EXHIBIT F
REGISTRATION RIGHTS AGREEMENT
dated as of May 18, 1998, among GENTLE
DENTAL SERVICE CORPORATION, a Washington
corporation (the "Company"), and the
PURCHASERS (as defined below).
The Purchasers own or have the right to purchase or otherwise acquire
(by the exercise, exchange or conversion of shares of the Company's securities
owned by the Purchasers that are exercisable or exchangeable for or convertible
into Common Stock (as hereinafter defined), without regard to any restrictions
on the ability of any Purchaser to exercise such rights or exercise exchange or
conversion) shares of the Common Stock, no par value (the "Common Stock"), of
the Company (or such other class of common stock of the Company into which the
Common Stock may be converted or reclassified, and all references herein to the
Common Stock shall mean such other class of common stock, if applicable). The
Company and the Purchasers deem it to be in their respective best interests to
set forth the rights of the Purchasers in connection with public offerings and
sales of the capital stock of the Company.
ACCORDINGLY, in consideration of the premises and mutual covenants and
obligations hereinafter set forth, the Company and the Purchasers hereby agree
as follows:
SECTION 1. Definitions. As used in this Agreement, the following
terms shall have the following meanings:
"Affiliate" shall have the meaning ascribed to it in the Purchase
Agreement.
"Commission" shall mean the Securities and Exchange Commission or any
other Governmental Authority at the time administering the
Securities Act.
"Common Stock" shall have the meaning ascribed to it in the Preamble.
"Common Stock Equivalent" shall mean one share of Common Stock or the
right to acquire, whether or not such right is immediately exercisable, one
share of Common Stock, whether evidenced by a Note, Warrant, Preferred Stock,
option, warrant, convertible security or other instrument or agreement.
"Notes" shall have the meaning ascribed to it in the Purchase
Agreement.
"CVCA" shall mean Chase Venture Capital Associates, L.P., a California
limited partnership.
"Exchange Act" shall mean the Securities Exchange Act of 1934 or any
successor Federal statute, and the rules and regulations of the Commission
promulgated thereunder, all as the same shall be in effect from time to time.
"Governmental Authority" shall mean any domestic or foreign government
or political subdivision thereof, whether on a federal, state or local level
and whether executive, legislative or judicial in nature, including any agency,
authority, board, bureau, commission, court, department or other
instrumentality thereof.
"Material Transaction" shall mean any material transaction in which
the Company or any of its subsidiaries proposes to engage or is engaged,
including a purchase or sale of assets or securities, financing, merger,
consolidation, tender offer or any other transaction that would require
disclosure pursuant to the Exchange Act, and with respect to which the Board of
Directors of the Company reasonably has determined in good faith that
compliance with this Agreement may reasonably be expected to either materially
interfere with the Company's or such subsidiary's ability to consummate such
transaction in a timely fashion or require the Company to disclose material,
non-public information prior to such time as it would otherwise be required to
be disclosed.
"Other Shares" shall mean at any time those shares of Common Stock
which do not constitute Primary Shares or Registrable Shares.
"Person" shall be construed as broadly as possible and shall include
an individual person, a partnership (including a limited liability
partnership), a corporation, an association, a joint stock company, a limited
liability company, a trust, a joint venture, an unincorporated organization and
a Governmental Authority.
"Preferred Stock" shall have the meaning ascribed to it in the
Purchase Agreement.
"Primary Shares" shall mean, at any time, the authorized but unissued
shares of Common Stock held by the Company in its treasury.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any prospectus subject to completion, and any such
prospectus as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Shares and, in
each case, by all other amendments and supplements to such prospectus,
including post-effective amendments, and in each case including all material
incorporated by reference therein.
"Purchase Agreement" means the Securities Purchase Agreement dated as
of May 12, 1998, between the Company and the Purchasers, as amended from time
to time.
"Purchasers" shall mean, collectively, (i) the Persons listed on
Schedule I attached to this Agreement and (ii) any successor to, or assignee or
transferee of Restricted Securities held by a Purchaser who or which agrees in
writing to be treated as a Purchaser hereunder and to be bound by and comply
with all of the applicable terms and provisions hereof.
