EXHIBIT 4.13
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT, dated as of June
16, 1997, among CASTLE DENTAL CENTERS, INC., a Delaware corporation (the
"Company"), the purchasers whose names appear under the heading "Purchasers" on
the signature page hereof (the "Purchasers") and the shareholders and investors
whose names appear under the heading "Inside Shareholders" on the signature
pages hereof (the "Inside Shareholders").
WHEREAS, the parties hereto are parties to a Registration Rights
Agreement, dated as of December 18, 1995 (the "Original Agreement"); and
WHEREAS, the parties to the Original Agreement desire to amend and
restate such Original Agreement in its entirety;
NOW, THEREFORE, the parties hereto, based on the premises and
agreements contained herein, hereby agree to amend and restate the Original
Agreement in its entirety as follows:
1. BACKGROUND. The Company is a party to a securities purchase
agreement, dated as of December 18, 1995, as amended by Amendment No. 1 thereto,
dated as of the date hereof, entered into with the Purchasers (as amended, the
"Securities Purchase Agreement"), pursuant to which the Company issued to the
Purchasers (i) $7,500,000 of 12% Senior Subordinated Notes (the "Notes"), (ii)
1,244,737 shares of Series A Convertible Preferred Stock, par value $.001 per
share (the "Series A Convertible Preferred Stock"), (iii) $2,000,000 of 12% New
Senior Subordinated Notes (the "New Notes") and (iv) 485,382 shares of Series C
Convertible Preferred Stock, par value $.001 per share (the "Series C
Convertible Preferred Stock" and, collectively with the Series A Convertible
Preferred Stock, the "Convertible Preferred Stock"). In addition, the Company
issued and delivered to GulfStar Investments, Ltd. a warrant to purchase 113,158
shares of the Company's Common Stock (the "Gulfstar Warrant").
In connection with the Securities Purchase Agreement, the Company
entered into this Amended and Restated Registration Rights Agreement, to which
the Purchasers who received securities under the Securities Purchase Agreement
became parties.
2. REGISTRATION UNDER SECURITIES ACT, ETC.
2.1. REGISTRATION OF REGISTRABLE SECURITIES ON REQUEST. (a) REQUEST.
Up to three times following the Company's initial Public Offering (as defined in
the Securities Purchase Agreement), the holder or holders of in excess of 50% of
the Registrable Securities shall have the right to request in writing that the
Company effect an underwritten registration under the Securities Act of 1933, as
amended (the "Securities Act") of all or part of such holders' Registrable
Securities; PROVIDED that the aggregate Fair Market Value (as defined in the
Securities Purchase Agreement) of the Registrable Securities requested to be so
registered is at least $4,000,000. The Company will promptly give written notice
of such requested registration to all other holders of Registrable Securities
and all holders of Registrable Inside Shareholder Securities, which holders
shall be entitled to include their Registrable Securities in such registration
subject to Sections 2.1(b) and 2.1(g). Thereupon the Company will use its best
efforts to effect the registrations under the Securities Act of:
(i) the Registrable Securities which the Company has been so
requested to register by such holders; and
(ii) subject to Sections 2.1(b) and 2.1(g), all other
Registrable Securities and Registrable Inside Shareholder Securities
which the Company has been requested to register by the holders
thereof by written request given to the Company within 30 days after
the giving of such written notice by the Company (which request
shall specify the intended method of disposition of such Registrable
Securities and Registrable Inside Shareholder Securities) all to the
extent requisite to permit the disposition of the Registrable
Securities and Registrable Inside Shareholder Securities so to be
registered.
(b) REGISTRATION OF OTHER SECURITIES. Whenever the Company shall
effect a registration pursuant to this Section 2.1, no securities other than
Registrable Securities shall be included among the securities covered by such
registration unless (i) the managing underwriter of such offering shall have
advised each holder of Registrable Securities to be covered by such registration
in writing that the inclusion of such other securities would not in the
underwriter's reasonable judgment adversely affect such offering or (ii) the
holders of a majority of Registrable Securities to be covered by such
registration shall have consented in writing to the inclusion of such other
securities. The Company will not grant to any person at any time on or after the
date hereof the right to be included among the securities registered pursuant to
this Section 2.1 that is inconsistent with the provisions of this Section
2.1(b); PROVIDED, HOWEVER, that subject to Section 2.1(g), Registrable Inside
Shareholder Securities may be included in a registration effected pursuant to
this Section 2.1.
