Exhibit 10.11
C-BRIDGE INTERNET SOLUTIONS, INC.
RIGHT OF FIRST OFFER AND CO-SALE AGREEMENT
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This Agreement dated as of October 7, 1999 is entered into by and among
▇▇▇▇▇▇▇▇ Trust Company Limited, as Trustee of the Willingdon Trust, Cambridge
Technology Enterprises, Limited, ▇▇▇▇▇▇▇▇▇▇▇ Trust (Bermuda) Limited, as Trustee
of the ▇▇▇▇▇▇ Trust (individually, a "Founder" and collectively, the
"Founders"), the persons and entities listed on Exhibit A attached hereto
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(individually, a "Purchaser" and collectively, the "Purchasers"), and C-bridge
Internet Solutions, Inc., a Delaware corporation (the "Company").
Recitals
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As used in this Agreement, the term "Shares" shall include all shares
of capital stock of the Company held by the Founders or Purchasers, whether now
owned or hereafter acquired. For purposes of calculating any Purchaser's "pro
rata" ownership of Shares, all shares of Preferred Stock of the Company shall be
deemed to have been converted into Common Stock of the Company.
The purpose of this Agreement is to protect the management and control
of the Company from influence by any person not acceptable to the Company or the
Purchasers and Founders and to assist the Purchasers and Founders in selling
their Shares if they so desire.
NOW, THEREFORE, for valuable consideration, it is agreed as follows.
1. Restrictions on Transfer.
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1.1 Any sale, transfer or other disposition, whether voluntarily or
by operation of law ("Transfer") of any of the Shares by a Founder or Purchaser,
other than according to the terms of this Agreement, shall be void and transfer
no right, title, or interest in or to any of such Shares to the purported
transferee.
1.2 An original copy of this Agreement, duly executed by each of the
parties hereto, shall be delivered to the Secretary of the Company and
maintained at the principal executive office of the Company and made available
for inspection by any person requesting it.
1.3 Each Founder and Purchaser agrees to present the certificates
representing the Shares presently owned or hereafter acquired by him to the
Secretary of the Company and cause the Secretary to stamp on the certificate in
a prominent manner the following legend:
"The sale or other disposition of any of the shares represented
by this certificate is restricted by a Right of First Offer and
Co-Sale Agreement, dated as of October 7, 1999, as amended from
time to time, among certain of the shareholders of this
corporation and this corporation (the "Agreement"). A copy of
the Agreement is available for inspection during normal business
hours at the principal executive office of this corporation."
2. Transfers Not Subject to Restrictions.
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2.1 Any Purchaser may Transfer Shares to any affiliates, general
partners or limited partners, without compliance with Sections 3 through 6
hereof provided that the transferee delivers to the Company a written instrument
agreeing to be bound by the terms of this Agreement as if it were a Founder or
Purchaser. Any Founder may Transfer Shares to a beneficiary or stockholder, as
appropriate, provided that the transferee delivers to the Company a written
instrument agreeing to be bound by the terms of this Agreement as if it were a
Founder or Purchaser.
2.2 The rights of the Company and the Purchasers and Founders under
Sections 4 and 5 hereof shall not apply to any pledge of Shares by a Founder or
Purchaser which creates a mere security interest, provided the pledgee provides
the Company and the Purchasers or Founders with a written agreement to be bound
hereby to the same extent as the pledging Founder or Purchaser.
3. Offer of Sale; Notice of Proposed Sale.
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If any Founder or Purchaser desires to Transfer any of his Shares, or
any interest in such Shares, in any transaction other than pursuant to Section 2
of this Agreement, such Founder or Purchaser (the "Selling Party") shall first
deliver written notice of his desire to do so (the "Notice") to the Company and
each of the Purchasers (or to the Founders, if the Selling Party is a
Purchaser), in the manner prescribed in Section 9.4 of this Agreement. The
Notice must specify: (i) the number of Shares the Selling Party proposes to sell
or otherwise dispose of (the "Offered Shares"), (ii) the consideration per Share
to be delivered to the Selling Party for the proposed sale,
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transfer or disposition, and (iii) all other material terms and conditions of
the proposed transaction.
