EXHIBIT 10.11
FOURTH AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT
This Fourth Amended and Restated Stockholders' Agreement (this "Agreement")
is entered into as of March 13, 2002, by and among the parties listed on
Schedule A hereto (together with persons who become parties pursuant to Sections
4 or 10(a), the "Stockholders") and DoveBid, Inc., a Delaware corporation
("Company").
BACKGROUND
A. Company has issued shares of its Common Stock and Series A, B, C, D-1
and DD Preferred Stock and has entered into the Third Amended and Restated
Stockholders' Agreement, dated as of August 28, 2001, as amended by the
Amendment to Investors' Rights and Stockholders' Agreements entered into as of
November 13, 2001 (as amended, the "Prior Agreement") with the holders of such
shares (the "Prior Stockholders") for the purpose of regulating certain aspects
of their relationship with regard to their ownership of such shares of Common
and Series A, B, C, D-1 and DD Preferred Stock;
B. On October 17, 2000, the Company effected a one-for-three reverse
stock split of its outstanding common stock (the "Common Stock"); and on
December 18, 2000, the Company effected a one-for-three reverse stock split of
its outstanding preferred stock (collectively, the "Stock Splits").
C. The Board of Directors of the Company has approved and declared
advisable the transaction (the "Transaction") contemplated by the Asset Purchase
Agreement dated as of February 27, 2002 by and among ZoneTrader, Inc.
("ZoneTrader"), the Company and DoveBid Management Services, Inc., a Delaware
corporation and wholly-owned subsidiary of the Company (the "ZoneTrader
Agreement").
D. In connection with the Transaction, the parties to this Agreement
desire that this Agreement shall supersede the Prior Agreement and shall
hereafter regulate certain aspects of their relationship with regard to their
ownership of the Series A, B, C, D-1 and DD Preferred Stock and the Common Stock
of Company (collectively, "Company Stock");
E. The execution and delivery of this Agreement by the parties hereto is
a condition to the Closing (as defined in the ZoneTrader Agreement) of the
Transaction, and the effectiveness of this Agreement is conditioned upon the
Closing (as defined in the ZoneTrader Agreement) of the Transaction (the
"Effective Time"); and
F. Conditioned upon the Effective Time and the execution of this
Agreement by the Company and the Prior Stockholders holding immediately prior to
the Effective Time, (i) shares of the Company's Common Stock representing at
least a majority of all of the outstanding shares of Common Stock immediately
prior to the date of this Agreement, and (ii) shares of the Company's Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D-1
Preferred Stock and Series DD Preferred Stock (or Common Stock issued upon
conversion thereof) representing at least sixty-six and seven-tenths percent
(66.7%) of all shares of Common
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Stock issuable upon conversion of all outstanding shares of the Company's Series
A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series
D-1 Preferred Stock and Series DD Preferred Stock plus all outstanding shares of
Common Stock, if any, that have been issued upon conversion of such Preferred
Stock as of immediately prior to the date of this Agreement, the Prior Agreement
shall be amended and restated as set forth in this Agreement, each of the
parties to the Prior Agreement shall have no further rights or obligations
thereunder, and each of the parties to the Prior Agreement shall have the rights
and obligations hereunder.
Now, therefore, in consideration of the mutual promises and covenants
hereinafter set forth, effective at the Effective Time, the parties hereby agree
as follows:
1. Authorization. Each Stockholder hereby represents and warrants to
Company and to each other that such Stockholder has full power and authority to
execute, deliver and perform such Stockholder's obligations under this
Agreement. The execution and delivery of this Agreement has been duly and
validly authorized, and all necessary action has been taken, to make this
Agreement a valid and binding obligation of such Stockholder, enforceable
against such Stockholder in accordance with the terms hereof, except that the
enforcement hereof may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and to general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law).
2. Restrictions on Sale of Company Stock.
(a) Except as provided in Sections 3, 4 and 8 of this Agreement, The
Dove Holdings Corporation, a California corporation, Xxxx Xxxx and Xxxx Xxxx
(collectively, the "Doves") shall not sell, transfer, assign, pledge,
hypothecate or encumber any of the shares of Common Stock owned by them, except
that, after October 18, 1999:
(i) The Doves may sell up to an aggregate of 666,666 shares of
Common Stock (which share number reflects the effect of the Stock Splits
and is to be adjusted for stock splits and like events occurring after the
date hereof) to any other person or entity;
(ii) The Doves may sell up to an additional 666,666 shares of
Common Stock (which share number reflects the effect of the Stock Splits
and is to be adjusted for stock splits and like events occurring after the
date hereof) in the aggregate, subject to a right of first refusal by
Company (or its assignee or assignees) pursuant to the provisions of
Section 3, provided that (A) Company shall only have ten (10) days to make
the election provided for in Section 3(c) and (B) if and to the extent
Company (or its assignee or assignees) does not exercise such right of
first refusal, the Doves may sell such shares during the six-month period
provided in Section 3(e) below; and
(iii) All shares of Common Stock sold by The Dove Holdings
Corporation pursuant to the Second Amended and Restated Put/Call Agreement,
dated as of February 25, 2000, between The Dove Holdings Corporation and
Fremont Ventures I, L.P., shall not be subject to the restrictions of this
Section 2(a) and shall not count against the number of shares permitted to
be sold pursuant to Section 2(a)(i) and (ii) hereof.