(c) REGISTRATION STATEMENT FORM. Registrations under this Section
2.1 shall be on such appropriate registration form or prospectus of the
Commission (i) as shall be selected by the Company and as shall be reasonably
acceptable to the holders of more than 50% (by number of shares) of the
Registrable Securities so to be registered and (ii) as shall permit the
disposition of such Registrable Securities in accordance with the intended
method or methods of disposition specified in their request for such
registration. The Company agrees to include in any such registration statement
all information which holders of Registrable Securities being registered shall
reasonably request.
(d) EXPENSES. The Company will pay all Registration Expenses in
connection with the registration requests made pursuant to this Section 2.1.
(e) EFFECTIVE REGISTRATION STATEMENT. A registration requested
pursuant to this Section 2.1 shall not be deemed to have been effected and shall
not count as a requested registration pursuant to Section 2.1 (a) hereof (i)
unless a registration statement with respect thereto has become effective, (ii)
unless a registration statement has been filed with the Commission and prior to
its becoming effective a majority of holders of the Registrable Securities to be
registered has decided to terminate the registration process, (iii) if after it
has become effective, such registration is interfered with by any stop order,
injunction or other order or requirement of the Commission or other governmental
agency or court for any reason not the fault of a holder of Registrable
Securities and the Registrable Securities covered thereby have not been sold, or
(iv) if the conditions to closing specified in the selling agreement or
underwriting agreement entered into in connection with such registration are not
satisfied or waived by the parties thereto other than a holder of Registrable
Securities.
(f) UNDERWRITERS. Any registration effected pursuant to this Section
2.1 shall at the election of the holders of at least 50% of the Registrable
Securities be an underwritten public offering on a firm commitment basis or a
best efforts basis. The managing underwriter or underwriters thereof shall be
selected by the Company and such underwriter as well as the price, terms and
provisions of the offering shall be subject to the approval of the Company and
the holders of more than 50% (by number of shares) of the Registrable Securities
to be so registered.
(g) APPORTIONMENT IN REGISTRATIONS REQUESTED. If, in connection with
a registration requested pursuant to this Section 2.1, the managing underwriter
shall advise the Company in writing (with a copy to each holder of Registrable
Securities and Registrable Inside Shareholder Securities requesting
registration) that, in its opinion, the number of securities requested to be
included in such registration exceeds the number which can be sold in such
offering within a price range acceptable to the holders of more than 50% (by
number of shares) of the Registrable Securities requested to be included in such
registration, the number of securities that are otherwise entitled to be
included in such registration shall be allocated in the following manner: (i)
all Registrable Inside Shareholder Securities shall be reduced, on a pro rata
basis (based on the number of securities requested to be included in such
registration) and (ii) if, after the exclusion of such securities, further
reductions are still required, the Registrable Securities requested to be
included in such registration shall be reduced pro rata among the holders
thereof requesting such registration on the basis of the percentage of the
Registrable Securities of the Company held by the holders of Registrable
Securities which have requested that such Registrable Securities be included. In
connection with any registration as to which the provisions of this clause (g)
apply, no securities other than Registrable Securities or Registrable Inside
Shareholder Securities shall be covered by such registration and if the pro
ration as aforesaid results in the exclusion of in excess of 15% of the
Registrable Securities originally sought to be registered, the request shall not
be counted for purposes of determining the number of registrations pursuant to
Section 2.1 hereof.
2.2. REGISTRATIONS ON FORM S-3. Following its initial Public
Offering, the Company shall use its best efforts to qualify for registration on
Form S-3 promulgated under the Securities Act or any successor form thereto
("Form S-3") for secondary sales. Anything contained in Section 2.1 to the
contrary notwithstanding, at such time as the Company shall have qualified for
the use of Form S-3, the holder or holders of in excess of 20% of the
Registrable Securities shall have the right to request in writing an unlimited
number of registrations on Form S-3 of Registrable Securities, which request or
requests shall (i) specify the number of Registrable Securities intended to be
sold or disposed of and the holders thereof, (ii) state the intended method of
disposition of such Registrable Securities and (iii) relate to Registrable
Securities having an anticipated aggregate gross offering price (before
underwriting discounts and commissions) of at least $500,000. A requested
registration on Form S-3 form in compliance with this Section 2.2 shall not
count as a registration statement initiated pursuant to Section 2.1 but shall
otherwise be treated as a registration initiated pursuant to, and shall, except
as otherwise expressly provided in this Section 2.2, be subject to Section 2.1.
