underwritten Offering contemplated by Section 2 shall be
parties to the underwriting agreement between the Company and such Underwriters
and may, at such Holders' option, require that any or all of the representations
and warranties by, and the other agreements on the part of, the Company to and
for the benefit of such Underwriters shall also be made to and for the benefit
of such Holders of Registrable Securities and that any or all of the conditions
precedent to the obligations of such Underwriters under such underwriting
agreement be conditions precedent to the obligations of such Holders of
Registrable Securities; provided, however, that the Company shall not be
required to make any representations or warranties with respect to written
information specifically provided by a selling Holder for inclusion in the
Registration Statement. No Holder shall be required to make any representations
or warranties to, or agreements with, the Company or the Underwriters other than
representations, warranties or agreements regarding such Holder, such Holder's
Registrable Securities and such Holder's intended method of disposition.
(c) Participation in Underwritten Registration.
Notwithstanding anything herein to the contrary, no Person may participate in
any underwritten registration hereunder unless such Person (i) agrees to sell
its securities on the same terms and conditions provided in any underwritten
arrangements approved by the Persons entitled hereunder to approve such
arrangement and (ii) accurately completes and executes in a timely manner all
questionnaires, powers of attorney, indemnities, custody agreements,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
2.6 Conversions; Exercises. Notwithstanding anything to the
contrary herein, in order for any Registrable Securities that are issuable upon
the exercise of conversion rights, options or warrants to be included in any
registration pursuant to Section 2 hereof, the exercise of such conversion
rights, options or warrants must be effected no later than immediately prior to
the closing of any sales under the Registration Statement pursuant to which such
Registrable Securities are to be sold.
2.7 Postponements. The Company shall be entitled to postpone a
Demand Registration and to require the Holders of Registrable Securities to
discontinue the disposition of their securities covered by a Shelf Registration
during any Blackout Period (as defined below) (i) if the Board of Directors of
the Company determines in good faith that effecting such a registration or
continuing such disposition at such time
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would have a material adverse effect upon a proposed sale of all (or
substantially all) of the assets of the Company or a merger, reorganization,
recapitalization or similar current transaction materially affecting the capital
structure or equity ownership of the Company, or (ii) if the Company has
delivered a notice pursuant to Section 2.2 that it is undertaking an
underwritten offering in which the Holders will be entitled to exercise their
incidental registration rights; provided, however, that the Company may only
delay a Demand Registration pursuant to this Section 2.7 by delivery of a
Blackout Notice (as defined below) within 30 days of delivery of the request for
such Registration under Section 2.1, as applicable, and may delay a Demand
Registration and require the Holders of Registrable Securities to discontinue
the disposition of their securities covered by a Shelf Registration only for a
reasonable period of time not to exceed 90 days (or such earlier time as such
transaction is consummated or no longer proposed or the material information has
been made public) (the "Blackout Period"). There shall not be more than one
Blackout Period in any 12 month period. The Company shall promptly notify the
Holders in writing (a "Blackout Notice") of any decision to postpone a Demand
Registration or to discontinue sales of Registrable Securities covered by a
Shelf Registration pursuant to this Section 2.7 and shall include a general
statement of the reason for such postponement, an approximation of the
anticipated delay and an undertaking by the Company promptly to notify the
Holders as soon as a Demand Registration may be effected or sales of Registrable
Securities covered by a Shelf Registration may resume. In making any such
determination to initiate or terminate a Blackout Period, the Company shall not
be required to consult with or obtain the consent of any Holder, and any such
determination shall be the Company's sole responsibility. Each Holder shall
treat all notices received from the Company pursuant to this Section 2.7 in the
strictest confidence and shall not disseminate such information. If the Company
shall postpone the filing of a Demand Registration Statement, the Majority
Holders of Registrable Securities who were to participate therein shall have the
right to withdraw the request for registration. Any such withdrawal shall be
made by giving written notice to the Company within 30 days after receipt of the
Blackout Notice. Such withdrawn registration request shall not be treated as a
Demand Registration effected pursuant to Section 2.1 (and shall not be counted
towards the number of Demand Registrations effected), and the Company shall pay
all Registration Expenses in connection therewith.
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3. HOLDBACK ARRANGEMENTS.
3.1 Restrictions on Sale by Holders of Registrable Securities.
Each Holder of Registrable Securities agrees, by acquisition of such Registrable
Securities, if timely requested in writing by the sole or lead managing
Underwriter in an Underwritten Offering of any Registrable Securities, not to
make any short sale of, loan, grant any option for the purchase of or effect any
public sale or distribution, including a sale pursuant to Rule 144 (or any
successor provision having similar effect) under the Securities Act of any
Registrable Securities or any other security of the Company (or any security
convertible into or exchangeable or exercisable for any security of the Company)
(except as part of such underwritten registration), during the nine business
days (as such term is used in Rule 10b-6 under the Exchange Act) prior to, and
during the time period reasonably requested by the sole or lead managing
Underwriter not to exceed 90 days, beginning on the effective date of the
applicable Registration Statement.
