EXHIBIT 10.10
FOURTH AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
This Fourth Amended and Restated Investors' Rights Agreement (this
"Agreement") is made as of March 13, 2002, by and among DoveBid, Inc., a
Delaware corporation (the "Company"), and the investors listed on Schedule A
hereto, each of which is herein referred to as an "Investor" and collectively as
the "Investors."
BACKGROUND
A. The Company has (i) issued shares of the Company's Series A
Preferred Stock to one Investor pursuant to the Series A Preferred Stock
Purchase Agreement dated as of June 4, 1999 (the "Series A Purchase Agreement"),
(ii) shares of the Company's Series B Preferred Stock to certain Investors
pursuant to the Series B Preferred Stock Purchase Agreement dated as of October
18, 1999 (the "Series B Purchase Agreement"), (iii) shares of the Company's
Series C Preferred Stock to certain Investors 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 Purchase Agreement") and
(iv) shares of the Company's Series C Preferred Stock, Series D-1 Preferred
Stock and Series DD Preferred Stock to certain Investors pursuant to the Asset
Purchase Agreement dated as of August 3, 2001 by and between TradeOut, Inc.
("TradeOut") and the Company (the "TradeOut Agreement"). Such Investors (the
"Prior Investors") possess certain rights pursuant to the Third Amended and
Restated Investors' Rights Agreement dated as of August 28, 2001 between the
Company and such Investors, as amended by the Amendment to Investors' Rights and
Stockholders' Agreements entered into as of November 13, 2001 (as amended, the
"Prior Agreement"). Certain Investors have been added as Prior Investors holding
rights under the Prior Agreement by entering into Adoption Agreements in
substantially the form attached hereto as Exhibit B, adding (i) 619,225 shares
of Series C Preferred Stock to Fremont Ventures I, L.P. or its Affiliates in
August 2001 in exchange for cancellation of outstanding shares of the Company's
Common Stock and (ii) 124,843 shares of Series C Preferred Stock issued to Xxxxx
X. Xxxxxxxx (which were thereafter transferred to his trust) and 31,210 shares
of Series C Preferred Stock issued to Xxxxxx Xxxxx-Xxxxxx upon their purchases
of such Preferred Stock in November 2001, subsequent to rescinding their prior
purchases of Common Stock (the "Series C Exchanges").
B. On December 18, 2000, the Company effected a one-for-three reverse
stock split of its outstanding preferred stock (the "Stock Split").
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").
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D. In connection with the Transaction, the Company will issue shares of
the Company's Common Stock, Series C Preferred Stock, Series D-1 Preferred Stock
and Series DD Preferred Stock to ZoneTrader in exchange for certain assets of
ZoneTrader.
E. In connection with the Transaction, the parties to this Agreement
desire that this Agreement shall supersede the Prior Agreement and shall
hereafter govern the rights of all of the Investors to cause the Company to
register shares of Common Stock issued or issuable to the Investors and certain
other matters as set forth herein; and
F. 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").
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. Registration Rights. The Company covenants and agrees as follows:
1.1 Definitions. For purposes of this Agreement:
(a) The term "Act" means the Securities Act of 1933, as amended.
(b) An "Affiliate" means an entity that, directly or indirectly,
controls, is controlled by, or is in common control with, the entity in
question.
(c) The term "Form S-3" means such form under the Act as in
effect on the date hereof or any registration form under the Act
subsequently adopted by the Securities and Exchange Commission ("SEC")
which permits inclusion or incorporation of substantial information by
reference to other documents filed by the Company with the SEC.
(d) The term "Holder" means any person, including the Investors,
owning or having the right to acquire Registrable Securities or any
assignee thereof in accordance with Section 1.13 hereof.
(e) The term "Initiating Holders" means Holders, who own at
least fifty percent (50%) of the Registrable Securities then
outstanding.
(f) The term "1934 Act" means the Securities Exchange Act of
1934, as amended.
(g) "Qualifying Acquisition" means any merger or consolidation
of the Company with or into another entity resulting in the
stockholders of the Company holding less than a majority of the voting
power of the surviving Company, or the sale by the Company's
stockholders of more than 50% of the voting power of the Company in one
transaction or series of related transactions, other than (i) open
market sales or (ii) any sale to a person or entity who is an affiliate
of the Company within the meaning of
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the Act, that has not been approved by the Company's Board of Directors
by unanimous vote.
(h) A "Qualifying IPO" means the consummation of the sale of
securities pursuant to a closing of a bona fide, firm-commitment,
underwritten public offering of shares of Common Stock registered under
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.
(i) The term "register," "registered," and "registration" refer
to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Act, and the
declaration or ordering of effectiveness of such registration statement
or document.
(j) The term "Registrable Securities" means (i) the Common Stock
issuable or issued upon conversion of (A) the Series A Preferred Stock
issued pursuant to the Series A Purchase Agreement, (B) the Series B
Preferred Stock issued pursuant to the Series B Purchase Agreement, (C)
the Series C Preferred Stock issued pursuant to the Series C Purchase
Agreement, (D) the Series C Preferred Stock issued or issuable pursuant
to the Warrant issued under the Series C Purchase Agreement (the
"Warrant"), (E) the Series C Preferred Stock, Series D-1 Preferred
Stock and Series DD Preferred Stock originally issuable pursuant to the
TradeOut Agreement, (F) the Series C Preferred Stock, Series D-1
Preferred Stock and Series DD Preferred Stock originally issuable
pursuant to the ZoneTrader Agreement and (G) the shares of Series C
Preferred Stock issued to Fremont Ventures I, L.P., Xxxxx X. Xxxxxxxx
or Xxxxxx Xxxxx-Xxxxxx or their Affiliates in the Series C Exchanges;
and (ii) any Common Stock of the Company issued as (or issuable upon
the conversion or exercise of any warrant, right or other security
which is issued as) a split, dividend or other distribution with
respect to, or in exchange for or in replacement of, such Series A, B,
C, D-1 or DD Preferred Stock or Common Stock; excluding in all cases,
however, any Registrable Securities sold by a person in a transaction
in which such person's rights under this Section 1 are not assigned in
accordance with this Agreement and any Registrable Securities sold to
the public in a registered public offering or sold in accordance with
Rule 144 promulgated under the Securities Act.