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For purposes of calculating the number of shares of Common Stock transferred
pursuant to this Section 2(a) prior to the date hereof, if any, such numbers
shall be adjusted to reflect the Stock Splits and are to be adjusted for stock
splits and like events occurring after the date hereof. The restrictions set
forth in this Section 2(a) shall apply until (i) the closing of a bona fide,
firm-commitment, underwritten public offering of Common Stock registered under
the Securities Act of 1933, as amended (the "Act") raising gross proceeds of at
least $50,000,000 in the aggregate; provided, that immediately after such
closing the Company's Common Stock is listed on a national securities exchange
or over-the-counter market (a "Qualifying IPO"); or (ii) any sale of all or
substantially all of the assets of Company or any transfer of Company's capital
stock in connection with a sale of Company, whether such sale is effected by
merger, consolidation, sale of assets or sale or exchange of stock representing
more than fifty percent (50%) of the voting power of the stock of Company (in
terms of number of votes for the election of directors) other than pursuant to
the Series C Preferred Stock Purchase Agreement dated as of February 25, 2000,
as amended by the Amendment to Series C Preferred Stock Purchase Agreement and
Ancillary Agreements dated as of August 7, 2000 (the "Series C Agreement") (a
"Company Sale").
(b) Notwithstanding anything else herein to the contrary, no
Stockholder may transfer or attempt to transfer any Company Stock that is
unvested or otherwise subject to an option to repurchase by Company (provided
that the Doves will not violate this restriction if they continue to own,
directly or indirectly, at least the number of shares that are subject to
repurchase pursuant to Section 8 below).
(c) No Stockholder may transfer any Company Stock to a competitor of
Company, or to any shareholder, partner or other beneficial holder of an equity
ownership interest in a competitor of Company, other than pursuant to a merger,
combination, or other transaction approved by the Board of Directors of Company.
This Section 2(c) shall not apply to those transfers set forth in Section 3(f)
below.
3. Rights of First Refusal.
(a) Except as provided in Sections 2, 4 and 8 hereof, before any
shares of Company Stock, or any beneficial interest therein, may be sold,
transferred or assigned (including transfer by operation of law) or pledged,
hypothecated or encumbered by any of the Stockholders (a "Selling Stockholder"),
such shares shall first be offered to Company and the other Stockholders as set
forth below.
(b) Selling Stockholder shall deliver a notice (the "Notice") to
Company stating (i) such Stockholder's bona fide intention to sell or transfer
such shares, (ii) the number of shares proposed to be sold or transferred (the
"Noticed Shares"), (iii) the price for which it proposes to sell or transfer the
Noticed Shares (in the case of a transfer not involving a sale such price shall
be deemed to be fair market value of the Noticed Shares as determined pursuant
to Section 3(d) hereof) and the terms of payment of that price and other terms
and conditions of sale, and (iv) the name and address of the proposed purchaser
or transferee. A Selling Stockholder shall not effect, or attempt to effect, any
sale or other transfer for value of Company Stock other than for money or an
obligation to pay money.
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(c) For a period of thirty (30) days after receipt of the Notice,
Company shall have the right to purchase all of the Noticed Shares. The price
per share of the Noticed Shares purchased by Company pursuant to this Section 3
shall be, in the case of a sale, the price per share as set forth in the Notice
and, in the case of a transfer not involving a sale, the fair market value of
such shares determined pursuant to Section 3(d) hereof, and the purchase shall
be on the same terms and subject to the same conditions as those set forth in
the Notice. Subject to Section 3(g) below, if Company does not elect to purchase
all the Noticed Shares, it shall give written notice to the other Stockholders
within the thirty (30) day period following receipt of the Notice, and for a
period of twenty (20) days after receipt of the aforementioned notice from
Company, the other Stockholders shall have the right to purchase pro rata all of
the Noticed Shares not purchased by Company (the "Remaining Shares") (pro rata
on the basis of those Stockholders that elect to purchase such Remaining Shares
and the number of shares of Company Stock held by each) on the same terms and
conditions as set forth in the Notice. The price per share of the Noticed Shares
purchased by the Stockholders pursuant to this Section 3 shall be, in the case
of a sale, the price per share as set forth in the Notice and, in the case of a
transfer not involving a sale, the fair market value of such shares determined
pursuant to Section 3(d) hereof, and the purchase shall be on the same terms and
subject to the same conditions as those set forth in the Notice.
