REGISTRATION RIGHTS AGREEMENT
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This agreement is made effective May 22, 1997, between American Dental
Partners, Inc., a Delaware corporation (the "Company"), and Xxxx X. Xxxxxx, DMD
("Xx. Xxxxxx").
Background Information
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A. Concurrently with the execution of this agreement, the Company is
acquiring from Xx. Xxxxxx all of the outstanding capital stock of Xxxxxx Dental,
Inc., a Pennsylvania corporation, fka Xxxxxx Dental Association, P.A.
("Xxxxxx"), pursuant to a Stock Purchase Agreement dated May 22, 1997, among the
Company, Xx. Xxxxxx, and Xxxxxx (the "Purchase Agreement"). Under the Purchase
Agreement, the consideration being paid to Xx. Xxxxxx consists, in part, of
2,353 shares of common stock, par value $.01 per share, in the Company (the "ADP
Shares").
B. This agreement is being entered into as a condition to the completion
of such acquisition.
Statement of Agreement
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The parties to this agreement (the "Parties") hereby acknowledge the
foregoing Background Information and agree as follows:
(S)1. Definitions. In addition to other terms defined in other provisions
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of this agreement, as used in this agreement, the following terms shall have the
following meanings, respectively:
(a) "Act" means the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
(b) "Commission" means the Securities and Exchange Commission, or
any other federal agency from time to time administering the Act.
(c) "Common Stock" means shares of common stock, par value $.01 per
share, of the Company.
(d) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect from time to
time.
(e) "Holder" means a person who is then a record owner of
Registrable Securities.
(f) "IPO" means the first sale of Common Stock pursuant to a public
offering (including without limitation one for the assets or securities of
other companies) pursuant to a registration statement under the Act, and
"IPO Date" means the date on which the IPO is completed.
(g) "Registrable Securities" means shares of Common Stock which
have not been previously registered for sale under the Act, including
without limitation those issuable upon conversion of the Company's Series A
Convertible Preferred Stock and any securities issued or issuable with
respect to any such shares of Common Stock (i) upon any conversion or
exchange thereof, (ii) by way of stock split or stock dividend, or (iii) in
connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization.
(h) The term "register" means to register under the Act and
applicable state securities laws for the purpose of effecting a public sale
of securities, and the term "registration" means a registration of
securities under the Act and applicable state securities laws for the
purpose of effecting a sale of securities.
(i) "Registration Expenses" means all expenses incurred by the
Company in compliance with (S)(S)2 or 4 of this agreement, including
without limitation all registration and filing fees, printing expenses,
transfer taxes, fees and disbursements of accountants and counsel for the
Company, blue-sky fees and expenses (including fees and disbursements of
counsel for the underwriter(s)), fees of transfer agents and registrars,
reasonable fees and disbursements of one counsel for all selling Holders
(selected by Holders owning a majority of all Registrable Securities then
owned by all such Holders), and the expense of any special audits incident
to or required by any such registration.
(j) "Rule 144" means Rule 144 promulgated by the Commission under
the Act.
(k) "Selling Expenses" means all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and any
transfer taxes applicable to such sales.
(l) "Selling Shareholder" means all Holders who are participating
in a registration.
(S)2. Piggy Back Registrations.
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(a) If, after the IPO Date, the Company decides to register any
Registrable Securities, either for its own account or the account of any
Holder exercising registration
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rights or otherwise (other than a registration relating solely to a merger,
acquisition of assets or securities or tender or exchange offer, or to
employee benefit plans, or a registration on any registration form which
does not permit secondary sales or does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of Registrable Securities), the Company shall:
(i) Promptly give notice thereof to Xx. Xxxxxx (which notice
shall include the number of shares the Company or other Holder
proposes to register and, if known, the name of the proposed
underwriter); and
(ii) Use all commercially reasonable efforts to include in
such registration all the Registrable Securities specified in a
request made by Xx. Xxxxxx within 15 days after the date of delivery
of the notice from the Company described in clause (i) above. If the
underwriter advises the Company that marketing considerations require
a limitation on the number of Registrable Securities offered pursuant
to any related registration statement, then the Company may offer all
of the Registrable Securities it proposes to register for its own
account and such limitation on any remaining Registrable Securities
that may, in the opinion of the underwriter, be sold will be imposed
pro rata among all Holders who requested inclusion of Registrable
Securities in such registration (whether under this agreement, any
other similar agreement, or otherwise) in proportion to the number of
Registrable Securities requested to be registered by each of them,
respectively.