(k) The number of shares of "Registrable Securities then
outstanding" shall mean the number of shares of Common Stock then
outstanding which are, and the number of shares of Common Stock
issuable pursuant to then exercisable or convertible securities which
are, Registrable Securities.
1.2 Request for Registration.
(a) If the Company shall receive at any time after the earlier
of (i) November 30, 2001 or (ii) six (6) months after the effective date of the
first registration statement for a public offering of securities of the Company
(other than a registration statement relating to either the sale of securities
to employees of the Company pursuant to a stock option,
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stock purchase or similar plan or a SEC Rule 145 transaction), a written request
from the Initiating Holders that the Company file a registration statement under
the Act covering the registration of at least twenty percent (20%) of the
Registrable Securities then outstanding (or a lesser percent if the anticipated
aggregate offering price, net of underwriting discounts and commissions, would
exceed $7,000,000), then the Company shall, within ten (10) days after the
receipt thereof, give written notice of such request to all Holders and shall,
subject to the limitations of subsection 1.2(b), use its best efforts to effect
as soon as practicable the registration under the Act of all Registrable
Securities which the Holders request to be registered within twenty (20) days
after the mailing of such notice by the Company in accordance with Section 3.5.
(b) If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
this Section 1.2, and the Company shall include such information in the written
notice referred to in subsection 1.2(a). The underwriter will be selected by a
majority in interest of the Initiating Holders and shall be reasonably
acceptable to the Company. In such event, the right of any Holder to include
such Holder's Registrable Securities in such registration shall be conditioned
upon such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting (unless otherwise mutually
agreed by a majority in interest of the Initiating Holders and such Holder) to
the extent provided herein. All Holders proposing to distribute their securities
through such underwriting shall (together with the Company as provided in
subsection 1.4(e)) enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting by a majority in
interest of the Initiating Holders. Notwithstanding any other provision of this
Section 1.2, if the underwriter advises the Initiating Holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the Initiating Holders shall so advise all Holders of
Registrable Securities which would otherwise be underwritten pursuant hereto,
and the number of shares of Registrable Securities that may be included in the
underwriting shall be allocated among all Holders thereof, including the
Initiating Holders, in proportion (as nearly as practicable) to the amount of
Registrable Securities of the Company owned by each Holder; provided, however,
that the number of shares of Registrable Securities to be included in such
underwriting shall not be reduced unless all other securities are first entirely
excluded from the underwriting.
(c) The Company is obligated to effect only two (2) such
registrations pursuant to this Section 1.2.
(d) Notwithstanding the foregoing, if the Company shall furnish
to Holders requesting a registration statement pursuant to this Section 1.2, a
certificate signed by the Chief Executive Officer of the Company stating that in
the good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its shareholders for such registration
statement to be filed and it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer taking action
with respect to such filing for a period of not more than one hundred twenty
(120) days after receipt of the request of the Initiating Holders; provided,
however, that the Company may not utilize this right more than once in any
twelve-month period.
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(e) In addition, the Company shall not be obligated to effect,
or to take any action to effect, any registration pursuant to this Section 1.2:
(i) During the period starting with the date thirty (30)
days prior to the Company's good faith estimate of the date of
filing of, and ending on a date one hundred eighty (180) days after the
effective date of, a registration subject to Section 1.3 hereof,
provided that the Company is actively employing in good faith all
reasonable efforts to cause such registration statement to become
effective; or
(ii) If the Initiating Holders propose to dispose of
shares of Registrable Securities that may be immediately registered on
Form S-3 pursuant to a request made pursuant to Section 1.12 below.
1.3 Company Registration. If (but without any obligation to do so)
the Company proposes to register (including for this purpose a registration
effected by the Company for stockholders other than the Holders) any of its
stock or other securities under the Act in connection with the public offering
of such securities (other than a registration relating solely to the sale of
securities to participants in a Company stock plan, a SEC Rule 145 transaction
or a registration on any form which does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of the Registrable Securities), the Company shall, at such
time, promptly give each Holder written notice of such registration. Upon the
written request of each Holder given within twenty (20) days after mailing of
such notice by the Company in accordance with Section 3.5, the Company shall,
subject to the provisions of Section 1.8, cause to be registered under the Act
all of the Registrable Securities that each such Holder has requested to be
registered.
1.4 Obligations of the Company. Whenever required under this Section
1 to effect the registration of any Registrable Securities, the Company shall,
as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the Holders
of a majority of the Registrable Securities registered thereunder, keep such
registration statement effective for up to one hundred twenty (120) days or
until the distribution contemplated in the Registration Statement has been
completed; provided, however, that (i) such 120-day period shall be extended for
a period of time equal to the period the Holder refrains from selling any
securities included in such registration (A) at the request of an underwriter of
Common Stock (or other securities) of the Company or (B) when a prospectus must
be updated pursuant to Section 1.4(f) below; and (ii) in the case of any
registration of Registrable Securities on Form S-3 which are intended to be
offered on a continuous or delayed basis, such 120-day period shall be extended,
if necessary, to keep the registration statement effective until all such
Registrable Securities are sold, provided that Rule 415, or any successor rule
under the Act, permits an offering on a continuous or delayed basis, and
provided further that applicable rules under the Act governing the obligation to
file a post-effective amendment permit, in lieu of filing a post-effective
amendment which (1) includes any prospectus required by Section 10(a)(3) of the
Act or (2) reflects facts or events representing a material or fundamental
change in the information set forth in the registration statement, the
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incorporation by reference of information required to be included in (1) and (2)
above to be contained in periodic reports filed pursuant to Section 13 or 15(d)
of the 1934 Act in the registration statement.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Act with respect to the disposition of all securities covered
by such registration statement.