(d) In the case of a transfer of shares of Company Stock not
involving a sale, the fair market value of the shares shall be determined by
agreement between Company and the transferor or, if they are unable to agree, by
an independent appraiser mutually agreed upon by the parties based upon a
valuation of Company and its subsidiaries as a going concern. This determination
will be final and binding upon all parties and persons claiming under or through
them. Anything in this Section 3(d) to the contrary notwithstanding, if a
Selling Stockholder is not satisfied with the determination of fair market
value, such Stockholder may elect not to proceed with the proposed transfer of
shares of Company Stock not involving a sale and retain such shares under this
Agreement.
(e) If Company and/or the other Stockholders do not elect to purchase
all of the shares of Company Stock to which the Notice refers as provided in
Section 3(b) hereof, then none of the shares shall be purchased (unless the
Selling Stockholder elects otherwise during the 20-day period set forth in
Section 3(c) hereof), and the Selling Stockholder may sell or transfer all (but
not less than all) of the shares to any purchaser or transferee named in the
Notice at, in the case of a sale, the price specified in the Notice or at a
higher price, provided that such sale or transfer is consummated within six (6)
months after the date of the Notice to Company.
(f) Notwithstanding subsections (a) through (e) of this Section 3,
this Section 3 shall not apply to transfers: (i) in connection with or at any
time subsequent to a Qualifying IPO; (ii) as a result of or at any time after a
Company Sale; (iii) in connection with the separate transfers to the Company by
Fremont Ventures I, L.P., Xxxxx X. Xxxxxxxx or Xxxxxx Xxxxx-Xxxxxx of up to an
aggregate of 833,332 shares of Common Stock in exchange for the issuance of up
to an aggregate of 775,278 shares of Series C Preferred Stock, either by way of
exchange or as a rescission followed by a purchase of the Preferred Stock (the
"Series C Exchanges"); (iv) in connection with a distribution of TradeOut Shares
(defined below) by TradeOut, Inc. ("TradeOut") to its stockholders; or (v) in
connection with a sale or, upon
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ZoneTrader's dissolution, a distribution of ZoneTrader Shares (defined below) by
ZoneTrader to any of the holders of its Preferred Stock; provided that the
exception set forth in Subsection (f)(iv) shall have no force or effect herein
if such distribution occurs prior to the Revenue Measurement Date (as defined in
the Asset Purchase Agreement dated as of August 3, 2001 by and between TradeOut
and the Company (the "TradeOut Agreement")). For purposes of this Agreement, the
term "TradeOut Shares" shall mean any shares of Company Stock (including shares
issued upon conversion thereof) issued pursuant to the TradeOut Agreement and
the term "ZoneTrader Shares" shall mean any shares of Company Stock (including
shares issued upon conversion thereof) issued pursuant to the ZoneTrader
Agreement.
(g) The rights of other Stockholders to purchase the Remaining Shares
pursuant to Section 3(c) above is conditioned upon each such other Stockholder:
(a) holding at least 100,000 shares (as adjusted for stock splits and like
events occurring after the date hereof) on the date of the notice given by the
Company to the other Stockholders; and (b) being an "accredited investor" (as
defined below), on the date of such other Stockholder's purchase of his, her or
its pro rata portion of the Remaining Shares. For purposes of this Agreement,
the term "accredited investor" shall have the meaning ascribed to it under
Regulation D promulgated under the Act.
4. Exempt Transfers. The provisions of Sections 2(a), 2(c) and 3 shall
not apply to any of the following transfers of Company Stock (provided, that the
transferee shall acknowledge and agree, in a writing satisfactory to Company, to
be bound by the terms of this Agreement and shall execute and deliver to Company
a joinder as set forth in Exhibit A to such effect): (a) in the case of a
Stockholder who is an individual, any transfer, either during his lifetime or on
death by will or intestacy, to (i) his ancestors, descendants, spouse, brothers,
sisters, nephews or nieces, or (ii) any trust, family partnership or similar
entity or any custodian, trustee, executor, administrator or other personal
representative for the account or benefit of such Stockholder or such
Stockholder's ancestors, descendants, spouse, brothers, sisters, nephews or
nieces, (b) in the case of a Stockholder which is an entity, any transfer to (i)
another entity or individual that, directly or indirectly, controls, is
controlled by, or is under common control with such Stockholder, (ii) any
current partner, member or shareholder of such Stockholder, (iii) any retired
partner or member of such Stockholder who was a partner or member of such
Stockholder as of, and retired from such Stockholder after, the date the Company
Stock to be transferred was issued to such Stockholder, and (iv) any other
entity or person under common investment management (by an investment manager
who retains voting control of any such shares of Company Stock) with such
Stockholder, or (c) in the case of any Stockholder who is a former holder of
preferred stock of ZoneTrader, to any other former holder of preferred stock of
ZoneTrader.
