Exhibit 99.3
INTERDENT, INC.
INVESTOR RIGHTS AGREEMENT
THIS INVESTOR RIGHTS AGREEMENT is entered into as of the 15th day of
June 2000 (this "AGREEMENT"), by and among SPROUT CAPITAL VII, L.P., SPROUT
GROWTH II, L.P., THE SPROUT CEO FUND, L.P., DLJ CAPITAL CORP. , DLJ FIRST ESC
L.L.C., SRM '93 CHILDREN'S TRUST, CB CAPITAL INVESTORS, LLC, XXXXXXX X. XXXXX,
XXXXXX X. XXXXXXX, D.D.S. and XXXXXX XXX XXXXX, XX. (collectively, the
"PRINCIPAL SHAREHOLDERS"), INTERDENT, INC., a Delaware corporation (the
"COMPANY"), and XXXXXX XXXXXXXXX CAPITAL PARTNERS II, L.P., a California limited
partnership ("LLCP").
R E C I T A L S
A. The Company Parties and LLCP are parties to that certain Securities
Purchase Agreement dated of even date herewith (as amended, supplemented or
otherwise modified from time to time, the "SECURITIES PURCHASE AGREEMENT")
pursuant to which, on the date hereof, the Issuers are jointly and severally
issuing and selling to LLCP, and LLCP is purchasing from the Issuers, the Note,
and the Company is issuing and selling to LLCP, and LLCP is purchasing from the
Company, the Warrant and the June 2000 LLCP Shares, all on the terms and subject
to the conditions set forth in the Securities Purchase Agreement. Unless
otherwise indicated, capitalized terms used and not otherwise defined in this
Agreement shall have the meanings set forth in the Securities Purchase
Agreement.
B. The execution of this Agreement by the Company and the Principal
Shareholders is a condition precedent to the obligation of LLCP to consummate
the transactions contemplated by the Securities Purchase Agreement.
C. In addition, in consideration of the substantial direct and indirect
benefits which the Company and the Principal Shareholders will realize from the
consummation of the transactions contemplated by the Securities Purchase
Agreement, the Company and the Principal Shareholders have agreed to grant to
LLCP the investment monitoring and other rights set forth in this Agreement,
respectively.
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. INVESTMENT MONITORING RIGHTS.
1.1 AGREEMENT TO VOTE. Each Principal Shareholder, as a holder of
shares of Common Stock of the Company, hereby agrees on behalf of itself and any
transferee or assignee of any such shares of Common Stock, to hold any and all
shares of Common Stock and all other voting securities of the Company owned,
held or acquired by such Principal Shareholder on or after the date hereof (and
any securities of the Company issued with respect to, upon conversion of, or in
exchange or substitution for such securities) (the "PRINCIPAL SHAREHOLDER
SHARES") subject to, and to vote the Principal Shareholder Shares in accordance
with, the provisions of this Agreement.
(a) ELECTION OF LLCP REPRESENTATIVE AS DIRECTOR. LLCP shall
have the right to require the Principal Shareholders to vote all of the
Principal Shareholder Shares then owned by them (or as to which they then have
voting power) to duly elect or appoint to the Board of Directors of the Company
(the "BOARD") an individual designated by LLCP in an LLCP Representative Request
(as such term is defined below (the "LLCP REPRESENTATIVE") furnished to the
Principal Shareholders, in accordance with the following terms:
(i) Within five (5) Business Days after the Company's
receipt of an LLCP Representative Request, the Company and the
Principal Shareholders shall take or cause to be taken as soon as
practicable such actions (including, without limitation, creating a
vacancy or adding an additional Board seat) as may be necessary or
advisable to cause the LLCP Representative to be elected or appointed
to the Board and to remain a duly elected or appointed member of the
Board; and
(ii) In connection with any such election or
appointment of the LLCP Representative to the Board pursuant to this
SECTION 1.1, each Principal Shareholder agrees that he or it will vote
(or cause to be voted) all of the Principal Stockholder Shares then
owned beneficially and of record by him or it, directly or indirectly,
so that the LLCP Representative shall be duly elected or appointed to
the Board.
For purposes of this Agreement, the term "LLCP REPRESENTATIVE REQUEST"
shall mean a written request delivered by or on behalf of LLCP to the Company
notifying the Company of LLCP's election under this SECTION 1.1 to have an LLCP
Representative elected or appointed to the Board and naming the individual who
has been so designated.
(b) REMOVAL. Any director of the Company may be removed from
the Board in the manner allowed by Applicable Law and the Company's Certificate
of Incorporation and Bylaws, but, with respect to the LLCP Representative
designated above, only upon the affirmative vote or written consent of LLCP.
