Exhibit D
RIGHT OF FIRST REFUSAL AGREEMENT
This RIGHT OF FIRST REFUSAL AGREEMENT (the "Agreement") is entered into as
of August 19, 2002 by and among The Bluebook International Holding Company, a
Delaware corporation (the "Company"), Xxxx X. Xxxxxxxxxx, Xxxxxx X. Xxxxxxxxxx,
Xxxxxx X. Xxxxxxxxxx and Xxxxxxx X. Xxxxxxxxxx (each a "Founder" and
collectively, the "Founders") and Cotelligent, Inc., a Delaware corporation (the
"Purchaser").
RECITALS
The Company and the Purchaser are parties to the Series C Preferred Stock
Purchase Agreement of even date herewith, pursuant to which the Purchaser is
purchasing shares of the Company's Series C Preferred Stock (the "Series C
Preferred");
The Founders are the beneficial owners of the number of shares of Common
Stock set forth opposite each Founder's name on Schedule A hereto; and
The Founders wish to provide further inducement to the Purchaser to
purchase the Series C Preferred by providing the Purchaser with a right of first
refusal to purchase the Founders' Common Stock as provided in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual promises
set forth in this Agreement;
The parties agree as follows:
1. Restrictions on Transfer of Shares by the Founders. Except as otherwise
provided in this Agreement, the Founders will not sell, assign, transfer,
pledge, hypothecate, or otherwise encumber or dispose of in any way, all or any
part of or any interest in the Equity Securities (as defined below) now or
hereafter owned or held by the Founders. Any sale, assignment, transfer, pledge,
hypothecation or other encumbrance or disposition of Equity Securities not made
in conformance with this Agreement shall be null and void, shall not be recorded
on the books of the Company and shall not be recognized by the Company.
2. Definitions.
Equity Securities. For purposes of this Agreement, the term "Equity
Securities" shall mean any securities having voting rights in the election of
the Board of directors of the Company not contingent upon default, or any
securities evidencing an ownership interest in the Company, or any securities
convertible into or exercisable for any shares of the foregoing, or any
agreement or commitment to issue any of the foregoing.
3. Agreements Among the Company, the Purchaser and the Founders.
3.1 Rights of First Refusal.
(a) Transfer Notice. If at any time any Founder proposes to
transfer Equity Securities to one or more third parties pursuant to an
understanding with such third parties (a "Transfer"), then such
Founder shall give Purchaser written notice of the Founder's intention
to make the Transfer (the "Transfer Notice"), which Transfer Notice
shall include (i) a description of the Equity Securities to be
transferred ("Offered Shares"), and (ii) the consideration and the
material terms and conditions upon which the proposed Transfer is to
be made. The Transfer Notice shall certify that the Founder has
received a firm offer from the prospective transferee(s) and in good
faith believes a binding agreement for the Transfer is obtainable on
the terms set forth in the Transfer Notice. The Transfer Notice shall
also include a copy of any written proposal, term sheet or letter of
intent or other agreement relating to the proposed Transfer, subject
to any obligation to keep the identity of the prospective transferee
confidential.
(b) Purchaser's Option. Purchaser shall have an option for a
period of ten (10) days from receipt of the Transfer Notice to elect
to purchase the Offered Shares at the same price and subject to the
same material terms and conditions as described in the Transfer
Notice. Purchaser may exercise such purchase option and, thereby,
purchase all (or a portion of) the Offered Shares by notifying such
Founder in writing before expiration of the such ten (10) day period.
If Purchaser gives the Founder notice that it desires to purchase such
shares, then payment for the Offered Shares shall be by check or wire
transfer, against delivery of the Offered Shares to be purchased at
the Company's principal place of business or such other place agreed
upon between the parties and at the time of the scheduled closing
therefor, which shall be no later than thirty (30) days after
Purchaser's receipt of the Transfer Notice, unless the value of the
purchase price has not yet been established pursuant to Section 3.1(c)
below.