5. Restriction on Public Sale. Anything to the contrary herein
notwithstanding, in the event that Company files a registration statement with
respect to an underwritten public offering under the Act in which any class of
Company's equity securities is offered, no Stockholder (excluding any
Stockholder who is a party to that certain Fourth Amended and Restated
Investors' Rights Agreement dated the date hereof between Company and the
investors in Company's Series A, B, C, D-1 and/or DD Preferred Stock, as such
Agreement shall hereafter be amended) shall effect any public sale or
distribution of any of the shares of Company Stock (which shares, for the
purposes of this Section 5, shall include any and all voting securities
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received by such Stockholder as a stock dividend, stock split or other
recapitalization or similar distribution on or in respect of the shares of
Company Stock) or any of Company's other equity securities, or of any securities
convertible into or exchangeable for such securities other than securities sold
in such public offering, during the period beginning ten (10) days before the
filing of such registration statement with the Securities and Exchange
Commission and ending one hundred eighty (180) days after such registration
statement has become effective or ten (10) days after it has been withdrawn.
6. Register of Securities; Removal of Restrictions on Transfer.
(a) Company or its duly appointed agent shall maintain separate
registers for the shares of each class and series of Company Stock, in which it
shall register the issue and sale of all such respective shares. Company may
issue stop transfer instructions to such agent and make similar notations in
such register to ensure that all transfers of such securities are made in
accordance with this Agreement. All transfers of such securities shall be
recorded on the register maintained by Company or its agent, and Company shall
be entitled to regard the registered holder of such securities as the actual
holder thereof until Company or its agent is required to record a transfer of
such securities on its register. Subject to the other provisions of this
Agreement restricting or prohibiting transfers, Company or its agent shall be
required to record any such transfer when it receives the security to be
transferred duly and properly endorsed by the registered holder thereof or by
its attorney duly authorized in writing.
(b) Any legend endorsed on a certificate evidencing shares of
Company Stock and the stop transfer instructions and record notations with
respect to such shares shall be removed and Company shall issue a certificate
without such legend to the holder of such shares of Company Stock (i) if such
shares are registered under the Act, (ii) if a notification under Regulation A
under the Act is in effect with respect thereto, or (iii) if such shares may be
sold under Rule 144 or Rule 144A under the Act.
(c) In addition to any legends required by securities laws or
otherwise reflecting restrictions on transfer of the shares of Company Stock
pursuant to this Agreement, each stock certificate or other document evidencing
shares of Company Stock or other securities held by a Stockholder shall bear a
legend in substantially the following form until such legends may be removed in
accordance with this Agreement:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
STOCKHOLDERS' AGREEMENT, WHICH CONTAINS RESTRICTIONS ON TRANSFER,
RIGHTS OF FIRST REFUSAL, RIGHTS OF REPURCHASE, AND VOTING RIGHTS. A
COPY OF SAID STOCKHOLDERS'AGREEMENT MAY BE OBTAINED FROM THE COMPANY
BY THE HOLDER OF SUCH CERTIFICATE."
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED BY
THE HOLDER SOLELY FOR ITS OWN ACCOUNT FOR THE PURPOSE OF INVESTMENT
AND NOT WITH A VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION
THEREOF. THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 ("ACT") OR STATE SECURITIES LAWS AND MAY NOT BE SOLD,
PLEDGED OR OTHER-
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WISE TRANSFERRED WITHOUT REGISTRATION UNDER THE ACT OR AN EXEMPTION
THEREFROM."
7. Enforcement: Violation of Transfer Provisions.
(a) The parties acknowledge that the remedy at law for any breach
or violation of the provisions of this Agreement shall be inadequate and that,
in the event of any such breach or violation, Company and/or the Stockholders
shall be entitled to injunctive relief in addition to any other remedy, at law
or in equity, to which it may be entitled.
(b) Company shall not be required (i) to transfer on its books any
shares of Company Stock or other securities that shall have been sold,
transferred, assigned or pledged in violation of any of the provisions set forth
in this Agreement, or (ii) to treat as owner of such shares of Company Stock or
to accord the right to vote as such owner or to pay dividends to any transferee
to whom such shares shall have been so transferred.
8. Repurchase of Dove Stock
(a) Subject to Section 8(b) below, Company (or its assignee or
assignees) shall have the option, but not the obligation, to purchase up to a
maximum of 1,155,808 shares of the Common Stock (which share number reflects the
effect of the Stock Splits and is to be adjusted for stock splits and like
events occurring after the date hereof) then held by the Doves, if Xxxx Xxxx or
Xxxx Xxxx should terminate his employment with Company due to death or
"Disability" (as defined below). In the event the repurchase provided for in
this Section 8 is exercised, unless otherwise agreed among the Doves, each of
the Doves will be required to sell a portion of such Dove's Common Stock in
proportion to the number of shares held by such Dove immediately prior to the
death or Disability that triggered the repurchase right, divided by the total
number of shares of Common Stock held by all of the Doves at that time. The
repurchase price shall be $0.99 per share (which per share price reflects the
effect of the Stock Splits and is to be adjusted for stock splits and like
events occurring after the date hereof), payable in cash. Company may exercise
its repurchase option by written notice within 60 days after such termination of
employment. The closing of such repurchase shall occur within 75 days after such
termination of employment.