(b) The Company shall select the underwriter for any offering made
pursuant to this (S)2.
(S)3. Expenses of Registration. All Registration Expenses incurred in
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connection with any registration, qualification or compliance pursuant to
(S)(S)2 or 4 shall be paid by the Company. All Selling Expenses incurred in
connection with any such registration, qualification or compliance shall be
borne by the Holders of the Registrable Securities registered, pro rata on the
basis of the number of their Registrable Securities so registered.
(S)4. Listing Application. If shares of Common Stock are listed on a
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national securities exchange or approved for quotation on any over-the-counter
market system, the Company shall, at its expense, include in its listing
application all of the shares of Common Stock of the listed class then owned by
Xx. Xxxxxx.
(S)5. Registration Procedures. In the case of each registration effected
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by the Company pursuant to this agreement,
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the Company shall keep Xx. Xxxxxx, if he has Registrable Securities included in
any such registration, advised in writing as to the initiation of each
registration and as to the completion thereof. At its expense, the Company
shall as promptly as practicable do the following for the benefit of Xx. Xxxxxx:
(a) Keep such registration effective for a period of 120 days or
until Xx. Xxxxxx has completed the distribution described in the
registration statement relating thereto, whichever first occurs, and amend
or supplement such registration statement and the prospectus contained
therein from time to time to the extent necessary to comply with the Act
and applicable state securities laws;
(b) Use all commercially reasonable efforts to register or qualify
the Registrable Securities covered by such registration under the
applicable securities or "blue sky" laws of such jurisdictions as Xx.
Xxxxxx may reasonably request; provided that the Company shall not be
obligated to qualify to do business in any jurisdiction where it is not
then so qualified or otherwise required to be so qualified or to take any
action which would subject it to the service of process in suits other than
those arising out of such registration or which would subject it to
taxation in such jurisdiction;
(c) Furnish such number of conformed copies of such registration
statement and of each amendment or supplement thereto (in each case
including all exhibits and documents filed therewith), such number of
copies of the prospectus included in such registration statements
(including each preliminary prospectus and summary prospectus), such
documents incorporated by reference in such registration statement or
prospectus and such other documents incident thereto as Xx. Xxxxxx from
time to time may reasonably request;
(d) To the extent then permitted under applicable professional
guidelines and standards, use all reasonable efforts to obtain a comfort
letter from the Company's independent public accountants in customary form
and covering such matters of the type customarily covered by comfort
letters and an opinion from the Company's counsel in customary form and
covering such matters of the type customarily covered in a public issuance
of securities and provide copies thereof to Xx. Xxxxxx; and
(e) Permit the counsel to the selling Holders whose expenses are
being paid pursuant to (S)3 hereof to participate in the registration
statement preparation process and to inspect and copy such corporate
documents as he may reasonably request.
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(S)6. Indemnification.
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(a) The Company shall indemnify Xx. Xxxxxx with respect to
registration, qualification or compliance effected pursuant to this
agreement against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any prospectus,
offering circular or other document (including any related registration
statement, notification or the like) prepared by the Company incident to
any such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact required to
be stated therein or necessary to make the statements therein (in light of
the circumstances under which they were made, in the case of any
prospectus) not misleading, or any violation by the Company of the Act or
the Exchange Act or securities act of any state 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,
qualification or compliance, and shall reimburse Xx. Xxxxxx for any legal
and any other expenses reasonably incurred in connection with investigating
and defending any such claim, loss, damage, liability or action, whether or
not resulting in any liability, provided that the Company shall not be
liable in any such case to the extent that: (i) any such claim, loss,
liability or expense arises out of or is based on any untrue statement (or
alleged untrue statement) or omission (or alleged omission) made in such
prospectus, offering circular or other document in reliance upon any
written information furnished to the Company by Xx. Xxxxxx or any
underwriter expressly for use therein; or (ii) in the case of a sale
directly by Xx. Xxxxxx (including without limitation a sale through any
underwriter retained by Xx. Xxxxxx), it arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged
omission that was contained in a preliminary prospectus or other
preliminary document and corrected in a final or amended prospectus or
other document and Xx. Xxxxxx failed to deliver a copy of the final or
amended document at or prior to the confirmation of the sale of the
applicable securities to the person asserting such claim, loss, damage,
liability, or action.