(c) VACANCY. In the event of the death or resignation, or
removal by LLCP, of the LLCP Representative at any time, or in the event the
LLCP Representative shall not be elected to the Board at any election of
directors for any reason, or if the LLCP Representative is removed from the
Board, the Company and the Principal Shareholders shall, upon the request of
LLCP, promptly (and in any event within ten (10) days of such request) take such
steps as may be necessary or appropriate to cause another Person designated by
LLCP to become the LLCP Representative on the Board, including increasing the
size of the Board and/or filling the resulting vacancy with an LLCP
Representative. Such steps may include calling and holding, in accordance with
the Bylaws of the Company and Applicable Laws, a special meeting of the Board or
the shareholders of the Company or circulating a written consent for execution
by members of the Board and/or the shareholders.
(d) To the extent that the Board delegates any of its duties
to an executive committee or other committee, the LLCP Representative shall,
upon the request of LLCP, be appointed to such number of committees of the Board
on which it is customary for such members to serve.
(e) The agreements set forth in this SECTION 1.1 are intended
to constitute enforceable voting agreements within the scope of Section 218(c)
of the General Corporation Law of the State of Delaware.
1.2 OBSERVATION RIGHTS. The Company shall invite two (2)
representatives of LLCP to attend in a non-voting observer capacity all meetings
of the Board held at any time or from time to time that no LLCP Representative
is serving as a member of the Board. To the extent that any LLCP Representative
is then serving as a member of the Board, one (1) additional representative of
LLCP may attend in a non-voting observer capacity at all meetings of the Board.
Notice of such meetings shall be given to LLCP in the same manner and at the
same time as to the members of the Board. LLCP shall be provided with copies of
(a) a meeting agenda, if any is prepared, (b) all information that is provided
to the members of the Board (whether prior to, at, or subsequent to any such
meetings), as the case may be, at the same time as such materials are provided
to the members of the Board and (c) copies of the minutes of all meetings of the
Board concurrently with the distribution of such minutes to one or more members
of the Board. The representatives referred to in this SECTION 1.2 shall agree to
hold in confidence and trust and to act in a fiduciary manner with respect to
all information so provided. In addition, the Company reserves the right to
withhold any information, and to exclude such representatives from any meeting
or portion thereof, if access to such information or attendance at such meeting
could adversely affect the attorney-client privilege between the Company and its
counsel (or would result in disclosure of trade secrets to such representatives
if LLCP or its representatives is a direct competitor of the Company).
1.3 MONTHLY OPERATING MEETINGS. In each calendar month after the date
hereof, representatives of LLCP and of the Company shall meet to review the
financial condition of the Company and its Subsidiaries as reflected in the
financial information furnished pursuant to SECTION 9.3 of the Securities
Purchase Agreement. Each meeting shall at all times be comprised of at least two
(2) members of senior management of the Company, who initially shall be Xxxxxxx
X. Xxxxx and Xxxxxx X. Xxxxxxxx, and two (2) individuals designated by LLCP (who
shall be representatives of Xxxxxx Xxxxxxxxx Capital Partners, Inc. ("LLCP
INC."), an Affiliate of LLCP). The financial officers and other members of
senior management of the Company shall be available at each meeting to review
the financial information delivered to LLCP pursuant to Section 9.3 of the
Securities Purchase Agreement and to discuss other matters. LLCP and the Company
shall mutually agree in each calendar month on the date and time for the meeting
to be held in the immediately succeeding calendar month (PROVIDED that the
failure to agree on such date and time in any month shall not be construed as an
agreement not to hold a meeting in the immediately succeeding month). Meetings
may be conducted by telephone so long as each of the persons attending can hear
each of the other persons attending the meeting.
2. INDEMNIFICATION AND INSURANCE.
2.1 The Company shall, to the maximum extent permitted by law,
indemnify, defend and hold harmless the LLCP Representative, LLCP and the
employees, partners, principals, agents, attorneys, accountants, representatives
and other Affiliates of LLCP (including, without limitation, LLCP Inc.)
(collectively, the "LLCP PARTIES"), from and against all costs, expenses,
liabilities, claims, judgments, damages and losses, including, without
limitation, all reasonable attorneys' fees and expenses and the cost of any
investigation and preparation incurred in connection therewith, incurred in
connection with any threatened, pending or completed action or proceeding,
whether civil, criminal, administrative or investigative (collectively,
"LIABILITIES AND COSTS"), arising out of or in any way related to the fact that
any LLCP Party is or was a director, officer, employee or other agent of the
Company or any subsidiary of the Company, is or was serving as an observer of
the Board, or is or was serving at the request of the Company as a director,
officer, employee, trustee, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise
and, in connection with any LLCP Party serving as such director, officer,
employee or other agent, PROVIDED that such LLCP Party acted in good faith and
in a manner he or she reasonably believed to be in the best interests of the
Company.