(b) The number of shares subject to the repurchase option shall be
reduced by 288,952 (which share number reflects the effect of the Stock Splits
and is to be adjusted for stock splits and like events occurring after the date
hereof) (25%) on June 4 of each year commencing on June 4, 2000, so that Company
will have no repurchase option on and after June 4, 2003. Company's repurchase
option shall also terminate on the first to occur of a Qualifying IPO or a
Company Sale.
(c) If and for so long as Company has such repurchase option, it
shall purchase and maintain term life insurance on the lives of Xxxx Xxxx and
Xxxx Xxxx. The coverage amount of each policy shall be an amount not less than
the product of (i) the maximum number of shares subject to the repurchase option
at such time, and (ii) $1.32 per share (which per share price reflects the
effect of the Stock Splits and is to be adjusted for stock splits and like
events
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occurring after the date hereof). The beneficiaries of each policy shall be as
designated by Xxxx Xxxx and Xxxx Xxxx from time to time.
(d) For purposes of this Agreement, "Disability" means that either
Xxxx Xxxx or Xxxx Xxxx has been unable substantially to perform his duties for
Company for a period of at least three months because of a physical or mental
disability, and at the end of such period, a fully-qualified physician
reasonably selected by Company certifies that it appears likely that he will be
unable substantially to perform his duties for an indefinite additional period
of time because of such physical or mental incapacity.
9. Board of Directors of Company. Pursuant to Article Fifth,
Section 6, of Company's Restated Certificate of Incorporation, as such Section
may hereafter be amended (the "Certificate"), the Stockholders have the right to
elect certain members of Company's Board of Directors (the "Board"). In
accordance with the Certificate, the Stockholders agree:
(a) To nominate to the Board such person or persons who shall
be reasonably acceptable to Company;
(b) So long as the holders of the Series C Preferred Stock
have the right to elect two members of the Board pursuant to Article Fifth,
Section 6.1.2 of the Certificate and (i) SOFTBANK Capital Partners LP,
SOFTBANK Capital LP and/or SOFTBANK Capital Advisors Fund LP remains a
holder of at least 75% of the shares of the Series C Preferred Stock they
acquired pursuant to the Series C Agreement or the Common Stock into which
such securities may have been converted, then SOFTBANK Capital Partners LP
("SOFTBANK") shall have the right to nominate the first member of the Board
to be elected pursuant to Article Fifth, Section 6.1.2 of the Certificate,
the name of which nominee shall be conveyed by SOFTBANK to the Company and
(ii) the Affiliates (defined below) of TPG Partners III, L.P. who are
parties to this Agreement (collectively, "TPG") hold, as a group, at least
75% of the shares of Series C Preferred Stock they acquired pursuant to the
Series C Agreement or the Common Stock into which such securities may be
converted, then TPG shall have the right to nominate the second member of
the Board to be elected pursuant to Article Fifth, Section 6.1.2 of the
Certificate, the name of which nominee shall be conveyed by TPG Partners
III, L.P. to the Company; provided, however, that TPG's right to nominate
the second member of the Board will terminate when (i) the number of
outstanding shares of Series C Preferred Stock originally issued under the
Series C Agreement falls below 5,000,000 (which share number reflects the
effect of the Stock Splits and is to be adjusted for stock splits and like
events occurring after the date hereof) and the SOFTBANK entities specified
above continue to hold the type and the number of shares specified for the
SOFTBANK entities above or (ii) the number of outstanding shares of Series
C Preferred Stock originally issued under the Series C Agreement falls
below 2,500,000 (which share number reflects the effect of the Stock Splits
and is to be adjusted for stock splits and like events occurring after the
date hereof);
(c) So long as the holders of the Series D-1 Preferred Stock
have the right to elect one member of the Board pursuant to Article Fifth,
Section 6.1.1 of the Certificate and TradeOut and its stockholders hold at
least 75% of the shares of
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Series D-1 Preferred Stock issued pursuant to the TradeOut Agreement or the
Common Stock into which such securities may be converted, then TradeOut and
its stockholders shall have the right to nominate the member of the Board
to be elected pursuant to Article Fifth, Section 6.1.1 of the Certificate,
the name of which nominee shall be conveyed by General Electric Capital
Corporation to the Company; provided, however, that such nominee must be an
officer of General Electric Capital Corporation or its subsidiaries;
(d) Each Executive and Audit Committee of the Board, if any,
shall be comprised of at least one member of the Board designated only by
directors elected by the holders of the Series C Peferred Stock; and
(e) There shall be a compensation committee of the Board (the
"Compensation Committee") which shall be comprised of at least the two
members of the Board, one designated only by directors elected by the
holders of Series A or B Preferred Stock and one designated only by
directors elected by the holders of Series C Preferred Stock, and the
compensation, including, without limitation, salary, bonus and other
benefits and perquisites, of each officer of the Company and its
subsidiaries shall be subject to approval by a majority of the Compensation
Committee.
