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Exhibit 2.2
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT is dated as of the 1st day of September, 1998, by and
among Monarch Dental Corporation, a Delaware corporation (the "Company"), and
the persons listed on Exhibit A hereto (each, a "Holder" and collectively, the
"Holders").
WHEREAS, each Holder has heretofore been a stockholder of Valley Forge
Dental Associates, Inc. ("Valley Forge");
WHEREAS, each Holder has received shares of Common Stock of the Company
in a private placement in connection with a merger of a subsidiary of the
Company with and into Valley Forge;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Holders hereby
covenant and agree with each other as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the following respective meanings:
"BOARD OF DIRECTORS" means the Board of Directors of the Company.
"COMMISSION" shall mean the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Securities
Act and the Exchange Act.
"COMMON STOCK" shall mean Common Stock, par value $.01 per share, of
the Company, and any other securities into which or for which any of the
securities described above may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or otherwise.
"COMPANY" shall refer to the Company and any successor or successors
thereto.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, or any similar successor federal statute, and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the time.
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"PERSON" shall mean an individual, a corporation, a partnership, a
joint venture, a trust, an unincorporated organization, a limited liability
company or partnership, a government and any agency or political subdivision
thereof.
"REGISTRABLE SECURITIES" shall mean (i) any shares of Common Stock
held by a Holder and (ii) any other securities issued and issuable with respect
to any such shares described in clause (i) above by way of a stock dividend or
stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization; provided, however, that
notwithstanding anything to the contrary contained herein, "Registrable
Securities" shall not at any time include any securities (a) registered pursuant
to the Securities Act, (b) sold to the public pursuant to Rule 144 promulgated
under the Securities Act or pursuant to an effective registration statement
under the Securities Act or (c) which could then be sold in accordance with Rule
144 under the Securities Act (including in accordance with the limitations
described in subsection (e) of Rule 144), measured as of the date of the notice
delivered to the Holders by the Company under Section 2.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended,
or any similar successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
2. PIGGYBACK REGISTRATION. If the Company at any time proposes to
register any of its Common Stock under the Securities Act for sale to the public
except with respect to registration statements on Forms X-0, X-0 or another form
not available for registering the Registrable Securities for sale to the
public), each such time it will give written notice as contemplated by Section
8(a) at the applicable address of record to each Holder of Registrable
Securities as indicated on Exhibit A hereto, or such other address of which any
Holder shall notify the Company in writing, of its intention to do so. Upon the
written request of any Holders of the Registrable Securities received by the
Company within twenty (20) days after receipt by such Person of such notice, the
Company will, subject to the limits contained in this Section 2, use
commercially reasonable efforts to cause such number of Registrable Securities
of said requesting Holders to be registered under the Securities Act and
qualified for sale under any state blue sky law in connection with such
registration for the period such registration remains effective, such period to
be determined by the Company in its sole discretion; provided, however, that if
the Company is advised in writing in good faith by any managing underwriter of
the Company's securities being offered in a public offering pursuant to such
registration statement, or if the Company's Board of Directors otherwise
determines in good faith based on the written advice of an investment banker,
that the amount to be sold by persons other than the Company (collectively,
"Selling Stockholders") is greater than the amount which can be offered without
adversely affecting the offering or the trading market for the Company's Common
Stock, the Company may reduce the amount offered for the accounts of Selling
Stockholders (including Holders of shares of Registrable Securities) to a number
deemed satisfactory by such managing underwriter or the Board. If any limitation
of the number of shares of Registrable
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Securities to be registered by the Holders is required pursuant to this Section
2, the number of shares that may be included in the registration on behalf of
the Holders shall be allocated among the Holders and the holders of any other
contractual incidental registration rights (including, without limitation, the
rights of the holders of registration rights under that certain Amended and
Restated Stockholders' Agreement (the "Stockholders' Agreement") dated as of
August 29, 1996, by and among the Company and the Investors (as defined
therein)), in proportion, as nearly as practicable, to their respective holdings
of Registrable Securities and other securities for which the holders have
contractual registration rights; provided, however, that participating Holders
within any Investor Group (as defined in the Stockholders' Agreement and
including for purposes of this Agreement, the Holders of a separate Investor
Group) shall have the first right to include shares in place of
non-participating Holders within such Investor Group before shares are allocated
to participating Holders within any other Investor Group.
In connection with any registration which is an underwritten public
offering, the right of any Person to participate in such registration shall be
conditioned upon their participation in such underwritten public offering, the
execution of any underwriting custody and power of attorney agreements
reasonably requested by the managing underwriter or the Company and the
inclusion of their Registrable Securities in such underwritten public offering
to the extent provided herein.