"Registrable Shares" shall mean, at any time, and with respect to any
Purchaser, the shares of Common Stock held by such Purchaser which constitute
Restricted Securities. As to any particular Registrable Shares, once issued,
such Registrable Shares shall cease to be Registrable Shares (A) when such
Registrable Shares have been registered under the Securities Act, the
Registration Statement in connection therewith has been declared effective and
they have been disposed of pursuant to and in the manner described in such
effective Registration Statement, (B) when such Registrable Shares are sold or
distributed pursuant to Rule 144, (C) in the case of any Purchaser who,
together with its Affiliates, holds Common Stock Equivalents that constitute
less than two percent of the issued and outstanding shares of Common Stock of
the Company, one year after the date on which such Purchaser may first sell
such Registrable Shares under Rule 144 (provided that such Purchaser is still
able, at such time, to sell such Registrable Shares under Rule 144), or (D)
when such Registrable Shares have ceased to be outstanding.
"Registration Statement" shall mean any registration statement of the
Company which covers any of the Registrable Shares, and all amendments and
supplements to any such Registration Statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Representative" of a Person shall be construed broadly and shall
include such Person's partners, officers, directors, employees, agents,
counsel, accountants and other representatives.
"Requisite Purchasers" shall mean those Purchasers who hold in the
aggregate in excess of a majority the Restricted Securities (based on Common
Stock Equivalents) held by all of the Purchasers, provided that so long as
CVCA, or its Affiliates, is a Significant Holder, CVCA must be included in such
majority.
"Restricted Securities" shall mean, at any time and with respect to
any Purchaser, the Common Stock Equivalents and any other securities received
with respect to any such Common Stock Equivalents, which are held by such
Purchaser and which theretofore have not been sold to the public pursuant
to a Registration Statement or pursuant to Rule 144.
"Rule 144" shall mean Rule 144 promulgated under the Securities Act or
any successor rule thereto.
"Securities" shall have the meaning ascribed to it in the Purchase
Agreement.
"Securities Act" shall mean the Securities Act of 1933 or any
successor Federal statute, and the rules and regulations of the Commission
promulgated thereunder, all as the same shall be in effect from time to time.
"Significant Holder" shall have the meaning ascribed to it in the
Purchase Agreement.
"Suspension Period" shall have the meaning ascribed to it in
Section 10.
"Transfer" shall mean any disposition of any Restricted Securities or
of any interest therein which would constitute a sale thereof within the
meaning of the Securities Act, other than any such disposition pursuant to a
Registration Statement and in compliance with all applicable state securities
and "blue sky" laws.
"Warrants" shall have the meaning ascribed to it in the Purchase
Agreement.
SECTION 2. Required Registration.
(a) If at any time the Company shall be requested by CVCA to effect
the registration under the Securities Act of Registrable Shares, it shall
promptly give written notice to the other Purchasers of its requirement to so
register such Registrable Shares and, upon the written request, delivered to
the Company within 30 days after delivery of any such notice by the Company, of
the other Purchasers to include in such registration Registrable Shares (which
request shall specify the number of Registrable Shares proposed to be included
in such registration), the Company shall, subject to Section 2(b) below,
promptly use its best efforts to effect such registration under the Securities
Act of the Registrable Shares which the Company has been so requested to
register.
(b) Anything contained in Section 2(a) to the contrary
notwithstanding, the Company shall not be obligated to effect pursuant to
Section 2(a) any registration under the Securities Act except in accordance
with the following provisions:
(i) the Company shall not be obligated to use its best
efforts to file and cause to become effective (A) more than one
Registration Statement initiated pursuant to Section 2(a) (provided,
that if the Company, shall consummate a "shelf" registration pursuant
to this Agreement such registration shall be deemed to count as one
demand registration by the Purchasers); provided however, that if the
Purchasers were unable to sell at least 90% of the Registrable Shares
requested to be included in the registration pursuant to Section 2(a)
as a result of an underwriter's cutback, then an additional
registration shall be added to this Section 2(b)(i) until the
foregoing condition is satisfied, (B) any Registration Statement
during any period in which any other registration statement (other
than on Form S-4 or Form S-8 promulgated under the Securities Act or
any successor forms thereto pursuant to which Primary Shares are to be
or were sold has been filed and not withdrawn or has been declared
effective within the prior 90 days, or (C) any Registration Statement
if the aggregate market value of the Registrable Shares to be
registered thereunder, whether held by CVCA or others, shall be less
than $5 million;
(ii) the Company may delay the filing or effectiveness of any
Registration Statement for a period of up to 90 days after the date of
a request for registration pursuant to Section 2(a) if at the time of
such request the Company is engaged in a Material Transaction; and
(iii) with respect to any registration pursuant to Section
2(a), the Company may include in such registration any Primary Shares
or Other Shares; provided, however, that if the managing underwriter
advises the Company that the inclusion of all Registrable Shares,
Primary Shares and Other Shares proposed to be included in such
registration would interfere with the successful marketing (including
pricing) of all such securities, then the number of Registrable
Shares, Primary Shares and Other Shares proposed to be included in
such registration shall be included in the following order:
(A) first, the Registrable Shares held by the
Purchasers requesting that their Registrable Shares be
included in such registration pursuant to Section 2(a), pro
rata based upon the number of Restricted Securities owned by
each such Purchaser at the time of such registration;
(B) second, the Primary Shares; and
(C) third, the Other Shares.