4. Company's Option to Purchase.
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4.1 Subject to Section 6.1, the Company shall have the first option
to purchase all or any part of the Offered Shares for the consideration per
share and on the terms and conditions specified in the Notice. The Company must
exercise such option, no later than 15 days after such Notice is deemed under
Section 9.4 hereof to have been delivered to it, by written notice to the
Selling Party.
4.2 In the event the Company does not exercise its option within such
15-day period with respect to all of the Offered Shares, the Company shall, by
the last day of such period, give written notice of that fact to the Purchasers
or Founders, as the case may be (the "Purchaser Notice"). The Purchaser Notice
shall specify the number of Offered Shares not purchased by the Company (the
"Remaining Shares").
4.3 In the event the Company duly exercises its option to purchase
all or part of the Offered Shares, the closing of such purchase shall take place
at the offices of the Company on the later of (i) the date five days after the
expiration of such 15-day period or (ii) the date that the Purchasers or
Founders consummate their purchase of Remaining Shares under Section 5.3 hereof.
4.4 Notwithstanding anything to the contrary herein, neither the
Company nor any of the Purchasers or Founders shall have any right to purchase
any of the Offered Shares hereunder unless the Company and/or the Purchasers
and/or the Founders exercise their option or options to purchase all of the
Offered Shares.
5. Purchasers' or Founders' Option to Purchase.
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5.1 Subject to Section 6.1, each Purchaser or Founder shall have an
option, exercisable for a period of 15 days from the date of delivery of the
Purchaser Notice, to purchase, on a pro rata basis according to the number of
Shares owned by such Purchaser or Founder, the Remaining Shares for the
consideration per share and on the terms and conditions set forth in the Notice.
Such option shall be exercised by delivery by such Purchaser or Founder of
written notice to the Secretary of the Company. Alternatively, each Purchaser
or Founder, if the Purchaser proposes to transfer Common Stock, may, subject to
any lock-up letter, within the same 15-day period, notify the Secretary of the
Company of its desire to participate in the sale of the Shares on the terms set
forth in the Notice, and the number of Shares it wishes to sell.
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5.2 In the event options to purchase have been exercised by the
Purchasers or Founders with respect to some but not all of the Remaining Shares,
those Purchasers or Founders who have exercised their options within the 15-day
period specified in Section 5.1 shall have an additional option, for a period of
five days next succeeding the expiration of such 15-day period, to purchase all
or any part of the balance of such Remaining Shares on the terms and conditions
set forth in the Notice, which option shall be exercised by the delivery of
written notice to the Secretary of the Company. In the event there are two or
more such Purchasers or Founders that choose to exercise the last-mentioned
option for a total number of Remaining Shares in excess of the number available,
the Remaining Shares available for each such Purchaser's or Founder's option
shall be allocated to such Purchaser or Founder pro rata based on the number of
Shares owned by the Purchasers or Founders so electing.
5.3 If the options to purchase the Remaining Shares are exercised in
full by the Purchasers or Founders, the Company shall immediately notify all of
the exercising Purchasers of that fact. The closing of the purchase of the
Remaining Shares shall take place at the offices of the Company no later than
five days after the date of such notice to the Purchasers.
6. Failure to Fully Exercise Options; Co-Sale.
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6.1 If the Company and the Purchasers or Founders do not exercise
their options to purchase all of the Offered Shares within the periods described
in this Agreement (the "Option Period"), then all options of the Company and the
Purchasers or Founders to purchase the Offered Shares, whether exercised or not,
shall terminate, but each Purchaser or Founder which has, pursuant to Section 5,
expressed a desire to sell Shares in the transaction (a "Participating
Purchaser"), shall be entitled to do so pursuant to this Section. The Company
shall promptly, on expiration of the Option Period, notify the Selling Party of
the aggregate number of Shares the Participating Purchasers or Founders wish to
sell. The Selling Party shall use his best efforts to interest the party to
which the Selling Party proposes to sell or otherwise dispose of the Shares or
an interest in the Shares (the "Prospective Buyer") in purchasing, in addition
to the Offered Shares, the Shares the Participating Purchasers or Founders wish
to sell. If the Prospective Buyer does not wish to purchase all of the Shares
made available by the Selling Party and the Participating Purchasers or
Founders, then (i) if the Selling Party is a Founder, then each Participating
Purchaser and the Selling Party shall be entitled to sell, at the price and on
the terms and conditions set forth in the Notice, a portion of the Shares being
sold to the Prospective Buyer, in the same proportion as such Selling Party or
Participating Purchaser's ownership of Shares bears to the aggregate number of
Shares owned by the Selling Party and the Participating Purchasers or (ii) if
the Selling Party is a Participating Purchaser, then each Founder
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and the Selling Party shall be entitled to sell, at the price and on the terms
and conditions set forth in the Notice, an equal number of Shares to the
Prospective Buyer. The transaction contemplated by the Notice shall be
consummated not later than 60 days after the expiration of the Option Period.
