Exhibit 10.1

PREFERRED SHARES PURCHASE AGREEMENT

between

DCP HOLDING COMPANY

and

CINCINNATI FINANCIAL CORPORATION

Dated as of January 11, 2013

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The Redeemable Institutional Preferred Shares have not been registered with the
Securities and Exchange Commission or any state securities authority in reliance
on exemptions from registration under applicable securities laws. In making the
investment decision, Purchaser must rely on its own examination of the terms of
the placement, including the merits and risks involved. The Redeemable
Institutional Preferred Shares have not been recommended by any governmental or
regulatory authority.

The Redeemable Institutional Preferred Shares are subject to restrictions on
transferability and resale and may not be transferred or resold except as
permitted by the Amendment to the Company’s Amended and Restated Articles of
Incorporation, in the form attached to this Agreement, and under applicable
securities laws. An investment in the Redeemable Institutional Preferred Shares
involves risk. Purchaser will be required to bear the financial risks of an
investment in the Redeemable Institutional Preferred Shares for an indefinite
period of time.

 

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TABLE OF CONTENTS

 

         Page  

ARTICLE I

  SALE AND PURCHASE OF SHARES      1   

SECTION 1.01

  Issuance, Sale and Purchase of the Redeemable Institutional Preferred Shares
     1   

SECTION 1.02

  Closing      1   

ARTICLE II

  REPRESENTATIONS AND WARRANTIES OF THE COMPANY      2   

SECTION 2.01

  Organization and Good Standing      2   

SECTION 2.02

  Authority and Binding Obligation      2   

SECTION 2.03

  Capitalization      2   

SECTION 2.04

  The Redeemable Institutional Preferred Shares      3   

SECTION 2.05

  No Violation or Default      3   

SECTION 2.06

  No Conflicts      3   

SECTION 2.07

  No Governmental Consents Required      3   

SECTION 2.08

  Financial Statements      3   

SECTION 2.09

  No Material Adverse Effect      4   

SECTION 2.10

  No Other Representations or Warranties      4   

ARTICLE III

  REPRESENTATIONS AND WARRANTIES OF THE PURCHASER      4   

SECTION 3.01

  Organization and Good Standing      4   

SECTION 3.02

  Authority and Binding Obligation      4   

SECTION 3.03

  No Conflicts      5   

SECTION 3.04

  No Governmental Consents Required      5   

SECTION 3.05

  Purchase Entirely for Own Account      5   

SECTION 3.06

  Accredited Investor      5   

SECTION 3.07

  Investment Experience      5   

SECTION 3.08

  Disclosure of Information      5   

ARTICLE IV

  CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER      6   

SECTION 4.01

  Stock Certificates      6   

SECTION 4.02

  Amendment      6   

SECTION 4.03

  [Intentionally Omitted]      6   

SECTION 4.04

  Representations and Warranties      6   

SECTION 4.05

  Performance      6   

SECTION 4.06

  Closing Certificates      6   

 

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TABLE OF CONTENTS

 

         Page  

SECTION 4.07

  No Actions or Proceedings      7   

ARTICLE V

  CONDITIONS TO THE OBLIGATIONS OF THE COMPANY      7   

SECTION 5.01

  [Intentionally Omitted]      7   

SECTION 5.02

  Representations and Warranties      7   

SECTION 5.03

  Performance      7   

SECTION 5.04

  No Actions or Proceedings      7   

ARTICLE VI

  INDEMNIFICATION      8   

SECTION 6.01

  Survival      8   

SECTION 6.02

  Indemnification of the Purchaser      8   

SECTION 6.03

  Indemnification of the Company      8   

SECTION 6.04

  Exclusive Remedies      8   

ARTICLE VII

  MISCELLANEOUS      9   

SECTION 7.01

  Exchange for Equivalent Convertible Preferred Shares      9   

SECTION 7.02

  Brokerage      9   

SECTION 7.03

  Expenses      9   

SECTION 7.04

  Notices      9   

SECTION 7.05

  Governing Law      10   

SECTION 7.06

  Entire Agreement      11   

SECTION 7.07

  Assignments and Successors      11   

SECTION 7.08

  Counterparts      11   

SECTION 7.09

  Amendments      11   

SECTION 7.10

  Severability      11   

SECTION 7.11

  Sections Headings; Construction      11   

SECTION 7.12

  No Third-Party Beneficiaries      11   

Exhibit:

    

Exhibit A

  Amendment to Amended and Restated Articles of Incorporation   

 

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PREFERRED SHARES PURCHASE AGREEMENT

This PREFERRED SHARES PURCHASE AGREEMENT (this “Agreement”), dated as of
January 11, 2013, is made by and between DCP Holding Company, an Ohio
corporation (the “Company”), and Cincinnati Financial Corporation, an Ohio
corporation (the “Purchaser”). The Company and the Purchaser are sometimes
individually referred to in this Agreement as a “Party” and collectively as the
“Parties.”

WHEREAS, the Company desires to issue and sell to the Purchaser, and the
Purchaser desires to purchase from the Company, an aggregate of 1,000 shares of
the Company’s Redeemable Institutional Preferred Shares – 2013 (A) Series (the
“Redeemable Institutional Preferred Shares”), for an aggregate purchase price of
$1,000,000 in accordance with the terms hereof.

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows:

ARTICLE I

SALE AND PURCHASE OF SHARES

SECTION 1.01 Issuance, Sale and Purchase of the Redeemable Institutional
Preferred Shares. Subject to the terms and conditions of this Agreement, at the
Closing, the Company shall issue and sell to the Purchaser, and the Purchaser
shall purchase from the Company, 1,000 shares of the Redeemable Institutional
Preferred Shares for the purchase price of $1,000 per Redeemable Institutional
Preferred Share, with an aggregate purchase price of $1,000,000 (the “Purchase
Price”). The Redeemable Institutional Preferred Shares shall have the rights,
preferences, privileges, restrictions and other terms as set forth in the
Amendment to the Company’s Amended and Restated Articles of Incorporation in the
form attached as Exhibit A hereto (the “Amendment”).

SECTION 1.02 Closing. The closing of the issuance, sale and purchase of the
Redeemable Institutional Preferred Shares (the “Closing”) shall take place at
the offices of the Purchaser, at 6200 S. Gilmore Road, Fairfield, Ohio 45014, at
2:00 p.m. Eastern Time on January 11, 2013, or at such other location, date and
time as the Parties may agree. The date on which the Closing will occur is
referred to herein as the “Closing Date.” At the Closing, the Company shall
issue and deliver to the Purchaser a stock certificate, registered in the name
of the Purchaser, representing the Redeemable Institutional Preferred Shares in
exchange for the payment of the Purchase Price by the Purchaser to the Company
pursuant to the wire transfer instructions furnished by the Company.