3.2 Restrictions on Sale by the Company and Others. The Company
agrees that (i) if timely requested in writing by the sole or lead managing
Underwriter in an Underwritten Offering of any Registrable Securities, not to
make any short sale of, loan, grant any option for the purchase of or effect any
public sale or distribution of any of the Company's securities (or any security
convertible into or exchangeable or exercisable for any of the Company's
securities) during the nine business days (as such term is used in Rule 10b-6
under the Exchange Act) prior to, and during the time period reasonably
requested by the sole or lead managing Underwriter not to exceed 90 days (or
such longer period to the extent such sole or lead managing Underwriter shall so
reasonably request), beginning on the effective date of the applicable
Registration Statement (except as part of such underwritten registration or
pursuant to registrations on Forms S-4 or S-8 or any successor form to such
forms), and (ii) it will cause each holder of securities (or any security
convertible into or exchangeable or exercisable for any of its securities) of
the Company purchased from the Company at any time after the date of this
Agreement (other than in a registered public offering) to so agree.
4. REGISTRATION PROCEDURES.
4.1 Obligations of the Company. Whenever the Company is required
to effect the registration of Registrable Securities under the Securities Act
pursuant to Section 2 of this Agreement, the Company shall, as expeditiously as
possible:
(a) prepare and file with the SEC (promptly, and in any event
within 45 days after receipt of a request to register Registrable Securities)
the requisite Registration Statement to effect such registration, which
Registration Statement shall comply as to form in all material respects with the
requirements of the applicable form and include all financial statements
required by the SEC to be filed therewith, and the Company shall use its best
efforts to cause such Registration Statement to become effective (provided, that
the Company may discontinue any registration of its securities that are not
Registrable Securities, and, under the circumstances specified in Section 2.2,
its securities that are Registrable Securities); provided, however, that before
filing a Registration Statement or Prospectus or any amendments or supplements
thereto, or comparable statements under securities or blue sky laws of any
jurisdiction, the Company shall (i) provide Holders' Counsel and any other
Inspector with an adequate and
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appropriate opportunity to participate in the preparation of such Registration
Statement and each Prospectus included therein (and each amendment or supplement
thereto or comparable statement) to be filed with the SEC, which documents shall
be subject to the review and comment of Holders' Counsel, and (ii) not file any
such Registration Statement or Prospectus (or amendment or supplement thereto or
comparable statement) with the SEC to which Holder's Counsel, any selling Holder
or any other Inspector shall have reasonably objected on the grounds that such
filing does not comply in all material respects with the requirements of the
Securities Act or of the rules or regulations thereunder;
(b) prepare and file with the SEC such amendments and
supplements to such Registration Statement and the Prospectus used in connection
therewith as may be necessary (i) to keep such Registration Statement effective,
and (ii) to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such Registration
Statement, in each case until such time as all of such Registrable Securities
have been disposed of in accordance with the intended methods of disposition by
the seller(s) thereof set forth in such Registration Statement; provided, that
except with respect to any Shelf Registration, such period need not extend
beyond nine months after the effective date of the Registration Statement; and
provided further, that with respect to any Shelf Registration, such period need
not extend beyond the time period provided in Section 2.3, and which periods, in
any event, shall terminate when all Registrable Securities covered by such
Registration Statement have been sold (but not before the expiration of the 90
day period referred to in Section 4(3) of the Securities Act and Rule 174
thereunder, if applicable);
(c) furnish, without charge, to each selling Holder of such
Registrable Securities and each Underwriter, if any, of the securities covered
by such Registration Statement, such number of copies of such Registration
Statement, each amendment and supplement thereto (in each case including all
exhibits), and the Prospectus included in such Registration Statement (including
each preliminary Prospectus) in conformity with the requirements of the
Securities Act, and other documents, as such selling Holder and Underwriter may
reasonably request in order to facilitate the public sale or other disposition
of the Registrable Securities owned by such selling Holder (the Company hereby
consenting to the use in accordance with applicable law of each such
Registration Statement (or amendment or post-effective amendment thereto) and
each such Prospectus (or preliminary prospectus or supplement thereto) by each
such selling Holder of Registrable Securities and the Underwriters, if any, in
connection with the offering and sale of the Registrable Securities covered by
such Registration Statement or Prospectus);
(d) prior to any public offering of Registrable Securities,
use its best efforts to register or qualify all Registrable Securities and other
securities covered by such Registration Statement under such other securities or
blue sky laws of such jurisdictions as any selling Holder of Registrable
Securities covered by such Registration Statement or the sole or lead managing
Underwriter, if any, may reasonably request to enable such selling Holder to
consummate the disposition in such jurisdictions of the Registrable Securities
owned by such selling Holder and to continue such registration or qualification
in effect in each such jurisdiction for as long as such Registration Statement
remains in effect (including through new filings or amendments or renewals), and