2.3. "PIGGYBACK" REGISTRATIONS. (a) RIGHT TO INCLUDE REGISTRABLE
SECURITIES AND REGISTRABLE INSIDE SHAREHOLDER SECURITIES. If the Company at any
time prior to an initial Public Offering proposes to register any of its equity
securities, or at any time thereafter proposes to register any of its securities
(including, without limitation, debt or equity securities), under the Securities
Act (other than by a registration on Form X-0, Xxxx X-0 or any successor or
similar form, or in connection with a tender offer, merger, or other
acquisition, and other than pursuant to Section 2.1 or Section 2.2), whether or
not for sale for its own account, it will at each such time give prompt written
notice to all holders of Registrable Securities and Registrable Inside
Shareholder Securities of its intention to do so and of such holders' rights
under this Section 2.3. Upon the written request of any such holder made within
20 days after the date of any such notice given in accordance with Section 7
hereof, the Company will use its best efforts to effect the registration under
the Securities Act of all Registrable Securities and Registrable Inside
Shareholder Securities which the Company has been so requested to register by
the holders thereof, to the extent requisite to permit the disposition of the
Registrable Securities and Registrable Inside Shareholder Securities so to be
registered, PROVIDED that if, at any time after giving written notice of its
intention to register any securities and prior to the effective date of the
registration statement filed in 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 Registrable Inside
Shareholder Securities and, thereupon, (i) in the case of a determination not to
register, shall be relieved of its obligation to register any Registrable
Securities or Registrable Inside Shareholder Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses in
connection therewith), without prejudice, however, to the rights of any holder
or holders of Registrable Securities entitled to do so to request that such
registration be effected as a registration under Section 2.1 or Section 2.2, and
(ii) in the case of a determination to delay registering, shall be permitted to
delay registering any Registrable Securities or Registrable Inside Shareholder
Securities, for the same period as the delay in registering such other
securities. No registration effected under this Section 2.3 shall relieve the
Company of its obligation to effect any registration upon request under Section
2.1 or Section 2.2. The Company will pay all Registration Expenses in connection
with each registration of Registrable Securities and Registrable Inside
Shareholder Securities requested pursuant to this Section 2.3.
(b) APPORTIONMENT IN "PIGGYBACK" REGISTRATIONS. If (i) a
registration pursuant to this Section 2.3 involves an underwritten offering of
the securities being registered, whether or not for sale for the account of the
Company, to be distributed (on a firm commitment basis) by or through one or
more underwriters of recognized national or regional standing under underwriting
terms appropriate for such a transaction, and (ii) the managing underwriter of
such underwritten offering shall inform the Company and the holders of the
Registrable Securities requesting such registration by letter of its belief that
the number of securities requested to be included in such registration exceeds
the number which can be sold in (or during the time of) such offering or that
the inclusion would adversely affect the marketing or the selling price of the
securities to be sold by the Company therein, then the Company may include all
securities proposed by the Company to be sold for its own account and may
decrease the number of Registrable Securities, Registrable Inside Shareholder
Securities and other securities of the Company so proposed to be sold and so
requested to be included in such registration (pro rata on the basis of the
percentage of the securities of the Company held by the holders of such
Registrable Securities, Registrable Inside Shareholder Securities and such other
securities) to the extent necessary to reduce the number of securities to be
included in the registration to the level recommended by the managing
underwriter. Notwithstanding the foregoing, if the registration referred to
herein involves an underwritten offering of securities being registered for sale
by holders of securities other than Registrable Securities (pursuant to the
exercise by such holders of demand registration rights or otherwise), the
Company will include in such registration the securities proposed by such
holders to be sold and may decrease the number of Registrable Securities,
Registrable Inside Shareholder Securities and such other securities exercising
"piggyback" registration rights proposed to be sold in such registration (pro
rata on the basis of the percentage of the securities sought to be registered
held by such holders of Registrable Securities and such other securities
exercising "piggyback" registration rights) proposed to be sold in such
registration to the extent necessary to reduce the number of securities to be
included in the registration to the level recommended by the managing
underwriter. In such case, no securities shall be offered for sale by the
Company.