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ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby represents and warrants to the Purchaser as of the Closing
Date as follows:

SECTION 2.01 Organization and Good Standing. The Company and its subsidiaries
have been duly incorporated or organized and are validly existing and in good
standing under the laws of their respective jurisdictions of incorporation or
organization, are duly qualified to do business and are in good standing in each
jurisdiction in which their respective ownership or lease of property or the
conduct of their respective businesses requires such qualification, and have all
power and authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged, except where the failure to be
so qualified, in good standing or have such power or authority would not,
individually or in the aggregate, have a material adverse effect on the Company
and its subsidiaries taken as a whole or on the performance by the Company of
its obligations under this Agreement (a “Material Adverse Effect”).

SECTION 2.02 Authority and Binding Obligation. The Company has the necessary
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The Company has duly executed and delivered
this Agreement and, assuming due authorization, execution and delivery hereof by
the Purchaser, this Agreement constitutes the valid and legally binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other similar laws relating to creditors’ rights
and general principles of equity.

SECTION 2.03 Capitalization. All issued and outstanding shares of capital stock
of the Company have been duly authorized and validly issued and are fully paid
and non-assessable and, except as disclosed in the Company Reports (as defined
in Section 2.08), are not subject to any preemptive rights. Except as disclosed
in the Company Reports and set forth in the Amendment, (i) there are no options,
warrants, calls, subscriptions, convertible securities or other rights,
agreements or commitments which obligate the Company or any of its subsidiaries
to issue, transfer, sell or register any shares of capital stock or other
securities of the Company or any of its subsidiaries, (ii) there are no
outstanding obligations of the Company or any of its subsidiaries to repurchase,
redeem or otherwise acquire any shares of capital stock of the Company or any of
its subsidiaries and (iii) there are no outstanding stock appreciation rights,
security-based performance units, “phantom” stock or other security rights or
other agreements or arrangements pursuant to which any person is or may be
entitled to receive any payment or other value based on the revenues, earnings
or financial performance or other attribute of the Company or any of its
subsidiaries or assets or calculated in accordance therewith (other than
payments or commissions to employees or agents of the Company or any of its
Subsidiaries in the ordinary course of business consistent with past practices).
The Company has no outstanding bonds, debentures, notes or other obligations the
holders of which have the right to vote (or which are convertible into or
exercisable for securities having the right to vote) with the shareholders of
the Company on any matter. There are no voting trusts or other agreements or

 

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understandings to which the Company is a party with respect to the voting of
capital stock of the Company.

SECTION 2.04 The Redeemable Institutional Preferred Shares. The Redeemable
Institutional Preferred Shares to be issued and sold by the Company hereunder,
when issued and delivered and paid for as provided herein, will be duly
authorized, validly issued, fully paid and nonassessable. The issuance of the
Redeemable Institutional Preferred Shares is not subject to any preemptive or
similar rights.

SECTION 2.05 No Violation or Default. Neither the Company nor any of its
subsidiaries is: (i) in violation of its articles of incorporation or code of
regulations or similar organizational documents; (ii) in default, and no event
has occurred that, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound or to which
any of the property or assets of the Company or any of its subsidiaries is
subject; or (iii) in violation of any law or statute or any judgment, order,
rule or regulation of any court or arbitrator or governmental or regulatory
authority, except, in the case of clauses (ii) and (iii) above, for any such
default or violation that would not, individually or in the aggregate, have a
Material Adverse Effect.

SECTION 2.06 No Conflicts. The execution, delivery and performance by the
Company of this Agreement, including the issuance and sale of the Redeemable
Institutional Preferred Shares, will not: (i) result in any violation of the
provisions of the articles of incorporation or code of regulations or similar
organizational documents of the Company or any of its subsidiaries,
(ii) conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, or (iii) result in the violation of any
law or statute or any judgment, order, rule or regulation of any court or
arbitrator or governmental or regulatory authority, except, in the case of
clauses (ii) and (iii) above, for any such conflict, breach, violation or
default that would not, individually or in the aggregate, have a Material
Adverse Effect.

SECTION 2.07 No Governmental Consents Required. Subject, in part, to the truth
and accuracy of the Purchaser’s representations set forth in Article III, no
consent, approval, authorization, order, license, registration or qualification
of or with any court or arbitrator or governmental or regulatory authority is
required to be obtained or made by the Company for the execution, delivery and
performance by the Company of this Agreement, including the issuance and sale of
the Redeemable Institutional Preferred Shares.

SECTION 2.08 Financial Statements. The financial statements (including the
related notes thereto) of the Company and its consolidated subsidiaries included
or incorporated by reference in the reports filed by the Company with the U.S.
Securities and Exchange

 

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Commission (the “SEC”) since December 31, 2011 (including exhibits and any
amendments thereto or incorporated by reference therein, the “Company Reports”)
comply in all material respects with the applicable requirements of the
Securities Act of 1933, as amended (the “Securities Act”), and the Securities
Exchange Act of 1934, as amended, as applicable, and fairly present in all
material respects the financial position of the Company and its consolidated
subsidiaries as of the dates indicated and the results of their operations and
the changes in their cash flows for the periods specified (subject, in the case
of unaudited statements, to (i) such exceptions as may be permitted for
quarterly reports on Form 10-Q filed with the SEC and (ii) normal, recurring
year-end audit adjustments which are not material in the aggregate). Such
financial statements have been prepared in conformity with generally accepted
accounting principles in the United States applied on a consistent basis
throughout the periods covered thereby, except as may be noted therein.

SECTION 2.09 No Material Adverse Effect. Since the date of the most recent
financial statements of the Company included or incorporated by reference in the
Company Reports (i) there has not been any Material Adverse Effect and
(ii) except for actions taken in connection with this Agreement or the
transactions contemplated hereby, the Company and its subsidiaries have
conducted their respective businesses in the ordinary course.

SECTION 2.10 No Other Representations or Warranties. Except for the
representations and warranties made by the Company in this Article II, neither
the Company nor any other person makes any representation or warranty with
respect to the Company or its subsidiaries or their respective businesses,
operations, assets, liabilities, condition (financial or otherwise) or
prospects, notwithstanding the delivery or disclosure to the Purchaser or any of
its affiliates or representatives of any documentation, forecasts or other
information with respect to any one or more of the foregoing.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser represents and warrants to the Company as of the Closing Date as
follows:

SECTION 3.01 Organization and Good Standing. The Purchaser has been duly
incorporated or organized and is validly existing and in good standing under the
laws of its jurisdiction of incorporation or organization, is duly qualified to
do business and is in good standing in each jurisdiction in which its ownership
or lease of property or the conduct of its business requires such qualification,
and has all power and authority necessary to own or hold its properties and to
conduct the businesses in which it is engaged, except where the failure to be so
qualified, in good standing or have such power or authority would not,
individually or in the aggregate, have a material adverse effect on the
Purchaser or on the performance by the Purchaser of its obligations under this
Agreement (a “Purchaser Material Adverse Effect”).

SECTION 3.02 Authority and Binding Obligations. The Purchaser has the necessary
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The Purchaser has duly executed and delivered
this Agreement and, assuming due authorization, execution and delivery hereof by
the Company, this Agreement

 

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constitutes the valid and legally binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws relating to creditors’ rights and general
principles of equity.