do any and all other acts and things which may be necessary or advisable to
enable any such
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selling Holder to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such selling Holder; provided, however, that the
Company shall not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 4.1(d), (ii) subject itself to taxation in any such jurisdiction, or
(iii) consent to general service of process in any such jurisdiction;
(e) use its best efforts to obtain all other approvals,
consents, exemptions or authorizations from such governmental agencies or
authorities as may be necessary to enable the selling Holders of such
Registrable Securities to consummate the disposition of such Registrable
Securities;
(f) promptly notify Holders' Counsel, each Holder of
Registrable Securities covered by such Registration Statement and the sole or
lead managing Underwriter, if any: (i) when the Registration Statement, any
pre-effective amendment, the Prospectus or any prospectus supplement related
thereto or post-effective amendment to the Registration Statement has been filed
and, with respect to the Registration Statement or any post-effective amendment,
when the same has become effective, (ii) of any request by the SEC or any state
securities or blue sky authority for amendments or supplements to the
Registration Statement or the Prospectus related thereto or for additional
information, (iii) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation or threat of any
proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation of any proceeding for such purpose, (v) of the
existence of any fact of which the Company becomes aware or the happening of any
event which results in (A) the Registration Statement containing an untrue
statement of a material fact or omitting to state a material fact required to be
stated therein or necessary to make any statements therein not misleading, or
(B) the Prospectus included in such Registration Statement containing an untrue
statement of a material fact or omitting to state a material fact required to be
stated therein or necessary to make any statements therein, in the light of the
circumstances under which they were made, not misleading, (vi) if at any time
the representations and warranties contemplated by Section 2.5(b) cease to be
true and correct in all material respects, and (vii) of the Company's reasonable
determination that a post-effective amendment to a Registration Statement would
be appropriate or that there exists circumstances not yet disclosed to the
public which make further sales under such Registration Statement inadvisable
pending such disclosure and post-effective amendment; and, if the notification
relates to an event described in any of the clauses (ii) through (vii) of this
Section 4.1(f), the Company shall promptly prepare a supplement or
post-effective amendment to such Registration Statement or related Prospectus or
any document incorporated therein by reference or file any other required
document so that (1) such Registration Statement shall not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
(2) as thereafter delivered to the purchasers of the Registrable Securities
being sold thereunder, such Prospectus shall not include an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein in the light of the circumstances
under which they were made not misleading (and shall furnish to each such Holder
and each Underwriter, if any, a reasonable number of copies
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of such Prospectus so supplemented or amended); and if the notification relates
to an event described in clause (iii) of this Section 4.1(f), the Company shall
take all reasonable action required to prevent the entry of such stop order or
to remove it if entered;
(g) make available for inspection by any selling Holder of
Registrable Securities, any sole or lead managing Underwriter participating in
any disposition pursuant to such Registration Statement, Holders' Counsel and
any attorney, accountant or other agent retained by any such seller or any
Underwriter (each, an "Inspector" and, collectively, the "Inspectors"), all
financial and other records, pertinent corporate documents and properties of the
Company and any subsidiaries thereof as may be in existence at such time
(collectively, the "Records") as shall be necessary, in the opinion of such
Holders' and such Underwriters' respective counsel, to enable them to exercise
their due diligence responsibility and to conduct a reasonable investigation
within the meaning of the Securities Act, and cause the Company's and any
subsidiaries' officers, directors and employees, and the independent public
accountants of the Company, to supply all information reasonably requested by
any such Inspectors in connection with such Registration Statement;
(h) obtain an opinion from the Company's counsel and a "cold
comfort" letter from the Company's independent public accountants who have
certified the Company's financial statements included or incorporated by
reference in such Registration Statement, in each case dated the effective date
of such Registration Statement (and if such registration involves an
Underwritten Offering, dated the date of the closing under the underwriting
agreement), in customary form and covering such matters as are customarily
covered by such opinions and "cold comfort" letters delivered to underwriters in
underwritten public offerings, which opinion and letter shall be reasonably
satisfactory to the sole or lead managing Underwriter, if any, and to the
Majority Holders of the Registration, and furnish to each Holder participating
in the offering and to each Underwriter, if any, a copy of such opinion and
letter addressed to such Holder (in the case of the opinion) and Underwriter (in
the case of the opinion and the "cold comfort" letter);
(i) provide a CUSIP number for all Registrable Securities and
provide and cause to be maintained a transfer agent and registrar for all such
Registrable Securities covered by such Registration Statement not later than the
effectiveness of such Registration Statement;
(j) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC and any other governmental agency or