2.4. REGISTRATION PROCEDURES. If and whenever the Company is
required to use its best efforts to effect the registration of any Registrable
Securities or Registrable Inside Shareholder Securities under the Securities Act
as provided in Sections 2.1, 2.2 and 2.3, the Company will as expeditiously as
possible:
(i) prepare and (as soon thereafter as possible or in any
event no later than 45 days after the end of the period within which
requests for registration may be given to the Company) file with the
Commission the requisite registration statement to effect such
registration and thereafter use its best efforts to cause such
registration statement to become effective, PROVIDED that the
Company may discontinue any registration of its securities which are
not Registrable Securities or Registrable Inside Shareholder
Securities (and, under the circumstances specified in Section
2.3(a), its securities which are Registrable Securities or
Registrable Inside Shareholder Securities) at any time prior to the
effective date of the registration statement relating thereto;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used
in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions
of the Securities Act with respect to the disposition of all
securities covered by such registration statement until such time as
all of such securities have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof set
forth in such registration statement or for 6 months, whichever
period is shorter;
(iii) furnish to each seller of Registrable Securities or
Registrable Inside Shareholder Securities covered by such
registration statement such number of conformed copies of such
registration statement and of each such amendment and supplement
thereto, such number of copies of the prospectus contained in such
registration statement (including each preliminary prospectus and
any summary prospectus) and any other prospectus filed under Rule
424 or Rule 430A under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents, as
such seller may reasonably request;
(iv) 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 each seller thereof shall reasonably
request, to keep such registration or qualification in effect for so
long as such registration statement remains in effect, and take any
other action which may be reasonably necessary to enable such seller
to consummate the disposition in such jurisdictions of the
securities owned by such seller, except that the Company shall not
for any such purpose be required to qualify generally to do business
as a foreign corporation in any jurisdiction wherein it would not
but for the requirements of this subdivision (iv) be obligated to be
so qualified or to consent to general service of process in any such
jurisdiction or subject itself to be required to pay any franchise
or income taxes in any such jurisdiction.
(v) use its best efforts to cause all Registrable Securities
and Registrable Inside Shareholder Securities covered by such
registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to
enable the seller or sellers thereof to consummate the disposition
of such Registrable Securities or Registrable Inside Shareholder
Securities;
(vi) furnish to each seller of Registrable Securities or
Registrable Inside Shareholder Securities a signed counterpart,
addressed to such seller, except as provided in (y) below (and the
underwriters, if any), of
(x) an opinion of counsel for the Company, dated the
effective date of such registration statement (and, if such
registration includes an underwritten public offering, dated
the date of the closing under the underwriting agreement),
reasonably satisfactory in form and substance to such seller
or, if such registration includes an underwritten public
offering, to such underwriter, and
(y) a "comfort" letter, dated the effective date of such
registration statement (and, if such registration includes an
underwritten public offering, dated the date of the closing
under the underwriting agreement), signed by the independent
public accountants who have certified the Company's financial
statements included in such registration statement, addressed
to each seller, to the extent the same can be reasonably
obtained, and addressed to the underwriters, if any, covering
substantially the same matters with respect to such
registration statement (and the prospectus included therein)
and, in the case of the accountants' letter, with respect to
events subsequent to the date of such financial statements, as
are customarily covered in accountants' letters delivered to
the underwriters in underwritten public offerings of
securities and such other financial matters as such seller or
such holder (or the underwriters, if any) may reasonably
request;
(vii) notify each seller of Registrable Securities and
Registrable Inside Shareholder Securities covered by such
registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, upon
discovery that, or upon the happening of any event as a result of
which, the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in the light
of the circumstances under which they were made, and at the request
of any such seller or holder promptly prepare to furnish to such
seller or holder a reasonable number of copies of a supplement to or
an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, 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 not misleading in the light
of the circumstances under which they were made;
(viii) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least
twelve months, but not more than eighteen months, beginning with the
first full calendar month after the effective date of such
registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act, and, in the case
of a registration requested pursuant to Section 2.1 or 2.2 hereof,
will furnish to each such seller at least two business days prior to
the filing thereof a copy of any amendment or supplement to such
registration statement or prospectus and shall not file any thereof
to which any such seller shall have reasonably objected on the
grounds that such amendment or supplement does not comply in all
material respects with the requirements of the Securities Act or of
the rules or regulations thereunder;
(ix) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities and Registrable Inside
Shareholder Securities covered by such registration statement from
and after a date not later than the effective date of such
registration statement; and
(x) use its best efforts to list all Registrable Securities
and Registrable Inside Shareholder Securities covered by such
registration statement on any securities exchange on which any of
the Registrable Securities is then listed.
