Exhibit 10.9
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RIGHT OF FIRST REFUSAL AGREEMENT
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This Right of First Refusal Agreement (this "Agreement") is made this 30th
day of June, 1999 by and among Switchboard Incorporated, a Delaware corporation
(the "Company"), Banyan Systems Incorporated, a Massachusetts corporation
("Banyan"), and CBS Corporation, a Pennsylvania corporation (the "Purchaser").
Preliminary Statement
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A. On the date hereof, the parties are entering into (i) an Advertising
and Promotion Agreement by and among the Company, Banyan and the Purchaser and
(ii) a License Agreement by and between the Company and the Purchaser
(collectively, the "Switchboard Agreements").
B. The parties desire to provide for the right of first refusal and right
of first offer provisions set forth below as a means of protecting the
management and control of the Company from influence by any person not
acceptable to the Company or to Banyan.
NOW, THEREFORE, for valuable consideration, receipt of which is
acknowledged, the parties hereto agree as follows:
1. Certain Definitions.
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As used in this Agreement, the following terms shall have the following
respective meanings:
"Common Stock" means the common stock, $.01 par value per share, of the
Company.
"Purchase Agreement" means the Common Stock and Warrant Purchase Agreement
dated June 1, 1999 by and among the Company, Banyan and the Purchaser.
"Shares" means all shares of Common Stock issued, now or in the future,
pursuant to the Purchase Agreement, including the Shares (as defined therein)
and the Warrant Shares (as defined therein), but excluding the Conversion Share
(as defined therein).
"Transfer" means any sale, transfer or other disposition, whether
voluntarily or by operation of law.
2. Restrictions on Transfer.
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2.1 Any Transfer of any of the Shares by the Purchaser, other than
according to the terms of this Agreement, shall be void and transfer
no right, title, or interest in or to any such Shares to the purported
transferee.
2.2 All certificates representing Shares shall have affixed thereto (in
addition to any other legends that may be required contractually or
under federal or state laws) a legend in substantially the following
form, and the Purchaser agrees to present the certificates
representing the Shares presently owned or hereafter acquired by it to
the Secretary of the Company and cause the Secretary of the Company to
stamp such a legend on each such certificate in a prominent manner:
"The shares of stock represented by this certificate are subject to
restrictions on transfer and an option to purchase set forth in a
certain Right of First Refusal Agreement dated ____________, 1999, as
amended from time to time. A copy of such Agreement is available for
inspection without charge at the office of the Secretary of the
corporation."
2.3 The Purchaser agrees, to ensure compliance with the restrictions
referred to herein, that the Company may issue appropriate "stop
transfer" certificates or instructions and that, if the Company
transfers its own securities, it may make appropriate notations to the
same effect in its records.
3. Rights of First Offer.
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3.1 Offer by the Purchaser. Subject to Section 3.3, in the event at any
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time prior to the first anniversary of the closing date of the
Company's initial public offering the Purchaser desires to make a
Transfer of any or all of its Shares, the Purchaser shall first
deliver a notice (the "Right of First Offer Notice") to such effect to
the Company and to Banyan, which notice shall include an offer to sell
to the Company and Banyan (i) a specified number of Shares, which such
number of Shares shall constitute all of the Shares the Purchaser is
then interested in Transferring (the "Option Shares"), at (iii) a
specified per share price (the "Offer Price"). The Company shall have
the first right and option and Banyan shall have the next right and
option to purchase from the Purchaser, for a per share purchase price
equal to the Offer Price, some or all of the Option Shares. The
Company
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and/or Banyan shall have 15 business days to accept such offer. If the
Company and/or Banyan accepts such offer as to some or all of the
Option Shares, they will proceed in good faith to negotiate with the
Purchaser a definitive agreement and consummate such sale.
3.2 Purchaser's Right to Sell. If neither the Company nor Banyan
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accepts the Purchaser's offer set forth in Section 3.1, or if such
offer is accepted by the Company and/or Banyan only in part, then, for
a period of 120 days following the expiration of the 15-business day
period set forth in Section 3.1, the Purchaser may, subject to
compliance with Section 4 below, if applicable, consummate the sale of
the Option Shares or any portion thereof not subject to the Company's
and/or Banyan's acceptance at a price not less than the Offer Price.
If the Purchaser wishes to Transfer any Option Shares offered by the
Purchaser in the Right of First Offer Notice at a price per Share less
than the Offer Price or more than 120 days after the expiration of the
15-business day period set forth in Section 3.1, then, as a condition
precedent to such transaction, the Purchaser must again comply with
the provisions of Section 3.