authority having jurisdiction over the offering, and make available to its
security holders, as soon as reasonably practicable but no later than 90 days
after the end of any 12-month period, an earnings statement (i) commencing at
the end of any month in which Registrable Securities are sold to Underwriters in
an Underwritten Offering and (ii) commencing with the first day of the Company's
calendar month next succeeding each sale of Registrable Securities after the
effective date of a Registration Statement, which statement shall cover such
12-month periods, in a manner which satisfies the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder;
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(k) if so requested by the Majority Holders of the
Registration, use its best efforts to cause all such Registrable Securities to
be listed (i) on each national securities exchange on which the Company's
securities are then listed or (ii) if securities of the Company are not at the
time listed on any national securities exchange (or if the listing of
Registrable Securities is not permitted under the rules of each national
securities exchange on which the Company's securities are then listed), on a
national securities exchange designated by the Majority Holders of the
Registration;
(l) keep each selling Holder of Registrable Securities advised
in writing as to the initiation and progress of any registration under Section 2
hereunder;
(m) enter into and perform customary agreements (including, if
applicable, an underwriting agreement in customary form) and provide officers'
certificates and other customary closing documents;
(n) cooperate with each selling Holder of Registrable
Securities and each Underwriter participating in the disposition of such
Registrable Securities and their respective counsel in connection with any
filings required to be made with the NASD and make reasonably available its
employees and personnel and otherwise provide reasonable assistance to the
Underwriters (taking into account the needs of the Company's businesses and the
requirements of the marketing process) in the marketing of Registrable
Securities in any Underwritten Offering;
(o) furnish to each Holder participating in the offering and
the sole or lead managing Underwriter, if any, without charge, at least one
manually-signed copy of the Registration Statement and any post-effective
amendments thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits (including those deemed to be
incorporated by reference);
(p) cooperate with the selling Holders of Registrable
Securities and the sole or lead managing Underwriter, if any, to facilitate the
timely preparation and delivery of certificates not bearing any restrictive
legends representing the Registrable Securities to be sold, and cause such
Registrable Securities to be issued in such denominations and registered in such
names in accordance with the underwriting agreement prior to any sale of
Registrable Securities to the Underwriters or, if not an Underwritten Offering,
in accordance with the instructions of the selling Holders of Registrable
Securities at least three business days prior to any sale of Registrable
Securities;
(q) if requested by the sole or lead managing Underwriter or
any selling Holder of Registrable Securities, immediately incorporate in a
prospectus supplement or post-effective amendment such information concerning
such Holder of Registrable Securities, the Underwriters or the intended method
of distribution as the sole or lead managing Underwriter or the selling Holder
of Registrable Securities reasonably requests to be included therein and as is
appropriate in the reasonable judgment of the Company, including, without
limitation, information with respect to the number of shares of the Registrable
Securities being sold to the Underwriters, the purchase price being paid
therefor by such Underwriters and with respect to any other terms of the
Underwritten Offering of the Registrable Securities to be sold in such offering;
make all required filings of such Prospectus supplement or post-effective
amendment as soon as notified of the
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matters to be incorporated in such Prospectus supplement or post-effective
amendment; and supplement or make amendments to any Registration Statement if
requested by the sole or lead managing Underwriter of such Registrable
Securities;
(r) use its best efforts to take all other steps necessary to
expedite or facilitate the registration and disposition of the Registrable
Securities contemplated hereby; and
(s) use its best efforts to cause the Registrable Securities
to be rated with the appropriate rating agencies, if so requested by the
Majority Holders of the Registration or the sole or lead managing Underwriter,
if any.
4.2 Seller Information. The Company may require each selling
Holder of Registrable Securities as to which any registration is being effected
to furnish to the Company such information regarding such Holder, such Holder's
Registrable Securities and such Holder's intended method of disposition as the
Company may from time to time reasonably request in writing; provided that such
information shall be used only in connection with such registration.
If any Registration Statement or comparable statement under
"blue sky" laws refers to any Holder by name or otherwise as the Holder of any
securities of the Company, then such Holder shall have the right to require (i)
the insertion therein of language, in form and substance satisfactory to such
Holder and the Company, to the effect that the holding by such Holder of such
securities is not to be construed as a recommendation by such Holder of the
investment quality of the Company's securities covered thereby and that such
holding does not imply that such Holder will assist in meeting any future
financial requirements of the Company, and (ii) in the event that such reference
to such Holder by name or otherwise is not in the judgment of the Company, as
advised by counsel, required by the Securities Act or any similar federal
statute or any state "blue sky" or securities law then in force, the deletion of
the reference to such Holder.