(c) Valuation of Property. Should the purchase price specified in
the Transfer Notice be payable in property other than cash or
evidences of indebtedness, Purchaser shall have the right to pay the
purchase price in the form of cash equal in amount to the value of
such property. If such property does not have a readily ascertainable
value, and if the Offered Shares are common stock or other Equity
Securities sold on the public market, then the value of such property
shall be deemed to be the value of such Offered Shares, which shall be
equal to the average daily trading price over the ten (10) day period
immediately preceding the date of the Transfer Notice. For any other
Offered Shares, Founder and Purchaser shall use their best efforts to
agree upon a value of such property within ten (10) days of
Purchaser's receipt of the Transfer Notice. If the Founder and
Purchaser cannot agree on such cash value within ten (10) days after
Purchaser's receipt of the Transfer Notice, Founder and Purchaser
shall mutually select an appraiser who is active in the appraisal of
the type of property at issue within twenty (20) days after
Purchaser's receipt of the Transfer Notice. Founder shall submit
Founder's determination of value ("Founder's Value") and Purchaser
shall submit Purchaser's determination of value ("Purchaser's Value")
to such appraiser, at such time or times and in such manner as Founder
and Purchaser shall agree (or as soon as possible as determined and
directed by the appraiser if Founder and Purchaser do not promptly
agree). The appraiser shall promptly (but in no event beyond ten (10)
days) select either Founder's Value or Purchaser's Value as the fair
value of the subject property, and such determination shall be binding
on Founder and Purchaser. If Founder's determination is selected as
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the fair value of the property, then Purchaser shall bear all of the
appraiser's costs and fees. If Purchaser's determination is selected
as the fair value of the property, the Founder shall bear all of the
broker's costs and fees. If the time for the closing of Purchaser's
purchase has expired but for the determination of the value of the
purchase price offered by the prospective transferee(s), then such
closing shall be held on or prior to the fifth (5th) business day
after such valuation shall have been made pursuant to this subsection.
3.2 Non-Exercise of Rights. To the extent Purchaser has not exercised
its rights to purchase all of the Offered Shares within the time periods
specified in Section 3.1, the Founder shall have until the later of (1) the
closing date set forth in the Transfer Notice, or (2) a period of sixty
(60) days from the expiration of such rights in which to sell the Offered
Shares not so purchased (the "Open Period") upon terms and conditions
(including the purchase price) no more favorable than those specified in
the Transfer Notice to the third-party transferee(s). The third-party
transferee(s) shall acquire any such Offered Shares free and clear of
subsequent rights of first refusal under this Agreement. In the event the
Founder does not consummate the sale or disposition of all of the Offered
Shares not purchased by Purchaser within the Open Period, Purchaser's first
refusal rights shall continue to be applicable to any subsequent
disposition of any of the Offered Shares by the Founder until such right
lapses in accordance with the terms of this Agreement. Furthermore, the
exercise or non-exercise of the rights of Purchaser under this Section 3 to
purchase Equity Securities from the Founder shall not adversely affect its
right to make subsequent purchases from the Founder of Equity Securities.
3.3 Limitations to Rights of First Refusal. Notwithstanding the
provisions of Section 3.1 of this Agreement, any Founder may sell or
otherwise assign, with or without consideration, Equity Securities to
either (i) the Founder's spouse, parent, sibling, child, or any of their
lineal descendants (collectively, the "Immediate Family") or to a
custodian, trustee (including a trustee of a voting trust), executor, or
other fiduciary for the account of the Founder's Immediate Family, or to a
trust for the Founder's own self or any partnership, limited liability
company or corporation qualified under Subchapter "S" of the Internal
Revenue Code beneficially owned solely by the Founder and/or the Immediate
Family; provided that each such transferee or assignee, prior to the
completion of the sale, transfer, or assignment shall have executed
documents assuming the obligations of the applicable Founder or Founders
under this Agreement with respect to the transferred securities; or (ii) to
Microsoft, Cisco, KPMG or Hewlett Packard and their successors-in-interest
by merger, division or sale of substantially all the assets or stock of any
of the foregoing companies, which transfer shall be made free and clear of
subsequent rights of first refusal under this Agreement.
3.4 Failure to Close. In the event that Purchaser elects to purchase
the Offered Shares within the time period specified in Section 3.1 above
but fails to close such purchase within the time period specified therein,
then Founder may seek any contract remedy it may have in such event,
including specific performance.
4. Assignments and Transfers; No Third Party Beneficiaries. Purchaser may
not assign any rights under this Agreement, except to a successor-in-interest by
merger or sale of substantially all of the assets or stock of Purchaser. Subject
to the foregoing, this Agreement and the rights and obligations of the parties
hereunder shall inure to the benefit of, and be binding upon, their respective
successors, assigns (except as provided in Section 3.3 above) and legal
representatives, but shall not otherwise be for the benefit of any third party.