Notwithstanding the foregoing, the Company may defer its obligations
under Section 2.1 and, in the case of clause (ii) below only, Section 2.2, for a
period of no more than (i) 90 days in any 365-day period, if the Company's Board
of Directors determines in good faith based upon a written opinion of counsel
that filing such a registration statement would require a public disclosure by
the Company, which disclosure would interfere with a material transaction then
under consideration by the Company, PROVIDED that once such information has been
publicly disclosed, the Company shall promptly proceed to fulfill its
obligations under Section 2.1 and (ii) 180 days from the most recent effective
date of any registration statement of the Company filed under the Securities Act
and pursuant to Section 2.1 occurring prior to the request for registration made
pursuant to Section 2.1.
The Company may require each proposed seller of Registrable
Securities or Registrable Inside Shareholder Securities as to which any
registration is being effected to promptly furnish the Company, as a condition
precedent to including such holder's Registrable Securities or Registrable
Inside Shareholder Securities in any registration, such information regarding
such seller and the distribution of such securities as the Company may from time
to time reasonably request in writing.
Each holder of Registrable Securities and Registrable Inside
Shareholder Securities agrees by acquisition of such Registrable Securities or
Registrable Inside Shareholder Securities that upon receipt of any notice from
the Company of the happening of any event of the kind described in subdivision
(vii) of this Section 2.4, such holder will forthwith discontinue such holder's
disposition of Registrable Securities or Registrable Inside Shareholder
Securities pursuant to the registration statement relating to such Registrable
Securities until such holder's receipt of the copies of the supplemented or
amended prospectus contemplated by subdivision (vii) of this Section 2.4 and, if
so directed by the Company, will 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 relating to such Registrable Securities or
Registrable Inside Shareholder Securities current at the time of receipt of such
notice.
2.4. UNDERWRITTEN OFFERINGS. (a) REQUESTED UNDERWRITTEN OFFERINGS.
If requested by the underwriters for any offering by holders of Registrable
Securities pursuant to a registration requested under Section 2.1, the Company
will enter into an underwriting agreement with such underwriters for such
offering, such agreement to be satisfactory in substance and form to the
Company, to holders of more than 50% of the Registrable Securities included in
such registration and the underwriters and to contain such representations and
warranties by the Company and such other terms as are generally prevailing in
agreements of this type, including, without limitation, indemnities to the
effect and to the extent provided in Section 2.7. The holders of the Registrable
Securities and Registrable Inside Shareholder Securities will cooperate with the
Company in the negotiation of the underwriting agreement and will give
consideration to the reasonable requests of the Company regarding the form
thereof, PROVIDED that nothing herein contained shall diminish the foregoing
obligations of the Company. The holders of Registrable Securities or Registrable
Inside Shareholder Securities to be distributed by such underwriters shall be
parties to such underwriting agreement and may, at their 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
Registrable Inside Shareholder 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 and Registrable Inside Shareholder Securities. Other than
as required under Section 2.3 hereof, any such holder of Registrable Securities
or Registrable Inside Shareholder Securities shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements typical in an
offering of this type, including those regarding such holder, such holder's
Registrable Securities or Registrable Inside Shareholder Securities, and such
holder's intended method of distribution, any other information supplied by such
holder to the Company for use in the Registration Statement and any other
representation required by law.
