EXHIBIT 10.11
EQUITY HOLDERS AGREEMENT
THIS EQUITY HOLDERS AGREEMENT (this "Agreement") is made as of October
25, 1996 by and between Xxxxxxxx X. Xxxx, an individual residing in the State
of Florida (the "Equity Holder") and Dental Care Alliance, Inc., a Delaware
corporation (the "Company")
RECITALS:
WHEREAS, the authorized capital stock of the Company consists of
200,000 shares of common stock, par value $0.01 per share, and 15,000 shares of
Class A Preferred Stock, par value $0.01 per share (collectively, the
"Shares").
WHEREAS, the Equity Holder holds warrants to acquire Two Thousand
(2,000) Shares pursuant to that certain Warrant Agreement dated as of the date
hereof between the Company and the Equity Holder (the "Warrant Agreement").
WHEREAS, the Equity Holder and the Company wish to establish certain
rights and obligations with respect to the Equity Holder's Shares, including any
Shares issued or issuable to the Equity Holder upon the exercise of any option
or warrant ("Equity Securities").
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. RESTRICTION ON TRANSFER OF SHARES. The Equity Holder may not
transfer (other than to the Company) any Equity Securities whether presently
owned or hereafter acquired by him without the prior written consent of the
Company, except as permitted in accordance with the terms of this Agreement. Any
purported transfer of any Shares in any other manner shall be void. As used in
this Agreement, the word "transfer" includes any sale, bequest, exchange,
assignment or gift, the creation of any security interest or other encumbrance
and any other disposition of any kind, whether voluntary or involuntary,
affecting title to or possession of any of the Shares.
2. PERMITTED TRANSFERS. Notwithstanding anything to the contrary in
this Agreement, the Equity Holder may at any time make any of the following
transfers:
(a) a transfer of Equity Securities to the executor or
administrator of the estate of a deceased Equity Holder upon his
death for purposes of the administration or such Equity Holder's estate, and to
the devise, legatee or beneficiary of the estate;
(b) a transfer by Equity Securities by an Equity Holder to his
spouse or issue or any trust for the benefit of himself, his spouse or issue,
PROVIDED that any Shares transferred to his spouse or trust for the benefit of
his spouse shall be immediately transferred back to such Equity Holder should
his spouse cease to be his spouse;
(c) a transfer of Equity Securities pursuant to a public offering;
PROVIDED, HOWEVER, in the case of a transfer pursuant to paragraph (a) or (b),
any transferee shall have executed and delivered an agreement, in form and
substance reasonably satisfactory to the Company, to be bound by the terms of
this Agreement as if the transferee were the applicable Equity Holder.
3. PIGGYBACK REGISTRATION RIGHTS.
(a) RIGHT OF EQUITY HOLDER TO INCLUDE SHARES. Whenever the Company
proposes to register any of its Shares under the Securities Act of 1933, as
amended on Form X-0, X-0, X-0 or any similar form then in effect (a
"Registration Statement"), whether or not for its own account, the Company
shall, except with respect to the initial public offering by the Company of any
class of equity securities (but this exception sahll apply only if no other
holders of Shares are permitted to participate in such offering as selling
stockholders), give written notice, thereof to the Equity Holder at least 30
days before such filing, if practicable (but in no event less than 20 days
before such filing), offering the Equity Holder the opportunity to register on
such Registration Statement such number of Shares as such Equity Holder may
request in writing, subject to the provisions of SECTION 3 (b), not later than
10 days before such filing (a "Piggyback Registration"). Upon receipt by the
Company of any such request, the Company shall use reasonable efforts to, or in
the case of an offering that is underwritten (an "Underwritten Registration"),
to cause the managing underwriter or underwriters to, include such Shares in
such Registration Statement (or in a separate Registration Statement
concurrently filed) and to cause such Registration Statement to become effective
with respect to such Shares. If the Company's registration is to be effected
pursuant to an Underwritten Offering, Shares registered pursuant to the SECTION
3 shall be distributed in accordance with such offering. Notwithstanding the
foregoing, if at any time after giving written notice of its intention to
register its Shares and before the effectiveness of the Registration Statement
filed in connection with such registration, the Company determines for any
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reason either not to effect such registration or to delay such registration, the
Company may, at its election, by delivery of written notice to the Equity
Holder (i) in the case of a determination not to effect registration, relieve
itself of its obligation to register the Shares in connection with such
registration or (ii) in the case of a determination to delay registration, delay
the registration of such Shares of the Equity Holder for the same period as the
delay in the registration of such other Shares. If the Equity Holder requests
inclusion in a registration pursuant to this SECTION 3, he may, at any time
before the effective date of the Registration Statement relating to such
registration, revoke such request by delivering written notice of such
revocation to the Company (which notice shall be effective only upon receipt by
the Company, notwithstanding the provisions of SECTION 4 (d); PROVIDED, HOWEVER,
that if the Company, in consultation with its financial and legal advisors,
determines that such revocation would materially delay the registration or
otherwise require a recirculation of the prospectus contained in the
Registration Statement, then such Equity Holder shall have no right to so revoke
his request.