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders,
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
(g) Cause all such Registrable Securities registered hereunder
to be listed on each securities exchange on which similar securities issued by
the Company are then listed.
(h) Provide a transfer agent and registrar for all Registrable
Securities registered hereunder and a CUSIP number for all such Registrable
Securities, in each case not later than the effective date of such registration.
(i) Furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to this Section 1, on the date
that such Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to this Section 1, if such securities
are being sold through underwriters, or, if such securities are not being sold
through underwriters, on the date that the registration statement with respect
to such securities becomes effective, (i) an opinion, dated such date, of the
counsel representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders
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requesting registration of Registrable Securities and (ii) a letter dated such
date, from the independent certified public accountants of the Company, in form
and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed to the
underwriters, if any, and to the Holders requesting registration of Registrable
Securities.
1.5 Furnish Information.
(a) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Section 1 with respect to the
Registrable Securities of any selling Holder that such Holder shall furnish to
the Company such information regarding itself, the Registrable Securities held
by it, and the intended method of disposition of such securities as shall be
required to effect the registration of such Holder's Registrable Securities.
(b) The Company shall have no obligation with respect to any
registration requested pursuant to Section 1.2 or Section 1.12 if, due to the
operation of subsection 1.5(a), the number of shares or the anticipated
aggregate offering price of the Registrable Securities to be included in the
registration does not equal or exceed the number of shares or the anticipated
aggregate offering price required to originally trigger the Company's obligation
to initiate such registration as specified in subsection 1.2(a) or subsection
1.12(b)(2), whichever is applicable.
1.6 Expenses of Demand Registration. All expenses (other than
underwriting discounts and commissions) incurred in connection with
registrations, filings or qualifications pursuant to Section 1.2, including
(without limitation) all registration, filing and qualification fees, printers'
and accounting fees, fees and disbursements of counsel for the Company, and the
reasonable fees and disbursements of one counsel for the selling Holders shall
be borne by the Company; provided, however, that the Company shall not be
required to pay for any expenses of any registration proceeding begun pursuant
to Section 1.2 if the registration request is subsequently withdrawn at the
request of the Holders of a majority of the Registrable Securities to be
registered (in which case each Holder shall bear a pro rata portion of such
expenses, based on the ratio of the number of Registrable Securities to have
been included in such registration by such Holder compared to the total number
of Registrable Securities to have been included by all Holders), unless the
Holders of a majority of the Registrable Securities agree to forfeit their right
to one demand registration pursuant to Section 1.2; provided, further, however,
that if at the time of such withdrawal, the Holders have learned of a material
adverse change in the condition, business, or prospects of the Company from that
known to the Holders at the time of their request and have withdrawn the request
with reasonable promptness following disclosure by the Company of such material
adverse change, then the Holders shall not be required to pay any of such
expenses and shall retain their rights pursuant to Section 1.2.
1.7 Expenses of Company Registration. The Company shall bear and pay
all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the company
registrations pursuant to Section 1.3 and the first two Form S-3 registrations
pursuant to Section 1.12 below, for each Holder, including (without limitation)
all registration, filing, and qualification fees, printers and accounting fees
relating or apportionable thereto, but excluding underwriting discounts and
commissions relating to
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Registrable Securities. In addition, the Company shall pay the reasonable fees
and disbursements of one counsel for the selling Holders.
1.8 Underwriting Requirements. In connection with any offering
involving an underwriting of shares of the Company's capital stock, the Company
shall not be required under Section 1.3 to include any of the Holders'
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it (or by
other persons entitled to select the underwriters), and then only in such
quantity as the underwriters determine in their sole discretion will not
jeopardize the success of the offering by the Company. If the total amount of
securities, including Registrable Securities, requested by stockholders to be
included in such offering exceeds the amount of securities sold other than by
the Company that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters determine in their sole
discretion will not jeopardize the success of the offering (the securities so
included to be apportioned pro rata among the selling stockholders according to
the total amount of securities entitled to be included therein owned by each
selling stockholder or in such other proportions as shall mutually be agreed to
by such selling stockholders) but in no event shall:
(i) the amount of securities of the selling Holders included
in the offering be reduced below thirty percent (30%) of the total amount
of securities included in such offering, unless such offering is the
initial public offering of the Company's securities in which case the
selling stockholders may be excluded if the underwriters make the
determination described above and no other stockholder's securities are
included; or
(ii) notwithstanding (i) above, any shares being sold by a
stockholder exercising a demand registration right similar to that granted
in Section 1.2 above be excluded from such offering.
For purposes of the preceding parenthetical concerning apportionment, for any
selling stockholder which is a holder of Registrable Securities and which is a
partnership or corporation, the partners, retired partners, members, retired
members and stockholders of such holder, or the estates and family members of
any such partners, retired partners, members, retired members and any trusts for
the benefit of any of the foregoing persons shall be deemed to be a single
"selling stockholder," and any pro-rata reduction with respect to such "selling
stockholder" shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
"selling stockholder," as defined in this sentence.