3. REGISTRATION PROCEDURES.
(a) If and whenever the Company undertakes pursuant to Section 2 of
this Agreement to use its commercially reasonable efforts to effect the
registration of any of its securities under the Securities Act, the Company
will:
(i) furnish to each selling Holder, such reasonable number of
copies of such registration statement, any amendments thereto, any documents
incorporated by reference therein, the prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as such selling Holder may reasonably request in order to
facilitate the public sale or other disposition of the securities owned by such
selling Holder;
(ii) promptly notify each selling Holder of Registrable
Securities of the happening of any event which makes any statement made in the
registration statement or related prospectus untrue or which requires the making
of any changes in such registration statement or prospectus so that they will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein in the light of the circumstances under which they were made not
misleading, provided that each Holder agrees that, upon receipt of notice from
the Company of the happening of any event of the kind described herein, such
Holder will forthwith discontinue disposition of Registrable Securities pursuant
to such registration statement until such Holder's receipt of the copies of the
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supplemented or amended prospectus (which the Company shall furnish promptly to
such Holder), and, if so directed by the Company, such Holder will deliver to
the Company all copies then in its possession of the prospectus covering such
Registrable Securities at the time of receipt of such notice; and
(iii) make generally available to its security holders, in each
case as soon as practicable, but not later than 45 days after the close of the
period covered thereby, an earnings statement of the Company which will satisfy
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any comparable successor provisions).
(b) Each Holder agrees in connection with each registration
hereunder to provide all information reasonably requested by the Company and
take such reasonable action as the Company may reasonably request to facilitate
such registration. Each holder further agrees, if requested by the Company and
an underwriter of Registrable Securities of the Company in connection with any
underwritten public offering of the Company, not to sell or otherwise transfer
or dispose of any shares held by it for such period, not to exceed one hundred
eighty (180) days following the effective date of the relevant registration
statement filed under the Securities Act, as such underwriter shall specify
reasonably and in good faith, which period shall not be longer than the lock-up
period agreed to by the directors and executive officers of the Company in
connection with such offering.
4. EXPENSES. The Company will pay the registration and filing fees,
printing expenses and fees and disbursements of counsel and accountants of the
Company and expenses of complying with the securities or blue sky laws of any
jurisdictions in connection with requests by Holders for registration hereunder.
All underwriting fees, commissions or discounts and expenses of any counsel to
the Holders shall be paid by the Holders.
5. INDEMNIFICATION.
(a) The Company shall indemnify and hold harmless the selling
Holder of Registrable Securities and each other Person, if any, who controls
(within the meaning of the Securities Act) such seller (individually and
collectively, the "Indemnified Person") against any losses, claims, damages,
liabilities or expenses (collectively, the "liability") to which such
Indemnified Person may become subject under the Securities Act or any other
statute or at common law, insofar as such liability (or action in respect
thereof) arises out of or is based upon (i) any untrue statement or alleged
untrue statement of any material fact contained, on the effective date thereof,
in any registration statement under which such securities were registered under
the Securities Act, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or (ii) 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; provided, however, that
the Company shall not be liable to any Indemnified Person in any such case to
the extent that any such liability arises out of or is based upon any untrue
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statement or alleged untrue statement or omission or alleged omission made in
such registration statement, preliminary or final prospectus, or amendment or
supplement thereto in reliance upon and in conformity with information furnished
in writing to the Company by such Person specifically for use therein; and
provided further, that the Company shall not be required to indemnify any Person
against any liability arising from any untrue or misleading statement or
omission contained in any preliminary prospectus if such deficiency is corrected
in the final prospectus (provided the Company has complied with its obligations
in Section 3(a)(i)) or for any liability which arises out of the failure of any
Person to deliver a prospectus as required by the Securities Act.
(b) Each selling Holder of any securities included in such
registration being effected shall indemnify and hold harmless each other selling
Holder of any securities, the Company, its directors and officers, each
underwriter and each other Person, if any, who controls the Company or such
underwriter (individually and collectively also the "Indemnified Person"),
against any liability (as defined in Section 5(a)), joint or several, to which
any such Indemnified Person may become subject under the Securities Act or any
other statute or at common law, insofar as such liability (or actions in respect
thereof) arises out of or is based upon (i) any untrue statement or alleged
untrue statement of any material fact contained, on the effective date thereof,
in any registration statement under which securities were registered under the
Securities Act at the request of such selling Holder, any preliminary prospectus
or final prospectus contained therein, or any amendment or supplement thereto,
or (ii) any omission or alleged omission by such selling Holder to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in the case of (i) and (ii) to the extent,
but only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in such registration statement,
preliminary or final prospectus, amendment or supplement thereto in reliance
upon and in conformity with information furnished in writing to the Company by
such selling Holder specifically for use therein; provided, however, that the
liability of a selling Holder for indemnification under this Section 5(b) shall
not exceed the proceeds received by such selling Holder from its sale of
securities under such registration statement.