An "Affiliate" means an entity that directly, or indirectly, controls, is
controlled by, or is under common control with, the entity in question. Each of
the Stockholders shall appear in person or by proxy at any annual or special
meeting of Stockholders for the purpose of obtaining a quorum for the election
of directors and shall vote the shares of Company Stock owned by such
Stockholder, either in person or by proxy, at any annual or special meeting of
stockholders of Company called for the purpose of voting on the election of
directors or by written consent of stockholders with respect to the election of
directors, in favor of the election of the directors nominated and approved in
accordance with the Certificate and this Section 9. No Stockholder shall grant
any proxy or enter into and agree to be bound by any voting trust with respect
to Company Stock held by such Stockholder, nor shall any Stockholder enter into
any stockholder agreements or arrangements of any kind with any person with
respect to Company Stock, that is inconsistent with the provisions of this
Agreement. The Company shall reimburse the reasonable travel expenses incurred
by each of the members of the Board in fulfillment of his or her duties to the
Company. The provisions of this Section 9 shall terminate on the first to occur
of a Qualifying IPO or a Company Sale.
10. General Provisions.
(a) After-Acquired Shares. All of the provisions of this Agreement
apply to (a) all of the shares of Company Stock now owned or which may be
transferred hereafter to, or owned by, any Stockholder and (b) all securities
and instruments (i) received by a Stockholder as a dividend on or other payment
made to holders of Company Stock, or (ii) issued in connection with a split of
Company Stock or as a result of any exchange for or reclassification of Company
Stock or a reorganization, recapitalization, consolidation or merger. In
addition, any person or entity who does not presently own but subsequently
acquires shares of Company Stock may become a party to and bound by all or any
portion of this Agreement by executing a Joinder substantially in the form
attached hereto as Exhibit A, including, but not limited to, Fremont Ventures I,
L.P., Xxxxx X. Xxxxxxxx and Xxxxxx Xxxxx-Xxxxxx and/or their respective
Affiliates in
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connection with the Company Stock acquired upon consummation of the Series C
Exchanges, as though such stock has been acquired pursuant to the Series C
Agreement, and any holder of preferred stock of ZoneTrader purchasing shares of
Company Stock from ZoneTrader or receiving shares of Company Stock upon
ZoneTrader's dissolution.
(b) Aggregation of Stock. All shares of Company Stock held or
acquired by Affiliates or affiliated persons, including, in each case, general
or limited partners, shareholders or members of such person or entities or
persons under common investment management by an investment manager who retains
voting control of any such shares of Company Stock, shall be aggregated together
for the purpose of determining the availability of any rights under this
Agreement; provided, however, TradeOut's individual ownership shall not be so
aggregated with shares of Company Stock held by a stockholder of TradeOut,
unless such stockholder (a) was a former holder of Preferred Stock of TradeOut,
and (b) holds more than 100,000 shares of Company Stock; provided, further,
ZoneTrader's individual ownership shall not be so aggregated with shares of
Company Stock held by a stockholder of ZoneTrader, unless such stockholder (a)
was a former holder of preferred stock of ZoneTrader, and (b) holds more than
100,000 shares of Company Stock.
(c) Rights and Obligations of Transferees. Subject to Section 3(g),
if a Stockholder transfers any or all of its shares of Company Stock to any
person, such person and each subsequent transferee shall have the same rights
hereunder as are applicable to the transferring Stockholder, and shall be
subject to the same obligations as are imposed upon, such Stockholder by the
terms hereof (and all references herein to a Stockholder shall include such
transferee), unless otherwise provided herein. Company will not record any
transfer of Company Stock that was made in violation of any provision of this
Agreement.
(d) Owner of Shares. The person in whose name shares of Company
Stock or other securities of the Company are registered in the stock books of
Company shall be treated as the owner thereof for all purposes, including
without limitation, for the giving of notices under this Agreement.
(e) Notices. All notices, requests, consents and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been given for all purposes upon (i) personal delivery, (ii) one
day after being sent, when sent by professional overnight courier service from
and to locations within the United States, (iii) five days after posting when
sent by registered or certified mail, or (iv) on the date of transmission when
sent by facsimile and when receipt has been confirmed, addressed (A) if to
Company at the address or facsimile number, as applicable set forth on the
signature pages hereto; or (B) if to any Stockholder, addressed to such
Stockholder at its address or facsimile number, as applicable, as shown on the
stock register maintained by Company. The addresses for the purposes of this
Section 10(d) may be changed by giving written notice of such change in the
manner provided herein for giving notice. Unless and until such written notice
is received, the address provided herein shall be deemed to continue in effect
for all purposes hereunder.