1.9 Delay of Registration. No Holder shall have any right to obtain
or seek an injunction restraining or otherwise delaying any such registration
filed with and declared effective by the SEC as the result of any controversy
that might arise with respect to the interpretation or implementation of this
Section 1.
1.10 Indemnification. In the event any Registrable Securities are
included in a registration statement under this Section 1 the following shall
apply.
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(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, the partners, officers, directors, stockholders
and members of each Holder, any underwriter (as defined in the Act) for such
Holder and each person, if any, who controls such Holder or underwriter within
the meaning of the Act or the 1934 Act, against any losses, claims, damages or
liabilities (joint or several) to which they may become subject under the Act,
or the 1934 Act, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"):
(i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein, or any
amendments or supplements thereto,
(ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the
statements therein not misleading, or
(iii) any violation or alleged violation by the Company of
the Act, the 1934 Act, any other federal or state law, or any rule or
regulation promulgated under the Act or the 1934 Act;
and the Company will pay to each such Holder, underwriter or controlling person
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this subsection
1.10(a) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage, liability
or action to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by any such Holder,
underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, any other
Holder selling securities in such registration statement and any controlling
person of any such underwriter or other Holder, against any losses, claims,
damages or liabilities (joint or several) to which any of the foregoing persons
may become subject, under the Act, or the 1934 Act or any other federal or state
law insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Holder expressly
for use in connection with such registration; and each such Holder will pay any
legal or other expenses reasonably incurred by any person intended to be
indemnified pursuant to this subsection 1.10(b), in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this subsection
1.10(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such
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settlement is effected without the consent of the Holder, which consent
shall not be unreasonably withheld; provided, that, in no event shall any
indemnity under this subsection 1.10(b) exceed the net proceeds from the
offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 1.10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.10, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
1.10, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 1.10.
(d) If the indemnification provided for in this Section 1.10 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations; provided that in no event shall any contribution by a Holder
under this Section 1.10(d) exceed the gross proceeds from the offering received
by such Holder. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control, provided that the Company shall use its reasonable
efforts to cause such provisions to conform to those set forth herein.
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(f) The obligations of the Company and Holders under this
Section 1.10 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1, and otherwise.
1.11 Reports Under 1934 Act. With a view to making available
to the Holders the benefits of Rule 144 promulgated under the Act and any other
rule or regulation of the SEC that may at any time permit a Holder to sell
securities of the Company to the public without registration or pursuant to a
registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144, at all times after the effective
date of the first registration statement filed by the Company for the offering
of its securities to the general public;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(c) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of SEC Rule 144 (at
any time after the effective date of the first registration statement filed by
the Company), the Act and the 1934 Act (at any time after it has become subject
to such reporting requirements), or that it qualifies as a registrant whose
securities may be resold pursuant to Form S-3 (at any time after it so
qualifies), (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company, and (iii)
such other information as may be reasonably requested in availing any Holder of
any rule or regulation of the SEC which permits the selling of any such
securities without registration or pursuant to such form.
1.12 Form S-3 Registration. In case the Company shall receive from a
Holder or Holders a written request or requests that the Company effect a
registration on Form S-3 and any related qualification or compliance with
respect to all or a part of the Registrable Securities owned by such Holder or
Holders, the Company will:
(a) promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other Holders; and
(b) as soon as practicable, effect such registration and all
such qualifications and compliances as may be so requested and as would permit
or facilitate the sale and distribution of all or such portion of such Holder's
or Holders' Registrable Securities as are specified in such request, together
with all or such portion of the Registrable Securities of any other Holder or
Holders joining such request as are specified in a written request given within
15 days after receipt of such written notice from the Company; provided,
however, that the Company shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this Section 1.12: (i) if
Form S-3 is not available for such offering by the Holders; (ii) if the Holders,
together with the holders of any other securities of the Company entitled to
inclusion in such
11
registration, propose to sell Registrable Securities and such other
securities (if any) at an aggregate price to the public (net of any
underwriters' discounts or commissions) of less than $1,000,000; (iii) if
the Company shall furnish to the Holders a certificate signed by the Chief
Executive Officer of the Company stating that in the good faith judgment of
the Board of Directors of the Company, it would be seriously detrimental to
the Company and its stockholders for such Form S-3 Registration to be
effected at such time, in which event the Company shall have the right to
defer the filing of the Form S-3 registration statement for a period of not
more than 90 days after receipt of the request of the Holder or Holders
under this Section 1.12; provided, however, that the Company shall not
utilize this right (A) more than once in any twelve month period or (B) if
it has exercised the deferral right in Section 1.2(d) in the previous
twelve month period; (iv) if the Company has, within the twelve month
period preceding the date of such request, already effected two
registrations on Form S-3 for the Holders pursuant to this Section 1.12; or
(v) in any particular jurisdiction in which the Company would be required
to qualify to do business or to execute a general consent to service of
process in effecting such registration, qualification or compliance.
Subject to the foregoing, the Company shall file a registration statement
covering the Registrable Securities and other securities so requested to be
registered as soon as practicable after receipt of the request or requests of
the Holders. All expenses incurred in connection with a registration requested
pursuant to Section 1.12, including (without limitation) all registration,
filing, qualification, printer's and accounting fees and the reasonable fees and
disbursements of one counsel for the selling Holder or Holders and counsel for
the Company, but excluding any underwriters' discounts or commissions associated
with Registrable Securities, shall for the first two such registrations be borne
by the Company and, thereafter shall be borne pro rata by the Holder or Holders
participating in the Form S-3 Registration. Registrations effected pursuant to
this Section 1.12 shall not be counted as demands for registration or
registrations effected pursuant to Sections 1.2 or 1.3, respectively.