4.3 Notice to Discontinue. Each Holder of Registrable Securities
agrees by acquisition of such Registrable Securities that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 4.1(f)(ii) through (vii), such Holder shall forthwith discontinue
disposition of Registrable Securities pursuant to the Registration Statement
covering such Registrable Securities until such Holder's receipt of the copies
of the supplemented or amended prospectus contemplated by Section 4.1(f) and, if
so directed by the Company, such Holder shall deliver to the Company (at the
Company's expense) all copies, other than permanent file copies, then in such
Holder's possession of the Prospectus covering such Registrable Securities which
is current at the time of receipt of such notice. If the Company shall give any
such notice, the Company shall extend the period during which such Registration
Statement shall be maintained effective pursuant to this Agreement (including,
without limitation, the period referred to in Section 4.1(b)) by the number of
days during the period from and including the date of the giving of such notice
pursuant to Section 4.1(f) to and including the date when the Holder shall have
received the copies of the supplemented or amended prospectus contemplated by
and meeting the requirements of Section 4.1(f).
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5. INDEMNIFICATION; CONTRIBUTION.
5.1 Indemnification by the Company. The Company agrees to
indemnify and hold harmless, to the fullest extent permitted by law, each Holder
of Registrable Securities, its officers, directors, partners, members,
shareholders, employees, Affiliates and agents (collectively, "Agents") and each
Person who controls such Holder (within the meaning of the Securities Act) and
its Agents with respect to each registration which has been effected pursuant to
this Agreement, against any and all losses, claims, damages or liabilities,
joint or several, actions or proceedings (whether commenced or threatened) in
respect thereof, and expenses (as incurred or suffered and including, but not
limited to, any and all expenses incurred in investigating, preparing or
defending any litigation or proceeding, whether commenced or threatened, and the
reasonable fees, disbursements and other charges of legal counsel) in respect
thereof (collectively, "Claims"), insofar as such Claims arise out of or are
based upon any untrue or alleged untrue statement of a material fact contained
in any Registration Statement or Prospectus (including any preliminary, final or
summary prospectus and any amendment or supplement thereto) related to any such
registration or any omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of the Securities Act or any rule or
regulation thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration, or
any qualification or compliance incident thereto; provided, however, that the
Company will not be liable in any such case to the extent that any such Claims
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact or omission or alleged omission of a material fact so made in
reliance upon and in conformity with written information furnished to the
Company specifically for use therein. The Company shall also indemnify any
Underwriters of the Registrable Securities, their Agents and each Person who
controls any such Underwriter (within the meaning of the Securities Act) to the
same extent as provided above with respect to the indemnification of the Holders
of Registrable Securities. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of any Person who may be
entitled to indemnification pursuant to this Section 5 and shall survive the
transfer of securities by such Holder or Underwriter.
5.2 Indemnification by Holders. Each Holder, if Registrable
Securities held by it are included in the securities as to which a registration
is being effected, agrees to, severally and not jointly, indemnify and hold
harmless, to the fullest extent permitted by law, the Company, its directors and
officers, each other Person who participates as an Underwriter in the offering
or sale of such securities and its Agents and each Person who controls the
Company or any such Underwriter (within the meaning of the Securities Act) and
its Agents against any and all Claims, insofar as such Claims arise out of or
are based upon any untrue or alleged untrue statement of a material fact
contained in any Registration Statement or Prospectus (including any
preliminary, final or summary prospectus and any amendment or supplement
thereto) related to such registration, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, 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 specifically for use therein; provided, however, that
the
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aggregate amount which any such Holder shall be required to pay pursuant to this
Section 5.2 shall in no event be greater than the amount of the net proceeds
received by such Holder upon the sale of the Registrable Securities pursuant to
the Registration Statement giving rise to such Claims less all amounts
previously paid by such Holder with respect to any such Claims. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such indemnified party and shall survive the transfer of such
securities by such Holder or Underwriter.
5.3 Conduct of Indemnification Proceedings. Promptly after receipt
by an indemnified party of notice of any Claim or the commencement of any action
or proceeding involving a Claim under this Section 5, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party pursuant to Section 5, (i) notify the indemnifying party in writing of the
Claim or the commencement of such action or proceeding; provided, that the
failure of any indemnified party to provide such notice shall not relieve the
indemnifying party of its obligations under this Section 5, except to the extent
the indemnifying party is materially and actually prejudiced thereby and shall
not relieve the indemnifying party from any liability which it may have to any
indemnified party otherwise than under this Section 5, and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided, however, that any indemnified
party shall have the right to employ separate counsel and to participate in the
defense of such claim, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (A) the indemnifying party has agreed
in writing to pay such fees and expenses, (B) the indemnifying party shall have
failed to assume the defense of such claim and employ counsel reasonably
satisfactory to such indemnified party within 10 days after receiving notice
from such indemnified party that the indemnified party believes it has failed to
do so, (C) in the reasonable judgment of any such indemnified party, based upon
advice of counsel, a conflict of interest may exist between such indemnified
party and the indemnifying party with respect to such claims (in which case, if
the indemnified party notifies the indemnifying party in writing that it elects
to employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such claim
on behalf of such indemnified party) or (D) such indemnified party is a
defendant in an action or proceeding which is also brought against the
indemnifying party and reasonably shall have concluded that there may be one or
more legal defenses available to such indemnified party which are not available
to the indemnifying party. No indemnifying party shall be liable for any
settlement of any such claim or action effected without its written consent,
which consent shall not be unreasonably withheld. In addition, without the
consent of the indemnified party (which consent shall not be unreasonably
withheld), no indemnifying party shall be permitted to consent to entry of any
judgment with respect to, or to effect the settlement or compromise of any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim), unless such settlement,
compromise or judgment (1) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim, (2) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party, and (3) does not provide for any
action on the part of any party other than the payment of money damages which is
to be paid in full by the indemnifying party.