(b) Xx. Xxxxxx shall, if Registrable Securities held by it are
included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors
and officers and each underwriter, if any, of the Company's securities
covered by such a registration statement, each person who controls the
Company or such underwriter within the meaning of the Act and the rules and
regulations thereunder, each other Holder and each of their officers,
directors and partners, and each
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person controlling such Holder, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained
in any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements
therein (in light of the circumstances under which they were made, in the
case of any prospectus) not misleading, and will reimburse the Company and
each such Holder's directors, officers, partners, persons, underwriters or
control persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, whether or not resulting in liability, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by Xx. Xxxxxx; provided, however, that the obligations of Xx.
Xxxxxx hereunder shall be limited to an amount equal to the net proceeds
received by Xx. Xxxxxx upon sale of his securities.
(c) Each party entitled to indemnification under this (S)6 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be
sought, but the failure of any Indemnified Party to give such notice shall
not relieve the Indemnifying Party of its obligations under this (S)6
(except and to the extent the Indemnifying Party has been prejudiced as a
consequence thereof). The Indemnifying Party will be entitled to
participate in, and to the extent that it may elect by written notice
delivered to the Indemnified Party promptly after receiving the aforesaid
notice from such Indemnified Party, at its expense to assume, the defense
of any such claim or any litigation resulting therefrom, with counsel
reasonably satisfactory to such Indemnified Party; provided that the
Indemnified Party may participate in such defense at its expense,
notwithstanding the assumption of such defense by the Indemnifying Party;
and provided, further, that if the defendants in any such action shall
include both the Indemnified Party and the Indemnifying Party and the
Indemnified Party shall have reasonably concluded that there may be legal
defenses available to it and/or other Indemnified Parties which are
different from or additional to those available to the Indemnifying Party,
the Indemnified Party shall have the right to select separate counsel to
assert such legal defenses and to otherwise participate in the defense of
such action on behalf of such Indemnified Party or Parties and
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the fees and expenses of such counsel shall be paid by the Indemnifying
Party. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party (which
consent shall not be unreasonably withheld, delayed or conditioned),
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. Each Indemnified Party shall (i)
furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be
reasonably required in connection with defense of such claim and litigation
resulting therefrom and (ii) reasonably assist the Indemnifying Party in
any such defense, provided that the Indemnified Party shall not be required
to expend its funds in connection with such assistance.
(d) Xx. Xxxxxx shall not be required to participate in a
registration pursuant to which he would be required to execute an
underwriting agreement in connection with a registration effected by (S)2
which imposes indemnification obligations on Xx. Xxxxxx more onerous than
those imposed hereunder; provided, however the Company shall not be deemed
to breach the provisions of (S)2 if Xx. Xxxxxx is not permitted to
participate in a registration on account of his refusal to execute an
underwriting agreement on the basis of this subsection (d).
(S)7. Xx. Xxxxxx Information; Further Assurances. If Xx. Xxxxxx has
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Registrable Securities included in any registration, or requests inclusion in
any registration, Xx. Xxxxxx shall furnish to the Company such information
regarding Xx. Xxxxxx and the distribution proposed by Xx. Xxxxxx as the Company
may reasonably request and as shall be reasonably required in connection with
any registration, qualification or compliance referred to in this agreement, or
in connection with an opinion or "no-action" letter of the type described in
(S)8, below, or otherwise required by applicable state or federal securities
laws. Xx. Xxxxxx shall execute such documents and take such other actions
consistent with this agreement which may be reasonably requested by the Company.
(S)8. Exception to Registration Obligation. Notwithstanding any other
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provisions of this agreement to the contrary, the Company shall not be required
to effect a registration under this agreement with respect to Registrable
Securities held by Xx. Xxxxxx if: (i) in the written opinion of counsel for the
Company, which counsel and the opinion so rendered shall be reasonably
acceptable to Xx. Xxxxxx, Xx. Xxxxxx may sell without registration all
Registrable Securities for which Xx. Xxxxxx requested registration under the
provisions of this agreement, in the quantity in which the Registrable
Securities were proposed to be sold (whether under Rule
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144 or otherwise); or (ii) the Company shall have obtained from the Commission a
"no-action" letter to that effect.