3.3 Limitation. The Purchaser shall not be required to comply with
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Section 3 following a termination for any reason of one or both of the
Switchboard Agreements prior to the second anniversary thereof.
4. Rights of First Refusal.
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4.1 Offer of Sale; Notice of Proposed Sale. If, following a termination
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for any reason of one or both of the Switchboard Agreements prior to
the second anniversary thereof, the Purchaser desires to Transfer any
of its Shares, or any interest in such Shares, it shall first deliver
written notice of its desire to do so (the "Notice") to the Company
and Banyan. The Notice must specify: (i) the name and address of the
party to which the Purchaser proposes to sell or otherwise dispose of
the Shares or an interest in the Shares (the "Offeror"), (ii) the
number of Shares the Purchaser proposes to sell or otherwise dispose
of (the "Offered Shares"), (iii) the consideration per Share to be
delivered to the Purchaser for the proposed Transfer, and (iv) all
other material terms and conditions of the proposed transaction.
4.2 Company's Option to Purchase.
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(a) The Company shall have the first option, exercisable for a period
of 15 business days from the date of delivery of the Notice, to
purchase all or any part of the Offered Shares for the
consideration
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per share and on the terms and conditions specified in the
Notice. Such option shall be exercised by the delivery by the
Company of written notice to the Purchaser and Banyan.
(b) In the event the Company does not exercise its option within such
15-business day period with respect to all of the Offered Shares,
the Company shall, by the last day of such period, give written
notice of that fact to Banyan (the "Banyan Notice"). The Banyan
Notice shall specify the number of Offered Shares not purchased
by the Company (the "Remaining Shares").
(c) In the event the Company exercises its option to purchase all or
part of the Offered Shares, the closing of such purchase shall
take place at the offices of the Company on (i) the date five
days after the expiration of the Banyan Option Period (as defined
in Section 4.3(a) of this Agreement) if Banyan does not elect to
purchase any Offered Shares or (ii) the date that Banyan
consummates its purchase of Remaining Shares under Section 4.3(b)
of this Agreement.
4.3 Banyan's Option to Purchase.
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(a) Banyan shall have an option, exercisable during the period
beginning on the date 16 business days after the delivery to
Banyan of the Notice and ending on the date 21 business days
after the delivery to Banyan of the Notice (the "Banyan Option
Period"), to purchase all or any part of the Remaining Shares for
the consideration per share and on the terms and conditions set
forth in the Notice. Such option shall be exercised by delivery
by Banyan of written notice to the Purchaser and the Company.
(b) The closing of the purchase of the Remaining Shares shall take
place at the offices of the Company no later than five (5) days
after the date of such notice to the Purchaser.
4.4 Consideration. To the extent that the consideration proposed to be
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paid by the Offeror for the Offered Shares consists of property other
than cash or a promissory note, the consideration required to be paid
by the Company or Banyan exercising their respective options under
Sections 4.2 and 4.3 of this Agreement may consist of cash equal to
the value of such property, as determined in good faith by agreement
of the Purchaser and the Company or Banyan, as applicable.
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4.5 Purchaser's Right to Sell.
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(a) If, following compliance by the Purchaser with the provisions of
Section 4, the Company and Banyan do not exercise their options
to purchase all of the Offered Shares under Section 4 within the
periods described in this Agreement (the "Option Period"), then
the Purchaser shall be entitled to sell, at the price and on the
terms and conditions no less favorable to the Purchaser than the
price and terms set forth in the Notice, the Shares not purchased
by the Company and Banyan. The transaction contemplated by the
Notice shall be consummated not later than 60 days after the
expiration of the Option Period.
(b) If the Purchaser wishes to Transfer any Shares at a price per
Share less than the price set forth in the Notice, upon terms
different from those previously offered to the Company and
Banyan, or more than 60 days after the expiration of the Option
Period, then, as a condition precedent to such transaction, the
Purchaser must again comply with the provisions of Section 4.
5. Adjustments for Stock Splits, Stock Dividends, etc. If from time to time
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there is any stock split, stock dividend, stock distribution or other
reclassification of the Common Stock of the Company, any and all new,
substituted or additional securities to which the Purchaser is entitled by
reason of its ownership of the Shares shall be immediately subject to the
purchase options, the rights of first refusal, the restrictions on Transfer and
the other provisions of this Agreement in the same manner and to the same extent
as the Shares.
6. General.
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6.1 Severability. The invalidity or unenforceability of any provision of
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this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement, and each other provision of this
Agreement shall be severable and enforceable to the extent permitted
by law.