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5.4 Contribution. If the indemnification provided for in Section
5.1 or 5.2 from the indemnifying party for any reason is unavailable to (other
than by reason of exceptions provided therein), or is insufficient to hold
harmless, an indemnified party hereunder in respect of any Claim, then the
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such Claim in such proportion as is appropriate to reflect the relative fault
of the indemnifying party, on the one hand, and the indemnified party, on the
other hand, in connection with the actions which resulted in such Claim, as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such indemnifying party or indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. If, however, the foregoing allocation is not permitted by applicable
law, then each indemnifying party shall contribute to the amount paid or payable
by such indemnified party in such proportion as is appropriate to reflect not
only such relative faults but also the relative benefits of the indemnifying
party and the indemnified party as well as any other relevant equitable
considerations.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5.4 were determined by pro
rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by a party as a result of any Claim
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth in Section 5.3, any legal or other fees,
costs or expenses reasonably incurred by such party in connection with any
investigation or proceeding. Notwithstanding anything in this Section 5.4 to the
contrary, no indemnifying party (other than the Company) shall be required
pursuant to this Section 5.4 to contribute any amount in excess of the net
proceeds received by such indemnifying party from the sale of the Registrable
Securities pursuant to the Registration Statement giving rise to such Claims,
less all amounts previously paid by such indemnifying party with respect to such
Claims. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
5.5 Other Indemnification. Indemnification similar to that
specified in the preceding Sections 5.1 and 5.2 (with appropriate modifications)
shall be given by the Company and each selling Holder of Registrable Securities
with respect to any required registration or other qualification of securities
under any Federal or state law or regulation of any governmental authority,
other than the Securities Act. The indemnity agreements contained herein shall
be in addition to any other rights to indemnification or contribution which any
indemnified party may have pursuant to law or contract.
5.6 Indemnification Payments. The indemnification and contribution
required by this Section 5 shall be made by periodic payments of the amount
thereof during the course of any investigation or defense, as and when bills are
received or any expense, loss, damage or liability is incurred.
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6. GENERAL.
6.1 Adjustments Affecting Registrable Securities. The Company
agrees that it shall not effect or permit to occur any combination or
subdivision of shares which would adversely affect the ability of the Holder of
any Registrable Securities to include such Registrable Securities in any
registration contemplated by this Agreement or the marketability of such
Registrable Securities in any such registration.
6.2 Registration Rights to Others. Other than pursuant to the
Subscription Agreements listed on Schedule 6.2 hereto, the Company has not
previously entered into an agreement with respect to its securities granting any
registration rights to any Person. If the Company shall at any time hereafter
provide to any holder of any securities of the Company rights with respect to
the registration of such securities under the Securities Act, (i) such rights
shall not be in conflict with or adversely affect any of the rights provided in
this Agreement to the Holders and (ii) if such rights are provided on terms or
conditions more favorable to such holder than the terms and conditions provided
in this Agreement, the Company shall provide (by way of amendment to this
Agreement or otherwise) such more favorable terms or conditions to the Holders.
6.3 Availability of Information; Rule 144; Rule 144A; Other
Exemptions. So long as the Company shall not have filed a registration statement
pursuant to Section 12 of the Exchange Act or a registration statement pursuant
to the requirements of the Securities Act, the Company shall, at any time and
from time to time, upon the request of any Holder of Registrable Securities and
upon the request of any Person designated by such Holder as a prospective
purchaser of any Registrable Securities, furnish in writing to such Holder or
such prospective purchaser, as the case may be, a statement as of a date not
earlier than 12 months prior to the date of such request of the nature of the
business of the Company and the products and services it offers and copies of
the Company's most recent balance sheet and profit and loss and retained
earnings statements, together with similar financial statements for such part of
the two preceding fiscal years as the Company shall have been in operation, all
such financial statements to be audited to the extent audited statements are
reasonable available, provided that, in any event the most recent financial
statements so furnished shall include a balance sheet as of a date less than 16
months prior to the date of such request, statements of profit and loss and
retained earnings for the 12 months preceding the date of such balance sheet,
and, if such balance sheet is not as of a date less than 6 months prior to the
date of such request, additional statements of profit and loss and retained
earnings for the period from the date of such balance sheet to a date less than
6 months prior to the date of such request. If the Company shall have filed a
registration statement pursuant to the requirements of Section 12 of the
Exchange Act or a registration statement pursuant to the requirements of the
Securities Act, the Company covenants that it shall timely file any reports
required to be filed by it under the Securities Act or the Exchange Act
(including, but not limited to, the reports under Sections 13 and 15(d) of the
Exchange Act referred to in subparagraph (c) of Rule 144 under the Securities
Act), and that it shall take such further action as any Holder of Registrable
Securities may reasonably request, all to the extent required from time to time
to enable such Holder to sell Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by (i) Rule
144 and Rule 144A under the Securities Act, as such rules may be amended from
time to time, or (ii) any other rule or regulation now existing or hereafter
adopted by the SEC.