(c) A requested registration under this Section 2 may be
rescinded prior to such registration being declared effective by the
Commission by written notice to the Company from CVCA; provided,
however, that such rescinded registration shall not count as a
registration initiated pursuant to this Section 2 for purposes of
subclause (A) of clause (i) of subsection (b) above if the Company
shall have been reimbursed (pro rata by the Purchasers requesting
registration or in such other proportion as they may agree) for all
out-of-pocket expenses incurred by the Company in connection with such
rescinded registration.
SECTION 3. Shelf Registration. If at any time the Company shall be
requested by the Requisite Purchasers to file a shelf registration statement
for an offering to be made on a continuous basis pursuant to Rule 415
promulgated under the Securities Act covering the Registrable Shares, then:
(i) the Company shall, as expeditiously as
practicable, file a shelf registration statement under the
Securities Act permitting registration of such Purchasers'
Registrable Shares for resale by Purchasers in the manner or
manners designated by them (including, without limitation,
one or more underwritten offerings);
(ii) the Company shall use its best efforts to keep
such shelf registration statement continuously effective
under the Securities Act until the date which is 18 months
from its effective date, or such shorter period ending when
all the Registrable Shares covered by such shelf registration
statement have been sold in the manner set forth and as
contemplated in the shelf registration statement; and
(iii) the Company shall promptly supplement and
amend the shelf registration statement if required by the
rules, regulations or instructions applicable to the
registration form used for such shelf registration statement,
if required by the Securities Act, or if reasonably requested
by CVCA or by any underwriter of the Registrable Shares
registered thereunder.
SECTION 4. Piggyback Registration. If the Company at any time proposes
for any reason to register Primary Shares or Other Shares under the Securities
Act (other than on Form S-4 or Form S-8 promulgated under the Securities Act or
any successor forms thereto), it shall promptly give written notice to each
Purchaser of its intention so to register the Primary Shares or Other Shares
and, upon the written request, given within 20 days after delivery of any such
notice by the Company, of any such Purchaser to include in such registration
Registrable Shares (which request shall specify the number of Registrable
Shares proposed to be included in such registration), the Company shall use its
best efforts to cause all such Registrable Shares to be included in such
registration on the same terms and conditions as the securities otherwise
being sold in such registration; provided, however, that if the managing
underwriter advises the Company that the inclusion of all Registrable
Shares or Other Shares proposed to be included in such registration would
interfere with the successful marketing (including pricing) of Primary
Shares proposed to be registered by the Company, then the number of Primary
Shares, Registrable Shares and Other Shares proposed to be included in such
registration shall be included in the following order:
(i) first, the Primary Shares;
(ii) second, the Registrable Shares held by the
Purchasers, pro rata based upon the number of Restricted
Securities owned by each such Purchaser at the time of such
registration; and
(iii) third, the Other Shares.
SECTION 5. Holdback Agreement.
(a) If the Company at any time shall register shares of Common Stock
under the Securities Act in an underwritten offering pursuant to any
registration so long as the Requisite Purchasers agree in writing that this
holdback provision applies to such registration, then the Purchasers shall not
sell, make any short sale of, grant any option for the purchase of, or
otherwise dispose of any Restricted Securities (other than those Registrable
Shares included in such registration pursuant to Section 2, 3 or 4) without the
prior written consent of the Company for a period as shall be determined by the
managing underwriters, which period cannot begin more than 10 days prior to the
effectiveness of such Registration Statement and cannot last more than 180 days
after the effective date of such Registration Statement.
