REGISTRATION RIGHTS AGREEMENT
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This agreement is made effective December 13, 1996, among American Dental
Partners, Inc., a Delaware corporation (the "Company") and ▇▇▇ ▇. ▇▇▇▇▇, D.D.S.
(the "Shareholder").
Background Information
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A. Concurrently with the execution of this agreement, the Company is
causing its wholly-owned subsidiary, Texas Dental Partners, Inc., a Texas
corporation ("American"), to acquire substantially all of the assets (the
"Assets") of ▇▇▇ ▇. ▇▇▇▇▇, D.D.S., P.C., a Texas corporation, dba Longhorn
Dental Associates ("Longhorn"), pursuant to an Asset Purchase Agreement among
the Company, American, Longhorn, and the Shareholder, dated December __, 1996
(the "Asset Purchase Agreement"). Under the Asset Purchase Agreement, the
consideration being paid to Longhorn consists in part of 8,200 shares of common
stock, par value $.01 per share, in the Company (the "ADP Shares"). Immediately
thereafter Longhorn is distributing the ADP Shares to the Shareholder. For
purposes of convenience the original certificate evidencing the ADP Shares has
been prepared in the name of the Shareholder to avoid the necessity of the
Company having to issue such certificate in the name of Longhorn, Longhorn
having to execute an assignment of the ADP Shares to the Shareholder, and the
Company having to transfer the ADP Shares on its books and reissue a new
certificate for the ADP Shares in the name of the Shareholder.
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 at the 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; provided that, with respect to the Shareholder
(i) Registrable Securities shall include only the ADP Shares and any other
shares of Common Stock hereafter acquired by the Shareholder as a result of
a stock dividend, stock split, or other similar transaction affecting the
ADP Shares; and (ii) notwithstanding any other provisions of this agreement
to the contrary, at any given time, Registrable Securities shall not
include any shares of Common Stock then subject to the Pledge Agreement
having the same date as this agreement among ADP and the Shareholder.
(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 counsel for the Company, blue-sky fees and
expenses, 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.
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(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 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 the Shareholder (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 the Shareholder 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,
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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
the Shareholder.
(S)5. Registration Procedures. In the case of each registration
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effected by the Company pursuant to this agreement, the Company shall keep the
Shareholder, if it 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 do the following for the
benefit of the Shareholder:
(a) Keep such registration effective for a period of 120 days or
until the Shareholder 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 the
Shareholder 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 prospectuses and other documents incident
thereto as the Shareholder from time to time may reasonably request;
(d) [Intentionally left blank.]
(e) 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
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in a public issuance of securities and provide copies thereof the
Shareholder; and
(f) 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.
(S)6. Indemnification.
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(a) The Company shall indemnify the Shareholder 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 the Shareholder 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) based upon written information furnished to the Company by the
Shareholder or any underwriter expressly for use therein; or (ii) in the
case of a sale directly by the Shareholder (including without limitation a
sale through any underwriter retained by the Shareholder), 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 the Shareholder 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.
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(b) The Shareholder 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 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 the
Shareholder; provided, however, that the obligations of the Shareholder
hereunder shall be limited to an amount equal to the net proceeds received
by the Shareholder upon sale of its 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
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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 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) The Shareholder shall not be required to participate in a
registration pursuant to which it would be required to execute an
underwriting agreement in connection with a registration effected by (S)2
which imposes indemnification obligations on the Shareholder more onerous
than those imposed hereunder; provided, however the Company shall not be
deemed to breach the provisions of (S)2 if the Shareholder is not permitted
to participate in a registration on account of its refusal to execute an
underwriting agreement on the basis of this subsection (d).
(S)7. Shareholder Information; Further Assurances. If the Shareholder
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has Registrable Securities included in any registration, or requests inclusion
in any registration, the Shareholder shall furnish to the Company such
information regarding the Shareholder and the distribution proposed by the
Shareholder 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. The Shareholder shall execute such documents
and take such other actions consistent with this agreement which may be
reasonably requested by the Company.
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(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 the Shareholder if: (i) in the written opinion of counsel
for the Company, which counsel and the opinion so rendered shall be reasonably
acceptable to the Shareholder, the Shareholder may sell without registration all
Registrable Securities for which the Shareholder requested registration under
the provisions of this agreement, in the quantity in which the Registrable
Securities were proposed to be sold (whether under Rule 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 the Shareholder owns any restricted securities,
furnish to the Shareholder 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 ninety 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 the Shareholder
may reasonably request in availing itself of any rules or regulations of
the Commission allowing the Shareholder to sell any such securities without
registration.
(S)10. Remedies. The Company and the Shareholder recognize and agree
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that they 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 the Shareholder seeks to include
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Registrable Securities in a registration pursuant to this
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agreement, the Shareholder 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 the Shareholder 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.
(S)12. Miscellaneous.
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(a) Any notice, request, or other communication desired or required to
be given to any Party under this agreement shall be in writing and shall be
deemed given when delivered personally to that Party, 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 delivered to
Federal Express or any similar express delivery service for delivery to
that Party at that address:
(i) If to the Company:
American Dental Partners, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
ATTN: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Telecopy No.: 617/224-4216
With a copy to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopy No.: 614/462-2616
(ii) If to the Shareholder:
▇▇. ▇▇▇ ▇. ▇▇▇▇▇, D.D.S.
2604 Guadalupe
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: 512/847-1236
With a copy to:
Richie & ▇▇▇▇▇▇▇▇▇, P.C.
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▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopy No.: 512/320-7230
(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 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
Shareholders owning at least a majority of the Registrable Securities then
owned by all Shareholders.
(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) This agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to principles of
conflicts of law. 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 or any 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/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇ ▇. ▇▇▇▇▇, D.D.S.
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President ▇▇▇ ▇. ▇▇▇▇▇, D.D.S.
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