(b) UNDERWRITTEN REGISTRATION.
(i) Notwithstanding anything herein to the contrary, the Equity
Holder any not participate in any Underwritten Registration hereunder unless he
(a) agrees to sell his Shares on the same terms and conditions provided in any
underwriting arrangements approved by the persons entitled hereunder to approve
such arrangement and (b) accurately completes and executes in a timely manner
all questionnaires, powers of attorney, indemnities, custody agreements,
underwriting agreements and other documents required under the terms of such
underwriting arrangements. Notwithstanding (a) above, the Equity Holder shall
be required to pay his proportionate share of expenses borne by other
stockholders (as opposed to the Company) with respect to the registration and
offering of the Shares only if the Registration Statement relating to such
registration is declared effective, and shall be reimbursed for any such amounts
paid if the Registration Statement does not become effective or if there is a
suspension of its effectiveness.
(ii) If any Piggyback Registration is in the form of an
Underwritten Offering, the managing underwriter or underwriters and any
additional investment bankers and managers to be used in connection with such
registration shall be selected by the Company (subject to any separate
agreement with the holders on behalf of which a secondary Underwritten Offering
is being made).
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(c) PRIORITY IN PIGGYBACK REGISTRATION.
(i) If any of the Shares to be included in a Piggyback
Registration are to be sold in one or more Underwritten Offerings and the
managing underwriter or underwriters advise the Company in writing that the
total amount of Shares requested to be included in such offering would exceed
the maximum amount of securities which can be marketed at a price reasonable
related to the current fair market value of such securities without adversely
affecting such offering (the "Underwriters' Maximum Number"), then the Company
will so notify all holders of Shares requesting inclusion in such registration
and will be required to include in such registration, to the extent of the
Underwriters' Maximum Number; FIRST, if the Underwritten Registration is an
underwritten registration on behalf of the stockholders of the Company, the
Shares requested by such stockholders to be included in such registration, PRO
RATA among such stockholders on the basis of the number of Shares held by such
stockholders) SECOND, any Shares that the Company proposes to sell for its own
account; and THIRD, other securities requested to be included in such
registration; PROVIDED, HOWEVER, that if the Underwritten Registration is an
underwritten registration on behalf of the Company, the Company will include in
such registration, in lieu of the first and second priorities described above,
to the extent of the Underwriters' Maximum Number; FIRST, the Shares the Company
proposes to sell and SECOND, the Shares requested by the stockholders of the
Company to be included in such registration, pro rata among such Stockholders on
the basis of the number of Shares held by such stockholders.
(ii) If any of the Shares to be included in a Piggyback
Registration are to be sold in a non-underwritten offering, but the Company,
after consultation with an investment banking firm of nationally recognized
standing (including a regional firm of recognized standing), reasonably
determines the amount of Shares to be included in such registration exceeds the
amount of securities that can be sold within a price range acceptable to the
Company or the initiating holders and notifies all holders of Shares requesting
inclusion in such registration of such determination ("Company's Maximum
Number"), then the Company will be required to included in such registration, to
the extent of the Company's Maximum Number, Shares in accordance with the
priorities set forth in paragraph (i) above.
(d) DELIVERY OF REGISTRATION STATEMENT. In connection with a Piggyback
Registration, the Company shall deliver to the selling Equity Holder, its
counsel and the underwriter, if any, without charge, at least one signed copy of
the Registration Statement, upon request, and such number of conformed copies
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thereof and such number of copies of the Prospectus (including the preliminary
Prospectus) included in such Registration Statement and any amendment or
supplement thereto or any other document as such persons may reasonably request
and as promptly as practicable after the filing with the Securities and
Exchange Commission of any document which is incorporated by reference into a
Registration Statement, a copy of such document.