6.2 Transfers of Rights. Any permitted Transfer of Shares by the
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Purchaser shall be subject to the transferee providing written notice
of such assignment to the Company and Banyan and agreeing in writing
to be bound hereby, and such transferee shall be deemed a "Purchaser"
for purposes of this Agreement. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective
heirs,
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executors, administrators, legal representatives, successors and
assigns, subject to any applicable restrictions on Transfer. The
Purchaser acknowledges that the Purchase Agreement and the Warrant (as
defined therein) impose certain restrictions on the Purchaser's right
to Transfer any Shares. Nothing contained herein shall prohibit Banyan
from assigning its rights hereunder to one or more persons or
entities.
6.3 Notice. All notices, requests, consents, and other communications
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under this Agreement shall be in writing and shall be deemed delivered
(i) two business days after being sent by registered or certified
mail, return receipt requested, postage prepaid or (ii) one business
day after being sent via a reputable nationwide overnight courier
service guaranteeing next business day delivery, in each case to the
intended recipient as set forth below:
If to the Company, at 000 Xxxxxxxx Xxxx, Xxxxxxxx, XX 00000, Attention:
Chief Financial Officer, or at such other address or addresses as may have been
furnished in writing by the Company to the Purchaser, with a copy to the Company
at the foregoing address, Attention: General Counsel, and with a copy to Xxxx
and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000, Attention: Xxxx X. Xxxxxx,
Esq.; or
If to Banyan, at 000 Xxxxxxxx Xxxx, Xxxxxxxx, XX 00000, Attention: Chief
Financial Officer, or at such other address or addresses as may have been
furnished to the Company and the Purchaser in writing by Banyan, with a copy to
Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000, Attention: Xxxx X.
Xxxxxx, Esq.
If to the Purchaser, CBS Corporation, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX
00000, attention: Chief Financial Officer, or at such other address or
addresses as may have been furnished to the Company in writing by the Purchaser,
with a copy to attention: General Counsel.
Any party may give any notice, request, consent or other communication
under this Agreement using any other means (including, without limitation,
personal delivery, messenger service, telecopy, first class mail or electronic
mail), but no such notice, request, consent or other communication shall be
deemed to have been duly given unless and until it is actually received by the
party for whom it is intended. Any party may change the address to which
notices, requests, consents or other communications hereunder are to be
delivered by giving the other parties notice in the manner set forth in this
Section 6.3.
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6.4 Pronouns. Whenever the context may require, any pronouns used in this
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Agreement shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall
include the plural, and vice versa.
6.5 Entire Agreement. This Agreement constitutes the entire agreement
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between the parties, and supersedes all prior agreements and
understandings, relating to the subject matter of this Agreement. No
amendment, modification or termination of, or waiver under, any
provisions of this Agreement shall be valid unless in writing and
signed by each of the parties hereto.
6.6 Specific Performance. In addition to any and all other remedies that
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may be available at law in the event of any breach of this Agreement,
each party shall be entitled to specific performance of the agreements
and obligations of the other parties hereunder and to such other
injunctive or other equitable relief as may be granted by a court of
competent jurisdiction.
6.7 Counterparts; Facsimile Signatures. This Agreement may be executed in
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any number of counterparts, each of which shall be deemed to be an
original, and all of which together shall constitute one and the same
document. This Agreement may be executed by facsimile signature.
6.8 Section Headings. The section headings used in this Agreement are for
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the convenience of the parties and in no way alter, modify, amend,
limit or restrict the contractual obligations of the parties.
6.9 Governing Law. This Agreement shall be construed, interpreted and
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enforced in accordance with the internal laws of the State of New York
without regard to any applicable conflicts of laws.
6.10 Tolling of Periods. The lapsing of any and all periods described in
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Sections 3 and 4 of this Agreement for providing any notice, for
closing any exercise of any option or any right of first refusal or
otherwise shall be tolled for the duration of (i) any legal or
regulatory requirement forestalling any such notice, closing or other
event or (ii) the determination pursuant to Section 4.4 of this
Agreement of the value of the consideration other than cash or a
promissory note proposed to be paid by the Offeror for the Offered
shares.
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6.11 Termination. This Agreement shall terminate on the first anniversary
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of the closing date of the Company's initial public offering.
6.12 Notice of Termination of Switchboard Agreements. Within five (5) days
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of the termination for any reason, prior to the second anniversary
thereof, of either or both of the Switchboard Agreements, the Company
shall deliver to Banyan a notice of such termination and the
effective date thereof.
[signatures on following page]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
SWITCHBOARD INCORPORATED
By: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
Title: President
BANYAN SYSTEMS INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President & CFO
CBS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President
and Chief Financial Officer
(signature page to right of first refusal agreement)
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