(c) If the indemnification provided for in this Section 5 for any
reason is held by a court of competent jurisdiction to be unavailable to an
indemnified party in respect of any losses, claims, damages, expenses or
liabilities referred to therein, then each indemnifying party under this Section
5, in lieu of indemnifying such indemnified party thereunder, shall contribute
to the amount paid or payable by such indemnified party as a result of such
losses, claims, damages, expenses or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, the
selling Holders and the underwriters from the offering of the Registrable
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company, the other selling Holders and the underwriters in
connection with the statements or omissions which resulted in
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such losses, claims, damages, expenses or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the
Company, the selling Holders and the underwriters shall be deemed to be in the
same respective proportions that the net proceeds from the offering (before
deducting expenses) received by the Company and the selling Holders and the
underwriting discount received by the underwriters, in each case as set forth in
the table on the cover page of the applicable prospectus, bear to the aggregate
public offering price of the Registrable Securities. The relative fault of the
Company, the selling Holders and the underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, the selling Holders or the
underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, the selling Holders, and the underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 5
were determined by pro rata or per capita allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in the immediately preceding paragraph. In no event, however, shall a selling
Holder be required to contribute any amount under this Section 5(c) in excess of
the lesser of (i) that proportion of the total of such losses, claims, damages
or liabilities indemnified against equal to the proportion of the total
Registrable Securities sold under such registration statement which are being
sold by such selling Holder or (ii) the proceeds received by such selling Holder
from its sale of Registrable Securities under such registration statement. No
person found 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 found guilty of such fraudulent misrepresentation.
(d) In the event the Company, any selling Holder or other Person
receives a complaint, claim or other notice of any liability or action, giving
rise to a claim for indemnification under Sections 5(a) or (b) above, the Person
claiming indemnification under such paragraphs shall promptly notify the Person
against whom indemnification is sought of such complaint, notice, claim or
action, and such indemnifying Person shall have the right to investigate and
defend any such loss, claim, damage, liability or action. The Person claiming
indemnification shall have the right to employ separate counsel in any such
action and to participate in the defense thereof but the fees and expenses of
such counsel shall not be at the expense of the Person against whom
indemnification is sought (unless the indemnifying party fails to promptly
defend or unless in the reasonable opinion of counsel for the Person claiming
indemnification, a conflict exists, in which case the reasonable fees and
expenses of such separate counsel shall be borne by the Person against whom
indemnification is sought (except that the Company shall only be obligated to
bear the reasonable fees and expenses of one such separate counsel for all
Holders including shares in any Registration Statement)). In no event shall a
Person against whom indemnification is sought be obligated to indemnify any
Person for
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any settlement of any claim or action effected without the indemnifying Person's
prior written consent.
6. AMENDMENTS. The provisions of this Agreement may be amended, and
the Company may take any action herein prohibited or omit to perform any act
herein required to be performed by it, only with the written consent of the
Company and a majority in interest (based on then current holdings of
Registrable Securities) of the Holders.
7. ASSIGNMENT. The registration rights set forth in this Agreement are
not assignable by the Holders other than pursuant to the laws of descent and
distribution provided that a permitted assignee of such registration rights must
consent in writing to be bound by the terms and conditions of this Agreement in
order to acquire the rights granted pursuant to this Agreement; provided,
however, that each Principal Stockholder (as defined in the Agreement and Plan
of Merger dated as of September 1, 1998 by and among the Company, Valley Forge
and certain other parties thereto) may assign its registration rights and
related obligations with respect to Registrable Securities to such Principal
Stockholder's partners (it being understood that no further assignment shall be
permitted) in connection with a distribution of such Registrable Securities to
such partners if the distribution is accomplished in accordance with the
Securities Act, and if requested by the Company, the transferring Principal
Stockholder provides the Company with a legal opinion reasonably satisfactory to
the Company to that effect. In connection with any such assignment of
registration rights and related obligations, the Principal Stockholders hereby
agree that: (i) the Company shall be entitled to rely solely and conclusively
upon elections, notices, waivers and other instructions given by Xxxxxx
Management Company, Inc. ("Xxxxxx") with regard to such Registrable Securities
without reference to any instructions given by such a distributee; (ii) the
Company shall be obligated to provide notices with regard to such Registrable
Securities only to Xxxxxx and shall not be required to provide notice in any
circumstance to such distributees; (iii) the Principal Stockholders will
indemnify and hold harmless the Company from any claim, loss, liability or
damage asserted by such a distributee with regard to this Agreement and the
registration rights and related obligations created hereby; and (iv) prior to
such assignment, the Principal Stockholders will cause Xxxxxx to obtain a power
of attorney and agreement from each distributee (x) granting the power to act
for the distributee in accordance with the preceding clauses to Xxxxxx, and (y)
agreeing to the terms of this Section 7.