(b) INCIDENTAL UNDERWRITTEN OFFERINGS. If the Company at any time
proposes to register any of its securities under the Securities Act as
contemplated by Section 2.3 and such securities are to be distributed by or
through one or more underwriters, the Company will, if requested by any holder
of Registrable Securities as provided in Section 2.3 and subject to the
provisions of Sections 2.3(a), 2.3(b) and 2.4, arrange for such underwriters to
include all the Registrable Securities and Registrable Inside Shareholder
Securities to be offered and sold by such holder among the securities to be
distributed by such underwriters. The holders of Registrable Securities and
Registrable Inside Shareholder Securities to be distributed by such underwriters
shall be parties to the underwriting agreement between the Company and such
underwriters and may, at their 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 Registrable Inside
Shareholder 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 and
Registrable Inside Shareholder Securities. Other than as required under Section
2.4 hereof, any such holder of Registrable Securities or Registrable Inside
Shareholder Securities shall not be required to make any representations or
warranties to or agreements with the Company or the underwriters other than
representations, warranties, or agreements typical in an offering of this type,
including those regarding such holder, such holder's Registrable Securities or
Registrable Inside Shareholder Securities and such holder's intended method of
distribution, any other information supplied by such holder to the Company for
use in the Registration Statement and any other representation required by law.
2.6. PREPARATION; REASONABLE INVESTIGATION. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the holders of Registrable
Securities and Registrable Inside Shareholder Securities registered under such
registration statement, their underwriters, if any, and their respective counsel
(such holders' counsel to be appointed by the holders of more than 50% by number
of shares) of the Registrable Securities being registered, the opportunity to
participate in the preparation of such registration statement, each prospectus
included therein or filed with the Commission, and each amendment thereof or
supplement thereto, and will give each of them such access to its books and
records and such opportunities to discuss the business of the Company with its
officers and the independent public accountants who have certified its financial
statements as shall be necessary, in the opinion of such holders' and such
underwriters' respective counsel, to conduct a reasonable investigation within
the meaning of the Securities Act.
2.7. INDEMNIFICATION. (a) INDEMNIFICATION BY THE COMPANY. In the
event of any registration of any securities of the Company under the Securities
Act, the Company will, and hereby does, indemnify and hold harmless the seller
of any Registrable Securities or Registrable Inside Shareholder Securities
covered by such registration statement, its directors and officers, each other
Person who participates as an underwriter in the offering or sale of such
securities and such other Person, if any, who controls such seller or any such
underwriter within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which such seller or any
such director or officer or underwriter or controlling person may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, 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, and the Company will
reimburse such seller and each such director, officer, underwriter and
controlling person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding; PROVIDED, HOWEVER, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon (a) an untrue statement or alleged
untrue statement or omission or alleged omission made in such registration
statement, said preliminary or final prospectus or said amendment or supplement
in reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by such seller, specifically for use in
the preparation thereof or (b) an untrue statement or alleged untrue statement,
omission or alleged omission in a prospectus if such untrue statement or alleged
untrue statement, omission or alleged omission is corrected in an amendment or
supplement to the prospectus or in the final prospectus, which amendment,
supplement or final prospectus is delivered to such seller and such seller
thereafter fails to deliver such prospectus as so amended or supplemented prior
to or concurrently with the sale of registered Registrable Securities or
Registrable Inside Shareholder Securities to the person asserting such loss,
claim, damage, liability or expense. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of such seller
or any such director, officer, under writer or controlling person and shall
survive the transfer of such securities by such seller.