(b) If the Company at any time pursuant to Sections 2, 3 or 4 of this
Agreement shall register under the Securities Act Registrable Shares held by
Purchasers for sale to the public pursuant to an underwritten offering, the
Company shall not, without the prior written consent of the Requisite
Purchasers, effect any public sale or distribution of securities similar to
those being registered or any securities convertible into or exercisable or
exchangeable for such securities, for such period as shall be determined by the
managing underwriters, which period shall not begin more than 10 days prior to
the effectiveness of the Registration Statement pursuant to which such public
offering shall be made and shall not last more than 180 days after the closing
of sale of shares pursuant to such Registration Statement.
SECTION 6. Preparation and Filing. If and whenever the Company is
under an obligation pursuant to the provisions of this Agreement to use its
best efforts to effect the registration of any Registrable Shares, the Company
shall, as expeditiously as practicable:
(i) use its best efforts to cause a Registration Statement
that registers such Registrable Shares to become and remain effective
for a period of 90 days or until all of such Registrable Shares have
been disposed of (if earlier);
(ii) furnish, at least five business days before filing a
Registration Statement that registers such Registrable Shares, a
Prospectus relating thereto and any amendments or supplements relating
to such Registration Statement or Prospectus, to one counsel selected
by CVCA (the "Purchasers' Counsel"), copies of all such documents
proposed to be filed (it being understood that such five-business-day
period need not apply to successive drafts of the same document
proposed to be filed so long as such successive drafts are supplied to
such counsel in advance of the proposed filing by a period of time
that is customary and reasonable under the circumstances);
(iii) prepare and file with the Commission such amendments
and supplements to such Registration Statement and the Prospectus used
in connection therewith as may be necessary to keep such Registration
Statement effective for at least a period of 90 days or until all of
such Registrable Shares have been disposed of (if earlier) and to
comply with the provisions of the Securities Act with respect to the
sale or other disposition of such Registrable Shares;
(iv) notify the Purchasers' Counsel promptly in writing (A)
of any comments by the Commission with respect to such Registration
Statement or Prospectus, or any request by the Commission for the
amending or supplementing thereof or for additional information with
respect thereto, (B) of the issuance by the Commission of any stop
order suspending the effectiveness of such Registration Statement or
Prospectus or any amendment or supplement thereto or the initiation of
any proceedings for that purpose and (C) of the receipt by the Company
of any notification with respect to the suspension of the
qualification of such Registrable Shares for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purposes;
(v) use its best efforts to register or qualify such
Registrable Shares under such other securities or blue sky laws of
such jurisdictions as any seller of Registrable Shares reasonably
requests and do any and all other acts and things which may be
reasonably necessary or advisable to enable such seller of
Registrable Shares to consummate the disposition in such
jurisdictions of the Registrable Shares owned by such seller;
provided, however, that the Company will not be required to
qualify generally to do business, subject itself to general
taxation or consent to general service of process in any
jurisdiction where it would not otherwise be required so to do but
for this clause (v);
(vi) furnish to each seller of such Registrable Shares such
number of copies of a summary Prospectus or other Prospectus,
including a preliminary Prospectus, in conformity with the
requirements of the Securities Act, and such other documents as such
seller of Registrable Shares may reasonably request in order to
facilitate the public sale or other disposition of such Registrable
Shares;
(vii) use its best efforts to cause such Registrable Shares
to be registered with or approved by such other governmental agencies
or authorities as may be necessary by virtue of the business and
operations of the Company to enable the seller or sellers thereof to
consummate the disposition of such Registrable Shares;
(viii) notify on a timely basis each seller of such
Registrable Shares at any time when a Prospectus relating to such
Registrable Shares is required to be delivered under the Securities
Act within the appropriate period mentioned in clause (i) of this
Section 6 of the happening of any event as a result of which the
Prospectus included in such Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light
of the circumstances then existing and, at the request of such
seller, prepare and furnish to such seller a reasonable number of
copies of a supplement to or an amendment of such Prospectus as
may be necessary so that, as thereafter delivered to the offerees
of such shares, such Prospectus shall not include an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then
existing;
(ix) make available for inspection by any seller of such
Registrable Shares, any underwriter participating in any disposition
pursuant to such Registration Statement and any attorney, accountant
or other agent retained by any such seller or underwriter
(collectively, the "Inspectors"), all pertinent financial,
business and other records, pertinent corporate documents and
properties of the Company (collectively, the "Records"), as shall
be reasonably necessary to enable them to exercise their due
diligence responsibility, and cause the Company's officers,
directors and employees to supply all information (together with
the Records, the "Information") reasonably requested by any such
Inspector in connection with such Registration Statement (and any
of the Information which the Company determines in good faith to
be confidential, and of which determination the Inspectors are so
notified, shall not be disclosed by the Inspectors unless (A) the
disclosure of such Information is necessary to avoid or correct a
misstatement or omission in the Registration Statement, (B) the
release of such Information is ordered pursuant to a subpoena or
other order from a court of competent jurisdiction, (C) such
Information has been made generally available to the public, and
(D) the seller of Registrable Shares agrees that it will, upon
learning that disclosure of such Information is sought in a court
of competent jurisdiction, give notice to the Company and allow
the Company, at the Company's expense, to undertake appropriate
action to prevent disclosure of the Information deemed
confidential);
(x) use its best efforts to obtain from its independent
certified public accountants a "cold comfort" letter in customary form
and covering such matters of the type customarily covered by cold
comfort letters;
(xi) use its best efforts to obtain, from its counsel, an
opinion or opinions in customary form (which shall also be addressed
to the Purchasers selling Registrable Shares in such registration);
(xii) provide a transfer agent and registrar (which may be
the same entity and which may be the Company) for such Registrable
Shares;
(xiii) issue to any underwriter to which any seller of
Registrable Shares may sell shares in such offering certificates
evidencing such Registrable Shares;
(xiv) list such Registrable Shares on any national securities
exchange on which any shares of the Common Stock are listed or, if the
Common Stock is not listed on a national securities exchange, use its
best efforts to qualify such Registrable Shares for inclusion on the
automated quotation system of the National Association of Securities
Dealers, Inc. (the "NASD"), National Market System ("NMS"), or such
other national securities exchange as the holders of a majority of
such Registrable Shares shall request included in such registration;
(xv) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available
to its securityholders, as soon as reasonably practicable, earnings
statements which need not be audited covering a period of 12 months
beginning within three months after the effective date of the
Registration Statement, which earnings statements shall satisfy the
provisions of Section 11(a) of the Securities Act; and
(xvi) use its best efforts to take all other steps necessary
to effect the registration of such Registrable Shares contemplated
hereby.
SECTION 7. Expenses. All expenses incurred by the Company in complying
with Section 6, including, without limitation, all registration and filing fees
(including all expenses incident to filing with the NASD), fees and expenses of
complying with securities and blue sky laws, printing expenses, fees and
expenses of the Company's counsel and accountants and fees and expenses of one
special legal counsel to the Purchasers selected by CVCA, shall be paid by the
Company; provided, however, that all underwriting discounts and selling
commissions applicable to the Registrable Shares shall not be borne by the
Company but shall be borne by the seller or sellers thereof, in proportion to
the number of Registrable Shares sold by such seller or sellers.
SECTION 8. Indemnification.
(a) In connection with any registration of any Registrable Shares
under the Securities Act pursuant to this Agreement, the Company shall
indemnify and hold harmless the seller of such Registrable Shares, each
underwriter, broker or any other Person acting on behalf of such seller, each
other Person, if any, who controls any of the foregoing Persons within the
meaning of the Securities Act and each Representative of any of the foregoing
Persons, against any losses, claims, damages or liabilities, joint or several,
to which any of the foregoing Persons may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement under which such Registrable Shares were registered, any preliminary
Prospectus or final Prospectus contained therein, any amendment or supplement
thereto or any document incident to registration or qualification of any
Registrable Shares, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or, with respect to any
Prospectus, necessary to make the statements therein in light of the
circumstances under which they were made not misleading, or any violation by
the Company of the Securities Act or state securities or blue sky laws
applicable to the Company and relating to action or inaction required of the
Company in connection with such registration or qualification under such state
securities or blue sky laws, and the Company shall promptly reimburse such
seller, such underwriter, such broker, such controlling Person or such
Representatives for any legal or other expenses incurred by any of them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company shall not be liable to
any such Person to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in said Registration Statement,
preliminary Prospectus, amendment, supplement or document incident to
registration or qualification of any Registrable Shares in reliance upon and in
conformity with written information furnished to the Company through an
instrument duly executed by such Person, or a Person duly acting on their
behalf, specifically for use in the preparation thereof; provided further,
however, that the foregoing indemnity agreement is subject to the condition
that, insofar as it relates to any untrue statement, allegedly untrue
statement, omission or alleged omission made in any preliminary Prospectus but
eliminated or remedied in the final Prospectus (filed pursuant to Rule 424 of
the Securities Act), such indemnity agreement shall not inure to the benefit of
any indemnified party from whom the Person asserting any loss, claim, damage,
liability or expense purchased the Registrable Shares which are the subject
thereof, if a copy of such final Prospectus had been timely made available to
such Indemnified Person and such final Prospectus was not delivered to such
Person with or prior to the written confirmation of the sale of such
Registrable Shares to such Person.
(b) In connection with any registration of Registrable Shares under
the Securities Act pursuant to this Agreement, each seller of Registrable
Shares shall indemnify and hold harmless (in the same manner and to the same
extent as set forth in the paragraph (a) of this Section 8) the Company, each
underwriter or broker involved in such offering, each other seller of
Registrable Shares under such Registration Statement, each Person who controls
any of the foregoing Persons within the meaning of the Securities Act and any
Representative of the foregoing Persons with respect to any statement or
omission from such Registration Statement, any preliminary Prospectus or final
Prospectus contained therein, any amendment or supplement thereto or any
document incident to registration or qualification of any Registrable Shares,
if such statement or omission was made in reliance upon and in conformity with
written information furnished to the Company or such underwriter through an
instrument duly executed by such seller or a Person duly acting on their behalf
specifically for use in connection with the preparation of such Registration
Statement, preliminary Prospectus, final Prospectus, amendment or supplement;
provided, however, that the maximum amount of liability in respect of such
indemnification shall be limited, in the case of each seller of Registrable
Shares, to an amount equal to the net proceeds actually received by such seller
from the sale of Registrable Shares effected pursuant to such registration.
(c) Promptly after receipt by an indemnified party of notice of the
commencement of any action involving a claim referred to in the preceding
paragraphs of this Section 8, such indemnified party will, if a claim in
respect thereof is made against an indemnifying party, give written notice to
the latter of the commencement of such action (provided however, that an
indemnified party's failure to give such notice in a timely manner shall only
relieve the indemnification obligations of an indemnifying party to the extent
such indemnifying party is prejudiced by such failure). In case any such action
is brought against an indemnified party, the indemnifying party will be
entitled to participate in and to assume the defense thereof, jointly with any
other indemnifying party similarly notified to the extent that it may wish,
with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be responsible
for any legal or other expenses subsequently incurred by the indemnified party
in connection with the defense thereof; provided, however, that if any
indemnified party shall have reasonably concluded that there may be one or more
legal or equitable defenses available to such indemnified party which are in
addition to or conflict with those available to the indemnifying party, or that
such claim or litigation involves or could have an effect upon matters beyond
the scope of the indemnity agreement provided in this Section 8, the
indemnifying party shall not have the right to assume the defense of such
action on behalf of such indemnified party and such indemnifying party shall
reimburse such indemnified party and any Person controlling such indemnified
party for that portion of the fees and expenses of any one lead counsel (plus
appropriate special and local counsel) retained by the indemnified party which
are reasonably related to the matters covered by the indemnity agreement
provided in this Section 8.
(d) If the indemnification provided for in this Section 8 is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, claim, damage or liability referred to herein, then the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amounts paid or payable by such indemnified party as a
result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and of the indemnified party on the other hand in connection with the
statements or omissions which resulted in such loss, claim, damage or liability
as well as any other relevant equitable considerations; provided, however, that
the maximum amount of liability in respect of such contribution shall be
limited, in the case of each seller of Registrable Shares, to an amount
equal to the net proceeds actually received by such seller from the sale of
Registrable Shares effected pursuant to such registration. The relative
fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or
by the indemnified party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission.
(e) The indemnification and contribution provided for under this
Agreement will remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified party and will survive the transfer of
securities.
SECTION 9. Underwriting Agreement.
(a) Notwithstanding the provisions of Sections 6 and 8, to the extent
that the Purchasers selling Registrable Shares in a proposed registration shall
enter into an underwriting or similar agreement, which agreement contains
provisions covering one or more issues addressed in such Sections of this
Agreement, the provisions contained in such Sections of this Agreement
addressing such issue or issues shall be of no force or effect with respect to
such registration, but this provision shall not apply to the Company if the
Company is not a party to the underwriting or similar agreement.