6.2 If the Participating Purchasers or Founders do not elect to sell
the full number of Shares which they are entitled to sell pursuant to Section
6.1, the Selling Party shall be entitled to sell to the Prospective Buyer,
according to the terms set forth in the Notice, that number of his own Shares
which equals the difference between the number of Shares desired to be purchased
by the Prospective Buyer and the number of Shares the Participating Purchasers
or Founders are entitled to sell pursuant to Section 6.1. If the Selling Party
wishes to Transfer any such Shares at a price per Share which differs from that
set forth in the Notice, upon terms different from those previously offered to
the Company and the Purchasers or Founders, or more than 60 days after the
expiration of the Option Period, then, as a condition precedent to such
transaction, such Shares must first be offered to the Company and the Purchasers
or Founders on the same terms and conditions as given the Prospective Buyer, and
in accordance with the procedures and time periods set forth above.
6.3 The proceeds of any sale made by the Selling Party without
compliance with the provisions of this Section 6 shall be deemed to be held in
constructive trust in such amount as would have been due the Participating
Purchasers or Founders if the Selling Party had complied with this Agreement.
7. Termination of Agreement.
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7.1 This Agreement shall terminate upon the earlier of the following
events:
(a) The sale of all or substantially all of the assets or business of
the Company, by merger, sale of assets or otherwise (except a merger or
consolidation in which the holders of capital stock of the Company immediately
prior to such merger or consolidation continue to hold immediately following
such merger or consolidation at least 75% by voting power of the capital stock
of the surviving corporation); or
(b) The closing of the Company's initial public offering of shares of
Common Stock pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "Act"), resulting in at least
$15,000,000 of gross proceeds to the Company at a price to the public of at
least $10.00 per share (subject to appropriate adjustment for stock splits,
stock dividends, recapitalizations and other similar events); or
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(c) With respect only to Cambridge Technology Enterprises, Limited and
▇▇▇▇▇▇▇▇▇▇▇ Trust (Bermuda) Limited, as Trustee of the ▇▇▇▇▇▇ Trust, three years
from the date of this Agreement.
7.2 The provisions of Sections 3, 4, 5 and 6 hereof shall not apply
to any sale of Shares pursuant to a transaction referred to in Sections 7.1(a)
or 7.1(b) above.
8. Transfers of Rights. This Agreement, and the rights and obligations
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of each Purchaser hereunder, may be assigned by such Purchaser to any person or
entity to which Shares are transferred by such Purchaser, and such transferee
shall be deemed a "Purchaser" for purposes of this Agreement; provided that the
transferee provides written notice of such assignment to the Company and agrees
in writing to be bound hereby.
9. General.
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9.1 Severability. The invalidity or unenforceability of any
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provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
9.2 Specific Performance. In addition to any and all other remedies
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that may be available at law in the event of any breach of this Agreement, each
Purchaser shall be entitled to specific performance of the agreements and
obligations of the Company and Founders hereunder and to such other injunctive
or other equitable relief as may be granted by a court of competent
jurisdiction.
9.3 Governing Law. This Agreement shall be governed by and construed
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in accordance with the internal laws of the State of Delaware (without reference
to the conflicts of law provisions thereof).