1.13 Assignment of Registration Rights. The rights to cause the
Company to register Registrable Securities pursuant to this Section 1 may be
assigned (but only with all related obligations) by a Holder to a wholly-owned
subsidiary of a corporate Holder, to an Affiliate of a Holder or to a transferee
or assignee of Registrable Securities who, after such assignment or transfer,
holds at least 10% of the Registrable Securities (subject to appropriate
adjustment for stock splits, stock dividends, combinations and other
recapitalizations), provided the Company is, within a reasonable time after such
transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned; and provided, further, that such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Act. For the purposes of determining the number of shares
of Registrable Securities held by a transferee or assignee, the holdings of
transferees and assignees of a partnership or limited liability company who are
partners or members or retired partners or members of such entity (including
spouses and ancestors, lineal descendants and siblings of such partners or
members or spouses who acquire Registrable Securities by gift, will or intestate
succession) shall be aggregated together and with the partnership or limited
liability company; provided that, with respect to Registrable Securities issued
to TradeOut, no such aggregation shall apply to a stockholder of TradeOut unless
such
12
stockholder (a) was a former holder of Preferred Stock of TradeOut and (b) holds
more than 100,000 Registrable Securities; provided, further, that all assignees
and transferees who would not qualify individually for assignment of
registration rights shall have a single attorney-in-fact for the purpose of
exercising any rights, receiving notices or taking any action under this Section
1. Notwithstanding anything in this Agreement to the contrary, any holder of
preferred stock of ZoneTrader who purchases Registrable Securities from
ZoneTrader or receives Registrable Securities upon ZoneTrader's dissolution
shall, upon execution of an Adoption Agreement as set forth in Section 3.1, be
deemed to be a "Holder" (whether or not such holder or former holder of
preferred stock of ZoneTrader holds at least 10% of the Registrable Securities)
rather than an assignee of a Holder in accordance with the foregoing provisions
of this Section 1.13.
1.14 Limitations on Subsequent Registration Rights. From and after the
date of this Agreement, the Company shall not, without the prior written consent
of the Holders of a majority of the outstanding Registrable Securities, enter
into any agreement with any holder or prospective holder of any securities of
the Company which would allow such holder or prospective holder (a) to obtain
registration rights superior to or on parity with the rights contained in this
Agreement, (b) to include such securities in any registration filed under
Section 1.2 hereof, unless under the terms of such agreement, such holder or
prospective holder may include such securities in any such registration only to
the extent that the inclusion of its securities will not reduce the amount of
the Registrable Securities of the Holders which is included or (c) to make a
demand registration which could result in such registration statement being
declared effective prior to the earlier of either of the dates set forth in
subsection 1.2(a) or within one hundred twenty (120) days of the effective date
of any registration effected pursuant to Section 1.2.
1.15 Market Stand-Off Agreement. Each Investor hereby agrees that,
during the period of duration specified by the Company and an underwriter of
common stock or other securities of the Company, following the effective date of
a Qualifying IPO, such Investor shall not, to the extent requested by the
Company and such underwriter, directly or indirectly sell, offer to sell,
contract to sell (including, without limitation, any short sale), grant any
option to purchase or otherwise transfer or dispose of (other than to donees who
agree to be similarly bound) any securities of the Company held by it at any
time during such period except common stock included in such registration;
provided, however, that:
(a) Such agreement shall not exceed one hundred eighty (180)
days; and
(b) An Investor shall not be subject to such agreement unless
substantially all executive officers and directors of the Company enter
into similar agreements and all other Investors and holders of other
registration rights are subject to or obligated to enter into similar
agreements.
In order to enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to all securities of the Company held by each Investor
(and the shares or securities of every other person subject to the foregoing
restriction) until the end of such period.
13
1.16 Termination of Registration Rights. No Holder shall be entitled
to exercise any right provided for in this Section 1 after the earlier of (a)
five (5) years following a Qualifying IPO (b) after a Qualifying Acquisition or
(c) with respect to any Holder which then owns one percent (1%) or less of the
outstanding capital stock of the Company, such time as the Holder can sell all
such stock under Rule 144 (or any successor rule) without restriction (including
without being subject to any sales volume limitation).