SECTION 3.03 No Conflicts. The execution, delivery and performance by the
Purchaser of this Agreement, including the purchase of the Redeemable
Institutional Preferred Shares, will not (i) result in any violation of the
provisions of the articles of incorporation or code of regulations or similar
organizational documents of the Purchaser, (ii) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Purchaser pursuant to, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Purchaser is a party or by which it is bound or to which
any of its properties or assets is subject, or (iii) result in the violation of
any law or statute or any judgment, order, rule or regulation of any court or
arbitrator or governmental or regulatory authority, except, in the case of
clauses (ii) and (iii) above, for any such conflict, breach, violation or
default that would not, individually or in the aggregate, have a Purchaser
Material Adverse Effect.

SECTION 3.04 No Governmental Consents Required. No consent, approval,
authorization, order, license, registration or qualification of or with any
court or arbitrator or governmental or regulatory authority is required to be
obtained or made by the Purchaser for the execution, delivery and performance by
the Purchaser of this Agreement.

SECTION 3.05 Purchase Entirely for Own Account. The Purchaser is acquiring the
Redeemable Institutional Preferred Shares for its own account for the purpose of
investment only, without any view toward sale or distribution.

SECTION 3.06 Accredited Investor. The Purchaser is an “accredited investor”
within the meaning of Rule 501 promulgated under the Securities Act.

SECTION 3.07 Investment Experience. The Purchaser has such knowledge and
experience in financial and business matters so as to be able to evaluate the
risks and merits of its investment in the Company and it is able financially to
bear the risks thereof.

SECTION 3.08 Disclosure of Information. The Purchaser has reviewed the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and the
Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2012; has had an opportunity to discuss the Company’s business,
management and financial affairs with the Company’s management and has had all
of Purchaser’s questions regarding the Company or the Redeemable Institutional
Preferred Shares answered to Purchaser’s satisfaction. The Purchaser understands
that (i) the Redeemable Institutional Preferred Shares have not been registered
under the Securities Act or any state securities or blue sky laws by reason of
their issuance in a transaction exempt from the registration requirements of the
Securities Act, (ii) no public agency has reviewed the accuracy or adequacy of
any information furnished to the Purchaser and the Purchaser’s representatives
in connection with the Purchaser’s purchase of the Redeemable Institutional
Preferred Shares, (iii) there will be no public market for the

 

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Redeemable Institutional Preferred Shares and the Redeemable Institutional
Preferred Shares will not be readily salable, (iv) the Redeemable Institutional
Preferred Shares will be subject to restrictions on transfer under the Amendment
and the Company’s Amended and Restated Code of Regulations, and (v) even if the
Redeemable Institutional Preferred Shares are subsequently registered or
qualified under the Securities Act and registered or qualified under state
securities or blue sky laws, or an exemption from such registration and
qualification is available, the amount or percentage of the Redeemable
Institutional Preferred Shares that may be sold or transferred may be limited by
applicable federal and state laws, rules and regulations. The Purchaser is not
relying upon any representation or warranty of any employee, officer or director
of the Company other than as provided herein.

ARTICLE IV

CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER

The obligations of the Purchaser to purchase and pay for the Redeemable
Institutional Preferred Shares at the Closing are subject to the satisfaction,
at or prior to the Closing, of the following conditions (any of which may be
waived by the Purchaser, in whole or in part):

SECTION 4.01 Stock Certificates. The Purchaser shall have received a certificate
representing the Redeemable Institutional Preferred Shares.

SECTION 4.02 Amendment. The Amendment shall have been duly filed with and
accepted by the Secretary of State of the State of Ohio.

SECTION 4.03 [Intentionally Omitted].

SECTION 4.04 Representations and Warranties. The representations and warranties
contained in Article II shall be true and correct in all material respects, and
an executive officer of the Company shall have certified to such effect to the
Purchaser in writing.

SECTION 4.05 Performance. The Company shall have performed and complied in all
material respects with all agreements contained herein required to be performed
or complied with by it at or prior to the Closing and an executive officer of
the Company shall have certified to the Purchaser in writing to such effect.

SECTION 4.06 Closing Certificates. The Purchaser shall have received copies of
the following certificates and other documents:

(a) the Amendment, certified by the Secretary of State of the State of Ohio;

(b) a certificate of the Secretary of State of the State of Ohio, dated as of a
recent date, as to the good standing of the Company; and

(c) a certificate of the Secretary of the Company dated the Closing Date and
certifying:

 

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(i) that attached thereto is a true and complete copy of the Amended and
Restated Code of Regulations of the Company as in effect on the date of such
certification; and

(ii) that attached thereto is a true and complete copy of all resolutions of the
Board of Directors of the Company adopting the Amendment and authorizing the
execution, delivery and performance of this Agreement, including the issuance
and sale of the Redeemable Institutional Preferred Shares, and that all such
resolutions are in full force and effect.

SECTION 4.07 No Actions or Proceedings. No action or proceeding by or before any
court, administrative body or governmental agency shall have been instituted or
threatened which seeks to enjoin, restrain or prohibit this Agreement or the
consummation of the transactions contemplated by this Agreement. No law or
regulation shall be in effect and no court order shall have been entered in any
action or proceeding instituted by any party which enjoins, restrains or
prohibits this Agreement or the consummation of the transactions contemplated by
this Agreement.

ARTICLE V

CONDITIONS TO THE OBLIGATIONS OF THE COMPANY

The obligations of the Company to issue and sell the Redeemable Institutional
Preferred Shares at the Closing are subject to the satisfaction, at or prior to
the Closing, of the following conditions (any of which may be waived by the
Company, in whole or in part):

SECTION 5.01 [Intentionally Omitted].

SECTION 5.02 Representations and Warranties. The representations and warranties
contained in Article III shall be true and correct in all material respects, and
an executive officer of the Purchaser shall have certified to such effect to the
Company in writing.

SECTION 5.03 Performance. The Purchaser shall have performed and complied in all
material respects with all agreements contained herein required to be performed
or complied with by it at or prior to the Closing and an executive officer of
the Purchaser shall have certified to the Company in writing to such effect.

SECTION 5.04 No Actions or Proceedings. No action or proceeding by or before any
court, administrative body or governmental agency shall have been instituted or
threatened which seeks to enjoin, restrain or prohibit this Agreement or the
consummation of the transactions contemplated by this Agreement. No law or
regulation shall be in effect and no court order shall have been entered in any
action or proceeding instituted by any party which enjoins, restrains or
prohibits this Agreement or the consummation of the transactions contemplated by
this Agreement.

 

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ARTICLE VI

INDEMNIFICATION

SECTION 6.01 Survival. All covenants, agreements, representations and warranties
made by either Party in this Agreement, and the indemnification obligations of
the Parties with respect thereto, shall survive the execution and delivery of
this Agreement and the Closing and continue in full force and effect until the
one-year anniversary of the Closing Date (the “Termination Date”). If, at any
time prior to the Termination Date, any Purchaser Indemnified Party or Company
Indemnified Party (as such terms are defined in Sections 6.02 and 6.03), as the
case may be, delivers to the other Party a written notice asserting a claim for
indemnification hereunder, then the claim asserted in such written notice shall
survive until such time as such claim is finally resolved.

SECTION 6.02 Indemnification of the Purchaser. The Company shall indemnify and
hold harmless the Purchaser and each affiliate, shareholder, director, officer,
employee, agent, representative and successor in interest of the Purchaser (the
“Purchaser Indemnified Parties”) from and against any and all losses,
liabilities, damages, demands, claims, suits, actions, judgments or causes of
action, assessments, costs and expenses, including interest, penalties,
reasonable attorneys’ fees, any and all reasonable expenses incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation (collectively, “Damages”) asserted against, resulting
to, imposed upon, or incurred or suffered by the Purchaser Indemnified Parties,
directly or indirectly, as a result of or arising from (i) any inaccuracy in or
breach of any of the representations and warranties made by the Company in this
Agreement or (ii) any breach of or nonperformance by the Company of its
covenants, agreements or other obligations under this Agreement.

SECTION 6.03 Indemnification of the Company. The Purchaser shall indemnify and
hold harmless the Company and each affiliate, shareholder, director, officer,
employee, agent, representative and successor in interest of the Company (the
“Company Indemnified Parties”) from and against any and all Damages, asserted
against, resulting to, imposed upon, or incurred or suffered by the Company
Indemnified Parties, directly or indirectly, as a result of or arising from
(i) any inaccuracy in or breach of any of the representations and warranties
made by the Purchaser in this Agreement or (ii) any breach of or nonperformance
by the Purchaser of its covenants, agreements or other obligations under this
Agreement.

SECTION 6.04 Exclusive Remedies. The remedies provided in this Article VI shall
be deemed the sole and exclusive remedies of the Parties with respect to this
Agreement and the transactions contemplated hereby after the Closing, and no
Party shall pursue or seek to pursue any other remedy except for any equitable
relief to which any Party may be entitled or in the case of fraud.

 

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ARTICLE VII

MISCELLANEOUS

SECTION 7.01 Exchange for Equivalent Convertible Preferred Shares. The Parties
acknowledge that the Company has under active consideration a revision to its
Amended and Restated Articles of Incorporation that would allow the issuance of
Preferred Shares that would be convertible into a class of Common Shares. In the
event that: (i) the Company’s Board of Directors and the holders of the Class A
Common Shares approve the necessary amendment(s) to the Company’s Amended and
Restated Articles of Incorporation and/or its Amended and Restated Code of
Regulations to provide the Company with the authority to issue one or more
series of Preferred Shares that are convertible, at the option of the holders
thereof, into any class of Common Shares; (ii) the Company’s Board of Directors
subsequently fixes the terms of such convertible Preferred Shares (the
“Convertible Preferred Shares”) so that such terms include (A) an annual
dividend that is equivalent to the annual dividend on the Redeemable
Institutional Preferred Shares, as described in the Amendment, (B) a put right
for the holders of the Convertible Preferred Shares that is equivalent to the
put right of the holders of the Redeemable Institutional Preferred Shares, as
described in the Amendment, (C) a conversion ratio in respect of the conversion
of Convertible Preferred Shares into Common Shares that is substantially
equivalent to the Conversion Ratio, as defined in the Amendment, and (D) terms
that are otherwise no less favorable in any material respect to holders of the
Redeemable Institutional Preferred Shares than those contained in the Amendment;
and (iii) the Company offers to exchange such number of Convertible Preferred
Shares for all then-outstanding Redeemable Institutional Preferred Shares so
that, upon consummation of such exchange, the prior holders of the Redeemable
Institutional Preferred Shares will hold Convertible Preferred Shares
representing the same percentage of the outstanding capital stock of the Company
as such holders held immediately prior to the consummation of such exchange,
then the Purchaser (and any assignee or transferee) of the Redeemable
Institutional Preferred Shares shall be obligated to exchange its Redeemable
Institutional Preferred Shares for such Convertible Preferred Shares. The
Parties agree that nothing in this Section 7.01 shall be construed or
interpreted as creating any binding obligation or covenant of the Company or
limiting, restricting or modifying the discretion, obligations or duties of the
Company’s Board of Directors. Capitalized terms used in this Section 7.01 but
not defined in this Agreement shall have the meanings given such terms in the
Company’s Amended and Restated Articles of Incorporation.

SECTION 7.02 Brokerage. Each Party hereto will indemnify and hold harmless the
other against and in respect of any claim for brokerage or other commissions
relative to this Agreement or to the transactions contemplated hereby, based in
any way on agreements, arrangements or understandings made or claimed to have
been made by such Party with any third party.

SECTION 7.03 Expenses. Each Party shall pay all of its own fees and expenses
incurred in connection with the negotiation, preparation and execution of this
Agreement.

SECTION 7.04 Notices. All notices, requests, consents and other communications
hereunder shall be in writing and will be deemed to have been duly given when
(i) delivered by hand (with written confirmation of receipt), (ii) received by
the addressee, if sent by a nationally

 

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recognized overnight delivery service, (iii) received by the addressee, if
mailed by certified or registered mail, return receipt requested, or (iv) sent
by telecopier or email (with confirmation of receipt), addressed as follows:

If to the Company:

DCP Holding Company

100 Crowne Point Place

Sharonville, OH 45241

Attention: Robert C. Hodgkins, Jr., Vice President and Chief Financial Officer

Facsimile: (513) 554-3187

E mail: rhodgkins@dentalcareplus.com

With a copy to:

Baker & Hostetler LLP

312 Walnut Street

Suite 3200

Cincinnati, OH 45202

Attention: Thomas W. Kahle

Facsimile: (513) 929-0303

E mail: tkahle@bakerlaw.com

If to the Purchaser:

Cincinnati Financial Corporation

6200 S. Gilmore Road

Fairfield, OH 45014

Attention: Michael Abrams

Facsimile: (        )          -        

E mail: Michael_Abrams@CINFIN.com

 

With a copy to:      

 

     

 

     

 

      Attention:                            
                                                             Facsimile:
(         )                                  -                                
      E mail:                                        
                                                 

or, in any such case, at such other address or addresses as shall have been
furnished in writing by such Party to the other.

SECTION 7.05 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio.

 

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SECTION 7.06 Entire Agreement. This Agreement, including the Schedules and
Exhibits hereto, supersedes all prior agreements between the Parties with
respect to its subject matter and constitutes the sole and entire agreement of
the Parties with respect to the subject matter hereof. All Schedules and
Exhibits hereto are hereby incorporated herein by reference.

SECTION 7.07 Assignments and Successors. This Agreement shall not be assigned by
either of the Parties (whether by operation of law or otherwise) without the
prior written consent of the other party. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the Parties and their respective successors and assigns.

SECTION 7.08 Counterparts. 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.

SECTION 7.09 Amendments. This Agreement may be amended or modified with the
written consent of the Company and the Purchaser.

SECTION 7.10 Severability. If any provision of this Agreement shall be declared
void or unenforceable by any judicial or administrative authority, the validity
of any other provision and of the entire Agreement shall not be affected
thereby.

SECTION 7.11 Section Headings; Construction. The headings of Articles and
Sections in this Agreement are for convenience only and are not to be considered
in construing or interpreting any term or provision of this Agreement. All
references to “Article”, “Articles”, “Section” or “Sections” refer to the
corresponding Article, Articles, Section or Sections (or sub-Section or
sub-Sections) of this Agreement. All words used in this Agreement will be
construed to be of such gender or number as the circumstances require. Unless
otherwise expressly provided, the word “including” does not limit the preceding
words or terms.

SECTION 7.12 No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the Parties and their respective
successors and permitted assigns, except for the rights of the Purchaser
Indemnified Parties and Company Indemnified Parties under Article VI of this
Agreement.

[Signatures of the Parties intentionally appear on the next page.]

 

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IN WITNESS WHEREOF, the undersigned have executed this Preferred Shares Purchase
Agreement as of the date first set forth above.

 

THE COMPANY: DCP HOLDING COMPANY By:   /s/ Anthony A. Cook  

 

Name:   Anthony A. Cook Title:   President and Chief Executive Officer THE
PURCHASER: CINCINNATI FINANCIAL CORPORATION By:   /s/ Martin F. Hollenbeck, CFA
 

 

Name:   Martin F. Hollenbeck Title:   SVP & Chief Investment Officer

 

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Exhibit A

Amendment to Amended and Restated Articles of Incorporation

(attached)

--------------------------------------------------------------------------------

Certificate

of

Amendment

to

Amended and Restated Articles of Incorporation

of

DCP Holding Company

The following amendment to the Amended and Restated Articles of Incorporation of
DCP Holding Company (the “Corporation”), adopted in accordance with Article
FOURTH, Section B.1. of the Amended and Restated Articles of Incorporation, was
adopted by the Board of Directors on December 12, 2012, at a meeting of the
Board of Directors on that date pursuant to the authority of Section 1701.70(B)
and 1701.73(A) and (C) of the Ohio Revised Code.

RESOLVED, that, pursuant to authority expressly vested in the Board of Directors
of the Corporation by the provisions of the Amended and Restated Articles of
Incorporation of the Corporation, the Board of Directors of the Corporation duly
adopted the following amendment to the Amended and Restated Articles of
Incorporation of the Corporation; and

FURTHER RESOLVED, that the Amended and Restated Articles of Incorporation of the
Corporation be, and hereby are, amended by adding at the end of Section B of
Article FOURTH a new subsection 9 that reads as follows:

9. THE REDEEMABLE INSTITUTIONAL PREFERRED SHARES – 2013 (A) SERIES

The Redeemable Institutional Preferred Shares – 2013 (A) Series shall have the
following express terms:

(a) DESIGNATION, AMOUNT AND SERIES. Of the 100,000 authorized Preferred Shares,
1,000 are designated as the “Redeemable Institutional Preferred Shares – 2013
(A) Series” (the “2013A Redeemable Institutional Preferred Shares”). The 2013A
Redeemable Institutional Preferred Shares have the express terms set forth in
this Section B of Article FOURTH as being applicable to all Preferred Shares as
a class and, in addition, the following express terms.

(b) ELIGIBLE OWNER. Only an “accredited investor” (within the meaning of Rule
501 promulgated under the Securities Act of 1933, as amended), which is not an
insurance company, dental HMO, dental PPO, a company that offers and sells a
vision benefit product, an affiliate of any of the foregoing, or any person or
entity acting directly or indirectly on behalf of any of the foregoing or
affiliate thereof, is eligible to purchase, own or hold the 2013A Redeemable
Institutional Preferred Shares (a “2013A Redeemable Institutional Preferred
Eligible Owner”).

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(c) CONSIDERATION FOR ISSUANCE. The per share purchase price for the 2013A
Redeemable Institutional Preferred Shares will be $1,000 (hereinafter referred
to in this subsection 9 as the “2013A Issue Price”).

(d) DIVIDENDS.

(i) Each 2013A Redeemable Institutional Preferred Share will carry an annual
dividend at a rate equal to: (A) in respect of the dividend for 2013, 5% of the
per share 2013A Issue Price, prorated based on the number of days that the 2013A
Redeemable Institutional Preferred Share was outstanding in 2013, payable in
four equal quarterly installments on or before the last business day of each
calendar quarter of 2013; and (B) in respect of the dividends for 2014 and all
years thereafter, 5% of the Adjusted Book Value per 2013A Redeemable
Institutional Preferred Share (as defined below) as of December 31 of the
preceding year. The dividend on the 2013A Redeemable Institutional Preferred
Shares for 2014 and all years thereafter, once declared by the Corporation’s
Board of Directors, shall be paid by the Corporation in four equal quarterly
installments, on or before the last business day of the calendar quarter of the
year for which the dividend was declared, to each holder of a 2013A Redeemable
Institutional Preferred Share who was a record holder of such share on
December 31 of the prior calendar year. (For example, the annual dividend for
2014 will be 5% of the Adjusted Book Value per 2013A Redeemable Institutional
Preferred Share as of December 31, 2013 and will be paid in four equal
installments on or before the last business day of each calendar quarter of
2014.) In the event that a 2013A Redeemable Institutional Preferred Share is not
outstanding for the entire year in which the dividend is paid, the dividend
payable during such quarter shall be proportionately reduced based on the number
of days in the quarter the 2013A Redeemable Institutional Preferred Share was
outstanding. Following the payment of a dividend on the 2013A Redeemable
Institutional Preferred Shares for any calendar year, any subsequent payment of
a dividend on the 2013A Redeemable Institutional Preferred Shares, including in
connection with a Liquidation Event (as defined in subsection (h) of this
subsection 9 below) or the exercise of a Put Right or Call Right (as defined in
subsection (g) of this subsection 9 below), shall include any adjustments
necessary to reconcile estimated and actual calculations of Adjusted Book Value
per 2013A Redeemable Institutional Preferred Share as of December 31 of the
calendar year for which the dividend on the 2013A Redeemable Institutional
Preferred Shares was paid based upon the year-end audit of the Corporation’s
financial statements. The dividend on the 2013A Redeemable Institutional
Preferred Shares, if not declared payable by the Corporation’s Board of
Directors or otherwise not paid for any reason, shall cumulate and compound
annually.

(ii) For purposes of this subsection 9, the “Adjusted Book Value per 2013A
Redeemable Institutional Preferred Share” shall be an amount determined in
accordance with generally accepted accounting principles and the following:

(A) As of the end of each calendar month after January 2013, the book value of
the Preferred Shares (as defined in the first paragraph of this Article FOURTH),
including the 2013A Redeemable Institutional Preferred Shares, the 2012A
Redeemable Institutional Preferred Shares (as defined in subsection 8(a) of
Section B of this Article FOURTH), the Redeemable Institutional Preferred Shares
– 2010 (A) Series (as described in subsection 7 of Section B of this Article
FOURTH, hereinafter referred to in this

 

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subsection 9 as the “2010 Redeemable Institutional Preferred Shares”) and the
Provider Preferred Shares (as defined in subsection 6(a) of Section B of this
Article FOURTH), the Class A Common Shares (as defined in the first paragraph of
this Article FOURTH), and the Class B Common Shares (as defined in the first
paragraph of this Article FOURTH; the Class A Common Shares, Class B Common
Shares and any additional class of common shares that may be issued by the
Corporation in the future, collectively, are hereinafter referred to in this
subsection 9 as the “Common Shares”), shall be adjusted as follows:

first, net earnings or net losses of the Corporation (constituting net income or
loss plus other comprehensive income or loss) for the completed monthly period
will be reduced by the amount of the dividends accrued during the completed
monthly period on the 2010 Redeemable Institutional Preferred Shares, the 2012A
Redeemable Institutional Preferred Shares and the 2013A Redeemable Institutional
Preferred Shares; and

thereafter, the net earnings or net losses of the Corporation from the completed
monthly period, as adjusted pursuant to the preceding paragraph, will be
allocated among the Preferred Shares, including the 2013A Redeemable
Institutional Preferred Shares, the 2012A Redeemable Institutional Preferred
Shares, the 2010 Redeemable Institutional Preferred Shares and the Provider
Preferred Shares, and the Common Shares based upon their respective and relative
percentages of the total equity of the Corporation, based upon 50% of the
aggregate book value of the 2013A Redeemable Institutional Preferred Shares, 50%
of the aggregate book value of the 2012A Redeemable Institutional Preferred
Shares, 50% of the aggregate book value of the 2010 Redeemable Institutional
Preferred Shares and 100% of the aggregate book value of the Provider Preferred
Shares, and based on a percentage of the aggregate book value of shares of other
series of Preferred Shares to be determined subject to the terms of any such
series of Preferred Shares as may be fixed by the Board of Directors, and 100%
of the aggregate book value of the Common Shares, in each case as of the month
end date immediately preceding the monthly period in question.

(B) After the allocation of net earnings or net losses to the Preferred Shares,
including the 2013A Redeemable Institutional Preferred Shares, the 2012A
Redeemable Institutional Preferred Shares, the 2010 Redeemable Institutional
Preferred Shares and the Provider Preferred Shares, and Common Shares pursuant
to the paragraphs under subsection (A) above, the aggregate book value of the
Preferred Shares, including the 2013A Redeemable Institutional Preferred Shares,
the 2012A Redeemable Institutional Preferred Shares, the 2010 Redeemable
Institutional Preferred Shares and the Provider Preferred Shares, and Common
Shares will be adjusted for any purchases or redemptions (including in
connection with the exercise of a Put Right or Call Right pursuant to subsection
9(g) or similar right pursuant to subsections 6(g), 7(g) and 8(g) of Section B
of this Article Fourth) thereof during the completed monthly period.

(C) The adjusted aggregate book values of the Preferred Shares, including the
2013A Redeemable Institutional Preferred Shares, the 2012A Redeemable
Institutional Preferred Shares, the 2010 Redeemable Institutional Preferred
Shares and the Provider Preferred Shares, and Common Shares as described in this
subsection (d)(ii) will be used as the basis of the allocation of the net
earnings or net losses of the Corporation in the

 

- 3 -

--------------------------------------------------------------------------------

following monthly period and will be subject to any adjustments necessary to
reconcile estimated and actual calculations of Adjusted Book Value per 2013A
Redeemable Institutional Preferred Share based upon the year-end audit of the
Corporation’s financial statements.

(e) NO VOTING RIGHTS; PROTECTIVE PROVISIONS.

(i) Except as provided in subsection (ii) below or as required by law, the 2013A
Redeemable Institutional Preferred Shares shall have no voting rights.

(ii) So long as any 2013A Redeemable Institutional Preferred Shares are
outstanding, the Corporation may not, without the consent of the holders of at
least two-thirds of the 2013A Redeemable Institutional Preferred Shares, by
amendment, merger, consolidation or otherwise, purchase or redeem or pay any
dividend on any capital stock of the Corporation prior to the 2013A Redeemable
Institutional Preferred Shares, other than (A) Common Shares repurchased from
former directors or employees in connection with the cessation of their services
or employment at a price not greater than book value as of the month-end
immediately preceding their termination date, (B) shares of the Corporation’s
capital stock repurchased pursuant to the Corporation’s Amended and Restated
Code of Regulations, (C) 2012A Redeemable Institutional Preferred Shares
redeemed or repurchased pursuant to subsection 8(f) of Section B of this Article
FOURTH, (D) 2010 Redeemable Institutional Preferred Shares redeemed or
repurchased pursuant to subsection 7(f) or 7(g) of Section B of this Article
FOURTH, (E) Provider Preferred Shares redeemed or repurchased pursuant to
subsection 6(f) or 6(g) of Section B of this Article FOURTH and (F) redemptions
of other Preferred Shares that may be issued in the future pursuant to the terms
thereof as fixed by the Board of Directors. For the avoidance of doubt, “capital
stock” as used in this subsection shall not include restricted share units,
phantom shares or other derivate securities of the Corporation.

(f) RESTRICTIONS ON TRANSFER.

(i) No transfers. Except as specifically provided in this subsection (f), no
legal or beneficial holder of 2013A Redeemable Institutional Preferred Shares
may transfer, gift, sell or assign any 2013A Redeemable Institutional Preferred
Shares or interests therein, legal or equitable, whether now owned or hereafter
acquired, or authorize, permit or suffer any such transfer, gift, sale or
assignment. Any attempted transfer, gift, sale or assignment of 2013A Redeemable
Institutional Preferred Shares or any interest therein not in compliance with
this subsection (f) will be null and void ab initio as against the Corporation
and all other persons, including but not limited to the transferor and
transferee. Without limiting the generality of the foregoing, no transfer, gift,
sale or assignment will be permitted or recognized, even if permitted by any
other provision of this subsection (f), unless each of the following conditions
is satisfied in the judgment of, or waived in writing by, the Board of Directors
in its discretion: (A) the transferor complies with all of the applicable
provisions of this subsection (f); (B) the transferor and transferee each
execute, acknowledge and deliver to the Corporation such instruments of
transfer, assignment and assumption with respect to such transfer and such other
instruments, acknowledgements and documents as may be reasonably deemed
necessary by, and in form and substance reasonably satisfactory to, the
Corporation to establish or evidence compliance with the provisions of this
subsection (f); (C) the Corporation shall have received, at the expense of

 

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the parties to the transfer, an opinion of counsel of the Corporation (or other
counsel acceptable to counsel of the Corporation) to the effect that such
transfer is exempt from registration under the Securities Act of 1933, as
amended, and is in compliance with all applicable federal and state securities
laws and regulations; provided, however, the Board of Directors, in its sole
discretion, may waive such opinion requirement; and (D) the transfer does not
cause any breach or violation of, cause an event of default under, or result in
acceleration of maturity of any indebtedness or other obligations under, any
contract, note, mortgage, loan or other instrument or document to which the
Corporation or any of its subsidiaries is a party or by which any of its or
their assets or properties is bound.

(ii) Permitted Transfers to Certain Purchasers and Corporation’s Right of First
Refusal. If a holder of 2013A Redeemable Institutional Preferred Shares desires
to accept a bona fide offer in writing from a 2013A Redeemable Institutional
Preferred Eligible Owner (a “Proposed Transferee” for purposes of this
subsection) for the purchase of all (but not less than all) of the 2013A
Redeemable Institutional Preferred Shares owned by such holder (hereinafter
referred to in this subsection as the “Offered Shares”), such holder shall
promptly deliver to the Corporation a written offer (hereinafter referred to in
this subsection as an “Offer”) to sell the Offered Shares to the Corporation for
a purchase price not more than the purchase price offered by the Proposed
Transferee and on such other terms and conditions that, taken as a whole, are no
less favorable to the Corporation than those set forth in the offer from the
Proposed Transferee. The Offer shall disclose the identity of the Proposed
Transferee, the terms of the bona fide offer from the Proposed Transferee
(including the date on which the transfer of the Offered Shares will be
abandoned and terminated if not then consummated (the “Termination Date” for
purposes of this subsection)), any other material facts relating to the proposed
transfer and proof that the Proposed Transferee is a 2013A Redeemable
Institutional Preferred Eligible Owner. Within 15 days after receipt of the
Offer, the Corporation may give written notice to such holder of the
Corporation’s intent to purchase all of the Offered Shares within 30 days of
such notice given by the Corporation on substantially the same terms and
conditions as set forth in the Offer. If the Corporation does not exercise its
purchase right under this subsection (f)(ii), upon the approval of the Board of
Directors, which shall not be unreasonably withheld so long as (A) the Proposed
Transferee is a 2013A Redeemable Institutional Preferred Eligible Owner and
(B) the requirements for transfer set forth in subsection (f)(i) above are
satisfied or waived by the Board of Directors, the holder may thereafter
transfer all (but not less than all) of the Offered Shares to the Proposed
Transferee for a purchase price not less than the purchase price set forth in
the Offer and upon such other terms and conditions that, taken as a whole, are
no more favorable to the Proposed Transferee than those set forth in the Offer;
provided that the transfer must be consummated or abandoned and terminated by
the earlier of the Termination Date and the date that is 10 days after the Board
of Directors approves such transfer.

(g) PUT AND CALL RIGHTS.

(i) A holder of the 2013A Redeemable Institutional Preferred Shares shall have
the right (referred to in this subsection 9 as the “Put Right”), exercisable
upon written notice to the Corporation (hereinafter referred to in this
subsection (g) as a “Put Notice”), to require the Corporation to redeem all or
any portion of the 2013A Redeemable Institutional Preferred Shares held by such
holder on the terms set forth in this subsection (g).

 

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(ii) The Corporation shall have the right (referred to in this subsection 9 as
the “Call Right”), exercisable upon written notice to a holder of 2013A
Redeemable Institutional Preferred Shares (hereinafter referred to in this
subsection (g) as a “Call Notice”), to redeem from such holder all or any
portion of the 2013A Redeemable Institutional Preferred Shares held by such
holder on the terms set forth in this subsection (g).

(iii) Within 180 days after the Corporation’s receipt of a Put Notice or a
holder’s receipt of a Call Notice, as the case may be, and, in the case of the
exercise by the Corporation of the Call Right, no earlier than 30 days after a
holder’s receipt of a Call Notice, the Corporation shall repurchase from the
holder, and such holder shall sell and deliver to the Corporation, the number of
2013A Redeemable Institutional Preferred Shares specified in the Put Notice or
the Call Notice, as the case may be, and the Corporation shall pay the Put Price
or the Call Price (as such terms are defined in subsection (iv) of this
subsection (g) below), as the case may be, to such holder. At the closing
(hereinafter referred to in this subsection (g) as the “Closing”) of the
purchase and sale of the 2013A Redeemable Institutional Preferred Shares
pursuant to this subsection (g), the selling holder of the 2013A Redeemable
Institutional Preferred Shares shall deliver to the Corporation such instruments
and documents as shall be necessary or appropriate to transfer the 2013A
Redeemable Institutional Preferred Shares being sold by such holder to the
Corporation, and the Corporation shall purchase and accept such 2013A Redeemable
Institutional Preferred Shares and shall pay the Put Price or the Call Price, as
the case may be, to such holder by wire transfer of immediately available funds
to the account of such holder provided in writing by such holder to the
Corporation. At the Closing, the selling holder of 2013A Redeemable
Institutional Preferred Shares shall provide the Corporation with a certificate,
executed on behalf of such holder by an authorized officer thereof, to the
effect that such holder has good and valid title to the 2013A Redeemable
Institutional Preferred Shares being sold, free and clear of all liens, other
than restrictions on transfer pursuant to these Amended and Restated Articles of
Incorporation and the Corporation’s Amended and Restated Code of Regulations.

(iv) For purposes of this subsection (g):

(A) The “Put Price” for each 2013A Redeemable Institutional Preferred Share
being purchased by the Corporation shall be (1) in the event that the Put Price
Calculation Date (as defined below) is on or prior to January 31, 2018
(hereinafter referred to in this subsection (g) as the “Price Adjustment Date”),
an amount equal to 95% of the Adjusted Book Value per 2013A Redeemable
Institutional Preferred Share, plus all accrued but unpaid dividends on each
2013A Redeemable Institutional Preferred Share or (2) in the event that the Put
Price Calculation Date is after the Price Adjustment Date, an amount equal to
100% of the Adjusted Book Value per 2013A Redeemable Institutional Preferred
Share, plus all accrued but unpaid dividends on each 2013A Redeemable
Institutional Preferred Share.

(B) The “Put Price Calculation Date” shall be the last day of the month
immediately preceding the date of the Corporation’s receipt of a Put Notice.

 

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(C) The “Call Price” for each 2013A Redeemable Institutional Preferred Share
being purchased by the Corporation shall be (1) in the event that the Call Price
Calculation Date (as defined below) is prior to the Price Adjustment Date, an
amount equal to the greater of (x) 105% of the Adjusted Book Value per 2013A
Redeemable Institutional Preferred Share and (y) the 2013A Issue Price, in each
case plus all accrued but unpaid dividends on each 2013A Redeemable
Institutional Preferred Share, or (2) in the event that the Call Price
Calculation Date is on or after the Price Adjustment Date, an amount equal to
100% of the Adjusted Book Value per 2013A Redeemable Institutional Preferred
Share, plus all accrued but unpaid dividends on each 2013A Redeemable
Institutional Preferred Share.

(D) The “Call Price Calculation Date” shall be the last day of the month
immediately preceding the date of a holder’s receipt of a Call Notice.

(v) Notwithstanding anything to the contrary contained in this subsection (g),
if a Liquidation Event (as defined in subsection (h) of this subsection 9 below)
occurs within 90 days of a Closing of the purchase of all or any portion of the
2013A Redeemable Institutional Preferred Shares in connection with the exercise
of a Call Right by the Corporation, then the holder of the 2013A Redeemable
Institutional Preferred Shares so purchased by the Corporation pursuant to the
Call Right shall be entitled to an additional cash payment in an amount equal to
the difference, if positive, between the Estimated Cash Payment (as defined in
subsection (h) of this subsection 9 below) and the Call Price.

(h) PAYMENT UPON A LIQUIDATION EVENT.

(i) Notwithstanding Section B.4 of this Article FOURTH, in the event of any
liquidation, dissolution or winding up of the Corporation, any merger or
consolidation involving the Corporation (other than one in which shareholders of
the Corporation own a majority by voting power of the outstanding shares of the
surviving or acquiring corporation), or any sale, lease, transfer or other
disposition of all or substantially all of the assets of the Corporation (each
of the foregoing, a “Liquidation Event” for purposes of this subsection 9), the
holders of the 2013A Redeemable Institutional Preferred Shares shall receive, in
redemption of the 2013A Redeemable Institutional Preferred Shares, a cash
payment equal to the greater of:

(A) 100% of the Adjusted Book Value per 2013A Redeemable Institutional Preferred
Share, plus all accrued but unpaid dividends on each 2013A Redeemable
Institutional Preferred Share, and such payment shall be equal to the rights to
any payments to the holders of other Preferred Shares, including the 2012A
Redeemable Institutional Preferred Shares, the 2010 Redeemable Institutional
Preferred Shares and the Provider Preferred Shares, and shall be senior to any
right of payment to the holders of the Common Shares and the Common Shares shall
rank junior to the 2013A Redeemable Institutional Preferred Shares; or

(B) the Estimated Cash Payment (as defined below).

(ii) For purposes of this subsection 9, the “Estimated Cash Payment” shall be
computed as follows:

 

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(A) If the Consideration (as defined below in this subsection 9) is paid,
payable or contributed directly to the holders of the Common Shares in
connection with a Liquidation Event, an amount equal to (1) the per Common Share
Consideration (as defined and described in clause (b) of subsection
(h)(ii)(C)(2) below of this subsection 9) paid, payable or contributed to the
holders of the Common Shares, times (2) the number of Class B Common Shares that
would be issued if the 2013A Redeemable Institutional Preferred Shares were
converted, on a hypothetical basis, at the Conversion Ratio (as defined below in
this subsection 9).

(B) For all other Liquidation Events not covered by subsection (h)(ii)(A) above
of this subsection 9, the Enterprise Value (as defined below in this subsection
9) shall be divided by the total number of Common Share Equivalents (as defined
below in this subsection 9), and the resulting quotient shall be the Estimated
Cash Payment per 2013A Redeemable Institutional Preferred Share.

(C) For purposes of computing the Estimated Cash Payment:

(1) “Enterprise Value” means an amount equal to the aggregate Consideration (as
defined in clause (a) of subsection (h)(ii)(C)(2) below of this subsection 9)
paid, payable or contributed, directly or indirectly, by an acquiror to the
Corporation in connection with a Liquidation Event, reduced by the Aggregate
Reduction Amount (as defined below in this subsection 9).

(2) “Consideration” means (a) the total value of all cash, securities (including
any debt or equity securities, options or warrants, collectively, “Securities”),
agreements with the Corporation or any of its subsidiaries (including, but not
limited to, consulting agreements, agreements not to compete and similar
agreements) and other property or non-cash consideration paid, payable or
contributed, directly or indirectly, by an acquiror to the Corporation in
connection with a Liquidation Event and any contingent, escrowed or earned
amounts (calculated at the present value of such amounts as of the date on which
the Liquidation Event is consummated) or (b) the per Common Share value of all
cash and Securities paid, payable or contributed directly by an acquiror to the
holders of the Common Shares in connection with a Liquidation Event and any
contingent, escrowed or earned amounts. For purposes of this subsection (h), the
value of (x) all freely tradeable Securities for which a public trading market
exists as of the date on which the Liquidation Event is consummated will equal
the last closing market price of such Securities on the business day prior to
public announcement of the Liquidation Event, (y) all Securities which are not
freely tradeable or which have no established public market will equal the fair
market value thereof as determined by the Corporation and the holder of the
2013A Redeemable Institutional Preferred Shares and (z) all other property or
non-cash consideration will equal the face value thereof or other appropriate
value as determined by the Corporation and the holder of the 2013A Redeemable
Institutional Preferred Shares. With respect to clauses (y) and (z) above, in
the event the Corporation and the holders of the 2013A Redeemable Institutional
Preferred Shares cannot agree on such value within 30 days, then they shall
select an independent accounting firm reasonably acceptable to all parties, and
such accounting shall conclusively establish such value. If the Consideration is
computed or payable in foreign currency, the value of such foreign currency
will, for purposes

 

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hereof, be converted into U.S. dollars at the noon buying rate in New York City
on the date or dates on which such Consideration is payable.

(3) “Aggregate Reduction Amount” means an amount equal to the sum of (x) the
aggregate amount payable by the Corporation as a liquidation preference to
holders of the 2012A Redeemable Institutional Preferred Shares (pursuant to
subsection 8(h) of Section B of this Article FOURTH), the 2010 Redeemable
Institutional Preferred Shares (pursuant to subsection 7(h) of Section B of this
Article FOURTH), the Provider Preferred Shares (pursuant to subsection 6(h) of
Section B of this Article FOURTH), and any other liquidation preference for
senior securities, plus (y) an amount equal to the Corporation’s liabilities on
a consolidated basis (as set forth on the Corporation’s then-most recent balance
sheet) but only to the extent such liabilities cannot be satisfied by the
Corporation’s assets or are not otherwise assumed by the acquiror (directly or
by operation of law) in connection with the Liquidation Event, plus (z) the
aggregate amount of all transaction expenses, including accounting, legal, and
investment advisory fees and expenses, incurred by the Corporation as a result
of or in connection with the Liquidation Event.

(4) “Common Share Equivalents” shall include (a) all issued and outstanding
Common Shares, (b) all securities convertible into or settled based upon a class
of Common Shares, including any and all stock options, warrants, restricted
shares, restricted share units and phantom shares, (c) the number of Class B
Common Shares that would be issued if the 2012A Redeemable Institutional
Preferred Shares were converted, on a hypothetical basis, at the Conversion
Ratio (as defined in subsection 8(h) of Section B of this Article FOURTH) and
(d) the number of Class B Common Shares that would be issued if the 2013A
Redeemable Institutional Preferred Shares were converted, on a hypothetical
basis, at the Conversion Ratio (as defined below in this subsection 9).

(5) “Conversion Ratio” means one 2013A Redeemable Institutional Preferred Share
to 1.2 Class B Common Shares (1:1.2).

[Signature appears on the following page.]

 

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IN WITNESS WHEREOF, the undersigned has executed this instrument as of
January 9, 2013.

 

/s/ Fred J. Bronson, DDS Fred J. Bronson, DDS Secretary

 

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