2.2 Upon request by any LLCP Party, the Company, shall advance (within
five (5) Business Days of such request) any and all expenses, including, without
limitation, any and all reasonable attorneys' fees and the cost of any
investigation and preparation incurred in connection with any matter for which
such LLCP Party is or may be entitled to indemnification
hereunder. The Company shall also indemnify each LLCP Party from and against any
and all Liabilities and Costs incurred in connection with any claim or action
brought to enforce such LLCP Party's rights under this SECTION 2, or under
Applicable Law or the Company's charter or bylaws now or hereafter in effect
relating to indemnification, or for recovery under directors' and officers'
liability insurance policies maintained by the Company, regardless of whether
such LLCP Party is ultimately determined to be entitled to such indemnification
or insurance recovery, as the case may be. If, for any reason, the foregoing
indemnification is not available for any reason or is not sufficient to
indemnify and hold the LLCP Parties harmless from all such Liabilities and
Costs, then the Company shall contribute to the amount of all such Liabilities
and Costs paid or payable by any LLCP Party in such proportion as is appropriate
to reflect not only the relative benefits received by the Company, on the one
hand, and LLCP, on the other hand, but also the relative fault of each, as well
as any other equitable considerations. The Company's reimbursement, indemnity
and contribution obligations shall be in addition to any liability the Company
may otherwise have at law or under any other agreement, including, without
limitation, the Securities Purchase Agreement, and such obligations shall
extend, upon the same terms, to all LLCP Parties. This SECTION 2 shall survive
indefinitely the termination of this Agreement.
2.3 At any time that an LLCP Representative is serving on the Board and
continuing for as long as any claim may be made against the LLCP Representative
during any applicable statute of limitations periods, the Company shall have in
place and shall maintain in force and effect one or more directors and officers
liability insurance policies providing at least $10,000,000 in insurance
coverage for director liability, including coverage for claims under federal and
state securities laws.
3. CO-SALE AGREEMENT.
3.1 If LLCP or one or more Principal Shareholders (each of LLCP or a
Principal Shareholder being referred to herein as a "SELLING HOLDER") proposes
to sell or transfer to any prospective BONA FIDE third party purchaser or
transferee any shares of Common Stock owned or held, directly or indirectly, by
it or them ("CO-SALE SHARES") in any transaction (or series of related
transactions) that does not involve a Permitted Transfer (as such term is
defined below), the Seller Holder shall furnish prompt written notice (a
"CO-SALE NOTICE") to the Company and each Non-Selling Holder (as such term is
defined below) at least twenty (20) days prior to the closing of such proposed
sale or transfer. The Co-Sale Notice shall describe in reasonable detail the
proposed sale or transfer, including, without limitation, the number of Co-Sale
Shares proposed to be sold or transferred, the name and address of the
prospective purchaser or transferee, the BONA FIDE purchase price to be paid by
such purchaser or transferee and the other material terms and conditions of sale
or transfer. For purposes of this Agreement, the term "PERMITTED TRANSFER" shall
mean (a) a sale of Common Stock pursuant to Rule 144 promulgated
under the Securities Act or in a public offering pursuant to an effective
registration statement under the Securities Act, (b) a transfer by Xxxxxxx X.
Xxxxx, Xxxxxx X. Xxxxxxx, D.D.S. or Xxxxxx Xxx Xxxxx, Xx. (each an "INDIVIDUAL
SHAREHOLDER") to such person's ancestors, descendants or spouse or to trusts for
the benefit of such persons, PROVIDED that such transferee acknowledges in
writing to be bound by the terms of this Agreement and furnishes to the Company
a copy of such writing prior to such transfer, (c) any transfer to the Company,
(d) any transfer by an Individual Shareholder by gift, PROVIDED that such
Individual Shareholder informs the Company of such transfer by gift, the donee
of such gift acknowledges in writing to be bound by the terms of this Agreement
and such Individual Shareholder furnishes a copy of such writing to the Company,
in each case prior to effecting such gift, and (e) any distribution of Co-Sale
Shares by LLCP or a Principal Shareholder to its own partners, owners or
affiliates, PROVIDED that such Co-Sale Shares shall remain subject to the terms
of this Agreement. For purposes of this Agreement, the term "NON-SELLING HOLDER"
shall mean (i) in the case of a sale or transfer by a Principal Shareholder,
LLCP and the other Principal Shareholders, and (ii) in the case of LLCP, the
Principal Shareholders.