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Upon the request of any Holder of Registrable Securities, the Company shall
deliver to such Holder a written statement as to whether it has complied with
such requirements.
6.4 Amendments and Waivers. The provisions of this Agreement may
not be amended, modified, supplemented or terminated, and waivers or consents to
departures from the provisions hereof may not be given, without the written
consent of the Company and the Holders of not less than 50% of the Registrable
Securities then outstanding; provided, however, that no such amendment,
modification, supplement, waiver or consent to departure shall reduce the
aforesaid percentage of Registrable Securities without the written consent of
all of the Holders of Registrable Securities; and provided further, that nothing
herein shall prohibit any amendment, modification, supplement, termination,
waiver or consent to departure the effect of which is limited only to those
Holders who have agreed to such amendment, modification, supplement,
termination, waiver or consent to departure.
6.5 Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, telecopier, any
courier guaranteeing overnight delivery or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to the applicable
party at the address set forth below or such other address as may hereafter be
designated in writing by such party to the other parties in accordance with the
provisions of this Section:
(i) If to the Company, to:
First New England Dental Centers, Inc.
00 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: President
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
With a copy to:
XxXxxxxxx, Will & Xxxxx
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxx, Esq.
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
(ii) If to the Initial Holders, to:
Wexford Management LLC
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxx Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
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With a copy to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxx, Esq.
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
(iii) If to any subsequent Holder, to the address of such
Person set forth in the records of the Company.
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; when
receipt is acknowledged, if telecopied; on the next business day, if timely
delivered to a courier guaranteeing overnight delivery; and five days after
being deposited in the mail, if sent first class or certified mail, return
receipt requested, postage prepaid.
6.6 Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
successors and permitted assigns (including any permitted transferee of
Registrable Securities). Any Holder may assign to any permitted (as determined
under the Subscription Agreement) transferee of its Registrable Securities
(other than a transferee that acquires such Registrable Securities in a
registered public offering or pursuant to a sale under Rule 144 of the
Securities Act (or any successor rule)), its rights and obligations under this
Agreement; provided, however, if any permitted transferee shall take and hold
Registrable Securities, such transferee shall promptly notify the Company and by
taking and holding such Registrable Securities such permitted transferee shall
automatically be entitled to receive the benefits of and be conclusively deemed
to have agreed to be bound by and to perform all of the terms and provisions of
this Agreement as if it were a party hereto (and shall, for all purposes, be
deemed a Holder under this Agreement). If the Company shall so request, any
heir, successor or permitted assign (including any permitted transferee) shall
agree in writing to acquire and hold the Registrable Securities subject to all
of the terms hereof. For purposes of this Agreement, "successor" for any entity
other than a natural person shall mean a successor to such entity as a result of
such entity's merger, consolidation, liquidation, dissolution, sale of
substantially all of its assets, or similar transaction. Except as provided
above or otherwise permitted by this Agreement, neither this Agreement nor any
right, remedy, obligation or liability arising hereunder or by reason hereof
shall be assignable by any Holder or by the Company without the consent of the
other parties hereto.
6.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which, when so executed and delivered, shall be deemed to
be an original, but all of which counterparts, taken together, shall constitute
one and the same instrument.
6.8 Descriptive Headings, Etc. The headings in this Agreement are
for convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein. Unless the context of this Agreement
otherwise requires: (1) words of
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any gender shall be deemed to include each other gender; (2) words using the
singular or plural number shall also include the plural or singular number,
respectively; (3) the words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section and
paragraph references are to the Sections and paragraphs of this Agreement unless
otherwise specified; (4) the word "including" and words of similar import when
used in this Agreement shall mean "including, without limitation," unless
otherwise specified; (5) "or" is not exclusive; and (6) provisions apply to
successive events and transactions.