(f) Severability. The parties hereto agree that the terms and
provisions in this Agreement are reasonable and shall be binding and enforceable
in accordance with the terms hereof and, in any event, that the terms and
provisions of this Agreement shall be enforced to the
10
fullest extent permissible under law. In the event that any term or provision of
this Agreement shall for any reason be adjudged to be unenforceable or invalid,
then such unenforceable or invalid term or provision shall not affect the
enforceability or validity of the remaining terms and provisions of this
Agreement, and the parties hereto hereby agree to replace such unenforceable or
invalid term or provision with an enforceable and valid arrangement, which in
its economic effect shall be as close as possible to the unenforceable or
invalid term or provision.
(g) Governing Law; Parties in Interest. This Agreement shall
be governed by, and construed and enforced in accordance with, the laws of the
State of California as applied to contracts entered into in California by
residents in such State and to be performed entirely within California. All the
terms and provisions of this Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto, whether so expressed or not.
(h) Modification, Amendment and Waiver. The provisions of
this Agreement may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, without the
written consent of (i) Stockholders then holding at least 66.7% of the then
outstanding shares of the Company's Series A, B, C, D-1 and DD Preferred Stock
(voting together as a single class on an as-converted basis), (ii) the
Stockholders then holding a majority of the shares of Common Stock then
outstanding, and (iii) to the extent that any amendment, modification or
supplement to this Agreement would materially change the rights or obligations
of Company or any Stockholder in a manner different from any other Stockholder
hereunder, Company or such Stockholder. Any amendment, modification, supplement
or waiver effected in accordance with this Section shall be binding on Company
and each Stockholder and their permitted transferees, successors and assignees.
The failure at any time to enforce any of the provisions of this Agreement shall
in no way be construed as a waiver of such provisions and shall not affect the
right of any of the parties thereafter to enforce each and every provision
hereof in accordance with its terms.
(i) Integration. This Agreement, together with all Exhibits
and Schedules hereto and the documents and agreements referred to herein,
constitute the entire agreement of the parties with respect to the specific
subject matter hereof (e.g., transfer restrictions, rights of first refusal,
restrictions on public sale and voting rights) and thereof and supersedes all
prior agreements and negotiations with respect thereto, including but not
limited to the Prior Agreement. Notwithstanding the foregoing, certain parties
hereto may have entered into stock purchase agreements that contain provisions
with regard to "vesting" of shares and repurchase options in favor of Company.
Those agreements are specifically agreed to deal with a subject matter different
from the subject matter hereof and are therefore not superseded by this
Agreement and are specifically acknowledged to remain in full force and effect.
(j) Headings and Pronouns. The headings of the sections and
paragraphs of this Agreement have been inserted for convenience of reference
only and do not constitute a part of this Agreement. Whenever used herein, words
importing the singular shall include the plural and words importing the
masculine shall include the feminine and neuter, and vice versa, unless the
context otherwise requires.
11
(k) Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
with the same effect as if all parties had signed the same document. All such
counterparts shall be deemed an original, shall be construed together and shall
constitute one and the same agreement.
(l) Injunctive Relief. Without intending to limit the
remedies available to any party, the parties hereto acknowledge that a breach of
any of the covenants contained in this Agreement may result in material
irreparable injury to the other parties for which there is no adequate remedy at
law, that it will not be possible to measure damages for such injuries precisely
and that, in the event of such a breach or threat thereof, the other parties, or
any of them, shall be entitled to obtain a temporary restraining order and a
preliminary or permanent injunction restraining or requiring actions prohibited
or required by this Agreement or such other relief as may be required to enforce
specifically any of the covenants of this Agreement.
[Signature Pages Follow]
12
In Witness Whereof, the parties hereto have executed this Stockholders'
Agreement as of the day and year first above written.
COMPANY:
DOVEBID, INC.
By: /s/ Xxxx Xxxx
--------------------------------------------
Its: Chairman and CEO
Address: 0000 Xxxx Xxxxxxxxx Xxxx.
Xxxxxx Xxxx, XX 00000
Facsimile No.: 000-000-0000
Attention: Chief Executive Officer
STOCKHOLDERS:
THE DOVE HOLDINGS CORPORATION
By: /s/ Xxxx Xxxx
--------------------------------------------
Its: President
/s/ Xxxx Xxxx
-----------------------------------------------
XXXX XXXX
/s/ Xxxx Xxxx
-----------------------------------------------
XXXX XXXX
XXXX MANAGEMENT SERVICES, INC.
By: ___________________________________________
Its:
XXXX & COMPANY, INC.