(b) INDEMNIFICATION BY THE PURCHASERS AND INSIDE SHAREHOLDERS. The
Purchasers and the Inside Shareholders will, and hereby do, indemnify and hold
harmless (in the same manner and to the same extent as set forth in subdivision
(a) of this Section 2.7) the Company, each director of the Company, each officer
of the Company and each other Person, if any, who controls the Company within
the meaning of the Securities Act with respect to any statement or alleged
statement in or omission or alleged omission from such registration statement,
any preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, if such statement or alleged
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Purchaser
or Inside Shareholder for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement. Such indemnity shall remain in full force and effect, regardless of
any investigation made by or on behalf of the Company or any such director,
officer or controlling Person and shall survive the transfer of such securities
by such Purchaser or Inside Shareholder.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding subdivisions of this Section 2.7, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action, PROVIDED that the failure of any indemnified party to give notice
as provided herein shall not relieve the indemnifying party of its obligations
under the preceding subdivisions of this Section 2.7, except to the extent that
the indemnifying party is prejudiced by such failure to give notice. In case any
such action is brought against an indemnified party, unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified
party and indemnifying parties may exist in respect of such claim, the
indemnifying party shall be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly notified to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of investigation.
No indemnifying party shall, without the consent of the indemnified party,
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release from all liability in respect to such
claim or litigation.
(d) OTHER INDEMNIFICATION. Indemnification similar to that specified
in the preceding subdivisions of this Section 2.7 (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Securities or Registrable Inside Shareholder 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.
(e) INDEMNIFICATION PAYMENTS. The indemnification required by this
Section 2.7 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
2.8. ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. The Company will
not effect or permit to occur any combination or subdivision of shares which
would adversely affect the ability of the holders of Registrable Securities to
include such Registrable Securities in any registration of its securities
contemplated by this Section 2 or the marketability of such Registrable
Securities under any such registration.
3. DEFINITIONS. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
COMMISSION: The Securities and Exchange Commission or any other Federal
agency at the time administering the Securities Act.
COMMON STOCK: All shares now or hereafter authorized and designated as the
Common Stock of the Company and stock of any other class with which such
shares may hereafter have been exchanged or reclassified.
CONVERTIBLE PREFERRED STOCK: As defined in Section 1.
EXCHANGE ACT: The Securities Exchange Act of 1934.
PERSON: A corporation, an association, a partnership, a business, an
individual, a governmental or political subdivision thereof or a
governmental agency.
REGISTRABLE INSIDE SHAREHOLDER SECURITIES: (a) All shares of Common Stock
held by the Inside Shareholders on the date hereof and any shares of
Common Stock issuable upon exercise of the Gulfstar Warrant or (b)
securities issued or issuable with respect to such Warrant or Common Stock
by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise upon any required adjustments.
As to any particular Registrable Inside Shareholder Securities, such
securities shall cease to be Registrable Inside Shareholder Securities
when (a) a registration statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such
registration statement, (b) they shall have been distributed to the public
pursuant to Rule 144 (or any successor provision) under the Securities
Act, or (c) they shall have ceased to be outstanding.
REGISTRABLE SECURITIES: The Common Stock issuable upon the conversion of
Convertible Preferred Stock and any (a) Convertible Preferred Stock or (b)
securities issued or issuable with respect to such Convertible Preferred
Stock or Common Stock by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise upon any required
adjustments.
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 become effective under
the Securities Act and such securities shall have been disposed of in
accordance with such registration statement, (b) they shall have been
distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act, or (c) they shall have ceased to be
outstanding.
REGISTRATION EXPENSES: All expenses incident to the Company's performance
of or compliance with Section 2, including, without limitation, all
registration, filing and National Association of Securities Dealers, Inc.
fees, all fees and expenses of complying with securities or blue sky laws,
all word processing, duplicating and printing expenses, messenger and
delivery expenses, the reasonable fees and disbursements of counsel for
the Company and of its independent public accountants, including the
expenses of any special audits or "cold comfort" letters required by or
incident to such performance and compliance, the reasonable fees and
disbursements of one counsel (except in the event of a conflict of
interest, then such number of counsel as is appropriate to resolve such
conflict) retained by the holder or holders of more than 50% (by number of
shares) of the Registrable Securities being registered, premiums and other
costs of policies of insurance obtained by the Company against liabilities
arising out of the public offering of the Registrable Securities being
registered and any fees and disbursements of underwriters customarily paid
by issuers or sellers of securities, including reasonable fees of
underwriters counsel including qualifications of Securities under blue sky
laws, but excluding all agency fees and commissions, underwriting
discounts and commissions and transfer taxes, if any.
SECURITIES ACT: The Securities Act of 1933, as amended.