3.2 Each Non-Selling Holder shall have the right, exercisable upon
written notice to the Selling Holder within thirty (30) days after receipt of
the Co-Sale Notice, to participate in such proposed sale or transfer on the same
terms and conditions as those specified in the Co-Sale Notice. To the extent
that any Non-Selling Holder exercises such right of participation in accordance
with the terms and conditions set forth in this SECTION 3, the number of Co-Sale
Shares that the Selling Holder may sell in such sale or transfer shall be
reduced by the number of shares of Common Stock that such Non-Selling Holder
shall elect to sell in such sale or transfer, subject to SECTION 3.4.
3.3 If there shall be a decrease in the purchase price proposed to be
paid by the purchaser or transferee for the Co-Sale Shares from that set forth
in the Co-Sale Notice or any other material change to the terms or conditions
set forth in the Co-Sale Notice which are less favorable to the Selling Holder,
the Selling Holder shall immediately notify the Non-Selling Holders in writing
of such decrease or other change, and each Non-Selling Holder shall have ten
(10) Business Days from the date of receipt of such written notice to modify the
number of shares of Common Stock it or he wishes to sell to the purchaser or
transferee as previously indicated in the written notice delivered by it or him
pursuant to SECTION 3.2.
3.4 Each Non-Selling Holder may elect to sell or transfer in such
transaction (or series of related transactions) all or any portion of that
number of shares of Common Stock owned or held by it or him equal to the product
of (a) the aggregate number of shares of Common Stock covered by the Co-Sale
Notice, MULTIPLIED BY (b) a fraction, the numerator of which is the number of
shares of Common Stock (and Warrant Shares, in the case of LLCP) owned by such
Non-Selling Holder immediately prior to the sale or transfer (collectively, each
"NON-SELLING
HOLDER SHARES"), and the denominator of which is the total number of issued and
outstanding shares of Common Stock owned by LLCP and the Principal Shareholders
in the aggregate immediately prior to the time of the sale or transfer. In no
event shall any Non-Selling Holder be required to make any representation or
warranty in connection with the sale to any prospective purchaser or transferee
other than as to the organization and authority of such Non-Selling Holder and
title to the shares of Common Stock to be sold by such Non-Selling Holder.
3.5 Each Non-Selling Holder shall effect its or his participation in
the proposed sale or transfer by delivering to the Selling Holder at least two
(2) Business Days prior to the proposed closing of such sale or transfer one or
more stock certificates, properly endorsed for transfer, which represent:
(a) the number of shares of Common Stock which such
Non-Selling Holder elected to sell; or
(b) in the case of LLCP, that number of Warrant Shares which
is at such time convertible into the number of shares of Common Stock which LLCP
elects to sell; PROVIDED, HOWEVER, that if the prospective purchaser or
transferee objects to the delivery of Warrant Shares in lieu of Common Stock,
LLCP shall convert such Warrant Shares into Common Stock and deliver shares of
Common Stock as provided in SECTION 3.5(a). The Company agrees to make any such
conversion concurrent with the actual transfer of such shares to the purchaser.
3.6 The stock certificate or certificates that each Non-Selling Holder
delivers to the Selling Holder pursuant to SECTION 3.5 shall be transferred to
the prospective purchaser or transferee in connection with the sale of the
Co-Sale Shares pursuant to the terms and conditions specified in the Co-Sale
Notice (as such terms and conditions may be modified and accepted pursuant to
SECTION 3.3), and the Selling Holder shall concurrently therewith remit to each
Non-Selling Holder, by wire transfer in immediately available funds, that
portion of the sale proceeds to which each such Non-Selling Holder is entitled
by reason of such Non-Selling Holder's participation in such sale. To the extent
that any prospective purchaser or transferee prohibits such assignment or
otherwise refuses to purchase shares or other securities from a Non-Selling
Holder, the Selling Holder may not sell to such prospective purchaser or
transferee any shares of Common Stock unless and until, simultaneously with such
sale, the Selling Holder shall purchase such shares or other securities from
Non-Selling Holder on terms and conditions identical to those under which the
Selling Holder sold his or its shares.
3.7 If the Selling Holder does not complete the proposed sale or
transfer for any reason, the Selling Holder shall immediately return to each
Non-Selling Holder the stock certificates, stock assignments or powers and other
instruments and documents delivered by such Non-Selling Holder in connection
with such sale or transfer pursuant to this SECTION 3.
3.8 The exercise or non-exercise of the rights of any Non-Selling
Holder hereunder to participate in one or more sales of Co-Sale Shares shall not
adversely affect its or his right to participate in subsequent sales of Co-Sale
Shares.
3.9 PROHIBITED TRANSFERS.
(a) In the event of any sale or transfer (including, without
limitation, the entering into of any agreement, arrangement or understanding to
sell) of Co-Sale Shares by LLCP or any Principal Shareholder in contravention of
the co-sale rights of any Non-Selling Holder under this SECTION 3 (a "PROHIBITED
TRANSFER"), the Non-Selling Holders shall have, in addition to all other rights,
powers or remedies available at law, in equity, under this Agreement or any
other Investment Document or under Applicable Law, the right (the "PROHIBITED
TRANSFER PUT") to require the party that entered into such sale or transfer to
purchase a number of shares of Common Stock equal to the number of shares that
such Non-Selling Holder would have been entitled to sell under SECTION 3.4 had
the Prohibited Transfer been effected in accordance and compliance with the
terms of SECTIONS 3.1 through 3.6.
(b) In the event of any Prohibited Transfer by LLCP or any
Principal Shareholder:
(i) The Company shall, upon the request of any
Non-Selling Holder, instruct the Company's transfer agent not to enter
such Prohibited Transfer on the stock ledger or other similar records
of the Company; and
(ii) Each Non-Selling Holder may exercise the
Prohibited Transfer Put substantially on the following terms and
conditions:
(A) The price per share at which shares are
to be sold to LLCP or such Principal Shareholder, as the case
may be, shall equal the price per share paid by the purchaser
or transferee in the Prohibited Transfer. LLCP or such
Principal Shareholder shall also reimburse the Non-Selling
Holder for any and all fees and expenses, including
attorneys', accountants' and other expenses, incurred pursuant
to the exercise or attempted exercise of such Non-Selling
Holder's rights under SECTION 3;
(B) Within thirty (30) days after the later
of the dates on which such Non-Selling Holder (x) received
notice of the Prohibited Transfer or (y) otherwise became
aware of the Prohibited Transfer, such Non-Selling Holder
shall, if exercising the Prohibited Transfer Put, deliver to
LLCP or such Principal Shareholder the certificate or
certificates representing the shares of Common
Stock to be sold or transferred pursuant to the Prohibited
Transfer Put, each certificate to be properly endorsed for
transfer; and
(C) LLCP or such Principal Shareholder, as
the case may be, shall, upon receipt of the certificate or
certificates representing the shares of Common Stock to be
sold by such Non-Selling Holder, pay to such Non-Selling
Holder the aggregate purchase price therefor and the amount of
reimbursable fees and expenses, as specified in SECTION
3.9(b)(ii)(A), by wire transfer in immediately available
funds.
4. PREEMPTIVE RIGHTS.
4.1 The Company hereby grants to LLCP and the Principal Shareholders
the right to purchase up to LLCP's or such Principal Shareholder's PRO RATA
share of any New Securities (as such term is defined below) which the Company
may from time to time propose to sell and issue, and the Company shall not issue
or sell any New Securities without first complying with the provisions of this
SECTION 4. For purposes of this SECTION 4.1, the "PRO RATA share of any New
Securities" of LLCP or any Principal Shareholder, as the case may be, shall be
equal to a percentage based on a fraction, (a) the numerator of which is equal
to (i) the number of shares of Common Stock held by LLCP or such Principal
Shareholder, (ii) in the case of LLCP, the number of shares of Common Stock
issuable upon exercise of the Warrant and other Equity Rights of Company owned
or held by LLCP and (iii) in the case of such Principal Shareholder, as the case
may be, the number of shares of Common Stock issuable upon exercise of any
Equity Rights of the Company owned or held by such Principal Shareholder, in
each case immediately prior to the issuance of the New Securities, and (b) the
denominator of which is the sum of the total number of shares of Common Stock
outstanding immediately prior to the issuance of the New Securities.
4.2 The term "NEW SECURITIES" shall mean any Capital Stock (including
Common Stock or preferred stock) of the Company whether now authorized or not,
and any Equity Rights of the Company; PROVIDED, HOWEVER, that the term New
Securities does not include any securities issued in a public offering pursuant
to an effective registration statement under the Securities Act with an
aggregate offering price to the public of at least $20,000,000 or shares of
Common Stock issued, issuable or reserved for issuance to directors, officers
and employees of the Company or any other Company Party in connection with their
services as directors, officers and/or employees of the Company pursuant to any
Company stock plan in existence on the date hereof that has been duly approved
and adopted by the stockholders of the Company.
4.3 If the Company proposes to undertake an issuance of New Securities,
it shall give
LLCP and each Principal Shareholder written notice (an "ISSUANCE NOTICE") of
such proposed issuance, describing the type of New Securities, the proposed
offer price and the general terms upon which the Company proposes to issue the
same. Each of LLCP and the Principal Shareholders shall have thirty (30) days
after its receipt of the Issuance Notice to agree to purchase up to its PRO RATA
share of such New Securities for the price and upon the terms specified in the
Issuance Notice by furnishing written notice to the Company (a "PURCHASE
NOTICE") indicating the number of New Securities to be purchased by LLCP or such
Principal Shareholder, as the case may be. To the extent that LLCP or any
Principal Shareholder shall have timely furnished a Purchase Notice to the
Company, the Company shall, at the closing of the issuance of such New
Securities, sell to LLCP and each such Principal Shareholder such number of New
Securities as LLCP and each such Principal Shareholder shall have agreed to
purchase in the applicable Purchase Notice.
5. [RESERVED].
6. MISCELLANEOUS.
6.1 LEGENDS. The Company shall cause all certificates representing
shares of Capital Stock of the Company now owned or held or hereafter acquired
by LLCP and the Principal Shareholders to be stamped or endorsed with a legend
substantially in the following form (in addition to any legends required under
applicable state securities laws) or take such other actions (including, without
limitation, placing such stop orders with the Company's transfer agent) to
effect the restrictions set forth herein with respect to such Capital Stock:
THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND
CONDITIONS OF AN INVESTOR RIGHTS AGREEMENT DATED AS OF JUNE
15, 2000, BY AND AMONG THE HOLDER, THE COMPANY AND CERTAIN
OTHER PERSONS. COPIES OF SUCH AGREEMENT MAY BE OBTAINED FROM
THE COMPANY UPON WRITTEN REQUEST.
6.2 STOCK TRANSFER RECORDS. The Company shall make appropriate
notations in its stock transfer records of the restrictions on transfer provided
for in this Agreement and shall not record any transfers of capital stock not
made in strict compliance with the terms of this Agreement. The Company
acknowledges that any such transfer shall constitute an Event of Default under
Section 12.1 of the Securities Purchase Agreement.
6.3 SUCCESSORS AND ASSIGNS. The rights and obligations of LLCP under
this Agreement shall be freely assignable in connection with any transfer of the
Warrant or any portion thereof or of any shares of Common Stock issued upon the
exercise thereof in whole or
in part. Any assignee of such rights shall be entitled to all of the benefits of
this Agreement as if such assignee were an original party hereto. This Agreement
shall be binding upon, and shall inure to the benefit of, each of the parties
and their respective successors and permitted assigns.
6.4 ENTIRE AGREEMENT. This Agreement constitutes the full and entire
agreement and understanding among the parties with respect to the subject matter
hereof and supersedes all prior oral and written, and all contemporaneous oral,
agreements and understandings relating to the subject matter hereof.
6.5 NOTICES. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given if transmitted by telecopier with
receipt acknowledged, or upon delivery, if delivered personally or by recognized
commercial courier with receipt acknowledged, or upon the expiration of 72 hours
after mailing, if mailed by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
(1) If to LLCP, to:
Xxxxxx Xxxxxxxxx Capital Partners II, L.P.
c/o Levine Xxxxxxxxx Capital Partners, Inc.
000 Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
WITH A COPY TO:
Xxxxxxx & XxXxxxxx
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(2) If to the Company or any Principal Shareholder,
at:
Interdent, Inc.
000 Xxxxx Xxxxxxxxx Xxxx. Xxxxx 000
Xx Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
WITH A COPY TO:
Xxxxxxxx & Xxxxxxxx
00000 XxxXxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
or at such other address or addresses as LLCP, such assignee, the Company or any
Principal Shareholder, as the case may be, may specify by written notice given
in accordance with this SECTION 6.5.
6.6 SEVERABILITY. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
6.7 COUNTERPARTS. This Agreement may be executed in two or more
counterparts and by facsimile, each of which shall be an original, but all of
which together shall constitute one instrument.
6.8 DESCRIPTIVE HEADINGS, CONSTRUCTION AND INTERPRETATION. The
descriptive headings of the several paragraphs of this Agreement are for
convenience of reference only and do not constitute a part of this Agreement and
are not to be considered in construing or interpreting this Agreement. All
section, preamble, recital and party references are to this Agreement unless
otherwise stated. No party, nor its counsel, shall be deemed the drafter of this
Agreement for purposes of construing the provisions of this Agreement, and all
provisions of this Agreement shall be construed in accordance with their fair
meaning, and not strictly for or against any party.
6.9 WAIVERS AND AMENDMENTS. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally or by course of
dealing, but only by a statement in writing signed by all of the parties.
6.10 REMEDIES. In the event that the Company or any Principal
Shareholder fails to observe or perform any covenant or agreement to be observed
or performed under this
Agreement, LLCP may proceed to protect and enforce its rights by suit in equity
or action at law, whether for specific performance of any term contained in this
Agreement or for an injunction against the breach of any such term or in aid of
the exercise of any power granted in this Agreement or to enforce any other
legal or equitable right of LLCP, or to take any one or more of such actions.
The Company and the Principal Shareholders hereby agree that LLCP shall not be
required or otherwise obligated to, and hereby waive any right to demand that
LLCP, post any performance or other bond in connection with the enforcement of
its rights and remedies hereunder. The Company agrees to pay all fees, costs,
and expenses, including, without limitation, fees and expenses of attorneys,
accountants and other experts retained by LLCP, and all fees, costs and expenses
of appeals, incurred or expended by LLCP in connection with the enforcement of
this Agreement or the collection of any sums due hereunder, whether or not suit
is commenced. None of the rights, powers or remedies conferred under this
Agreement shall be mutually exclusive, and each such right, power or remedy
shall be cumulative and in addition to any other right, power or remedy whether
conferred by this Agreement or now or hereafter available at law, in equity, by
statute or otherwise.
6.11 REPRESENTATIONS AND COVENANTS OF PRINCIPAL SHAREHOLDERS. Each
Principal Shareholder hereby represents and warrants to LLCP, severally and not
jointly, that (a) he or it has the sole power and authority to execute, deliver
and perform his or its obligations under this Agreement, without obtaining the
Consent of any other Person, (b) this Agreement has been duly executed and
delivered by such Principal Shareholder and constitutes the legal, valid and
binding obligation of such Principal Shareholder, enforceable against such
Principal Shareholder in accordance with its terms, (c) the execution and
delivery of this Agreement by such Principal Shareholder, and the performance by
such Principal Shareholder of his obligations hereunder, does not and will not
breach or violate any agreement, instrument or other document to which such
Principal Shareholder is a party or to which such Principal Shareholder's assets
are bound or any Applicable Laws, and (d) if such Principal Shareholder is
married, such Principal Shareholder has delivered to LLCP a duly executed
spousal consent, substantially in the form of EXHIBIT A. In addition, each
Principal Shareholder hereby represents and warrants to LLCP that he has
carefully read this Agreement and has had sufficient time and opportunity to
consider its terms and to obtain legal advice, if desired, and he fully
understands the final and binding effect of this Agreement.
6.12 GOVERNING LAW. IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE (WITHOUT
REGARD TO THE CHOICE OF LAW OR CONFLICTS OF LAW PROVISIONS THEREOF) AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
6.13 CONSENT TO JURISDICTION AND VENUE. EACH OF THE COMPANY, THE
PRINCIPAL SHAREHOLDERS AND LLCP HEREBY CONSENTS AND AGREES THAT ALL ACTIONS,
SUITS OR OTHER PROCEEDINGS ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT OR
ANY OTHER INVESTMENT DOCUMENT SHALL BE TRIED AND LITIGATED IN STATE OR FEDERAL
COURTS LOCATED IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF
CALIFORNIA, WHICH COURTS SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE
ANY AND ALL CLAIMS, CONTROVERSIES AND DISPUTES ARISING OUT OF THIS AGREEMENT OR
ANY OTHER INVESTMENT DOCUMENT OR ANY OTHER MATTER ARISING OUT OF OR RELATED TO
THIS AGREEMENT OR ANY OTHER INVESTMENT DOCUMENT. NOTWITHSTANDING THE FOREGOING,
NOTHING CONTAINED IN THIS SECTION 6.13 SHALL PRECLUDE LLCP FROM BRINGING ANY
ACTION, SUIT OR OTHER PROCEEDING IN THE COURTS OF ANY OTHER LOCATION WHERE THE
COMPANY OR ANY OF ITS ASSETS OR THE COLLATERAL MAY BE FOUND OR LOCATED OR TO
ENFORCE ANY JUDGMENT OR OTHER COURT ORDER IN FAVOR OF LLCP.
EACH OF THE COMPANY, THE PRINCIPAL SHAREHOLDERS AND LLCP
HEREBY (A) IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND
CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION, SUIT OR OTHER PROCEEDING
COMMENCED IN ANY SUCH COURT, (B) WAIVES ANY RIGHT IT MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS OR ANY OBJECTION THAT SUCH PERSON MAY HAVE
BASED UPON LACK OF PERSONAL JURISDICTION OR IMPROPER VENUE AND (C) CONSENTS TO
THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT. EACH OF THE COMPANY, THE PRINCIPAL SHAREHOLDERS AND LLCP HEREBY WAIVES
PERSONAL SERVICE OF THE SUMMONS, COMPLAINT OR OTHER PROCESS ISSUED IN ANY SUCH
ACTION, SUIT OR OTHER PROCEEDING AND AGREES THAT SERVICE OF SUCH SUMMONS,
COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO SUCH PARTY AT THE ADDRESS SET FORTH IN SECTION 6.5 (NOTICES) AND
THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH PERSON'S
ACTUAL RECEIPT THEREOF OR FIVE DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS,
PROPER POSTAGE PREPAID.