2. Covenants of the Company.
2.1 Delivery of Financial Statements. The Company shall deliver to
each Investor, for so long as such Investor continues to own at least five
percent (5%) of the Company's outstanding capital stock, on an as-converted
basis, and the Warrant, as if exercised and the shares acquired thereunder
converted, or, if less than five percent (5%) of such securities are purchased
by or issued to an Investor pursuant to the Series C Purchase Agreement and/or
pursuant to the Series C Exchanges, but such Investor has purchased under the
Series C Purchase Agreement and/or pursuant to the Series C Exchanges at least
1,248,333 shares of Series C Preferred Stock or an aggregate total of 1,248,333
shares of any combination of the Company's capital stock issued in connection
with the Transaction (which share numbers reflect the effect of the Stock Split
and are to be adjusted for stock splits and like events occurring after the date
hereof), for so long as such Investor continues to own all of the shares of
Series C Preferred Stock purchased under the Series C Purchase Agreement and/or
pursuant to the Series C Exchanges or the shares of Company's capital stock
issued in connection with the Transaction or the shares of Common Stock into
which such shares may be converted (each such Investor, a "Qualified Investor"):
(a) as soon as practicable, but in any event within ninety (90)
days after the end of each fiscal year of the Company, a statement of
operations for such fiscal year, a balance sheet of the Company and
statement of stockholder's equity as of the end of such year, and a cash
flow statement for such year, such year-end financial reports to be in
reasonable detail, prepared in accordance with generally accepted
accounting principles ("GAAP"), and audited and certified by independent
public accountants of nationally recognized standing selected by the
Company;
(b) as soon as practicable, but in any event within forty-five
(45) days after the end of each of the quarters of each fiscal year of the
Company, an unaudited statement of operations and cash flow statement, for
such fiscal quarter and setting forth year-to-date financial information,
and an unaudited balance sheet as of the end of such fiscal quarter;
(c) within twenty (20) days after the end of each month, an
unaudited statement of operations and cash flow statement for such month
and setting forth year-to-date financial information, and an unaudited
balance sheet as of the end of such month, all in reasonable detail;
(d) as soon as practicable, but in any event thirty (30) days
prior to the end of each fiscal year, a financial budget and business plan
for the next fiscal year, pre-
14
pared on a monthly and quarterly basis, in form and substance reasonably
acceptable to Investors;
(e) with respect to the financial statements called for in
subsection (b) and (c) of this Section 2.1, an instrument executed by the
Chief Financial Officer or Chief Executive Officer of the Company
certifying that such financials were prepared in accordance with GAAP
consistently applied with prior practice for earlier periods (with the
exception of footnotes that may be required by GAAP) and fairly present the
financial condition of the Company and its results of operations for the
period specified, subject to the year-end audit adjustment; and
(f) such other information relating to the financial condition,
business, prospects or corporate affairs of the Company as the Investor may
from time to time reasonably request; provided, however, that the Company
shall not be obligated pursuant to this Section 2.1(f) to provide access to
any information which it reasonably considers a trade secret or other
proprietary intellectual property information, unless the Investor has
agreed to maintain such information in confidence.
2.2 Inspection. The Company shall permit each Qualified Investor, at
such Qualified Investor's expense, to visit and inspect the Company's
properties, to examine its books of account and records and to discuss the
Company's affairs, finances and accounts with its officers, all at such
reasonable times as may be requested by the Investor; provided, however, that
the Company shall not be obligated pursuant to this Section 2.2 to provide
access to any trade secret or other proprietary intellectual property
information, unless the Investor has agreed to maintain such information in
confidence.
2.3 Termination of Information and Inspection Covenants. The covenants
set forth in Sections 2.1 and 2.2 shall terminate and be of no further force or
effect upon the earlier of (A) immediately prior to the first closing of a
Qualifying IPO, (B) the Company first becoming subject to the periodic reporting
requirements of Sections 12(g) or 15(d) of the 1934 Act or (C) after a
Qualifying Acquisition.
2.4 Right of First Offer. Subject to the terms and conditions
specified in this Section 2.4, the Company hereby grants to each Major Investor
(as defined below) a right of first offer with respect to future sales by the
Company of its Shares (as defined below). For purposes of this Section 2.4, a
"Major Investor" means TradeOut, ZoneTrader and any Investor who holds any
number of shares of Series C Preferred Stock issued or issuable pursuant to the
Series C Purchase Agreement or the Warrant and/or pursuant to any of the Series
C Exchanges, or who holds at least 500,000 shares (which share number reflects
the effect of the Stock Split and is to be adjusted for stock splits and like
events occurring after the date hereof) of: (a) Series A and B Preferred Stock
(or the Common Stock issued upon conversion thereof) issued or issuable pursuant
to the Series A or B Purchase Agreements, or (b) Series C, D-1 or DD Preferred
Stock (or the Common Stock issued upon conversion thereof) issued or issuable
pursuant to the TradeOut Agreement or the ZoneTrader Agreement. For purposes of
this Section 2.4, Investor includes any general or limited partners, members or
Affiliates of, or any other entity or person under common investment management
(by an investment manager who retains voting control of any such shares of the
Company's stock) with, an Investor, and the
15
shares held by such general or limited partners, members, Affiliates or entities
or persons under common investment management (by an investment manager who
retains voting control of any such shares of the Company's stock) shall be
aggregated for purposes of determining whether the Investor is a Major Investor;
provided that, with respect to shares issued to TradeOut, no such aggregation
--------
shall apply to a stockholder of TradeOut, unless such stockholder (a) was a
former holder of Preferred Stock of TradeOut and (b) holds more than 100,000
Registrable Securities. A Major Investor shall be entitled to apportion the
right of first offer hereby granted it among itself and its partners, members
and Affiliates in such proportions as it deems appropriate; provided that, with
--------
respect to shares issued to TradeOut and ZoneTrader, no such apportionment shall
be made to a stockholder of TradeOut or ZoneTrader, unless such member or
stockholder (a) was a former holder of Preferred Stock of TradeOut or
ZoneTrader, as applicable, (b) holds more than 100,000 Registrable Securities,
and (c) is an "accredited investor" (as defined below), on the date of the
Company proposes to sell its Shares. Each time the Company proposes to offer any
shares of, or securities convertible into or exercisable for any shares of, any
class of its capital stock ("Shares"), the Company shall first make an offering
of such Shares to each Major Investor in accordance with the following
provisions. For purposes of this Agreement, the term "accredited investor" shall
have the meaning ascribed to it under Regulation D promulgated under the
Securities Act of 1933, as amended.
(a) The Company shall deliver a notice by certified mail
("First Notice") to the Major Investors stating (i) its bona fide intention to
offer such Shares, (ii) the number of such Shares to be offered, and (iii) the
price and terms, if any, upon which it proposes to offer such Shares.
(b) Within 10 business days after receipt of the First
Notice, the Major Investors may elect to purchase or obtain, at the price and on
the terms specified in the First Notice, up to that portion of such Shares which
equals the proportion that the number of shares of Common Stock issued and held,
or issuable upon conversion of the Series A, B, C, D-1 and DD Preferred Stock
then held, by such Major Investor bears to the total number of shares of Common
Stock of the Company then outstanding (assuming full conversion and exercise of
all convertible or exercisable securities outstanding) as of the date of the
First Notice. For the avoidance of doubt, no individual share shall be counted
more than one time in calculating the portion of Shares which each of the Major
Investors may elect to purchase or obtain.
(c) If all Shares which the Major Investors are entitled to
obtain pursuant to Section 2.4(b) above are not elected to be obtained as
provided herein, the Company shall promptly following the expiration of the
period provided in such Section 2.4(b), deliver to each Major Investor who has
elected to purchase its full initial portion in accordance with Section 2.4(b)
(a "Fully Exercising Investor"), a written notice of Shares remaining
unsubscribed (the "Second Notice"), which shall specify the number of
unsubscribed Shares remaining after application of Section 2.4(b). A Fully
Exercising Investor may, during the ten calendar day period after receipt of the
Second Notice, elect to purchase any such unsubscribed Shares, up to each such
Fully Exercising Investor's pro rata portion, or such other proportion of all or
any part of the unsubscribed Shares as all Fully Exercising Investors may
mutually agree upon. A Fully Exercising Investor's pro rata portion shall be
equal to (i) the proportion that the number of shares of Common Stock issued, or
issuable upon conversion of Series A, B, C, D-1 and DD Preferred Stock then held
by such Fully Exercising Investor bears to (ii) the total number
16
of shares of such stock then held by all Fully Exercising Investors who wish to
purchase some of the unsubscribed Shares.
(d) If all Shares referred to in the First Notice are not
elected to be obtained as provided in subsections 2.4(b) and 2.4(c) hereof, the
Company may, during the 60-day period following the expiration of the period
provided in subsection 2.4(c) hereof, offer the remaining unsubscribed portion
of such Shares to any person or persons at a price not less than, and upon terms
no more favorable to the offeree than those specified in the First Notice. If
the Company does not enter into an agreement for the sale of the Shares within
such period, or if such agreement is not consummated within 60 days of the
execution thereof, the right provided hereunder shall be deemed to be revived
and such Shares shall not be offered unless first reoffered to the Major
Investors in accordance herewith.
(e) The right of first offer in this Section 2.4 shall not
be applicable (i) to the issuance or sale of Common Stock (or options therefor)
to employees, consultants or directors of the Company directly or pursuant to a
stock option plan, restricted stock plan or similar benefit program or agreement
approved by the Board of Directors of the Company or by the Compensation
Committee thereof, (ii) to or after a Qualifying IPO, (iii) upon the exercise of
warrants or options, or upon the conversion of convertible securities,
outstanding on the date hereof or as to which the Major Investors have been
previously offered the right to participate as contemplated by this Section 2.4,
(iv) to the issuance of securities in connection with a bona fide business
acquisition by the Company, whether by merger, consolidation, sale of assets,
sale or exchange of stock or otherwise, (v) to the issuance of stock, warrants
or other securities or rights to persons or entities with which the Company has
business relationships provided such issuances are for other than primarily
equity financing, (vi) to the issuance of capital stock (or warrants therefor)
to a lending or leasing institution in connection with a debt or lease
financing, (vii) in connection with a stock split or dividend, or a
recapitalization or reorganization of the Company, (viii) to securities issued
in a transaction registered under the Act, (ix) to the shares of Common Stock or
Series X, X, X, X-0 and DD Preferred Stock purchased pursuant to the Series A
Purchase Agreement, the Series B Purchase Agreement, the Series C Purchase
Agreement, the TradeOut Agreement, or the ZoneTrader Agreement or to the shares
of capital stock of the Company into which such shares of Preferred Stock may be
converted, (x) to any of the Series C Exchanges, or (xi) upon or after a
Qualifying Acquisition.
2.5 Proprietary Information Agreements. The Company agrees to
----------------------------------
use its best efforts to cause each officer and employee of the Company and its
subsidiaries to enter into, and maintain in effect, a proprietary information
and inventions agreement in a form that has been approved by the Investors.
2.6 Key Man Life Insurance. The Company shall maintain in full
----------------------
force and effect term life insurance in favor of the Company on the life of each
of Xxxx Xxxx and Xxxx Xxxx in a coverage amount not less than $2 million in each
case, unless otherwise approved by the Company's Board of Directors.
2.7 SBA Requirements. The Company will promptly furnish to any
----------------
Investor, upon request from such Investor, all forms that may be required to be
filed with the Small Business Administration ("SBA") from time to time with
respect to the transactions contemplated by
17
this Agreement and such Investor's ownership of the Series A or B Preferred
Stock, and will provide to such Investor and the SBA such other information and
forms as such Investor may reasonably request or the SBA may from time to time
request with respect to the transactions contemplated by this Agreement and such
Investor's ownership of such shares. The Company has not and will not directly
or indirectly use the proceeds from the issuance and sale of the shares of
Series A Preferred Stock pursuant to the Series A Purchase Agreement or the
Series B Preferred Stock pursuant to the Series B Purchase Agreement for any
purpose for which a small business investment company is prohibited from
providing funds under 13 C.F.R. ss.107.901.
2.8 Termination of Certain Covenants. The covenants set forth in
--------------------------------
Sections 2.5 through 2.7 shall terminate and be of no further force or effect
immediately prior to the first closing of a Qualifying IPO or upon a Qualifying
Acquisition.