9.4 Notices. All notices, requests, consents, and other
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communications under this Agreement shall be in writing and shall be deemed
delivered (i) two business days after being sent by registered or certified
mail, return receipt requested, postage prepaid or (ii) one business day after
being sent via a reputable nationwide overnight courier service guaranteeing
next business day delivery, in each case to the intended recipient as set forth
below:
If to the Company, at C-bridge Internet Solutions, Inc., ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President, or at such other
address or addresses as may have been furnished in writing by the Company to the
Purchasers,
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with a copy to ▇▇▇▇ and ▇▇▇▇ LLP, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.;
If to a Purchaser, at his or its address set forth in Schedule A hereto, or
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at such other address or addresses as may have been furnished to the Company in
writing by such Purchaser, with a copy to ▇'▇▇▇▇▇▇▇▇ Graev & Karabell, LLP, ▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. Nissan, Esq.;
or
If to a Founder, at Cambridge Executive Enterprises, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇, Esq., or at such other
address or addresses as may have been furnished to the Company in writing by
such Founder.
Any party may give any notice, request, consent or other communication
under this Agreement using any other means (including, without limitation,
personal delivery, messenger service, telecopy, first class mail or electronic
mail), but no such notice, request, consent or other communication shall be
deemed to have been duly given unless and until it is actually received by the
party for whom it is intended. Any party may change the address to which
notices, requests, consents or other communications hereunder are to be
delivered by giving the other parties notice in the manner set forth in this
Section.
9.5 Complete Agreement; Amendments. This Agreement constitutes the
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entire agreement and understanding of the parties hereto with respect to the
subject matter hereof, and supersedes all prior agreements and understandings
relating to such subject matter. No amendment, modification or termination of,
or waiver under, any provision of this Agreement shall be valid unless in
writing and signed by (i) the Company, (ii) Founders holding a majority of the
voting power of the Shares held by all of the Founders and (iii) Purchasers
holding a majority of the voting power of the Shares then held by all of the
Purchasers (giving effect to the conversion into Common Stock of all securities
convertible thereinto), and any such amendment, modification or termination
shall be binding on all parties hereto; provided that the consent of a party
shall not be required for any amendment, modification or termination of, or
waiver under, any provision of this Agreement if such party is not adversely
affected thereby.
9.6 Pronouns. Whenever the context may require, any pronouns used in
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this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns and pronouns shall include the plural, and
vice versa.
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9.7 Counterparts; Facsimile Signatures. This Agreement may be
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executed in any number of counterparts, each of which shall be deemed to be an
original, and all of which together shall constitute one and the same document.
This Agreement may be executed by facsimile signatures.
9.8 Section Headings. The section headings are for the convenience
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of the parties and in no way alter, modify, amend, limit or restrict the
contractual obligations of the parties.
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Executed as of the date first written above.
COMPANY:
C-BRIDGE INTERNET SOLUTIONS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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PURCHASERS:
INSIGHT CAPITAL PARTNERS III, L.P.
By: InSight Venture Associates III, L.L.C.,
its General Partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
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Name:
Title:
INSIGHT CAPITAL PARTNERS (CAYMAN)
III, L.P.
By: InSight Venture Associates III, L.L.C.,
its General Partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
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Name:
Title:
INSIGHT CAPITAL PARTNERS III -
CO-INVESTORS, L.P.
By: InSight Venture Associates III, L.L.C.,
its General Partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
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Name:
Title:
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H&D INVESTMENTS 97
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: General Partner
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FOUNDERS:
▇▇▇▇▇▇▇▇ TRUST COMPANY
LIMITED, AS TRUSTEE OF THE
WILLINGDON TRUST
By: /s/ ▇. ▇▇▇▇▇▇▇▇
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By: /s/ ▇. ▇▇▇▇
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▇▇▇▇▇▇▇▇▇▇▇ TRUST (BERMUDA)
LIMITED, AS TRUSTEE OF THE ▇▇▇▇▇▇
TRUST
By: /s/ ▇. ▇▇▇▇▇▇▇
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By: /s/ ▇. ▇▇▇▇▇▇▇
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CAMBRIDGE TECHNOLOGY
ENTERPRISES, LIMITED
By: /s/ ▇▇▇▇ ▇▇▇▇
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President
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ORACLE CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President, Corporate Development
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EXHIBIT A
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List of Purchasers
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Name and Address
of Purchaser
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InSight Capital Partners III, L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
InSight Capital Partners
(Cayman) III, L.P.
c/o ▇.▇. ▇▇▇▇▇▇ & Company
▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
Grand Cayman, Cayman Islands
InSight Capital Partners III -
Co-Investors, L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
H&D Investments 97
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇ and ▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Oracle Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
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