(e) EQUITY HOLDER INFORMATION. If Shares owned by the Equity Holder are
included in a Piggyback Registration, such Equity Holder shall furnish promptly
to the Company such information regarding himself and the distribution of such
securities as the Company may from time to time reasonably request in writing.
(f) INDEMNIFICATION.
(i) The Company agrees to indemnify, to the extent permitted by
law, each holder of Shares to be registered pursuant to SECTION 3 against all
losses, claims, damages, liabilities and expenses caused by any untrue or
alleged untrue statement of material fact contained in any registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as the same are caused by or contained in any
information furnished in writing to the Company by such holder expressly for
use therein or by such holder's failure to deliver copy of the registration
statement or prospectus or any amendments or supplements thereto after the
Company has furnished such holder with a sufficient number of copies of the
same.
(ii) In connection with any registration statement in which a
holder of Shares to be registered pursuant to SECTION 3 is participating, each
such holder shall, to the extent permitted by law, indemnify the Company, its
directors and officers and each person who controls the Company (within the
meaning of the Securities Act of 1933, as amended) against any losses, claims,
damages, liabilities and expenses resulting from any untrue or alleged untrue
statement of material fact contained in the registration statement, prospectus
or preliminary prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated therein
or necessary to make the statements therein to be misleading, but only to the
extent that such untrue statement or omission is contained in any information
or affidavit so furnished in writing by such holder; provided that the
obligation to indemnify shall be individual, not joint and several, for each
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holder and shall be limited to the net amount of proceeds received by such
holder from the sale of Shares pursuant to such registration statement.
4. MISCELLANEOUS.
(a) LEGENDS. Each certificate representing Shares from time to
time owned by the Equity Holder shall bear legends substantially as follows:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933 and may not be sold or transferred
in violation of such Act."
"Transfer of the shares represented by this certificate is restricted
by an Equity Holders Agreement, dated October 25, 1996, a copy of
which is on file at the office of Dental Care Alliance, Inc."
(b) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
agreements made and to performed in Delaware.
(c) ASSIGNMENT, MERGER OR CONSOLIDATION. This Agreement shall not be
assignable, but shall be binding upon and inure to the benefit of the successors
of the Company and the respective heirs and legal representatives of the Equity
Holder. If the Company is merged into or consolidated with another corporation,
or all or substantially all of the assets of the Company are transferred to
another entity, then the term "Company" for all purposes of this Agreement shall
include such successor corporation and the term "Shares" shall include any stock
and warrants of the successors corporation.
(d) NOTICES. Any notice or other communication under this Agreement
shall be considered given and received when (i) delivered personally in
writing, (ii) received by registered mail, return receipt requested or (iii)
sent by telecopier, with a copy confirmed by registered mail, return receipt
requested, by the parties at the following addresses and telecopier numbers
(or at such other addresses and telecopier numbers as a party may specify by
notice to the others):
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If to the Company:
Dental Care Alliance, Inc.
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: President
Telecopier No: (000) 000-0000
If to the Equity Holder:
Xxxxxxxx X. Xxxx
0000 Xxxxxx Xxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Telecopier No:
(e) APPOINTMENT OF PERSONAL REPRESENTATIVE. The executor or
administrator of the estate of any deceased party ("Personal Representative")
shall give the Company and the other parties prompt notice of his appointment,
stating the address at which notices under this Agreement shall be given to
him.
(f) WAIVER. The Company shall have the right to waive any of its
rights or any obligations owing to it hereunder without the consent of the
other parties to this Agreement.
(g) COUNTERPARTS: FACSIMILE. This Agreement may be executed in one
or more counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
instrument.
(h) COMPLETE AGREEMENT, MODIFICATION AND TERMINATION. This
Agreement contains a complete statement of all the arrangements among the
parties with respect to its subject matter, supersedes all existing agreements
among them concerning that subject matter and cannot be changed or terminated
except in writing signed by all of the parties.
(signature page follows)
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
DENTAL CARE ALLIANCE, INC.
By:------------------------------------
Title:---------------------------------
XXXXXXXX X. XXXX
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