Upon any such transfer accomplished in accordance with this Section 7,
such transferee shall be deemed to be included within the definition of a
"Holder" for purposes of this Agreement with the rights and obligations set
forth herein, and any such Holder to which registration rights are assigned in
accordance with the prior paragraph accepts and agrees to such provisions. The
relevant Holder as the case may be, shall notify the Company at the time of such
transfer.
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8. MISCELLANEOUS.
(a) All notices, requests, demands and other communications
provided for hereunder shall be in writing and mailed (by first class registered
or certified mail, postage prepaid), telegraphed, sent by express overnight
courier service or electronic facsimile transmission (with a copy by mail), or
delivered to the applicable party at the addresses indicated below:
If to the Company:
Monarch Dental Corporation
0000 Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Chief Executive Officer
Telecopy No.: (000) 000-0000
With a copy to:
Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. XxXxxxxx, P.C.
Telecopy No: (000) 000-0000
If to a Holder:
At such Person's address for notice as set forth on Exhibit A
hereto or the letter of transmittal submitted by such Holder.
or, as to each of the foregoing, at such other address as shall be designated by
such Person in a written notice to the other parties (except that a Holder shall
not be required to give notice of a change of address to the other Holders)
complying as to delivery with the terms of this subsection (a). All such
notices, requests, demands and other communications shall, when mailed,
telegraphed or sent, respectively, be effective (i) two days after being
deposited in the mails or (ii) one day after being delivered to the telegraph
company, deposited with the express overnight courier service or sent by
electronic facsimile transmission, respectively, addressed as aforesaid.
(b) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without giving effect to conflict of
laws principles thereof.
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(c) This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(d) If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability shall
attach only to such provision and shall not in any manner affect or render
illegal, invalid or unenforceable any other provision of this Agreement, and
this Agreement shall be carried out as if any such illegal, invalid or
unenforceable provision were not contained herein.
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IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed as of the date first set forth above.
THE COMPANY:
MONARCH DENTAL CORPORATION
By:/s/ XXXX X. XXXX
----------------------------
Name: Xxxx X. Xxxx
Title: Chief Executive Officer
BUSINESS DEVELOPMENT CAPITAL LIMITED
PARTNERSHIP-III
By: BDC-III Partners, its general partner
By: /s/ XXXXXXX X. XXXX
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ABBINGDON VENTURE PARTNERS LIMITED
PARTNERSHIP
By: BDC-III Partners, its general partner
By: /s/ XXXXXXX X. XXXX
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ABBINGDON VENTURE PARTNERS LIMITED
PARTNERSHIP-II
By: Abbingdon-II Partners, its general partner
By: /s/ XXXXXXX X. XXXX
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ABBINGDON VENTURE PARTNERS LIMITED
PARTNERSHIP-III
By: Abbingdon-II Partners, its general partner
By: /s/ XXXXXXX X. XXXX
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MANAGEMENT STOCKHOLDERS:
/s/ XXXXXXX XXXXXX
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Xxxxxxx Xxxxxx
/s/ XXXXX X. XXXXXXX
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Xxxxx X. Xxxxxxx
/s/ XXXXXX X. XXXXX
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Xxxxxx X. Xxxxx
/s/ W. XXXX XXXXXXX
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W. Xxxx Xxxxxxx
/s/ XXXXXX X. XXXXXXX
-----------------------------------
Xxxxxx X. Xxxxxxx
/s/ XXXXXXX X. X'XXXX
-----------------------------------
Xxxxxxx X. X'Xxxx
/s/ XXXXXX XXXXX XXXXXX
-----------------------------------
Xxxxxx Xxxxx Xxxxxx