4. RULE 144. 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 will file the reports required to be filed by it, and in the manner
required to be filed by it, under the Securities Act and the Exchange Act (or,
if the Company is not required to file such reports, will, upon the request of
any holder of Registrable Securities, make publicly available other information)
and will 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 (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time or (b) any similar
rule or regulation hereafter adopted by the Commission ("Rule 144"). Upon the
request of any holder of Registrable Securities, the Company will deliver to
such holder a written statement as to whether it has complied with such
requirements.
5. AMENDMENTS AND WAIVERS. 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 if the Company shall have obtained the
written consent to such amendment, action or omission to act, of the holder or
holders of 66 2/3% or more (by number of shares) of Registrable Securities. Each
holder of any Registrable Securities at the time or thereafter outstanding shall
be bound by any consent authorized by this Section 5, whether or not such
Registrable Securities shall have been marked to indicate such consent.
6. 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 upon the giving of written notice to the Company,
at its election, be treated as the holder 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. The Company may require
assurances reasonably satisfactory to it of such owner's beneficial ownership of
such Registrable Securities.
7. NOTICES. All communications provided for hereunder shall be sent
by first-class mail or overnight courier and (a) if addressed to a party other
than the Company, addressed to such party in the manner set forth in the
Securities Purchase Agreement, or at such other address as such party shall have
furnished to the Company in writing, or (b) if addressed to any other holder of
Registrable Securities, at the address that such holder shall have furnished to
the Company in writing, or, until any such other holder so furnishes to the
Company an address, then to and at the address of the last holder of such
Registrable Securities who has furnished an address to the Company, or (c) if
addressed to the Company, at 0000 Xxxx Xxx Xxxx., Xxxxx 0000, Xxxxxxx, Xxxxx
00000, to the attention of its President, or at such other address, or to the
attention of such other officer, as the Company shall have furnished to each
holder of Registrable Securities at the time outstanding.
8. ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors and assigns. In addition, and whether or not any express assignment
shall have been made, the provisions of this Agreement which are for the benefit
of the parties hereto other than the Company shall also be for the benefit of
and enforceable by any subsequent holder of any Registrable Securities, subject
to the provisions respecting the minimum numbers or percentages of shares of
Registrable Securities required in order to be entitled to certain rights, or
take certain actions, contained herein.
9. DESCRIPTIVE HEADINGS. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.
10. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of New York.
11. COUNTERPARTS. This Agreement may be executed simultaneously in
any number of counterparts, each of which shall be deemed an original, but all
such counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
CASTLE DENTAL CENTERS, INC.
By:
Name:
Title:
PURCHASERS:
DELAWARE STATE EMPLOYEES'
RETIREMENT FUND
By: Pecks Management Partners Ltd.
Its Investment Advisor
By:
Xxxxxx X. Xxxxxx
Managing Director
DECLARATION OF TRUST FOR DEFINED BENEFIT
PLAN OF ICI AMERICAN HOLDINGS INC.
By: Pecks Management Partners Ltd.
Its Investment Advisor
By:
Xxxxxx X. Xxxxxx
Managing Director
DECLARATION OF TRUST FOR DEFINED BENEFIT
PLAN OF ZENECA HOLDINGS INC.
By: Pecks Management Partners Ltd.
Its Investment Advisor
By:
Xxxxxx X. Xxxxxx
Managing Director
INSIDE SHAREHOLDERS:
----------------------------------
XXXX X. XXXXXX, XX., AS TRUSTEE
OF THE CASTLE 1995 GIFT TRUST
f/b/o XXXX X. XXXXXX, XX.
CASTLE INTERESTS, LTD.
By:
Xxxx X. Xxxxxx, Xx.
General Partner
By:
Xxxx X. Xxxxxx, D.D.S.
General Partner
By:
Xxxxxxx X. Xxxxxx
General Partner
XXXX X. XXXXXX DONNELL, AS TRUSTEE
OF THE CASTLE 1995 GIFT TRUST
f/b/o XXXX X. XXXXXX XXXXXXX
XXXX X. XXXXXX, D.D.S.
XXXXXXX X. XXXXXX
GULFSTAR INVESTMENTS, LTD.
By:
Name:
Title:
