EXHIBIT 5
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.
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(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).
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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
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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
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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
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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.
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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
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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
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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.
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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.
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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
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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
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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.
-14-
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]
-15-
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
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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.
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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
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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]
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