REGISTRATION RIGHTS AGREEMENT
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This agreement is made effective December 23, 1996, among American Dental
Partners, Inc., a Delaware corporation (the "Company"), and the individuals and
entities identified on the Schedule of Shareholders attached to this agreement
as Exhibit A (the "Shareholders").
Background Information
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A. Concurrently with the execution of this agreement, the Company is
acquiring Smileage Dental Care, Inc., a Wisconsin corporation ("SDC"), pursuant
to the Agreement and Plan of Merger and Reorganization dated December 23, 1996
among the Company, SDC, and the Shareholders (the "Acquisition Agreement").
Under the Acquisition Agreement, the Shareholders are exchanging their capital
stock in SDC for, among other things, a total of 50,700 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 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
Shareholders (i) Registrable Securities shall include only the ADP Shares
and any other shares of Common Stock hereafter acquired by any 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 Escrow
Agreement having the same date as this agreement among ADP, the
Shareholders, and the Escrow Agent identified in such agreement.
(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)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.
(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.
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(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 each 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 any 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)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.
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(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
any 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 each
Shareholder with 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 such Shareholders:
(a) Keep such registration effective for a period of 120 days or until
such Shareholders have 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 such Shareholders
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 such Shareholders 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 the Shareholders; 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
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inspect and copy such corporate documents as he may reasonably request.
(S)6. Indemnification.
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(a) The Company shall indemnify each Shareholder with respect to
which registration, qualification or compliance has been 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 each such 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 such
Shareholder or any underwriter expressly for use therein; or (ii) in the
case of a sale directly by a Shareholder (including without limitation a
sale through any underwriter retained by such 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 such 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.
(b) Each Shareholder shall, if Registrable Securities held by him 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
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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 such
Shareholder; provided, however, that the obligations of each Shareholder
hereunder shall be limited to an amount equal to the net proceeds received
by such Shareholder 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
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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) No Shareholder shall 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 such Shareholder more onerous than those
imposed hereunder; provided, however the Company shall not be deemed to
breach the provisions of (S)2 if a Shareholder 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. Shareholder Information; Further Assurances. Each Shareholder
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with Registrable Securities included in any registration, or requesting
inclusion in any registration, shall furnish to the Company such information
regarding such Shareholder and the distribution proposed by such 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. Each Shareholder 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 any Shareholder if: (i) in the written opinion of counsel
for the Company, which counsel and the opinion so rendered shall be reasonably
acceptable
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to such Shareholder, such Shareholder may sell without registration all
Registrable Securities for which such 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 a Shareholder owns any restricted securities, furnish
to that 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 that Shareholder
may reasonably request in availing itself of any rules or regulation of the
Commission allowing a 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 any 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. Each Shareholder who seeks to include
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Registrable Securities in a registration pursuant to this agreement 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 such Shareholder agrees
not to sell or otherwise transfer any Common Stock (except pursuant to such
offering) for such period of time following the
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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 any Shareholder, to that Shareholder or his agent at the
address or telecopy number (as the case may be) for that
Shareholder or his agent then contained in the Company's records.
(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.
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(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/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
[signature lines for Shareholders]
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