6.9 Severability. In the event that any one or more of the
provisions, paragraphs, words, clauses, phrases or sentences contained herein,
or the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the other remaining provisions,
paragraphs, words, clauses, phrases or sentences hereof shall not be in any way
impaired, it being intended that all rights, powers and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.
6.10 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York (without giving
effect to the conflict of laws principles thereof).
6.11 Remedies; Specific Performance. The parties hereto acknowledge
that money damages would not be an adequate remedy at law if any party fails to
perform in any material respect any of its obligations hereunder, and
accordingly agree that each party, in addition to any other remedy to which it
may be entitled at law or in equity, shall be entitled to seek to compel
specific performance of the obligations of any other party under this Agreement,
without the posting of any bond, in accordance with the terms and conditions of
this Agreement in any court of the United States or any State thereof having
jurisdiction, and if any action should be brought in equity to enforce any of
the provisions of this Agreement, none of the parties hereto shall raise the
defense that there is an adequate remedy at law. Except as otherwise provided by
law, a delay or omission by a party hereto in exercising any right or remedy
accruing upon any such breach shall not impair the right or remedy or constitute
a waiver of or acquiescence in any such breach. No remedy shall be exclusive of
any other remedy. All available remedies shall be cumulative.
6.12 Entire Agreement. This Agreement is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises or undertakings, other than those set forth or referred to herein. This
Agreement supersedes all prior agreements and understandings between the Company
and the other parties to this Agreement with respect to such subject matter.
6.13 Nominees for Beneficial Owners. In the event that any
Registrable Securities are held by a nominee for the beneficial owner thereof,
the beneficial owner thereof may, at its election in writing delivered to the
Company, be treated as the holder
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of such Registrable Securities for purposes of any request or other action by
any holder or holders of Registrable Securities pursuant to this Agreement or
any determination of any number or percentage of shares of Registrable
Securities held by any holder or holders of Registrable Securities contemplated
by this Agreement. If the beneficial owner of any Registrable Securities so
elects, the Company may require assurances reasonably satisfactory to it of such
owner's beneficial ownership of such Registrable Securities.
6.14 Consent to Jurisdiction; Waiver of Jury. Each party to this
Agreement hereby irrevocably and unconditionally agrees that any legal action,
suit or proceeding arising out of or relating to this Agreement or any
agreements or transactions contemplated hereby may be brought in any federal
court of the Southern District of New York or any state court located in New
York County, State of New York, and hereby irrevocably and unconditionally
expressly submits to the personal jurisdiction and venue of such courts for the
purposes thereof and hereby irrevocably and unconditionally waives any claim (by
way of motion, as a defense or otherwise) of improper venue, that it is not
subject personally to the jurisdiction of such court, that such courts are an
inconvenient forum or that this Agreement or the subject matter may not be
enforced in or by such court. Each party hereby irrevocably and unconditionally
consents to the service of process of any of the aforementioned courts in any
such action, suit or proceeding by the mailing of copies thereof by registered
or certified mail, postage prepaid, to the address set forth or provided for in
Section 6.5 of this Agreement, such service to become effective 10 days after
such mailing. Nothing herein contained shall be deemed to affect the right of
any party to serve process in any manner permitted by law or commence legal
proceedings or otherwise proceed against any other party in any other
jurisdiction to enforce judgments obtained in any action, suit or proceeding
brought pursuant to this Section. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES
TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING, WHETHER AT LAW OR EQUITY,
BROUGHT BY ANY OF THEM IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
6.15 Further Assurances. Each party hereto shall do and perform or
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as any other party hereto reasonably may request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
6.16 No Inconsistent Agreements. The Company will not hereafter
enter into any agreement which is inconsistent with the rights granted to the
Holders in this Agreement.
6.17 Construction. The Company and the Initial Holders acknowledge
that each of them has had the benefit of legal counsel of its own choice and has
been afforded an opportunity to review this Agreement with its legal counsel and
that this Agreement shall be construed as if jointly drafted by the Company and
the Holders.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
FIRST NEW ENGLAND INITIAL HOLDERS
DENTAL CENTERS, INC.
___________________________ BY: IMPRIMIS INVESTORS LLC
Name:
Title: _________________________
Name:
Title:
BY: WEXFORD SPECTRUM
INVESTORS LLC
___________________________
Name:
Title:
BY: ___________________________
XXXX X. XXXXX
BY: ___________________________
XXXXXXX X. XXXX
BY: ___________________________
XXXXXX X. XXXX
BY: ___________________________
XXXXXX X. XXXXXXXXXX
BY: ___________________________
L. XXXXX XXXXX
BY: ___________________________
XXXXXXX XXXXXX
BY: ___________________________
XXXXX X. XXXXXXXX
BY: ___________________________
XXXXXXX X. XXXXXXXXX
BY: ___________________________
XXXXXX X. XXXXXX
BY: ___________________________
XXXXX X. XXXXXXXX, XX.
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