By: /s/ [ILLEGIBLE]
--------------------------------------------
Its: Vice President
COMDISCO, INC.
By: /s/ [ILLEGIBLE]
--------------------------------------------
Title: Vice President
-----------------------------------------
FREMONT VENTURES I, L.P.
a Delaware limited partnership
By: FV, L.P., its General Partner
By: Fremont Resources, Inc.
its General Partner
By: /s/ [ILLEGIBLE]
--------------------------------------------
Its:
F&W INVESTMENTS 2000
By: /s/ [ILLEGIBLE]
--------------------------------------------
It's: General Partner
XXXXXXXX X, L.P.
By: Xxxxxxxx X Management, L.L.C.
Its: General Partner
By: /s/ A. Xxxxx Xxxxxxxx, III
--------------------------------------------
Its: Managing Director
XXXXXXXX ASSOCIATES FUND V, L.P.
By: Xxxxxxxx X Management, L.L.C.
Its: General Partner
By: /s/ A. Xxxxx Xxxxxxxx, III
--------------------------------------------
Its: Managing Director
XXXXXXXX PRINCIPALS FUND, L.L.C.
By: Xxxxxxxx X Management, L.L.C.
Its: Managing Member
By: /s/ A. Xxxxx Xxxxxxxx, III
-----------------------------------------------------
Its: Managing Director
SOFTBANK CAPITAL PARTNERS LP
a Delaware limited partnership
By: SOFTBANK Capital Partners LLC
its General Partner
By: /s/ [ILLEGIBLE]
-----------------------------------------------------
Its: Administrative Member
SOFTBANK CAPITAL ADVISORS FUND LP
a Delaware limited partnership
By: SOFTBANK Capital Partners LLC
its General Partner
By: /s/ [ILLEGIBLE]
-----------------------------------------------------
Its: Administrative Member
SUN MICROSYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------------------------
Xxxxxxx X. Xxxxxxxxxx
Its: Vice President
TPG PARTNERS III, L.P.
By: TPG GenPar III, L.P.
By: TPG Advisors III, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------------------------
Xxxxxxx X. Xxxxxxxxxx
Its: Vice President
TPG PARALLEL III, L.P.
By: TPG GenPar III, L.P.
By: TPG Advisors III, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxxxx
Title: Vice President
-----------------------------------
TPG INVESTORS III, L.P.
By: TPG GenPar III, L.P.
By: TPG Advisors III, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxxxx
Title: Vice President
-----------------------------------
T/3/ PARTNERS, L.P.
By: T/3/ GenPar, L.P.
By: T/3/ Advisors, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxxxx
Title: Vice President
-----------------------------------
T/3/ PARALLEL, L.P.
By: T/3/ GenPar, L.P.
By: T/3/ Advisors, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxxxx
Title: Vice President
-----------------------------------
T/3/ INVESTORS, L.P.
By: T/3/ GenPar, L.P.
By: T/3/ Advisors, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxxxx
Title: Vice President
-----------------------------------
FOF PARTNERS III, L.P.
By: TPG GenPar III, L.P.
By: TPG Advisors III, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxxxx
Title: Vice President
-----------------------------------
FOF PARTNERS III-B, L.P.
By: TPG GenPar III, L.P.
By: TPG Advisors III, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxxxx
Title: Vice President
-----------------------------------
TPG DUTCH PARALLEL III, C.V.
By: TPG GenPar Dutch, L.L.C
By: TPG GenPar III, L.P.
By: TPG Advisors III, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxxx
Title: Vice President
----------------------------------
T/3/ DUTCH PARALLEL, C.V.
By: T/3/ GenPar Dutch, L.L.C.
By: T/3/ GenPar, L.P.
By: T/3/ Advisors, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxxx
Title: Vice President
---------------------------------
T.H. eVENTURE PTE LTD
By:_______________________________________
Its:
YAHOO! INC.
By:_______________________________________
Its:
DATASTREAM SYSTEMS, INC.
By:_______________________________________
Its:
HARBOR INVESTORS, L.P.
By: /s/ [Illegible]
--------------------------------------
It's: General Partner
/s/ Xxxxx X. Xxxxxxxx
------------------------------------------
XXXXX X. XXXXXXXX, Trustee of the Xxxxx X.
Xxxxxxxx Trust U/A DTD 9/29/89
/s/ XXXXXX XXXXX-XXXXXX
------------------------------------------
XXXXXX XXXXX-XXXXXX
TRADEOUT, INC.
By: /s/ Xxxx Xxxxxxx
--------------------------------------
Name: Xxxx Xxxxxxx
Title: Chairman
ZONETRADER, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: CEO
SOFTBANK CAPITAL LP
a Delaware limited partnership
By: SOFTBANK Capital Partners LLC
its General Partner
By: /s/ [Illegible]
---------------------------------------
Its: Administrative Member