(S)9. Rule 144 Reporting. With a view to making available the benefits of
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certain rules and regulations of the Commission which may permit the sale of
restricted securities (as that term is used in Rule 144) to the public without
registration, the Company shall:
(a) Make and keep public information available as those terms are
defined in Rule 144, at all times from and after 90 days following the IPO
Date;
(b) Use all commercially reasonable efforts to file with the
Commission in a timely manner all reports and other documents required of
the Company under the Act and the Exchange Act at any time after it has
become subject to such reporting requirements; and
(c) So long as Xx. Xxxxxx owns any restricted securities, furnish
to Xx. Xxxxxx upon request a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 (at any time from
and after 90 days following the IPO Date) and of the Act and Exchange Act
(at any time after it has become subject to such reporting requirements), a
copy of the most recent annual or quarterly report of the Company, and such
other reports and documents so filed as Xx. Xxxxxx may reasonably request
in availing itself of any rules or regulations of the Commission allowing
Xx. Xxxxxx to sell any such securities without registration.
(S)10. Remedies. The Company and Xx. Xxxxxx recognize and agree that they
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may not have an adequate remedy if either of them fails to comply with the
provisions of this agreement, and that damages will not be readily
ascertainable, and each of them expressly agrees that in the event of such
failure the other parties shall be entitled to seek specific performance of the
defaulting party's obligations hereunder.
(S)11. Restrictions on Transfer. If Xx. Xxxxxx seeks to include
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Registrable Securities in a registration pursuant to this agreement, Xx. Xxxxxx
shall, if so requested by the underwriters who are managing such offering, as a
condition precedent to including Registrable Securities in such offering,
execute an agreement on usual and customary terms pursuant to which Xx. Xxxxxx
agrees not to sell or otherwise transfer any Common Stock (except pursuant to
such offering) for such period of time following the consummation of such
offering as such underwriters may reasonably request; provided that such period
shall not exceed 180 days.
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(S)12. Miscellaneous.
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(a) All notices and other communications required or desired to be
given to any Party under this agreement shall be in writing and shall be
deemed given when delivered personally, telecopied (which is confirmed) to
that Party at the telecopy number for that Party set forth below, mailed by
certified mail (return receipt requested) to that Party at the address for
that Party (or at such other address for such Party as such Party shall
have specified in notice to the other Parties) or being delivered to
Federal Express, UPS, or any similar express delivery service for delivery
to that Party at that address:
(i) If to the Company:
American Dental Partners, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxxxxx 00000-0000
ATTN: Xxxxxxx X. Xxxxxx, President
Telecopy No.: (000) 000-0000
With a copy to:
Xxxxx & Xxxxxxxxx
00 Xxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, Xxxx 00000
ATTN: Xxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
(ii) If to Xx. Xxxxxx:
Xxxxxx Dental Association, P.A.
000 Xxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx, DMD, Chairman
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxxx X. Franc, Esq.
Houston Xxxxxxxx
00xx Xxxxx, Xxx Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
(b) The headings of the various sections of this agreement are for
convenience of reference only and shall not limit, alter or otherwise
affect the meaning hereof. Where permitted by the context, each pronoun
used in this agreement
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shall include the same pronoun in other genders and numbers and each noun
used in this agreement shall include the same noun in other numbers. This
agreement constitutes the entire understanding of the Parties with respect
to the subject matter hereof and supersedes all prior and current
understandings and agreements, whether written or oral.
(c) This agreement shall be governed by and construed in accordance
with the laws of the State of Delaware without regard to the conflict of
laws provisions thereof.
(d) This agreement may not be amended or modified, and no provision
hereof may be waived, without the written consent of the Company and Xx.
Xxxxxx.
(e) 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.
(f) If any provisions 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.
(g) This agreement shall be binding upon, inure to the benefit of,
and be enforceable by and against the heirs, personal representatives,
successors, and assigns of each Party.
AMERICAN DENTAL PARTNERS, INC.
By /s/ Xxxxxx X. Xxxxxxxx /s/ Xxxx X. Xxxxxx, DMD
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Xxxxxx X. Xxxxxxxx, Chief XXXX X. XXXXXX, DMD
Financial Officer
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