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5. Legend. Each existing or replacement certificate for shares now owned or
hereafter acquired by a Founder shall bear the following legend upon its face
until this Agreement terminates:
"THE SALE, PLEDGE, HYPOTHECATION, ASSIGNMENT OR TRANSFER OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND
CONDITIONS OF A CERTAIN RIGHT OF FIRST REFUSAL AGREEMENT BY AND
BETWEEN THE STOCKHOLDER, THE CORPORATION AND CERTAIN PURCHASERS OF
STOCK OF THE CORPORATION. COPIES OF SUCH AGREEMENT MAY BE OBTAINED
UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION."
6. Effect of Change in Company's Capital Structure. The provisions of this
Agreement shall apply to any new or different shares issued to the Founders as
the result of a stock dividend, stock split, reverse stock split, combination,
reclassification or like change in the capital structure of the Company.
7. Notices. Any notice required or permitted by any provision of this
Agreement shall be given in writing and shall be delivered personally or by
courier, or by registered or certified mail, postage prepaid, addressed (i) in
the case of a Founder to that Founder's address as set forth in the signature
pages hereto or such other address as a Founder may designate in writing from
time to time, (ii) in the case of the Company, to its principal office, (iii) in
the case of Purchaser at the address of Purchaser as set forth in the signature
pages hereto or such other address for Purchaser as shall be designated in
writing from time to time by Purchaser; or (iv) in the case of any permitted
transferee of a party to this Agreement or its transferee, to such transferee at
its address as designated in writing by such transferee to the Company from time
to time. Notices that are mailed shall be deemed received five (5) business days
after deposit in the United States mail. Notices sent by courier or overnight
delivery shall be deemed received two (2) days after they have been so sent.
8. Further Instruments and Actions. The parties agree to execute such
further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Agreement. The Founders agree to
cooperate affirmatively with the Company and Purchaser, to the extent reasonably
requested by the Company or Purchaser, to enforce rights and obligations
pursuant hereto.
9. Term. This Agreement shall terminate upon (i) the mutual written consent
of the Company, Purchaser and each of the Founders, (ii) upon the transfer of
all the Equity Securities in accordance with this Agreement, or (iii) upon the
sale of all of the securities of the Company then held by Purchaser.
10. Entire Agreement. This Agreement contains the entire understanding of
the parties hereto with respect to the subject matter hereof, supersedes all
other agreements between or among any of the parties with respect to the subject
matter hereof and cannot be altered or otherwise amended except pursuant to an
instrument in writing signed by each of the parties to this Agreement. This
Agreement shall be interpreted under the laws of the State of California without
reference to California conflicts of law provisions.
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11. 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, the written consent of each Founder and the
written consent of the Purchaser. Any amendment or waiver effected in accordance
with this paragraph shall be binding upon the Founder and all Purchasers and
their respective successors and permitted assigns.
12. Separability. In case any provision of the Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
13. Attorney's Fees. In the event that any dispute among the parties to
this Agreement should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
14. 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.
[SIGNATURES APPEAR ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
COMPANY: FOUNDERS:
/s/ Xxxx X. Xxxxxxxxxx
THE BLUEBOOK INTERNATIONAL ---------------------------------
HOLDING COMPANY, Xxxx X. Xxxxxxxxxx
a Delaware corporation
Address:
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By: /s/ Xxxx X. Xxxxxxxxxx
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Xxxx X. Xxxxxxxxxx,
President -------------------------
/s/ Xxxxxx X. Xxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxx
PURCHASER:
Address:
COTELLIGENT, INC., a Delaware -------------------------
corporation
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By: /s/ Xxxxxx X. Machiorlette
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Xxxxxx X. Machiorlette
Senior Vice President /s/ Xxxxxx X. Xxxxxxxxxx
---------------------------------
Address: Xxxxxx X. Xxxxxxxxxx
000 Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000 Address:
Attn: Xxxxxx X. Xxxxxxx -------------------------
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/s/ Xxxxxxx X. Xxxxxxxxxx
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Xxxxxxx X. Xxxxxxxxxx
Address:
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[SIGNATURE PAGE TO RIGHT OF FIRST REFUSAL AGREEMENT]