(b) If any registration pursuant to Section 2 is requested to be an
underwritten offering, the Company shall negotiate in good faith to enter into
a reasonable and customary underwriting agreement with the underwriters
thereof. The Company shall be entitled to receive indemnities from lead
institutions, underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution, to the
same extent as provided above with respect to information so furnished in
writing by such Persons specifically for inclusion in any Prospectus or
Registration Statement and to the extent customary given their role in such
distribution.
(c) No Purchaser may participate in any registration hereunder that is
underwritten unless such Purchaser agrees to (i) sell such Purchaser's
Registrable Shares proposed to be included therein on the basis provided in any
underwriting arrangements acceptable to the Company and CVCA and (ii) as
expeditiously as possible, notify the Company of the occurrence of any event
concerning such Purchaser as a result of which the Prospectus relating to such
registration contains an untrue statement of a material fact or omits to state
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, not misleading.
SECTION 10. Suspension. Anything contained in this Agreement to the
contrary notwithstanding, the Company may (not more than once with respect to
each registration), by notice in writing to each holder of Registrable Shares
to which a Prospectus relates, require such holder to suspend, for up to 90
days (the "Suspension Period"), the use of any Prospectus included in a
Registration Statement filed under Section 2, 3 or 4 if a Material Transaction
exists that would require an amendment to such Registration Statement or
supplement to such Prospectus (including any such amendment or supplement made
through incorporation by reference to a report filed under Section 13 of the
Exchange Act). The period during which such Prospectus must remain effective
shall be extended by a period equal to the Suspension Period. The Company may
(but shall not be obligated to) withdraw the effectiveness of any Registration
Statement subject to this provision.
SECTION 11. Information by Holder. Each holder of Registrable Shares
to be included in any registration shall furnish to the Company and the
managing underwriter such written information regarding such holder and the
distribution proposed by such holder as the Company or the managing underwriter
may reasonably request in writing and as shall be reasonably required in
connection with any registration, qualification or compliance referred to in
this Agreement.
SECTION 12. Exchange Act Compliance. From and after the Registration
Date or such earlier date as a registration statement filed by the Company
pursuant to the Exchange Act relating to any class of the Company's securities
shall have become effective, the Company shall comply with all of the reporting
requirements of the Exchange Act (whether or not it shall be required to do so)
and shall comply with all other public information reporting requirements of
the Commission which are conditions to the availability of Rule 144 for the
sale of the Common Stock. The Company shall cooperate with each Purchaser in
supplying such information as may be necessary for such Purchaser to complete
and file any information reporting forms presently or hereafter required by the
Commission as a condition to the availability of Rule 144.
SECTION 13. No Conflict of Rights. The Company represents and warrants
to the Purchasers that the registration rights granted to the Purchasers hereby
do not conflict with any other registration rights granted by the Company. The
Company shall not, after the date hereof, grant any registration rights which
conflict with or impair, or have any priority over, the registration rights
granted hereby. In any underwritten public offering initiated pursuant to
Section 2(a), the managing underwriter shall be a nationally recognized
investment banking firm selected by the Company, and reasonably acceptable
to CVCA.
SECTION 14. Termination. This Agreement shall terminate and be of no
further force or effect when there shall not be any Restricted Securities;
provided however, that Sections 7 and 8 shall survive the termination of this
Agreement.
SECTION 15. Successors and Assigns. This Agreement shall bind and
inure to the benefit of the Company and the Purchasers and, subject to Section
16, their respective successors and assigns.
SECTION 16. Assignment. Each Purchaser may assign its rights hereunder
to any purchaser from such Purchaser of Restricted Securities; provided,
however, that such purchaser shall, as a condition to the effectiveness of such
assignment, be required to execute a counterpart to this Agreement agreeing to
be treated as a Purchaser hereunder whereupon such purchaser shall have the
benefits of, and shall be subject to the restrictions contained in, this
Agreement as an Purchaser.
SECTION 17. Entire Agreement. This Agreement contains the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all prior arrangements or understandings with respect hereto.
SECTION 18. Notices. All notices, requests, consents and other
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument and shall be deemed to have been duly given
when delivered in Person, by telex, telegram or telecopy, by overnight courier,
or by first class registered or certified mail, postage prepaid, addressed to
such party at the address set forth below or such other address as may
hereafter be designated in writing by the addressee to the sender:
(i) if to the Company, to:
Gentle Dental Service Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President and Chief Executive
Officer;
with a copy to:
▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
One Newport Place
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.;
(ii) if to any Purchaser, to him, her or
its address set forth on Schedule I
or, if none, in the books of the
Company;
with a copy to:
▇'▇▇▇▇▇▇▇▇ Graev & Karabell, LLP
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
All such notices, requests, consents and other communications shall be deemed
to have been delivered (a) in the case of personal delivery, telex, telegram
or telecopy, on the date of such delivery, (b) in the, case of overnight
courier, on the next business day, and (c) in the case of mailing, on the
fifth business day following such mailing.