3. Miscellaneous.
-------------
3.1 Successors and Assigns; Addition of Investors. Except as
---------------------------------------------
otherwise provided herein and in addition to any restriction on transfer that
may be imposed by any other agreement by which any party hereto may be bound,
the terms and conditions of this Agreement shall inure to the benefit of, and be
binding upon, the respective successors and assigns of the parties (including
transferees of any shares of Registrable Securities); provided that for any such
--------
transfer to be deemed effective, the transferee shall have executed and
delivered an Adoption Agreement substantially in the form attached hereto as
Exhibit A; provided, further, that upon the execution and delivery of an
--------- -------- -------
Adoption Agreement by any transferee reasonably acceptable to the Company (it
being understood that any former stockholder of TradeOut or ZoneTrader receiving
Registrable Securities pursuant to the liquidation of TradeOut or ZoneTrader, as
applicable, shall be deemed to be reasonably acceptable to the Company), such
transferee shall be deemed to be a party hereto as if such transferee's
signature appeared on the signature pages hereto (and Schedule A shall be
modified to include such transferee). For the avoidance of any doubt, no
transferee shall become a Holder unless such transferee meets the requirements
of Section 1.13. By their execution hereof or any Adoption Agreeement, each of
the Investors appoints the Company as its attorney-in-fact for the purpose of
executing any Adoption Agreement which may be required to be delivered
hereunder. Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.
3.2 Governing Law. This Agreement shall be governed by and
-------------
construed under the laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California.
3.3 Titles and Subtitles. The titles and subtitles used in this
--------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
3.4 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
18
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 the Company at the address or facsimile number,
as applicable, set forth on the signature pages hereto; or (B) if to any
Investor, at the address or facsimile number, as applicable, as shown on the
stock register maintained by the Company. Any party hereto may from time to time
by notice in writing to the other parties as provided herein, designate a
different mailing address or a different person to which such notices or demands
are thereafter to be addressed or delivered.
3.5 Expenses. If any action at law or in equity is necessary
--------
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
3.6 Amendments and Waivers. Any term of this Agreement may be
----------------------
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Holders of
a majority of the Registrable Securities then outstanding. Any amendment or
waiver effected in accordance with this paragraph shall be binding on each
Holder of any Registrable Securities then outstanding, each future holder of all
such Registrable Securities, and the Company.
3.7 Severability. If one or more provisions of this Agreement
------------
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
3.8 Aggregation of Stock. All shares of Registrable
--------------------
Securities held or acquired by Affiliates, or affiliated persons, including, in
each case, general or limited partners, shareholders or members of such person,
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's capital 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 Registrable
Securities; provided, further, ZoneTrader's individual ownership shall not be so
-------- -------
aggregated with shares of Company's capital 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 Registrable Securities.
3.9 Entire Agreement. This Agreement (including the Exhibits
----------------
hereto, if any) constitutes the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof and
supersedes all prior agreements or understandings between or among any of the
parties hereto with respect to the subject matter hereof, including the Prior
Agreement.
3.10 Counterparts. This Agreement may be executed in two or
------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
19
4. Amendment and Restatement of the Prior Agreement. Conditioned upon
------------------------------------------------
the Effective Time and the execution of this Agreement by the Company and the
Prior Investors holding immediately prior to the Effective Time 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 a majority of all shares
of Common 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 Effective
Time, effective as of immediately prior to the Effective Time, 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 this Agreement shall have the rights and
obligations hereunder.
[Signature Pages Follow]
20
In Witness Whereof, the parties have executed this Agreement as of the date
first above written.
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
INVESTORS: 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:______________________________________________
Its:
TPG PARTNERS III, L.P.
By: TPG GenPar III, L.P.
By: TPG Advisors III, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------------
Xxxxxxx X. Xxxxxxxxx
Title: Vice President
-------------------------------------------
TPG PARALLEL III, L.P.
By: TPG GenPar III, L.P.
By: TPG Advisors III, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------------
Xxxxxxx X. Xxxxxxxxx
Title: Vice President
-------------------------------------------
TPG INVESTORS III, L.P.
By: TPG GenPar III, L.P.
By: TPG Advisors III, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------------
Xxxxxxx X. Xxxxxxxxx
Title: Vice President
-------------------------------------------
T/3/ PARTNERS, L.P.
By: T/3/ GenPar, L.P.
By: T/3/ Advisors, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------------
Xxxxxxx X. Xxxxxxxxx
Title: Vice President
-------------------------------------------
T/3/ PARALLEL, L.P.
By: T/3/ GenPar, L.P.
By: T/3/ Advisors, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------------
Xxxxxxx X. Xxxxxxxxx
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. Xxxxxxxxxx
---------------------------------------------
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. Xxxxxxxxxx
---------------------------------------------
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. Xxxxxxxxxx
---------------------------------------------
Xxxxxxx X. Xxxxxxxxxx
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. Xxxxxxxxxx
---------------------------------------------
Xxxxxxx X. Xxxxxxxxxx
Title: Vice President
T.H. eVENTURE PTE LTD
By:_______________________________________
Its:
YAHOO! INC.
By:_______________________________________
Its:
DATA STREAM SYSTEMS, INC.
By:_______________________________________
Its:
HARBOR INVESTORS, L.P.
By: /s/ [ILLEGIBLE]
---------------------------------------
It's: General Partner
TRADEOUT, INC.
By: /s/ Xxxx Xxxxxxx
---------------------------------------
Name: Xxxx Xxxxxxx
Title: Chairman
/s/ Xxxxx X. Xxxxxxxx
------------------------------------------
XXXXX X. XXXXXXXX, Trustee of the Xxxxx X.
Xxxxxxxx Revocable Trust U/A DTD 9/29/89
/s/ Xxxxxx Xxxxx-Xxxxxx
----------------------------
XXXXXX XXXXX-XXXXXX
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