TO THE EXTENT PERMITTED UNDER THE APPLICABLE LAWS OF ANY SUCH
JURISDICTION, THE COMPANY AND EACH PRINCIPAL SHAREHOLDER HEREBY EXPRESSLY
WAIVES, IN RESPECT OF ANY SUCH
ACTION, SUIT OR OTHER PROCEEDING, THE JURISDICTION OF ANY OTHER COURT OR COURTS
THAT NOW OR HEREAFTER, BY REASON OF SUCH PERSON'S PRESENT OR FUTURE DOMICILE, OR
OTHERWISE, MAY BE AVAILABLE TO IT.
6.14 TERMINATION. The rights granted to LLCP under this Agreement shall
terminate at such time as LLCP no longer owns or has the right to acquire at
least 500,000 shares of Common Stock; PROVIDED, HOWEVER, that the rights granted
to LLCP under SECTION 1 shall continue notwithstanding LLCP's ownership of such
number of shares of Common Stock if LLCP informs the Company in writing that it
believes in good faith that it is required to retain such rights to qualify as a
"venture capital operating company" for purposes of complying with ERISA.
6.15 WAIVER OF JURY TRIAL. EACH OF THE COMPANY, THE PRINCIPAL
SHAREHOLDERS AND LLCP HEREBY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION,
SUIT OR OTHER PROCEEDING UNDER THIS AGREEMENT OR ANY OTHER INVESTMENT DOCUMENT
OR ANY CLAIM, CONTROVERSY OR DISPUTE ARISING OUT OF OR RELATED TO THE
TRANSACTIONS CONTEMPLATED HEREBY OR BY ANY OTHER INVESTMENT DOCUMENT, REGARDLESS
OF WHICH PARTY INITIATES SUCH ACTION OR ACTIONS.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized representatives as of the date
first written above.
PRINCIPAL SHAREHOLDERS
SPROUT CAPITAL VII, L.P.
By: DLJ Capital Corp., its Managing General Partner
By:
-------------------------------
Xxxxxx Xxxxx
Attorney-in-Fact
SPROUT GROWTH II, L.P.
By: DLJ Capital Corp., its Managing General Partner
By:
-------------------------------
Xxxxxx Xxxxx
Attorney-in-Fact
THE SPROUT CEO FUND, L.P.
By: DLJ Capital Corp., its General Partner
By:
-------------------------------
Xxxxxx Xxxxx
Attorney-in-Fact
DLJ CAPITAL CORP.
By:
--------------------------------------
Xxxxxx Xxxxx
Attorney-in-Fact
DLJ FIRST ESC L.L.C.
By: DLJ LBO Plans Management Corporation, its Manager
By:
-------------------------------
Xxxxxx Xxxxx
Attorney-in-Fact
SRM '93 CHILDREN'S TRUST
By:
-------------------------------------
--------------------
Trustee
CB CAPITAL INVESTORS, LLC
By: Chase Capital Partners, its Investment Manager
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
------------------------------
XXXXXXX X. XXXXX
------------------------------
XXXXXX X. XXXXXXX, D.D.S.
------------------------------
XXXXXX XXX XXXXX, XX.
COMPANY
INTERDENT, INC., a Delaware corporation
By:
-------------------------------
Xxxxxxx X. Xxxxx
Chief Executive Officer
LLCP
XXXXXX XXXXXXXXX CAPITAL PARTNERS,
INC., a California corporation
On behalf of XXXXXX XXXXXXXXX CAPITAL
PARTNERS II, L.P., a California limited
partnership
By:
-------------------------------
Xxxxxx X. Xxxxxxxxx
Chief Executive Officer
EXHIBIT A
FORM OF
SPOUSAL CONSENT
The undersigned is the spouse of ________________, one of the individuals
who has executed, delivered and agreed to be bound by the above Investor Rights
Agreement. The undersigned hereby acknowledges that she has read and understands
the terms and other provisions of the Investor Rights Agreement. Further, the
undersigned hereby consents to, approves of and agrees to be bound by the terms
and other provisions of the Investor Rights Agreement for all purposes as if she
were a party thereto, including, without limitation, in order to bind any
community property interest she has or may have in any Co-Sale Shares owned by
her and her spouse that are the subject of the Investor Rights Agreement.
[Name]