SECTION 19. Modifications; Amendments; Waivers. The terms and
provisions of this Agreement may not be modified or amended, nor may any
provision applicable to the Purchasers be waived, except pursuant to a writing
signed by the Company and Requisite Purchasers; provided, however, that (i) any
such amendment, modification, or waiver that would adversely affect the rights
hereunder of any Purchaser, in its capacity as an Purchaser, without similarly
affecting the rights hereunder of all Purchasers of such class, in their
capacities as Purchasers of such class, shall not be effective as to such
Purchaser without its prior written consent and (ii) Schedule I to this
Agreement shall be deemed to be automatically amended from time to time to
reflect the addition to this Agreement of any Person identified in clause (ii)
of the definition of Purchaser without requiring the consent of any party, and
the Company will, from time to time, distribute to the Purchasers a revised
Schedule I to reflect any such changes.
SECTION 20. Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be a part of this Agreement.
SECTION 21. Severability. It is the desire and intent of the parties
that the provisions of this Agreement be enforced to the fullest extent
permissible under the law and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, if any provision of this Agreement
would be held in any jurisdiction to be invalid, prohibited or unenforceable
for any reason, such provision, as to such jurisdiction, shall be ineffective,
without invalidating the remaining provisions of this Agreement or affecting
the validity or enforceability of such provision in any other jurisdiction.
Notwithstanding the foregoing, if such provision could be more narrowly drawn
so as not to be invalid, prohibited or unenforceable in such jurisdiction, it
shall, as to such jurisdiction, be so narrowly drawn, without invalidating the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 22. Governing Law; Etc. All questions concerning the
construction, interpretation and validity of this Agreement shall be governed
by and construed and enforced in accordance with the domestic laws of the State
of New York, without giving effect to any choice or conflict of law provision
or rule (whether in the State of New York or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of
New York. In furtherance of the foregoing, the internal law of the State of New
York will control the interpretation and construction of this Agreement, even
if under such jurisdiction's choice of law or conflict of law analysis, the
substantive law of some other jurisdiction would ordinarily apply.
SECTION 23. Counterparts; Validity. This Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of
which taken together shall constitute one and the same agreement, and
telecopied signatures shall be effective. The failure of any Person holding
Registrable Shares to execute this Agreement shall not render this Agreement
invalid as between the Company and any other Person holding Registrable Shares.
SECTION 24. Entire Agreement This Agreement and the other documents,
certificates, instruments, writings and agreements referred to herein or
delivered pursuant hereto contain the entire understanding of the parties with
respect to the subject matter hereof and supersede in their entirety any and
all prior agreements and understandings between any of the parties hereto, all
of which are hereby terminated in their entirety and of no further force or
effect.
* * * *
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement on the date first written above.
THE COMPANY:
GENTLE DENTAL SERVICE CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and CEO
THE PURCHASERS:
CHASE VENTURE CAPITAL ASSOCIATES, L.P.
By: Chase Capital Partners,
its General Partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
DLJ CAPITAL CORP.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attorney In Fact
DLJ FIRST ESC L.L.C.
By: DLJ LBO Plans Management Corporation
its Manager
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attorney In Fact
SPROUT CAPITAL VII, L.P.
By: DLJ Capital Corp.
its Managing General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attorney In Fact
SPROUT GROWTH II, L.P.
By: DLJ Capital Corp.
its Managing General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attorney In Fact
THE SPROUT CEO FUND, L.P.
By: DLJ Capital Corp.
its General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attorney In Fact
SCHEDULE I
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Purchasers
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Chase Venture Capital Associates, L.P.
c/o Chase Capital Partners
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
DLJ Capital Corp.
c/o The Sprout Group
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▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
DLJ First ESC L.L.C.
c/o The Sprout Group
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▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Sprout Capital VII, L.P.
c/o The Sprout Group
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▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE I
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Purchasers
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Sprout Growth II, L.P.
c/o The Sprout Group
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▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Sprout CEO Fund, L.P.
c/o The Sprout Group
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▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